may be applicable for Federal financial = participation in expenditures for carrying out such activities.

§ 401.10 Standards of personnel administration.

(a) The State plan shall set forth the State agency's standards of personnel administration applicable to its own employees and those of local rehabilitation agencies operating under its supervision. The State plan shall specify that rates of compensation and minimum qualifications will be established for each class of position which are commensurate with the duties and responsibilities of that class; and shall set forth the policies of the State agency with respect to the selection, appointment, promotion, and tenure of qualified personnel, including its policies against discrimination on the basis of sex, race, creed, color, or national origin.

(b) The State plan shall provide for the maintenance of such written personnel policies, records, and other information as are necessary to permit an evaluation of the operations of the system of personnel administration in relation to the standards of the State agency.

(c) Where personnel administration is conducted under a State merit system approved by the Department of Health, Education, and Welfare (or a constituent unit thereof) as meeting the "Standards for a Merit System of Personnel Administration," Part 70 of this title, the State plan may make reference to such fact, and the information required above with respect to "Standards of personnel administration" need not be submitted, except that the responsibility for the appointment of personnel shall be described.

(d) The Commissioner shall exercise no authority with respect to the selection, method of selection, tenure of office, or compensation of any individual employed in accordance with the provisions of the approved State plan.

§ 401.11 Medical consultation.

The State plan shall provide for and describe the arrangements made to secure adequate medical consultation and to assure the availability of medical consultative services of high quality on all medical aspects of the vocational rehabilitation program, as needed in all State, district, or local offices of the agency.

§ 401.12

State agency facility staff.

The State plan shall provide for adequate staff to carry out the functions of the State agency pertaining to workshops and rehabilitation facilities in such areas as: (a) The setting of standards for workshops and rehabilitation facilities utilized in providing services to eligible individuals under the State plan; (b) the effective utilization of existing workshops and rehabilitation facilities in the rehabilitation process; (c) the establishment of workshops and rehabilitation facilities under §§ 401.45 and 401.46, respectively; (d) the functions of the State agency in the administration of grants and services for workshops and rehabilitation facilities under this part and under Part 402 of this chapter; and (e) other activities under the State plan involving workshops and rehabilitation facilities.

The State plan shall provide for a program of staff development in order to improve the operation of the State vocational rehabilitation program and to promote the provision of a high quality of vocational rehabilitation services to increasing numbers of handicapped individuals. The State plan shall describe the scope of the training program which shall include as a minimum: (a) A systematic approach to the determination of training needs, periodic reassessment of these needs and a system for evaluating the effectiveness of the training activities provided; (b) an orientation program for new staff; and (c) a plan for continuing training opportunities for all classes of positions, held under expert leadership at suitable intervals. If the staff development program includes leaves of absence for institutional or other organized training such as fulltime study, released time or work-study, or worker-in-training programs, the State plan shall specify the policies governing the granting of such leave. The State plan shall provide for adequate staff to direct the staff development program.

§ 401.15

Fiscal administration. The State plan shall set forth the pollcies and methods pertinent to the fiscal administration and control of the vocational rehabilitation program, including sources of funds, incurrence and payment of obligations, disbursements, accounting, and auditing. The State plan shall provide for the maintenance by the State agency (or, where applicable, by the local rehabilitation agency) of such accounts and supporting documents as will serve to permit an accurate and expeditious determination to be made at any time of the status of the Federal grants, including the disposition of all moneys received and the nature and amount of all charges claimed to lie against the respective Federal authorization.

§ 401.16 Custody of funds.

The State plan shall designate the State official who will receive and provide for the custody of all funds paid to the State under the act, subject to requisition or disbursement by the State agency.

(a) The State plan shall provide that the State agency will make such reports in such form and containing such information as the Commissioner may reasonably require, and will comply with such provisions as he may find necessary to assure the correctness and verification of such reports. This provision applies to reports in all areas of program operation and administration and to various methods of reporting, including written and oral reports, and inspection and review of fiscal, statistical, casework, and other records and operations.

(b) From time to time members of the staff of the Vocational Rehabilitation Administration review, with the States' cooperation, administrative, fiscal and program methods and practices and make constructive suggestions for the improvement of such methods and practices.

