(e) (1) to (4), including the cost of sabbatical and educational leave pursuant to § 104.46 and employee benefits pursuant to § 104.43 (a) (1).

(2) Costs for training teachers, supervisors or directors of agricultural subjects, and teachers of trade, home economics, and industrial subjects as specified in 104.41(e) (5) to (7). These may include all expenditures specified in paragraph (a) of this section which can be reasonably attributable to training of teachers, to the extent provided in the sections referred to therein.

§ 104.44 Allowable expenditures

for

construction of area vocational education school facilities under the 1963 Act.

(a) Federal funds allotted to the State under section 3 of the 1963 Act may be used for the cost of area vocational education school facility projects (as specified in § 104.41(b) (5)) which are undertaken by the State board or by local educational agencies with the approval of the State board. There can be no Federal financial participation in any expenditures for construction projects prior to the approval of such projects except expenditures for advance planning pursuant to subparagraph (5) of this paragraph, and for the acquisition of land pursuant to subparagraph (3) of this paragraph. Funds so allotted may be applied to the following expenditures:

(1) Construction of new buildings to the extent they contain such school facilities and initial equipment as defined in § 104.1 (n) (2) (i).

(2) Expansion, remodeling, and alteration (as distinguished from maintenance and repair) of existing buildings to the extent they contain such school facilities and initial equipment as defined in § 104.1 (n) (2) (ii).

(3) Expenses (other than interest and carrying charges on bonds) related to the acquisition (from sources other than the State board or local educational agency) of the fee, leasehold, or other interest in land on which there is to be construction of new buildings or expansion of existing buildings that are incurred within one year prior to the approval of the construction project, if such expenses constitute an actual cost or transfer of public funds in accordance with usual procedures generally applicable to all State and local agencies and institutions, as provided for in § 104.31.

(4) Site grading and improvement of land on which such facilities are located. (5) Architectural, engineering, and inspection expenses incurred subsequent to the date of site selection.

(b) If the total proposed construction plan includes facilities which will be used for both eligible and ineligible purposes, the State board shall include in its State plan the policies and procedures to be followed by the State board in determining what facilities or portions of facilities are assignable to purposes eligible for funds under the 1963 Act.

(c) If the total proposed construction plan includes facilities which are eligible for Federal financial participation under the 1963 Act and under any other Federal statute, the State board shall set forth in its State plan an assurance that Federal financial participation under the 1963 Act will not be made available for a facility or portion thereof supported by Federal financial participation under such other Federal statute. [29 F.R. 12339, Aug. 28, 1964, as amended at 30 F.R. 10239, Aug. 18, 1965] § 104.45

Allowable

expenditures

work-study programs.

for

Federal funds allotted to the States under section 13 of the 1963 Act for work-study programs may be applied to the following expenditures:

(a) Compensation of students employed in work-study programs meeting the requirements in § 104.25.

(b) All expenditures specified in § 104.43 (a) attributable to development of the provisions of the State plan applicable to work-study programs, pursuant to § 104.24 to 104.26, which are incurred before the effective date of such provisions.

in

(c) All expenditures specified § 104.43 (a) attributable to administration and supervision of the work-study program under the State plan.

§ 104.46 Sabbatical and educational leave.

(a) Funds used under the State plan for salaries paid to approved vocational education personnel who have been engaged in activities under the State plan may include that part of the salary paid for the time spent (1) on sabbatical leave, or (2) on educational or other leave needed to obtain additional education, occupational experience or training of benefit to the vocational educa

tion programs under the State plan, provided in either case that such leave is in conformity with the policy of the employing board, agency, or institution which applies also to the other employees of similar rank or grade.

(b) The fact that funds are used for the salary of an employee on such leave does not preclude Federal financial participation in the salary of the person employed to replace him, as long as the replacement is otherwise eligible.

(c) In the case of sabbatical leave earned by the employee on the basis of time of service, Federal financial participation will be based on the prorated portion of the employee's time that was given to various reimursable vocational education activities during the period in which the leave was earned.

(d) In the case of educational or other leave not earned on the basis of time or service, Federal financial participation will be based on the relative benefit of such leave to the various education programs under the plan. Prorations required under this section will be made in accordance with the principles set out in § 104.35.

