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ain standards of education and experi munity Action programs, Work Expe-nce and other requirements in relation rience programs, VISTA, Work Study o the duties to be performed. If a merit programs, Manpower Development and system exists in the State, the plan shall Training programs, Vocational Educadescribe the requirements of such sys tion programs, and other programs reem for such personnel.

lating to the antipoverty effort (see

$ 166.11); 3 166.7 State and local advisory committees.

(d) Whether and to what extent a

program will utilize qualified instrucThe State plan shall contain a state

tional staff, adequate facilities, equipment of the policies and procedures to be

ment, materials, and guidance and counused in establishing State and local ad

seling services; visory committees on adult basic edu

(e) Whether and to what extent a cation in order to improve reporting of

program will provide health information State and local administration of pro

and services to the extent available grams and to assure that State plan pro

through cooperative arrangements with grams are meeting the needs of the

State health authorities; Community. The State plan shall indi

(f) Whether and to what extent a procate whether State and local advisory

gram makes provision for effective recommittees are existing groups or es

cruiting of adults for enrollment; pecially established for these purposes

(g) Whether and to what extent a and the respective natures thereof.

program will provide for the use of per8 166.8 Program.

sonnel in college work study programs, The State plan shall contain a state

VISTA, and other antipoverty programs; ment of the policies, procedures, criteria,

(h) Whether and to what extent a and priorities to be followed by the State program incorporates the results of reagency in approving local educational

search, or techniques which have been agency programs which will assure sub proven effective; stantial progress (with respect to all seg

(i) Whether and to what extent a ments of the adult population and all program incorporates innovative areas of the State) in the establishment imaginative instructional methods; and or expansion of adult basic education (j) Whether and to what extent a programs. Such criteria and priorities program provides for effective adminisshall be designed to assure that first tration and supervision by the local edupriority will be given to programs which

cational agency to assure eficient and provide for instruction in speaking, read economical operation. ing, or writing the English language for $ 166.10 Cooperative arrangements bepersons functioning at the fifth grade tween State educational agency and level or below. Second priority will be State health authority. given to such instruction for persons

The State plan shall provide for cofunctioning above the fifth and through the eighth grade level.

operative arrangements between the

State educational agency and the State $ 166.9 Program criteria.

health authority authorizing the use of In establishing such criteria, the State

such health information and services for agency shall give consideration to factors

adults as may be available from such such as the following:

agencies and as may reasonably be nec(a) Whether and to what extent a

essary to enable them to benefit from the program will serve adults in those geo

instruction provided pursuant to the Act. graphic areas of the State which have § 166.11 Cooperation in antipoverty high concentration of adults in need of

efforts. basic education;

The State plan shall set forth the poll(b) Whether and to what extent a

cies and procedures which the State program will serve adults with the great

agency will follow prior to approving est basic education deficiencies which

local educational agency programs, and are impairing their ability to obtain em

special projects, teacher-training, or reployment and become more productive

search grants to assure maximum coopand responsible citizens;

eration of effort with Community Action (c) Whether and to what extent a pro programs, Work Experience programs, gram has been planned and/or will be VISTA, Work Study, and other programs conducted in cooperation with Com relating to the antipoverty effort and to

ascertain that there is no unnecessary duplication of other programs offering adult basic education or teacher training for such programs. $ 166.12 Special projects, teacher train.

ing and research. The State plan shall describe the policies, procedures, criteria and priorities which the State agency will follow in making grants for adult basic education to public and private nonprofit agencies for special projects, teacher training and research. The State plan shall set forth the criteria and priorities it will use to assure that priority will be given to special projects, teacher training, and research programs related to speaking, reading, or writing the English language at the eighth grade level or below. The State plan shall state whether the State agency is prohibited under State law from making such grants to private nonprofit agencies and, if so, the basis for this determination. $ 166.13 Siate fiscal control and ac