§ 401.18 Cooperation with other agen

cies.

(a) The State plan shall provide that the State agency will establish and maintain cooperative working relationships with the Bureau of Employees' Compensation of the Department of Labor, the Social Security Administration of the Department of Health, Education, and Welfare, the State agencies responsible

for the programs of public assistance and workmen's compensation and the system of public employment offices. The basis for the cooperative working arrangement with the system of public employment offices shall be a written agreement which shall provide, among other things, for reciprocal referral services, exchange of reports of service, joint service programs, continuous liaison and maximum utilization of the job placement and employment counseling services and other services and facilities of the public employment offices.

(b) The State plan shall further provide that the State agency will establish and maintain working relationships with other public and private agencies and institutions, such as crippled children's agencies, Veterans Administration facilities, hospitals, health and mental health departments, State and Federal agencies administering wage and hour laws applicable to workshops, State and other agencies administering special education, economic opportunity and manpower development and training programs, the State Selective Service System and voluntary social and health agencies furnishing services relating to vocational rehabilitation, so as to assure maximum utilization on a coordinated basis of the services which all agencies in the State have to offer for the vocational rehabilitation of handicapped individuals.

(c) Where there is a separate State agency for the blind, the State plan shall also provide that the two State agencies will establish reciprocal referral services, utilize each other's services and facilities to the extent practicable and feasible, jointly plan activities which will improve services to handicapped individuals in the State, and otherwise cooperate in the interest of providing more effective services. § 401.19

Nondiscrimination in employment under construction contracts. The State plan shall provide that the State agency will incorporate, or cause to be incorporated, into construction contracts (including construction contracts related to the establishment of workshops or rehabilitation facilities) paid for in whole or in part with funds obtained from the Federal Government under the vocational rehabilitation program, such provisions on nondiscrimination in employment as are required by and pursuant to Executive Order No. 11246, and will otherwise comply with

(a) General provisions. (1) The State plan shall describe the policies and methods which the State agency will follow in determining eligibility for vocational rehabilitation services in each case. Insofar as applicable, the provisions relating to "Case study and diagnosis" in § 401.22 shall apply in the determination of eligibility.

(2) The State plan shall provide that eligibility requirements will be applied by the State agency or local rehabilitation agency without regard to sex, race, creed, color, or national origin of the individual. The State plan shall further provide that no group of individuals shall be excluded or found ineligible solely on the basis of their type of disability. In addition, the State plan shall specify that no upper or lower age limit will be established which will, in and of itself, result in a finding of ineligibility, provided, however, that the plan may contain an age requirement to the extent required by State statute until 90 days after the State legislature shall have met in regular session after January 1, 1967.

(b) Basic conditions. The State plan I shall provide that eligibility for voca[tional rehabilitation services (§ 401.1(x) (1)) shall be based upon: (1) The presence of a physical or mental disability; (2) the existence of a substantial handicap to employment; and (3) a reasonable expectation that vocational rehabilitation services may render the individual fit to engage in a gainful occupation.

(c) Certification of eligibility. (1) The State plan shall provide that, prior to or simultaneously with acceptance of the handicapped individual for vocational rehabilitation services, there will be a certification that the individual has met the three basic eligibility requirements specified in paragraph (b) of this section. (See § 401.21(d) for certification of need for determination of rehabilitation potential.) The State plan shall further provide that the certified statement of eligibility will be dated and signed by an appropriate agency staff member to whom such responsibility has been assigned.

(2) The State plan shall provide that a certification will be similarly executed

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for each case determined to be ineligible for vocational rehabilitation services, including those who have been found ineligible under this section and § 401.21. § 401.21 Determination of rehabilitation potential.

(a) General provisions. The State plan shall describe the policies and methods which the State agency will follow in establishing the need for an extended evaluation in order to determine the rehabilitation potential. Insofar as applicable, the provisions relating to "Case study and diagnosis" in § 401.22 shall apply in the determination of rehabilitation potential.