§ 104.47 Travel and transportation ex

penses.

Funds may be used for necessary and appropriate travel and transportation expenses attributable to vocational education programs under the State plan which shall set forth provisions governing the specific kinds of travel and transportation allowed and provide that travel and transportation expenditures be in accordance with State laws and regulations as required in § 104.31. Included in allowable travel and transportation expenses are the following:

(a) Travel expenses of vocational education personnel when performing official duties recognized by the State board and related to vocational education programs under the State plan:

(1) Travel expenses of State and local vocational education personnel whose salaries are supported by funds under the State plan.

(2) Travel expenses of members of the State board.

(3) Travel expenses of consultants, members of State advisory committees, and other persons or groups acting in an advisory capacity, whose fees and approved expenses are supported by Federal funds under the State plan when annually approved by the State board.

(b) Transportation expenses of vocational education students (with funds other than those available under the Smith-Hughes Act and title I of the George-Barden Act) which include only

(1) Transportation for one round trip per semester or shorter period determined by the duration of the program from the student's home to the place where he will reside while enrolled in the program.

(2) Transportation for one round trip daily between a student's place of residence and the school.

(3) Transportation between schools, in one of which the student is enrolled.

(4) Transportation between a school and the place where work experience for students is being provided.

(5) Transportation of classes for field work.

(c) Transportation expenses of prospective teachers enrolled in an approved teacher training program when they are sent to serve as student teachers in approved vocational education schools or classes in communities so located as to require transportation expense. Participation is not allowed for any travel expense other than transportation.

ance.

(d) All travel and transportation included in paragraphs (a), (b), and (c) of this section may be by common carrier, official conveyance, or private conveyCosts may not be paid in excess of costs of transportation by common carrier, or in the absence of suitable transportation by common carrier, in excess of reasonable rates established by the State or such other rates approved by the State board.

§ 104.48

Instructional equipment, supplies, and teaching aids.

(a) Under the George-Barden and 1963 Acts, funds may be used for the acquisition, maintenance and repair of instructional equipment, supplies, and teaching aids for vocational education programs provided that:

(1) No more than 10 percent of the funds appropriated in each allotment to each State under title I of the GeorgeBarden Act may be used for the acquisition of equipment, and

(2) No funds allotted under title I of the George-Barden Act may be used for the maintenance and repair of equipment.

(b) "Instructional equipment, supplies and teaching aids" means equipment, supplies and teaching aids (including

reference materials and textbooks to be retained by the local educational agency) used by authorized vocational education personnel in instructing, or by their students in learning, in an instructional situation in the classroom, library, laboratory, shop, or field. It may not include supplies to be made into equipment or products to be sold, or to be used by pupils, teachers, or other persons; except that supplies made into equipment for vocational instruction may be considered as equipment for instruction under the same conditions as apply to purchased equipment.

(c) Annual appropriation acts for the Department of Health, Education, and Welfare such as the Department of Health, Education, and Welfare Appropriation Act, 1964 (P.L. 88-136, title II, 77 Stat. 231), have provided that no part of the funds appropriated for "Defense Education Activities" shall be available for the purchase of science, mathematics, and modern language teaching equipment, or equipment suitable for use for teaching in such fields of education, which can be identified as originating in or having been exported from a Communist country, unless such equipment is unavailable from any other source. Such a prohibition applies to expenditures for the purpose of instructional equipment with funds allotted under title III of the George-Barden Act (including such funds transferred to another allotment pursuant to § 104.28).

§ 104.49 Other related expenditures.

(a) Funds may be used for the expenditures described in paragraph (b) of this section which are related to the vocational education programs, services, and activities specified in § 104.43, except that:

(1) Funds allotted under the SmithHughes Act may be used only for such expenditures which are related to teacher training, and

(2) Funds allotted under titles I and III of the George-Barden Act may be used only for such expenditures which are related to teacher training, research, demonstration, and experimental programs, and administration and supervision.

(b) Such expenditures shall include the following:

(1) Administrative overhead expenses such as salaries of clerical and custodial personnel, communications, utilities, office equipment, supplies, printing and

printed materials, and rental of space to the extent provided in subparagraph (2) of this paragraph.