counting procedures. (a) General. The State plan shall set forth such fiscal control and fund accounting procedures as may be necessary to assure proper disbursement of funds paid to the State, including funds paid by the State to local educational agencies; funds paid by the State to public and private nonprofit agencies for special projects, teacher training, and research; and all matching funds. Such procedures shall be in accordance with applicable State laws and regulations which shall be cited in the plan. In addition, the State plan shall specify the particular accounting basis (cash, accrual, or obligation) to be used by the State agency and cite the authority under State and local laws, rules, and regulations for such basis. If the State or local agency utilizes other than a cash accounting basis, the State plan shall indicate the time period or other conditions governing the liquidation of obligations. Accounts and supporting documents relating to any adult basic education programs involving Federal financial participation shall be adequate to permit an accurate and expeditious audit of the program. (b) Audit of expenditures.

All expenditures claimed for Federal financial participation shall be audited either by the State, a State-authorized audit agency, or by an independent certified public accountant. The State plan shall indi

cate how the expenditures of local educational agencies and other agencies participating under the State plan wil be audited; and, if the audit is to be carried out by other than the State or its authorized audit agency, how the State agency will secure such information. $ 166.14 Disbursement of funds.

The State plan shall state whether funds are paid to participating agencies under the plan on the basis of either (a. a reimbursement for actual expenditures already made, (b) an advance prior to the expenditure of funds, or (c) both. § 166.15 Policies and procedures for

State agency administrative review

and evaluation. The State plan shall contain a statement of the policies and procedures to be followed by the State agency in making periodic, systematic and objective ad. ministrative reviews and evaluations in order to evaluate the status and progress of the program in terms of the overal objectives stated in the plan. § 166.16 Reports.

The State plan shall provide that the State agency will make and submit to the Commissioner the reports described in § 166.47; and that the State agency will maintain records in support thereof as required under $ 166.40. $ 166.17 Amendment.

The State plan shall provide that is will be amended to reflect any material changes in the program provided for by such plan, any changes in pertinent State law, or any changes in the designation or organization of operations, policies, and methods of administration to be followed by the State agency; and that amendments will be submitted and certified in the same manner as the State plan. $ 166.18 Certification of the State plan.

(a) Certification by State agency The State plan and all amendments thereto shall include a certification by the officer of the State agency authorized to submit the State plan that the plan or amendment has been adopted by the State agency and that the plan, or plan as amended, will constitute the basis for operation and administration of the program in which there is Federal financial participation.

(b) Certification by State Attorney General. (1) The State plan and all

amendments thereto shall include a cer pended under an approved State plan tification by the State's Attorney Gen or amendments. Absent any contrary eral, or other official designated in ac notification, the date on which the State cordance with State law to advise the plan or amendments thereto shall be State agency on legal matters, that all considered to be in effect is the date of plan provisions and amendment thereto approval by the Commissioner, but in no are consistent with State law. He shall event shall such effective date precede further certify the official title of the of the date on which the State plan or ficer authorized to submit the State plan; amendment was received by the Comthat the State agency named in the plan missioner. The State agency will be has authority under State law to submit apprised of the effective date in the nothe State plan; that the State Treasurer tice of approval sent to the State agency (or, if here be no State Treasurer, the by the Commissioner. officer identified by title exercising sim

$ 166.28 Condition precedent to receive ilar functions for the State) has author

ing Federal funds. ity under State law to receive, hold, and disburse Federal funds under the State

Before a State may receive a payment plan.

from its allotment under section 304(b) (2) There shall be included as part of

of the Act, the Commissioner must find, the plan copies of, or citations to, all pursuant to section 307(b) of the Act, pertinent laws and interpretations of

that there will be available for expendilaws by appropriate State officials or

ture by the State including its political courts relevant to the State plan provi

subdivisions, for basic education for sions. All such copies or citations shall

adults, from non-Federal sources during be certified to be correct by the Attorney

the fiscal year for which the allotment General or other appropriate State of

is made, an amount equal to not less than ficial.

the total amount expended for such pur

poses from such sources during the preSubpart - Federal Financial

ceding fiscal year. The information Participation

received under $ 166.47 (a) and (b) shall § 166.25 Federal payments to a State.