(b) Basic conditions. The State plan shall provide that the furnishing of vocational rehabilitation services to determine rehabilitation potential shall be based upon: (1) The presence of a physical or mental disability; (2) the existence of a substantial handicap to employment; and (3) inability to make a determination as to the third condition of eligibility under § 401.20 (b) without an extended evaluation, including the provision of vocational rehabilitation services.

(c) Duration. Necessary vocational rehabilitation services, as specified in § 401.1(x) (2), may be provided during a period not in excess of 18 months in the case of an individual whose disability is (1) mental retardation, (2) deafness, (3) blindness, (4) paraplegia, quadriplegia, and other spinal cord injuries or diseases, (5) heart disease, (6) cancer, (7) stroke, (8) epilepsy, (9) mental illness, (10) cerebral palsy, or (11) brain damage, and not in excess of 6 months in the case of an individual with any other disability.

(d) Certification. The State plan shall provide that, prior to or simultaneously with acceptance of an individual for vocational rehabilitation services for purposes of determination of rehabilitation potential, there will be a certification that the individual has met the three requirements in paragraph (b) of this section. The State plan shall further provide that the certified statement will be dated and signed by an appropriate agency staff member to whom such responsibility has been assigned.

(e) Scope of services. The State plan shall provide that, in addition to counseling, any or all of the following vocational rehabilitation services shall be provided if necessary to determine the rehabilitation potential of the individual: (1)

Diagnostic and related services; (2) physical restoration services (without the need for a determination that the physical or mental condition is stable or slowly progressive); (3) maintenance; (4) transportation; (5) training and training materials (including tools); (6) reader services for the blind; (7) interpreter services for the deaf; (8) comprehensive evaluation at a rehabilitation facility, workshop or other suitable facility; (9) other goods and services, as specified in § 401.1(x) (2), which are necessary to determine the rehabilitation potential.

(f) Other conditions. (1) Federal financial participation will be available in expenditures for vocational rehabilitation services, authorized after the expiration of the 6- or 18-month period, whichever is applicable in the individual case, only if a certification of eligibility has been executed by the appropriate State agency staff member to whom such responsibility has been assigned, certifying that the individual has met the three basic conditions of eligibility in § 401.20 (b).

(2) The 6- or 18-month period shall begin with the date of the certification required in paragraph (d) of this section.

(3) Only one 6-month or 18-month period for determination of the rehabilitation potential shall be permitted during the period that the case is open. However, if a case has been closed a subsequent determination of the rehabilitation potential may be carried out provided that the conditions in paragraph (b) of this section are met.

(g) Termination. (1) The State plan shall provide that at any time prior to the expiration of the 6- or 18-month period, the extended evaluation for the determination of the rehabilitation potential shall be terminated and the individual found eligible for vocational rehabilitation services under § 401.20 if and when there is a reasonable expectation that he can be rendered fit to engage in a gainful occupation.

(2) The determination of the rehabilitation potential shall also be terminated before the expiration of the 6- or 18month period and the individual found ineligible for any other vocational rehabilitation services at any time it is determined that there is no reasonable likelihood that he can be rendered fit to engage in a gainful occupation.

(h) Review. The State plan shall provide for frequent review of the indi

vidual's progress during the 6- or 18month period including periodic reports from the institution, facility or person providing the service.

§ 401.22

Case study and diagnosis.

(a) The State plan shall provide that, prior to and as a basis for formulating the vocational rehabilitation plan for any individual certified as eligible under § 401.20, there will be a thorough diagnostic study, which will consist of a comprehensive evaluation of pertinent medical, psychological, vocational, educational, cultural, social, and environmental factors in the case. The State plan shall provide that in each case the diagnostic study shall be adequate to provide the basis for (1) establishing that a physical or mental disability is present; (2) appraising the current general health status of the individual; (3) determining how and to what extent the disabling conditions may be expected to be removed, corrected or minimized by physical restoration services; and (4) selecting an employment objective commensurate with the individual's interests, capacities and limitations.

(b) The State plan shall provide that the diagnostic study will include, in all cases to the degree needed, an evaluation of the individual's personality, intelligence level, educational achievements, work experience, vocational aptitudes and interests, personal and social adjustment, employment opportunities, and other pertinent data helpful in determining the nature and scope of services to be provided for accomplishing the individual's vocational rehabilitation objective.

