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data which are to be submitted on the application form prescribed by the Commissioner, required by the State commission to be submitted in connection with the filing of an application, or contained in reports or publications readily available to the State commission and the institutions of higher education within the State; (3) must be such as will enable an applicant to calculate in advance (on the assumption that suficient funds will be available to cover all applications) the estimated Federal share which the State commission will certify to the Commissioner if it recommends the project for a Federal grant; and (4) must be consistent with the criteria pubUshed by the Commissioner with respect to the determination of relative priorities among projects and be promotive of the purposes of title VI. § 171.7 Fiscal control and fund account

ing procedures. (a) State commissions. Each State plan shall contain specific information regarding fiscal control and fund accounting procedures, as required by the Commissioner to ensure proper disbursement of and accounting for Federal funds which may be paid to the State commission for expenses necessary for the proper and efficient administration of the State plan.

(b) Institutions. Applicants shall maintain adequate and separate accounting and fiscal records and accounts of all funds provided from any source to pay the cost of equipment, materials, and minor remodeling for each approved project, and audit of such records by the Commissioner's designated representatives shall be permitted and facilitated by applicants at any reasonable time. In addition, applicants shall make available for audit purposes financial accounting records and analyses which substantiate the total amount of pertinent expenditures for equipment, materials and minor remodeling for the particular institution or branch campus for the Federal fiscal year in which the grant is awarded, as well as the total amount of such expenditures for the preceding fiscal year. § 171.8 Retention of records.

(a) State commissions. (1) Accounts and documents supporting expenditures for expenses of State commissions shall be maintained until notification of com

pletion of Federal audits for the Federal fiscal year concerned.

(2) State commissions shall: Establish a complete case file on each application received; inform applicants of official actions and determinations, by letter or similar type of correspondence; and retain records regarding each case for at least 2 years after final action with respect to the application is taken by the State commission. In addition, each State commission shall maintain a full record of all proceedings by which it establishes relative priorities and recommended Federal shares for eligible projects considered according to each specified closing date and shall retain such records for at least 2 years after each such closing date.

(b) Institutions. All accounting records relating to approval projects and to verification of the applicant's maintenance of effort, as specified in paragraph (b) of $ 171.7, including bank deposit slips, cancelled checks and other support. ing documents and contract awards (or microfilm facsimiles thereof), shall be retained intact by the applicant for audit or inspection by authorized representatives of the Federal government for a period of 3 years after completion of the project or until the applicant is noti. fied of the government's audit, whichever is later. 8 171.9 State plans.

(a) The Commissioner shall approve a State plan only after he has received satisfactory assurance and explanation regarding the basis on which the State commission submitting the plan meets the requirements of section 601 of the Act. A State plan submitted in accordance with section 601 of the Act shall be submitted on forms or in a format supplied by the Commissioner and shall contain all provisions required by the Commissioner pursuant to section 603 of the Act and other sections of the regulations in this part, together with such additional organizational and administrative information as the Commissioner may request.

(b) All proposed amendments to the State plan shall be submitted to the Commissioner for his approval in such form and in accordance with such instructions as are established for that purpose. Such amendments shall apply uniformly to all applications to be considered together as of any closing date, and, unless otherwise provided in the State plan, shall be

come effective immediately upon ap pleted project and related financial proval by the Commissioner, except that accounts. in no event shall any amendment which (c) In any case where the costs eligible affects the standards and methods for for Federal participation, as determined determining priorities or Federal shares by the final audit, exceed those provided or any amendment providing for an for in the grant agreement for the projadditional closing date or for the change ect, the Federal share entitlement of the in an existing closing date become effec applicant shall be limited to that protive sooner than 60 days after the date vided by the grant agreement. the proposal to make such amendment

(d) In any case where the costs is received by the Commissioner and 30 eligible for Federal participation, as dedays after the date of the Commissioner's termined by the final audit, are less than approval of the amendments as a part of those provided for in the grant agreethe State plan: Provided, however, That ment, the Commissioner shall redeteramendments which are required by mine the amount of the Federal share amendments of the Act or are designed entitlement of the applicant in accordto promptly implement amendments of ance with the maximum Federal share the Act may be made effective immedi which would have been recommended for ately upon their approval by the Com the project, based on the lesser eligible missioner.

