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with respect to work-study programs in § 104.45 (b).

[30 F.R. 8268, June 29, 1965]

§ 104.30 Allotment availability.

Federal funds allotted or reallotted to a State under the acts shall be available only for expenditures for program activities or construction projects which are carried on under the plan and which are attributable to the fiscal year for which such allotments or reallotments are made. (See § 104.33.) [30 F.R. 8268, June 29, 1965]

§ 104.31 Application of State rules.

Subject to the provisions and limitations of the acts and regulations in this part, Federal financial participation under the State plan shall be available only for expenditures made in accordance with applicable State and local laws, rules, regulations, and standards governing expenditures by the States and their political subdivisions, or agencies thereof.

§ 104.32

State fiscal and accounting 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 and accounting for Federal funds paid to the States, including such funds paid by the State to local educational agencies. Such procedures shall be in accordance with applicable State laws and regulations which shall be set forth in the plan or an appendix thereto. Accounts and supporting documents relating to any Vocational education program involving Federal financial participation shall be adequate to permit an accurate and expeditious audit of the program.

(b) Audit of local expenditures. All expenditures of local educational agencies claimed for Federal financial participation shall be audited either by the State or by appropriate auditors at the local level. The State plan shall indicate how the expenditures of local educational agencies and other agencies participating in the State plan will be audited; and, if the audit is to be carried out at the local level, how the State agency will secure information necessary to assure proper use of funds expended under the Acts by such local educational agencies.

§ 104.33 Determination of fiscal year's allotment to which expenditure is chargeable.

(a) Each allotment or reallotment to a State under the acts is made with respect to a fiscal year commencing on July 1 and ending the following June 30.

(b) For the purpose of earning the Federal allotments under the acts, State and local laws and regulations shall be followed by the State in determining to which Federal fiscal year an expenditure by the State board, local educational agency, or other participating agency or institution is chargeable, except as provided in paragraphs (c), (d), and the last sentence in this paragraph. Each State shall therefore use the accounting basis applicable to its State or local accounting. The State plan shall specify for State and local expenditures the particular accounting basis to be so used indicating precisely the acts or occurrences necessary to charge an expenditure to a particular time period for States or local purposes, and cite the authority under State law for such a basis. If the State or local educational agencies utilize a basis other than a cash accounting basis, the State plan shall indicate the time period or other factors governing the liquidation of obligations. for the State or local educational agencies to be on an obligation basis, an obligation shall mean only a bona fide commitment which is supported by a contract or other evidence of legal liability consistant with State purchasing procedures.

In order

(c) For the purpose of the regulations of this part, an "expenditure" shall not include administrative approval of a program or project by the State board or local educational agency, or the advance or reimbursement by the State board of funds which are or will be expended by a local educational agency or other participating agency or institution under the State plan. None of such actions may be used as a basis for determining to which Federal fiscal year an expenditure by such board, agency, or institution is chargeable for the purpose of earning the Federal allotment, except as provided in paragraph (d) with respect to construction projects and paragraph (e) with respect to work-study programs.

(d) Notwithstanding the provisions of paragraphs (b) and (c) of this section, the State plan shall specify the basis for

charging costs of construction to a Federal fiscal year which indicates precisely the acts or occurrences necessary to charge such costs to a particular time or time period and which is not in conflict with State and local laws, rules, regulations, and standards. (See § 104.31.) If such a basis results in charging the costs of construction to a date prior to that of entering into a construction contract, the State plan shall also indicate within what reasonable period of time after the date of charging the Federal allotment such construction contract must be entered into.

(e) Notwithstanding the provisions of paragraphs (b) and (c) of this section, expenditures for special summer workstudy projects shall be charged to the allotment under section 13 of the Act for the fiscal year in which such projects have been approved for expenditure during the months of July and August immediately following such fiscal year. [30 F.R. 8268, June 29, 1965]

§ 104.34 Payment of funds to local educational agency.

The State plan shall provide whether funds are paid to local educational agencies or other agencies and institutions concerned with vocational education

under the State plan on the basis of either (a) a reimbursement for actual expenditures already incurred or (b) an advance prior to the expenditure of funds, or both. Under the SmithHughes and title I of the George-Barden Acts, no funds may be used to make payments in advance of expenditures. § 104.35 Proration of costs.

To cover situations where an expenditure is only partly attributable to an eligible purpose or activity under the State plan or where an expenditure is attributable to two or more eligible purposes or activities, the State plan shall specify a justifiable basis for identifying such expenditures and the method to be used in prorating the expenditure between the eligible and non-eligible purposes or activities or among the various eligible and non-eligible activities, as the case may be. The State board shall also maintain records, documented on an after-the-fact basis, to substantiate the proration of expenditures for applicable items such as salaries, travel, rent, supplies, and equipment. (See also § 104.44 and (b) and (c).)

§ 104.36 Fiscal audit and retention of records.

All fiscal transactions by a State which involve Federal funds under the acts are subject to audit by the Commissioner in order to determine whether expenditures have been made in accordance with the acts, the regulations in this part, and the State plan. State and local educational agencies receiving grants under the acts shall keep accessible and intact all records supporting claims for Federal grants or relating to the accountability of the grantee for expenditures of Federal grants and of matching funds, until notified of the completion of program reviews and of the fiscal audit covering such records. Inventory and records supporting accountability for and disposition of school facilities constructed and nonconsumable equipment costing $100 or more purchased under the State plan (whether from Federal or matching funds) shall be maintained until notified in writing of the completion of the review and audit covering the disposition of such school facilities and equipment.

