thereto shall include as an attachment a certificate of the officer of the State agency authorized to submit the State plan to the effect that the State plan or amendment has been adopted by the State agency and that the State plan, or State plan as amended, will constitute the basis for operation and administration of the program under Title II of the Act.

(g) Certificate of the State Attorney General or other appropriate State legal officer. The State plan shall also include, as an attachment, a certificate by the appropriate State legal officer to the effect that the State agency named in the plan is the "State agency" required by section 203 (a)(1) of the Act to have authority, either directly or through arrangements with other State or local public agencies, to act as the sole agency to submit the State plan; that such agency has authority under State law to carry out or arrange for the carrying out of the programs described therein; and that all the State plan provisions are consistent with State law.

(h) Approval by the Commissioner. The Commissioner will approve each plan, or modifications thereof, and the annual description of projected program activities which he determines meets the applicable requirements of the Act and regulations in this part, and will notify the applicant of the granting, conditioning, or withholding of approval in each such case. However, no final action with respect thereto, other than one of approval, will be taken by the Commissioner unless he first notifies the applicant of his proposed action and in connection therewith affords the applicant a reasonable opportunity for a hearing on whether the affected plan or modification meets such requirements.

(i) Withholding. Whenever the Commissioner, after reasonable notice and opportunity for a hearing, finds: (1) That the plan fails to comply with the requirements of the Act and the regulations in this part; or (2) that in the administration of the plan, there is a failure to comply substantially with any such provisions, the Commissioner will notify the applicant that said applicant will not be regarded as eligible to participate in the program under Title II of the Act until he is satisfied that there is no longer any such failure to comply.

(j) Effective date of the plan. Funds under Title II of the Act may not be applied to any expenditure (as defined in

(a) General. The plan shall set forth the criteria used in determining need and the proportions of the allocation to be used for school library resources, textbooks, and other printed and published instructional material provided under Title II of the Act among the children and teachers in the elementary and secondary schools, which criteria shall incorporate the provisions of paragraphs (b) and (c) of this section.

(b) Relative need. The criteria shall, on the basis of a comparative analysis and the application of standards, as defined in paragraph (k) of § 117.1, establish the relative need as determined from time to time of children, as well as teachers, for school library resources, textbooks, and other printed and published instructional materials to be provided under the plan. Such criteria shall include priorities for the provision of such materials on the basis of several factors such as the requirements of elementary and secondary instruction, quality and quantity of such materials now available. requirements of children and teachers in special or exemplary instructional programs, the cultural or linguistic needs of children or teachers, the degree of economic need, and degree of previous and current financial efforts for providing such materials in relation to financial ability. The distribution of such resources, textbooks, and materials for children and teachers solely on a per capita basis does not satisfy this provision.

(c) Equitable basis. The criteria established under a State plan shall provide for the allocation of school library resources, textbooks, and other printed and published instructional materials in such a way as to provide assurance that. to the extent consistent with State law, such resources, textbooks, and materials are provided on an equitable basis for the use of children and teachers in private elementary and secondary schools in the State which comply with the compulsory attendance laws of the State or are otherwise recognized by it through some procedure customarily used in the

State. However, said equitable provision shall not be effectuated by means of transfer of funds to private schools or purchase by them of such library resources, textbooks, and materials. § 117.4

Selection of school library resources, textbooks, and other instructional materials.

(a) Criteria. Each plan shall set forth the specific educational and other criteria to be used (1) in selecting the school library resources, textbooks, and other instructional materials to be made available to children and teachers under Title II of the Act and (2) as the basis for determining the proportions of the allotment for each fiscal year which will be spent for the acquisition of (i) school library resources, (ii) textbooks and (iii) other printed and published instructional materials. The ultimate responsibility for the selection under those criteria of all school library resources, textbooks, and other instructional materials for the use of children teachers in public and private elementary and secondary schools in a State shall be that of a State or local public agency. If proportions for the three categories of materials are changed significantly, the plan should be so amended.

and

(b) Public control. Each plan shall provide that title to, and control and administration of the use of, school library resources, textbooks, and other instructional materials acquired under Title II of the Act shall vest only in a public agency (as defined in § 117.1 (g)), or the United States, or Department or Agency thereof. Each State plan shall set forth the method by which such resources, textbooks, and other instructional materials acquired under Title II of the Act will be limited to those approved by an appropriate State or local educational authority or agency for use, or to those which are used, in a public elementary or secondary school of the State.