cost, under State plan provisions in effect § 171.10 Requirement for economical

at the time the project was recommendmethods of purchase.

ed for a grant, if sufficient funds had

been available in the State allotment at All equipment, materials, and minor

that time to provide the maximum posremodeling work, the cost of which is to

sible Federal share provided for by the be charged to an approved project, shall be procured in an economical manner

plan under such circumstances. If such consistent with sound business practice.

redetermined Federal share entitlement Proposed methods of purchase shall be

is less than the amount provided in the set forth by the applicant as part of each grant agreement, the grant shall be reproject application, and shall include duced accordingly, and any overpayment specific justification for any proposal to of Federal funds, plus any interest follow procedures other than open, com earned thereon, shall immediately be due petitive bidding.

to the Government of the United States. § 171.11 Determination of costs eligible

If such redetermined Federal share is for Federal participation.

equal to or greater than the amount of

the Federal share provided in the grant (a) Costs eligible for Federal participation in connection with any project

agreement, the final settlement shall be shall include only those costs to the ap

based on the Federal share amount proplicant which are determined to be eli

vided in the grant agreement. gible in accordance with paragraphs (c) 171.12 Payment of grant funds on and (d) of $ 171.3, are consistent with the

approved projects. plan for improvement of undergraduate instruction set forth in the approved ap

The Commissioner shall provide for plication, are incurred in an economical payment of grant funds for the project manner consistent with sound business pursuant to such methods as the Compractice, and are for items which are not missioner determines will best make the overly elaborate or extravagant. Ex funds available as needed and eliminate penditures in which Federal participa

unnecessary expense to the Federal tion is claimed also may include the cost

Government. of raw or processed materials or component parts to be made into finished PART 173— FINANCIAL ASSISTANCE products or into complete equipment FOR COMMUNITY SERVICE AND units, including the cost (above and be

CONTINUING EDUCATION PROyond salaries of any regular employees

GRAMS of the applicant) of making and assembling such equipment.

Subpart A-Definitions and Program Outline (b) Such determinations shall be finally made by the Commissioner at the 173.1 Definitions. time a final audit is made of the com 173.2 Program outline.

411

Sec.

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Subpart B-State Plan: Submission, Subpart A-Definitions and Program
Amendments, Approvals

Outline
Sec.
173.3 State agency or institution.

§ 173.1 Definitions, 173.4 Submission of State plan and annual As used in this part: amendments.

• (a) "Act" means the Higher Educa173.5 Amendments to State plan.

tion Act of 1965 (P.L. 89-329, 79 Stat. 173.6 Approval of State plan; noncompli

1219, 20 U.S.C. 1001). ance; judicial review.

(b) "Commissioner" means the US 173.7 Ineligible programs.

Commissioner of Education, Department 173.8 Relation to other Federal programs.

of Health, Education, and Welfare. Subpart C-State Plan Provisions

(c) “Community service program"

means an educational program, activity, 173.9 Administrative information.

or service offered by an institution (s) 173.10 Policies and procedures for selection

of higher education and designed to of community problems.

assist in the solution of community prob173.11 Policies and procedures for selection

lems in rural, urban, or suburban areas of institutions,

with particular emphasis on urban and 173.12 Annual program plan.

suburban problems. "Community serv173.13 Fiscal assurances.

ice program” may include but is not lim173.14 Fiscal procedures.

ited to a research program, an extension 173.15 Institutional assurance.

or continuing education activity, or a 173.16 Policies and procedures for State

course, provided, however, that such agency administrative review and

courses are extension or continuing eduevaluation.

cation courses and are either fully ac173.17 Transfer of funds to participating

ceptable toward an academic degree, or institutions.

of college level as determined by the in173.18 Accounting bases for expenditures, 173.19 Certification of Ştate plan.

stitution offering such courses. 173.20 Reports.