(c) The State plan shall further provide that the medical diagnostic study shall include (1) a complete general medical examination, providing an appraisal of the current medical status of the individual; (2) examinations by specialists in all medical specialty fields, as needed, including a psychiatric evaluation in all cases of mental illness (except as provided in paragraph (e) of this section); and (3) such clinical laboratory tests, X-rays, and other indicated studies as are necessary, in addition to subparagraphs (1) and (2) of this paragraph, to establish the diagnosis, to determine the extent to which the disability limits (or is likely to limit) the individual's daily living and work activities, and to estimate the probable results of physical restoration services.

(d) The State plan shall, in addition, set forth the specifications established by the agency for the content of the diagnostic study outlined in paragraph (c) of this section, including (1) the subject matter to be covered and the minimum diagnostic procedures to be employed routinely in the general medical examination; (2) the required recency of such examination, and the conditions under which a medical abstract will be accepted in lieu of a new examination; and (3) the conditions under which examinations by specialists will be required.

(e) The State plan shall provide that (1) in all cases of mental retardation a psychological evaluation will be obtained which will include a valid test of intelligence and an assessment of social functioning and educational progress and achievement; (2) in all cases of behavioral disorders a psychiatric or psychological evaluation will be obtained, as appropriate; and (3) in all cases of blindness an adequate hearing evaluation will be obtained.

(f) The State plan shall further provide that, prior to, and as a basis for the extended evaluation plan (§ 401.23), sufficient case study and diagnosis in accordance with the foregoing paragraphs of this section, insofar as they are applicable, will be completed to establish the presence of a physical or mental disability, a substantial handicap to employment and the services to be provided during the extended evaluation period. § 401.23 Extended evaluation plan.

(a) The State plan shall provide that an extended evaluation plan to determine rehabilitation potential will be formulated for each individual to whom services will be provided after certification under § 401.21. This individual plan shall (1) be based on data secured in the preliminary diagnostic study; (2) indicate the nature of the vocational rehabilitation services necessary to determine the rehabilitation potential of the individual and the arrangements for providing (or otherwise securing) such necessary services; and (3) be formulated with the assistance of appropriate agency consultants when necessary and with the client's participation.

(b) The State plan shall provide that the State agency shall terminate or revise the extended evaluation plan for an individual when it becomes evident that his vocational rehabilitation cannot be completed, his needs have changed, or suf

ficient facts have been secured to determine his rehabilitation potential. § 401.24 Vocational rehabilitation plan for the individual.

(a) The State plan shall provide that an individual plan of vocational rehabilitation will be formulated for each client to whom services will be provided after eligibility has been established. The individual plan shall (1) be based upon data secured in the diagnostic study and the extended evaluation, if provided; (2) specify the vocational rehabilitation objective (or tentative objective where the ultimate objective cannot be determined at that time), the services necessary to accomplish the client's vocational rehabilitation, and the arrangements for providing (or otherwise securing) such necessary services; and (3) be formulated with the assistance of appropriate agency consultants when necessary and with the client's participation.

(b) The State plan shall provide that the vocational rehabilitation plan shall specify that all necessary services will be carried to completion insofar as possible. The State plan shall further provide that the State agency may terminate or revise the plan for any client when it becomes evident that his vocational rehabilitation cannot be achieved, that services cannot be completed, or that the client's needs have changed. § 401.25

Processing referrals and appli

cations.

The State plan shall describe the methods to be followed in handling referrals and applications for vocational rehabilitation services.

§ 401.26 Order of selection for services.

The State plan shall set forth the criteria to be used in selecting eligible individuals for services when services cannot be provided to all eligible persons who apply. Such criteria shall be designed to achieve the objectives of the vocational rehabilitation program to the fullest extent possible with available funds.

§ 401.27 Administrative review of agency action, and fair hearings.

The State plan shall provide that an applicant for or recipient of vocational rehabilitation services under the State plan who is dissatisfied with any agency decision with regard to the furnishing or denial of services may file a request for review and redetermination of that