(c) Religious worship or instruction. Each plan shall provide that funds under Title II of the Act will not be used for religious worship or instruction, or for school library resources, textbooks, or materials to be used in such worship or instruction. § 117.5

ity.

Methods and terms of availabil

(a) General. Each plan shall set forth the methods and terms by which

the school library resources, textbooks, and other instructional materials acquired under Title II of the Act will be made available for the use of children and teachers in the elementary and secondary schools. Each plan shall contain an assurance that funds provided under Title II of the Act will be applied for the benefit of children and teachers rather than inure to the enrichment or benefit of any private school. With respect to children and teachers in private schools, each State plan shall provide that (1) library resources, textbooks, and other printed and published instructional materials are to be made available to children and teachers and not to institutions; (2) such materials are to be made available on a loan basis only; (3) a public agency will retain title to, and control and administration of the use of, such materials; (4) such materials must be limited to those which have been approved by an appropriate State or local educational agency or authority for use, or, are used in a public elementary or secondary school of that State; and (5) books and materials must not supplant those being provided children but must supplement library resources, textbooks, and other instructional materials to assure that the legislation will furnish increased opportunities for learning. It shall also assure that the Federal funds made available under this title will not be used to supplant or duplicate, inappropriately, functions of the public library system of the State.

(b) Control of materials. Each State plan shall contain an assurance that school library resources, textbooks, and other printed and published instructional materials acquired under Title II of the Act shall be available to children and teachers in elementary and secondary schools on a loan basis only and that there will be a proper accounting of such school library resources, textbooks, and other printed and published instructional materials. Each plan shall provide for the control, recall, and replacement of school library resources, textbooks, and other printed and published instructional materials. The public agency having control shall impose responsibility upon the children and teachers who borrow school library resources, textbooks, and other printed and published instructional materials (for loss, damage, failure to return when required, or other violations of the terms and conditions of the loan) which is comparable to that im

posed upon borrowers of similar items purchased with funds derived from other sources.

(c) Accessibility of loaned materials. Each State plan shall provide, unless prohibited from doing so by State law, that school library resources, textbooks, and other printed and published instructional materials acquired with funds under Title II of the Act will be made available for the use of children and teachers in private elementary and secondary schools on an equitable basis. The State plan shall provide for the maintenance of catalogs or lists of instructional materials acquired under the State plan or such other system or systems as may be approved by the Commissioner which will assure the reasonable accessibility and availability of instructional materials to children and teachers in both public and private schools. Such catalogs or lists may be limited in content, for example, to instructional materials designed for children with special needs or to instructional materials supporting particular areas of curriculum and which are not otherwise generally available to the affected children and teachers. Such catalogs or lists or other systems may be maintained on the basis of such limited and defined geographical areas as may be appropriate to assure distribution of materials on a feasible basis. Another method may be the use of a central depository system. The circulation of such instructional materials shall be subject to such restrictions as may be required to maintain an equitable distribution thereof among the children and teachers. The loan terms should be based on educational principles of service to instructional programs so that the children and teachers for whom the school library resources, textbooks, and other instructional materials are selected will not be deprived of their use when needed.

(d) Charge for use. No charge may be levied against children and teachers for the use of any school library resources, textbooks, and other instructional materials acquired under Title II of the Act.