serve as the basis of the Commissioner's

finding. The Commissioner will determine the amount of each State's allotment in ac

$ 166.29 Limitations. cordance with the provisions of section (a) No payment may be made from a 305 (a) of the Act. Payments will be State's allotment under the Act for any made only after approval of the State

educational program, activity or service plan and the submission of estimates and

related to sectarian instruction or relireports required under section 306(a) (6) of the Act and 166.47 (a) and (b),

gious worship or any adult basic educaPayments will be made in advance or by

tion program provided by a school or way of reimbursement, at such time or

department of divinity, as defined in times and in such installments as the

$ 166.1(k). An institution which has a Commissioner may determine, after nec

school, branch, department or other adessary adjustment on account of any ministrative unit within the definition of previously made overpayment or under "school or department of divinity” is not payment.

precluded for that reason from partici$ 166.26 Approval of State plan.

pating in the program described in SubThe Commissioner shall approve a

part B of this part if the adult basic State plan which he determines complies

education program is not offered by that with the applicable provisions of the Act

school, branch, department, or adminisand the regulations, and shall so notify

trative unit and, as in all other cases, the the State agency. The Commissioner adult basic education program is not reshall not finally disapprove a State plan lated to sectarian instruction or religious or amendment thereto without first af worship. fording the State reasonable notice and (b) Adults enrolled in an adult basic opportunity for a hearing.

education program conducted under $ 166.27 Effective dates of State plan Subpart B of this part may not be and amendments.

charged tuition, fees, or any other Federal financial participation is avail charges, or be required to purchase any able only with respect to amounts ex books or any other materials.


$ 166.30 Allotment availability.

Federal allotments to a State under the Act are available with respect to eligible expenditures during the Federal fiscal year for which funds are allotted. $ 166.31 Reallotments.

The amount of any State's allotment for any fiscal year under section 305(a) of the Act which the Commissioner determines will not be required during that fiscal year for carrying out that State's plan may be reallotted by the Commissioner on such dates during such year as he may fix, to other States for carrying out their plans in the same proportion as the original allotments were made for such purposes to such other States in the manner provided for in section 305(b) of the Act. Any amounts reallotted shall be determined by the Commissioner on the basis of (a) reports filed by the States of the amounts required to carry out the State plan and (b) such other information as he may have available. Any amounts reallotted shall be deemed part of the State's allotment for that fiscal year. & 166.32 Federal and State shares of eli

gible expenditures. (a) Federal share. The Federal share of expenditures to carry out a State plan shall be paid from a State's allotment available for grants to such State; and, for the fiscal year ending June 30, 1967, and the succeeding fiscal year, the Federal share for each State shall be 90 per centum,

(b) Limitation. The expenditures which are to be considered in computing the amount of Federal financial participation under a State plan are only those which are made by the State or any participating agency in furtherance of the purpose of the Act and which do not inure to the personal benefit of any donor. 8 166.33 State laws governing expendi

tures. Federal financial participation under the State plan shall be available only for those eligible costs for which State or local funds are expended or authorized to be expended under applicable State and local laws, rules, regulations, and standards. 8 166.34 Determination of fiscal year's

allotment to which an expenditure is

chargeable. An expenditure made under the Act will be charged to that Federal fiscal year

in which the expenditure was incurred. State and local laws and regulations shall determine when an expenditure by the State agency or participating entity is incurred. § 166.35 Disposition of equipment.

(a) Whenever Items of equipment, each initially costing $100 or more, in which cost the Federal Government has participated are sold or no longer used for the purpose authorized by the Act, the Federal Government shall be credited with its proportionate share of the value of such equipment, the value being determined on the basis of the sale price in the case of a bona fide sale or on the fair market value in the case of discontinuance of use or diversion for other than State plan purpose.

(b) Inventories and records are required to be kept for all items of equipment referred to in paragraph (a) of this section. The State agency is responsible for having available in the State agency's office information sufficient for a determination of whether such equipment continues to be used for a purpose provided for under the Act. § 166.36 Proration of costs.