(2) Rental of space (including the cost of utilities and janitorial services) in privately or publicly owned buildings if: (i) The expenditures for the space are necessary, reasonable, and properly related to the efficient administration of the program; (ii) the State board or local educational agency will receive the benefits of the expenditures during the period of occupancy commensurate with such expenditures; (iii) the amounts paid by the State board or local educational agency are not in excess of comparable rental in a particular locality; (iv) expenditures represent a current cost to the State board or local educational agency; and (v) in publicly owned buildings like charges are made to other agencies occupying similar space for similar purposes.

(3) Employer's contributions to retirement, workmen's compensation, or other welfare funds maintained for one or more general classes of employees of a State or local educational agency, to the extent that such contributions benefit Vocational education personnel whose salaries are supported with funds under the State plan.

Subpart D-Payment and Reports § 104.50 Certification of Federal funds.

(a) Conditions for certification. Payment to the States under the acts will be made only after the Commissioner has certified that the State is entitled to such payment. Such certification shall be made only when:

(1) The Commissioner determines that the State has on file in the Office of Education a State plan (including all amendments) which was adopted by the State board and approved by the Commissioner, and which has not been so changed that it no longer complies with the acts and regulations.

(2) An examination of the latest records, estimates and reports on file in the Office of Education indicates to the Commissioner's satisfaction that (i) the program of vocational education for the preceding fiscal year was conducted substantially in accordance with the acts, regulations, and the State plan, and (11) the State will be and is able to conduct its program for vocational education during the current fiscal year substantially and in accordance with the acts, regulations, and the State plan.

(3) The estimates and reports required for submission to the Commissioner (including information supporting a request for transfer of allotments pursuant to § 104.28) have been submitted and reviewed prior to the date of payment of funds pursuant to § 104.55.

(4) The Commissioner has determined that the State has met and will meet the various matching requirements under the acts (see § 104.38 to § 104.42) and all other conditions for payment of Federal funds under the Smith-Hughes Act (see § 104.57), and title III of the George-Barden Act (see § 104.84).

(b) Time of certification. Certification by the Commissioner shall be made on January 1 for payment of Federal funds during the succeeding fiscal year, except that certification for payment of Federal funds appropriated under titles II and III of the George-Barden Act and the 1963 Act may be made on such other dates as the Commissioner may determine.

(c) Certificate modification and withholding of funds. (1) The Commissioner may from time to time modify the amount certified to the State for the fiscal year on the basis of periodic requests for payment of Federal funds, estimates

and reports, reallotments, audits, program reviews, and other information and data available to the Commissioner.

(2) Whenever the Commissioner, after reasonable notice and opportunity for hearing to the State board administering the State plan, finds that the State no longer complies with the requirements for certification set forth in paragraph (a) of this section, the Commissioner shall notify such State board that his certification for payment has been withdrawn and that payment of Federal funds will be withheld from such State until he is satisfied that the State has complied with such requirements. At his discretion, the Commissioner may notify the State board that payment of Federal funds will be limited to support of programs under or portions of the State plan not affected by the State's failure to comply with such requirements, and that certification for payment will be modified to that extent. § 104.51

Method of payment.

Payments will be made in advance to a State of the amount to which the Commissioner certifies the State is entitled for the fiscal year, taking into account

necessary adjustments for previously made overpayments and underpayments. Under the Smith-Hughes Act, payments to the State will be made quarterly; under title I of the George-Barden Act payments will be made semi-annually; and under the other acts payments will be made in such installments and at such times as the Commissioner may determine to be reasonably required for expenditures by the States of the funds so allotted.

§ 104.52 Effect of Federal payments.

(a) No waiver. Neither the approval of the State plan nor any payment to the State pursuant thereto shall be deemed to waive the right or duty of the Commissioner to withhold funds by reason of the failure of the State to observe, before or after such administrative action, any Federal requirements.

(b) Settlement of accounts. The final amount to which the State is entitled for any period is determined on the basis of expenditures under the State plan with respect to which Federal financial participation is authorized.

§ 104.53 Disposition of unexpended Federal funds and reallotment.