(e) Inventory. The public agency in which title to school library resources, textbooks, and other printed and published instructional materials is vested, and the Department of the Interior and the Department of Defense, shall indicate ownership by appropriate marking of each item in a permanent manner and will maintain an inventory record

of such items, revised annually. The inventory records shall be maintained for the useful life of such items, and shall be made available to the Commissioner upon request.

(f) Methods of inventorying. The methods for inventorying and maintaining records of such materials employed by the public agency retaining title will be subject to the approval of the State agency administering the plan. Inventory records of such materials shall be compiled and maintained by the public agency retaining title and actual administrative control through the use of publicly employed personnel. The methods of inventorying shall include appropriate provision for substantiating the inventories by on-site inspection. The State agency administering the plan shall make an annual report to the Commissioner of the results of such inventorying and recordkeeping procedures as may be employed, adopted, or prescribed, including the nature and type of any discrepencies and the manner of disposition of same. The State plan shall set forth a policy for moving items from inventory. by procedures consistent with established State or local public agency determinations relative to loss, obsolescence, or rate of deterioration of school library resources, textbooks, and other instructional materials.

§ 117.6 Coordination with public library

programs.

The State plan shall contain an assurance that, in order to secure the effective and efficient use of Federal funds, and to avoid duplication of effort, there has been and will be appropriate coordination at both State and local levels between the program carried out under Title II of the Act with respect to school library resources and any program carried out under the Library Services and Construction Act (20 U.S.C. ch. 16).

§§ 117.7-117.10 [Reserved]

Subpart C-Availability of Title II Funds

§ 117.11 Allotment of funds.

(a) State allotment. The Federal Government will pay from each State's allotment amounts equal to the sums expended by the State under an approved State plan for (1) the acquisition of school library resources, textbooks, and other printed and published instructional materials for the use of children and

teachers in public and private elementary and secondary schools in the State; and (2) administration of the State plan. In no case will the amount paid for administration of the State plan for any fiscal year exceed an amount equal to 5 percent of the total amount of the projects approved by the State agency under Title II of the Act for that year or $50,000 whichever is greater.

(b) Reduction in State allotment. In any State which has an approved State plan and in which no State agency is authorized by law to provide school library resources, textbooks, and other printed and published instructional materials for the use of children and teachers in any one or more elementary or secondary schools in that State, the Commissioner will arrange for the provision on an equitable basis of such resources, textbooks, and other materials for the use of such children and teachers. In such an event, the Commissioner will pay the cost thereof for any fiscal year out of the State's allotment.

(c) Allotment to the Departments of the Interior and Defense. Such amount shall be allotted to the Secretary of the Interior as is necessary for such assistance for children and teachers in elementary and secondary schools operated for Indian children by the Department of the Interior, and to the Secretary of Defense the amount necessary for such assistance for children and teachers in the overseas dependents schools of the Department of Defense.

§ 117.12 Acquisition.

Acquisition of school library resources, textbooks, and other printed and published instructional materials in which there may be financial participation under Title II of the Act means the purchase, lease-purchase, or straight lease of such resources, textbooks, and materials and includes the necessary and essential cost of ordering, processing, and cataloging such resources, textbooks, and materials and delivery of them to the initial place at which they are made available for use. Funds under Title II of the Act are not available for the rebinding or repair of such resources, textbooks, and materials.

for the administration of the State plan. Of the funds so made available for administration of the State plan, appropriate amounts shall be made available to local educational agencies for responsibilities assigned by the State to such local educational agencies for the making of loaned materials accessible in accordance with 117.5(c). The administration of the State plan involves functions such as:

(1) The development of short- and long-term policy for making school library resources, textbooks, and other printed and published instructional materials available for the use of children and teachers in the elementary and secondary schools of a State;

(2) The development, revision, dissemination, and evaluation of standards relating to the selection, acquisition, and use of school library resources, textbooks, and other printed and published instructional materials;

(3) State supervisory services and evaluation of programs for the acquisition and use of school library resources, textbooks, and other printed and published instructional materials;

(4) Inventorying of acquisitions made under Title II of the Act and the maintaining of other requisite records;

(5) The control of loaned materials in accordance with section 117.5(c); and

(6) The rendering of such reports as the Commissioner may require.