(1) "Educational service" means an

aspect of the community service program Subpart D-Federal Financial Participation involving the resources of an institu173.21 Federal financial participation

tion(s) of higher education, including

equipment and library materials used in general. 173.22 Required certification by State

support of efforts to solve community agency.

problems. 173.23 Fiscal year to which an expenditure (2) "Educational research program" is chargeable.

means an experimental activity or dem173.24 Effective date for allowable expendi

onstration carried out on an objective tures.

and systematic basis using the resources 173.25 Proration of costs.

of an institution(s) of higher education 173.26 Deviation from estimates.

to identify and develop new, expanding, 173.27 Eligible costs.

or improved approaches to the solution 173.28 Fiscal audits.

of community problems. 173.29 Retention of records.

(3) "Extension and continuing educa. 173.30 Disposition of equipment. . tion” refers to the extension and con

tinuance of the teaching and research Subpart Payment Procedures

resources of an institution of higher ed. 173.31 Federal payment to a State.

ucation to meet the unique educational 173.32 Continuing authorization of pay needs of the adult population who have ment.

either completed or interrupted their 173.33 Adjustments.

formal training. Instructional methods 173.34 Reallotment.

include, but are not limited to, formal 173.35 Interstate transfer of allotments, classes, lectures, demonstrations, coun173.36 Interest on Federal funds,

seling and correspondence, radio, tele173.37 Termination of program.

vision, and other innovative programs AUTHORITY: The provisions of this part

of instruction and study organized at s 173 issued under sec. 803(a), 79 Stat. 1270; 20

time and geographic location enabling U.S.C. 1143.

individuals to participate. Programs of

continuing and extension education as. SOURCE: The provisions of this Part 173 sist the individual to meet the tasks imappear at 81 F.R. 6562, Apr. 8, 1966, unless posed by the complexities of our society otherwise noted.

in fulAlling his role in the world of work,

or

as an informed and responsible citizen, Columbia, Guam, American Samoa, and and in his individual growth and devel the Virgin Islands. opment.

(k) "State agency or institution" or (d) “Department" means the Depart

"State agency" means the State agency

State institution designated or ment of Health, Education, and Welfare. (e) "Fiscal year" means the period

created pursuant to section 105(a) of the

Act and § 173.3. beginning on the first day of July and ending on the following June 30, and is § 173.2 Program outline. designated by the calendar year in which

The program described in this part the fiscal year ends.

shall be administered by the State agency (f) "Institution of higher education"

or institution pursuant to a State plan means an educational Institution in any

developed and submitted through the State which (1) admits as regular stu

State agency or institution and approved dents only persons having a certificate

by the Commissioner. The State plan of graduation from a school providing

shall set forth a comprehensive, coordisecondary education, or the recognized

nated, and statewide system of comequivalent of such a certificate, (2) is

munity service programs designed to legally authorized within such State to

assist in the solution of community probprovide a program of education beyond

lems in rural, urban, or suburban areas secondary education, (3) provides an

(with particular emphasis on urban and educational program for which it awards

suburban problems), such as, but not a bachelor's degree or provides not less limited to, housing, poverty, Governthan a 2-year program which is accept ment, recreation, employment, youth opable for full credit toward such a degree, portunities, transportation, health, and (4) is a public or other nonprofit institu

land use, by utilizing the resources of intion, and (5) is accredited by a na

stitutions of higher education. The State tionally recognized accrediting agency

plan and necessary amendments thereof,

once approved by the Commissioner, shall or association as determined by the

constitute the basis on which Federal Commissioner or, if not so accredited, is

payments will be made as well as the an institution whose credits are ac basis for determining the propriety of cepted, on transfer, by not less than three expenditures by the State and particInstitutions which are so accredited, for ipating institutions in which there is credit on the same basis as if transferred Federal participation. from an institution so accredited. Such

Subpart B-State Plan: Submission, term also includes any business school

Amendments, Approvals or technical Institution which meets the provisions of subparagraphs (1), (2), & 173.3 State agency or institution. (4), and (5) of this paragraph.