(a) Whenever any portion of any annual allotment to any State under the acts has not been expended in the State for the purpose provided for in the regulations, State plan, and acts, and has not been reallotted to other States pursuant to paragraphs (b) and (c) of this section during the fiscal year in which such allotment is made, a sum equal to such portion shall be deducted from the next following payment of funds allotted to such State for the following fiscal year.

(b) Reallotment under George-Barden Act. (1) Under titles II and III of the George-Barden Act, the amount of any allotment to a State which is certified, on or before a date fixed by the Commissioner, as not being required for carrying out the State's plan or program thereunder, shall be reallotted to other States. Such a reallotment shall be made under title II pursuant to section 202(b), and under title III pursuant to section 302(b) of the George-Barden Act.

(2) Reallotments will be made in proportion to the original allotments to the States for the same fiscal year, except that, subject to the provisions of subparagraph (3) of this paragraph, (1)

no reallotment will be made to any State which has certified that it will not require the full amount of its allotment for such year, and (ii) the total of the amounts and the amounts reallotted to a State will not exceed the amount which it has certified will be needed for such year.

(3) Any State which (1) has certified that it will not require the full amount of its allotment, or (ii) has certified as to the amount in excess of its original allotment which will be required to carry out the State plan for a fiscal year, may nevertheless amend such certification by filing the appropriate form with the Commissioner on or before a date fixed pursuant to subparagraph (1) of this paragraph. The amended certification will then be used in computing all reallotments for that fiscal year made subsequent to such date.

(c) Reallotment under the 1963 Act. (1) Pursuant to sections 3(c) and 13(a) (2) of the 1963 Act, any amount of any State's allotment which the Commissioner determines is not required for carrying out the State's plan shall be reallotted to other States on such dates as the Commissioner may fix. Such determination by the Commissioner shall be made on the basis of (1) a certified statement submitted by the State affirming that the State does not require the full amount of its original allotment to carry out its plan, (ii) reports and information acquired by the Commissioner either from the State board or from independent investigation indicating that the State does not require the full amount of its original allotment to carry out its plan, or (iii) both. Within a reasonable time prior to the date fixed for reallotment of funds, the Commissioner shall notify the State of his determination affecting the State's allotment and either modify the amount certified for payment to the State or, if payment has already been made, direct the State to return to the United States whatever amount the Commissioner determines the State does not need.

(2) Reallotment shall be made to other States in proportion to their original allotment for the fiscal year in which the original allotment was made; except that, subject to the provisions in subparagraph (3) of this paragraph, such reallotments to such other States shall be reduced to the extent which the Commissioner estimates such State needs

and will be able to use under its plan for such fiscal year. The total of such reduction shall then be allotted among those States not suffering such a reduction in proportion to their original allotment. Such estimate by the Commissioner shall be made on the basis of (1) the certified statement submitted by the State pursuant to subparagraph (1) of this paragraph affirming that the State does not require the full amount of its original allotment to carry out its plan, (i) a request for reallotment by the State and its supporting certified statement indicating the amount of additional funds it needs and will be able to use effectively to carry out its plan, (iii) reports and information acquired by the Commissioner either from the State board or from independent investigation, or (iv) any two or all of the above. Within a reasonable time before the date fixed for reallotment, the Commissioner shall notify the State of the amount of realloted funds (if any) the State shall receive.

(3) Any State which the Commissioner has determined, either on the basis of certified statements from the State or from other reports or information available to him, (1) does not require the full amount of its original allotment to carry out its plan, or (ii) does not need or will not be able to use effectively the full amount of its proportionate share of funds to be reallotted, may, on or befor the date fixed for reallotment, request that the Commissioner reconsider his determination affecting the original allotment or anticipated reallotment to such State, and submit with his request additional supporting information and data. If the Commissioner's determination is based in whole or in part on certified statements submitted by the State itself, the State may submit to the Commissioner an amendment to such certification on or before the date fixed for reallotment. The Commissioner, making his reallotment of funds to the States, shall take into consideration all such amendments and additional information furnished by the State with their requests for reconsideration of the Commissioner's determination. All decisions made by the Commissioner regarding the reallotment of funds are final once reallotment is made.

§ 104.54 Interest.

in

Interest earned on Federal funds paid to a State shall accrue to the benefit of