(b) Eligible expenditures for administration of the State plan. Funds under Title II of the Act may be used for only those additional expenses incurred as a direct result of administration of the State plan and include such categories

as:

(1) Salaries, wages, and other personal service costs of permanent and temporary staff;

(2) Communications;
(3) Utilities;

(4) Consumable office supplies, including stationery;

(5) Printing and the acquisition of printed and published materials for use of administrative and supervisory staff;

(6) Travel and transportation expenses;

(7) Acquisition (including rental), maintenance, or repair of office equipment, or that equipment needed for supervisory and demonstration functions, for use of the administrative and supervisory staff;

(8) Minor alterations in previously completed building space used or to be used for administration of the program under Title II of the Act which would be needed to make effective use of equipment acquired for administration. Excluded are building construction, structural alterations to buildings, building maintenance, repair, or renovation.

(9) Fair rental of office space in privately or publicly owned buildings, subject to the following provisions:

(i) The expenditures for the space are necessary and properly related to the efficient administration of the program;

(ii) The State will receive the benefits of the expenditures during the period of Occupancy commensurate with such expenditures;

(iii) The amounts paid are not in excess of comparable rental in the particular locality;

(iv) Expenditures represent a current cost;

(v) In the case of a publicly owned building, like charges are made to other State agencies occupying similar space for similar purposes.

§ 117.14

Administration of the Departments of the Interior and Defense plans.

An amount not to exceed 5 percent of the funds made available to the Departments of the Interior and Defense shall be available for the administration of the plans of the Departments, respectively, in a manner consistent with § 117.13, except that funds will not be available for the rental of facilities. §§ 117.15-117.18 [Reserved]

Subpart D-Fiscal Procedures § 117.19 State fiscal procedures.

(a) State administration. The State plan shall prescribe such fiscal control and fund accounting procedures as may be necessary to assure the proper disbursement of and accounting for funds under Title II of the Act. Accounts and supporting documents relating to the program under Title II of the Act shall be adequate to permit an accurate and expeditious audit of the program.

(b) Expenditures. For the purpose of the regulations in this part, the expenditure (as hereafter defined) of funds under Title II of the Act shall occur prior to the end of the fiscal year in which such funds are to be available. The expenditures shall be deemed to have occurred

upon the date of execution of documentary evidence of binding commitments for the acquisition of goods and services acquired by purchase order or contract, including a binding commitment by a State agency to pay a local educational agency a fixed charge for the ordering and processing of instructional materials. However, personal services, rental, and travel are expenditures on the basis of the time when the services are rendered or received, the rental facilities are used, and the travel performed, rather than on the basis of entering into a binding commitment. All such binding commitments shall be liquidated by the end of the fiscal year following the fiscal year in which the binding commitments were entered into or the end of such additional period of time as the Commissioner may grant on the basis of a request from the State.

(c) Audit of other participating agencies. All expenditures of funds under Title II of the Act shall be audited either by the State or by other appropriate auditors. The State plan shall indicate how the accounts of those other State and local public agencies participating under the State plan through arrangements with the sole State agency for administration will be audited; and, when such an audit is to be carried out, how the State agency will secure information necessary to assure proper use of any funds under Title II of the Act turned over to such other agency or agencies for expenditure. The State plan shall name the State agency in which the reports of such audits will be maintained.

§ 117.20 Federal fiscal audits.

The State agency's program expenditure records are to be audited by the Federal Government to determine whether the State agency has properly accounted for Federal funds.

§ 117.21 Transfer of funds to other State or local agencies.

The State plan shall set forth the policies and procedures to be used in the payment of funds to other State or local public agencies by the State agency administering the State plan, either as reimbursement for actual expenditures, or as an advance prior to expenditures, for the acquisition of school library resources, textbooks, and other printed and published instructional materials, and for administration of the State plan.