(a) The State shall designate or (g) "Nonprofit institution" means an create a single State agency or InstituInstitution owned and operated by one tion to develop, submit, and administer or more nonprofit corporations or asso and/or supervise the administration of ciations no part of the net earnings of the State plan. The agency or institution which Inures, or may lawfully inure, to so designated or created shall include the benefit of any private shareholder

Individuals who have special qualificaor Individual.

tions or experience in working with and (h) "School or department of divin

solving community problems, and who ity" means an Institution, or a depart

are broadly representative of institutions

of higher education in the State, pubment or branch of an institution, whose

lic and private, which are competent to educational program is specifically de offer community service programs. The signed to prepare students to become State may, however, designate an existministers of religion, to enter upon some ing State agency or institution which other religious vocation, or to teach theo does not meet the above requirements, logical subjects.

provided that (1) the State agency or (1) "Secretary" means the Secretary of institution takes such action as necessary Health, Education, and Welfare.

to acquire such qualifications and to (j) "State" includes, in addition to the assure participation of such Institutions; several States of the Union, the Common or that (2) the State designates or wealth of Puerto Rico, the District of creates a State advisory council which

meets the requirements not met by the $ 173.5 Amendments to State plan. designated State agency or institution to

In addition to the annual amendment consult with the designated State agency

required under $ 173.4, the State plan or institution in the preparation of the

shall be appropriately amended whenState plan and necessary amendments

ever there is any material change in the thereto and in connection with any policy

designation of the State agency, the conmatters arising in the administration of

tent or administration of the State plan, the plan.

or when there has been a change in per(b) Prior to submission of a State

tinent State law. Such amendment shall plan, the State shall submit to the Com clearly indicate the changes and shall be missioner a satisfactory assurance and signed and certified in the same manner explanation regarding the basis on which

as the original plan submitted and shall the requirement of this section and sec become effective upon approval by the tion 105(a) of the Act are met. The Commissioner. State shall also designate the official of

$ 173.6 Approval of State plan; nonthe State agency or institution with

compliance; judicial review. whom the Commissioner is to communicate for purposes of Title I of the Act. (a) The Commissioner shall approve

(c) The State agency or institution any State plan or amendment thereof shall notify the Commissioner within 15 which complies with the provisions set days of changes in the composition of forth in the Act and this part. (For either the State agency or institution, or effective date of State plan, see 173.24.) the State advisory council, if any, affect No plan, or amendment thereof, shall be ing its special qualifications with respect

finally disapproved until the State agen

cy or institution submitting the plan is to solving community problems or its

afforded reasonable notice and opportubeing broadly representative of institu

nity for a hearing. tions of higher education in the State,

(b) Where the Commissioner, after public and private, which are competent

giving reasonable notice and opportunity to offer community service programs. for a hearing to the State agency or § 173.4 Submission of State plan and

institution administering a State plan annual amendments.

approved under section 105 (b) of the

Act, finds that (1) the State plan has (a) A State plan shall be submitted by been so changed that it no longer comthe duly authorized officer of the State plies with any provision of section 105(a) agency or institution for approval by the of the Act, or that (2) in the administraCommissioner. For the fiscal year 1966, tion of the plan there is a failure to the information required by $ 173.12 shall comply substantially with any such probe submitted with the original State

vision, the Commissioner shall notify the plan. The State plan must be amended

State agency that the State is no longer

regarded as eligible to participate in the prior to September 1, 1966, for the fiscal

program until the Commissioner is satisyear 1967 and thereafter prior to the

fied that there is no longer any such commencement of each fiscal year for

failure to comply. which funds are requested, in order that

(c) Final actions of the Commissioner the State plan will currently set forth

with respect to approval of a State plan the information required by $ 173.12. or amendment thereto, or changes in or This amendment shall be signed and noncompliance with an approved State certified in the same manner as the origi plan or amendment thereto are subject nal plan submitted and shall become to judicial review, pursuant to section effective upon approval by the Commis 108 of the Act.

er. (For procedure on other amend- & 173.7 Ineligible programs. ments, see § 173.5.)

No payment may be made from a (b) Notwithstanding the approval of

State's allotment under this part for a State plan during any prior year, unless

(a) any community service program and until the annual amendment has

which relates to sectarian instruction or been submitted by the State agency or religious worship or (b) any community institution and approved by the Commis service program which is provided by sioner there is no basis upon which new a school or department of divinity. An commitments may be made by the State institution of higher education which agency.

has a school, braneh, department or

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