Federal financial participation is available only with respect to that portion of any eligible costs as defined in $ 166.41 attributable to carrying out the provisions of an approved State plan. Prorated salaries and wages must be documented to show the time spent in carrying out the activities under the State plan and the percentage of time spent on each other activity. The State and all recipients of Federal funds under the State plan shall maintain records, documented on an after-the-fact basis, to substantiate the proration of expenditures for applicable items such as salaries, travel, rental, supplies, and equipment. § 166.37 Adjustments.

The State agency shall adjust its accounts, records, and reports to reflect refunds, credits, underpayments, or overpayments, as well as any adjustments resulting from Federal or State administrative reviews and audits. Such adjustments shall be set forth in the State's financial reports filed with the Commissioner. § 166.38 Interest on Federal funds.

In the event that any interest is earned on Federal funds, such interest a rnings shall be refunded to the U.S.

ffice of Education. The State agency

all submit as a part of each annual nancial report a statement showing the m ount of interest earned on Federal

unds by the State and participating Sencies during that fiscal year.

166.39 Fiscal audits.

Audit agencies representing the Deartment will audit the program records

vailable at the State agency to deteraine whether the Federal program funds zave been properly accounted for and

dministered. Audit reports of the paricipating agencies and State review and ther control procedures will be evalu

ted to determine the adequacy of infornation upon which to base the audit indings. Only where the available in"ormation is deemed to be inadequate vill the auditor arrange, through the State agency, to audit the records of the participating agencies.

166.40 Retention of records.

(a) General rule. The State agency shall provide for keeping accessible and

ntact all records supporting claims for Federal grants or relating to the accountability of the State agency or any other agency participating under the plan for the expenditure of such grants, expenditure of matching funds, and records supporting maintenance of effort. Such records shall be kept (1) for 3 years after the close of the fiscal year in which the expenditure was liquidated, (2) until notification that such records are not needed for program administrative review, or (3) until notification of the completion of the Federal fiscal audit, whichever is the latest.

(b) Questioned expenditures. The records pertaining to any claim or expenditure which has been questioned at the time of audit shall be maintained until necessary adjustments have been reviewed and cleared by the Department of Health, Education, and Welfare. S 166.41 Eligible costs.

To the extent that they are reasonably necessary for and attributable to carrying out the State plan, the eligible costs may at the discretion of the State agency include the following:

(a) Salaries of the professional and clerical staff, including all amounts de ducted or withheld as contributions to retirement, health, or other welfare benefit funds maintained for such staff;

(b) Employer's contribution to retirement, health, workmen's compensation, and other welfare funds ma tained for employees. For employees of the State agency, the retirement fund contributions may be computed in conformity with State laws or regulations governing the State's share of such contribution;

(c) Fees and approved expenses of consultants and other persons or groups acting in an advisory capacity;

(d) Expenses connected with committees, workshops, and conferences:

(e) Travel expenses of staff and consultants thereto, in accordance with established appropriate State, local, or institutional travel regulations and limitations;

(f) Communications costs;

(g) Supplies, printing, and printed materials, including processed instructional films;

(h) Rental of, or, where economically justified, purchase of office and program equipment;

(i) Rental of space (including the cost of utilities and custodial services) if: The cost does not exceed comparable rental on a square foot basis in the particular locality for the period of occupancy; the expenditures represent an actual cost; and like charges are made to other agencies occupying similar space for similar purposes. Rental for space in any building to the extent constructed with funds obtained from the Federal Government or with funds expended for matching purposes under any Federal program is not an allowable cost beyond the cost of utilities and custodial services;

(j) Minor remodeling of space in publicly owned buildings to the extent that such costs are not included in rental; and

(k) Utilities and custodial services to the extent not included in any other item of this section. $ 166.42 Effect of Federal payments.

Neither the approval of the State plan, the issuance of a Letter of Credit, the approval of withdrawals thereunder, nor the making of any direct payments to the State 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 any Federal requirements set out in the Act or regulations related thereto or any other relevant Federal Act or Order, either before or after such administrative action respecting payment.

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