(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 Administrator 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.

§ 401.13 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.

§ 401.14 State agency facility staff.

The State plan shall provide for adequate staff to carry out the functions of the State agency pertaining to rehabilitation facilities in such areas as: (a) The setting of standards for rehabilitation facilities utilized in providing services to handicapped individuals under the State plan and, where appropriate, to disadvantaged individuals under the State evaluation and work adjustment plan under Part 402 of this chapter; (b) the effective utilization of existing rehabilitation facilities in the rehabilitation process; (c) the establishment and construction of rehabilitation facilities under §§ 401.58 and 401.59; (d) the coordination between the State agency and the State agency or agencies administering the programs pursuant to any other act concerned with the development, establishment, or construction of

rehabilitation facilities, in order to prevent duplication of the rehabilitation facility effort and impairment of the State vocational rehabilitation program; (e) the functions of the State agency in the administration of grants and services for rehabilitation facilities under this part and under Part 404 of this chapter; (f) the updating and maintenance of the State rehabilitation facilities plan; and (g) other activities under the State plan involving rehabilitation facilities.

§ 401.15 State agency program planning staff.

(a) The State plan shall provide for adequate staff with appropriate qualifications to carry out continuing statewide studies of the needs of handicapped individuals within the State and the means by which these needs may be most effectively met. Such staff shall be responsible for studies, which may include but are not limited to: (1) A continuing identification of those disabled persons who need and can benefit from vocational rehabilitation services; (2) the review, updating, and implementation of statewide planning studies for vocational rehabilitation services and of related planning studies within the State; (3) an evaluation of the adequacy of existing rehabilitation program resources and the identification of those resources necessary for meeting future rehabilitation needs; (4) planning studies and activities necessary for the development and improvement of the State vocational rehabilitation program; and (5) such other studies as are necessary to ensure the orderly development of rehabilitation services and resources. Planning studies for rehabilitation services shall be coordinated, to the maximum extent possible, with related planning activities being conducted on a statewide, regional or other basis under the act or other authority. In States in which there is a separate agency for the blind, coordinated or joint planning studies shall be conducted.

(b) Advisory committees, representing labor, management, medical and health related organizations and institutions, the disabled, public and voluntary agencies and civic groups, shall be utilized by the State agency program planning staff, insofar as practicable, in the conduct of statewide planning studies, and no less than one-third of the

membership of such advisory committees shall be disabled persons.

§ 401.16 Staff development.

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 and career development 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 full-time 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. § 401.17

Political activity.

The State plan shall set forth the policies and methods pertinent to the fiscal administration and control of the vocational rehabilitation program, including sources of funds, incurrence and payment of obilgations, 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 against such grants.

§ 401.19 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.

§ 401.20 Reports.

(a) The State plan shall provide that the State agency will make such reports in such form and containing such information as the Administrator 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 the Social and Rehabilitation Service reviews, with the States' cooperation, administrative, fiscal, and program methods and practices and makes suggestions for the improvement of such methods and practices.

§ 401.21 Cooperation with other agencies.

(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 handicapped individuals, State and other agencies administering special education, vocational 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 services.

effective

§ 401.22 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 or construction of 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 requirements prescribed by and pursuant to such order.

§ 401.23 Funds made available to private nonprofit agencies for establishment or construction of rehabilitation facilities.

The State plan shall provide that funds made available to a private nonprofit agency for the establishment or construction of a rehabilitation facility (see §§ 401.58, 401.59) shall be expended by that agency in accordance with procedures and standards equivalent to those applicable to the State agency in making direct expenditures for similar purposes.

(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 provision relating to "Case study and diagnosis" (§ 401.32) 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 for any handicapped individual who otherwise meets the three basic eligibility requirements specified in paragraph (b) of this section.

(3) Effective no later than July 1, 1969, the State plan shall specify that no residence requirement, durational or other, will be imposed which excludes from services under the plan any individual who is in the State: Provided however, That the State plan may provide for the exclusion of nonresidents who are in the State for the sole purpose of becoming clients of the State vocational rehabilitation agency.

(b) Basic conditions. The State plan shall provide that eligibility for vocational rehabilitation services (§ 401.1(z) (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 § 401.31 (d) for certification of acceptability for extended evaluation to determine rehabilitation potentials.)

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 for each case determined to be ineligible for vocational rehabilitation services, including those who have been found ineligible under this section and § 401.31. In such cases the State agency shall notify the individual of the action taken.

§ 401.31

Extended evaluation to determine 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" (§ 401.32) shall apply in determining acceptability for extended evaluation of handicapped individuals.

(b) Basic conditions. The State plan shall provide that the furnishing of vocational rehabilitation services under extended evaluation 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 § 401.30 (b) without an extended evaluation, including the provision of vocational rehabilitation services.

(c) Duration. Necessary vocational rehabilitation services, as specified in paragraph (e) of this section, may be provided during a period not in excess of 18 months in the case of a handicapped individual whose disability is (1) mental retardation, (2) deafness, (3) blindness, (4) paraplegia, quadriplegia, and other spinal cord injuries or diseases, heart disease, (6) cancer, (7) stroke, (8) epilepsy, (9) mental illness, (10) cerebral palsy, (11) brain damage, (12) arthritis, (13) muscular dystrophy, (14) cystic fibrosis, or (15) renal failure, and not in excess of 6 months in the case of an individual with any other disability.

(5)

(d) Certification. The State plan shall provide that, prior to or simultaneously with acceptance of an individual for Vocational rehabilitation services for the purpose of extended evaluation to determine 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 any or all of the following vocational rehabilitation services shall be provided if necessary to determine the rehabilitation potential of the individual: (1) Evaluation, including diagnostic and related services; (2) counseling and guidance; (3) physical restoration services (without the need for a determination that the physical or mental condition is stable or slowly progressive; (4) training, including personal and vocational adjustment; (5) books and training materials (including tools); (6) maintenance; (7) transportation; (8) reader services for the blind; (9) interpreter services for the deaf; (10) services to members of the individual's family when such services will contribute substantially to the determination of the rehabilitation potential of the handicapped individual; and (11) other goods and services which are necessary to determine the rehabilitation potential of a handicapped individual.

(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 specified in § 401.30 (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- 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 deter

mination of the rehabilitation potential shall be terminated and the individual found eligible for vocational rehabilitation services under § 401.30 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 individual's progress during the 6- or 18-month period including periodic reports from the institution, facility, or person providing the service. § 401.32

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 § 401.30, 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. The State plan shall also set forth the specifications established by the State agency for the content of the evaluations described in subparagraphs (1) and (2) of this paragraph.

(f) The State plan shall further provide that, prior to, and as a basis for the extended evaluation plan (§ 401.33), sufficient case study and diagnosis in accordance with the foregoing paragraphs of this section, insofar as applicable, will be completed to establish (1) the presence of a physical or mental disability, (2) a substantial handicap to employment, and (3) the services to be provided during the extended evaluation period.