§ 104.37 Disposition of facilities and equipment.

(a) Whenever area vocational education school facilities or items of equipment, each initially costing $100 or more, in which cost the Federal Government has participated (whether with funds derived from Federal grants or State or local matching funds), are sold or no longer used for a purpose permitted under the acts, the Federal Government shall be credited with its proportionate share of the value of such facilities and equipment at that time, 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 vocational education purposes.

(b) Inventories and records are required to be kept for all area vocational education school facilities or items of equipment, as described in paragraph (a) of this section. Although the title to such facilities and equipment may rest with either the State board or a local educational agency, the State board is responsible for having available in the State office information sufficient for a determination of whether such facilities and equipment continue to be used for a purpose provided for under the Acts.

Re

MATCHING REQUIREMENTS AND PURPOSES

§ 104.38

Matching of Federal funds; amounts required.

(a) The acts require that, for each dollar of Federal funds expended under the State plan, at least a dollar of State or local funds, or both, be expended for the same purpose, except as provided in paragraph (b) of this section.

(b) In fiscal years 1965 and 1966, Federal funds allotted under section 13 (a) (2) of the 1963 Act for work-study program (see § 104.41(c)) need not be matched by State or local funds. In fiscal years 1967 and 1968, every three dollar of Federal funds must be matched by one dollar of State or local funds. § 104.39 Sources of matching funds.

(a) Only public funds may be used for expenditures under the plan. In addition to appropriated funds, such funds may include funds derived from donations by private organizations or individuals which are deposited in accordance with State or local law to the account of the State board or local educational agency without such conditions or restrictions on their use as would negate their character as public funds.

(b) Tuition and fees collected from students enrolled in a course may not be used as State or local funds for the purpose of matching the Federal funds. § 104.40

Basis for matching.

(a) Except as provided in paragraph (b) of this section, matching of Federal funds with State or local funds for each of the purposes set forth in § 104.41 may be on a State-wide basis. It is not necessary that Federal funds be matched by State or local funds for each individual school or class-only the totals for the State are to be considered.

(b) Matching of Federal funds allocated for construction of area vocational education school facilities (see § 104.41 (b) (5)) must be on a project basis. This means that every dollar of Federal funds must be matched with a dollar of State or local funds for each area vocational education school facility project supported by Federal funds in the State.

(c) State or local funds used to match Federal funds may be expended only for programs which meet all the conditions and requirements of the acts, regulations, and State plan. This means that every school, class, or other vocational educa

tion activity supported in whole or in part by State or local funds used for matching must meet the same conditions and requirements as those supported by Federal funds. The State's annual report submitted pursuant to § 104.55(a) shall indicate and describe the expenditures of Federal, State, or local funds used for matching Federal funds. § 104.41 Matching purposes.

(a) In matching Federal funds with State or local funds, a "matching purpose" means an area of activities or of expenditures within which Federal funds alloted to the States under the acts must be matched by State and local funds in accordance with the provisions of § 104.38. A matching purpose may either embrace (1) an entire allotment of Federal funds to the State under the acts, or (2) a portion of such allotment which the acts require to be applied only to certain types of activities or expenditures. (See § 104.42.)

(b) Under the provisions of section 4(a) of the 1963 Act, the matching purposes are:

(1) Vocational education for persons attending high school.

(2) Vocational education for persons who have completed or left high school and who are available for full-time study in preparation for entering the labor market.

(3) Vocational education for persons who have already entered the labor market and who need training or retraining to achieve stability or advancement in employment.

(4) Vocational education for persons who have academic, socio-economic, or other handicaps that prevent them from succeeding in the regular vocational education programs provided for in subparagraphs (1), (2), and (3) of this paragraph.

(5) Construction of area vocational education school facilities.

(6) Ancillary services and activities to assure quality in all vocational education programs.

(c) Under the provisions of section 13 of the 1963 Act, the matching purposes

are:

(1) Compensation of students in workstudy programs.

(2) Development and administration of State plan provisions for work-study programs.

(d) Under the provisions of the George-Barden Act, the matching purposes are:

(1) Vocational education in agriculture.

(2) Vocational education in home economics preparing students for gainful employment.

(3) Vocational education in home economics preparing students for useful employment in the home.

(4) Vocational education in trades and industry.

(5) Vocational education in distributive occupations.

(6) Vocational education in fishery trades and distribute occupations

therein.

(7) Vocational education in health occupations under title II of the GeorgeBarden Act.

(8) Technical education programs under title III of the George-Barden Act. (e) Matching purposes under the Smith-Hughes Act are:

(1) Salaries of teachers, supervisors, or directors of agricultural subjects.

(2) Salaries of teachers of trade and industrial subjects.

(3) Salaries of teachers of home economics subjects preparing students for gainful employment in (1) part-time schools or classes or (ii) other than parttime schools or classes.

(4) Salaries of teachers of home economics subjects preparing students for useful employment in the home in (1) part-time schools or classes or (ii) other than part-time schools or classes.

(5) Maintenance of training of teachers, supervisors, or directors of agricultural subjects.

(6) Maintenance of training of teachers of trade and industrial subjects.

(7) Maintenance of training of teachers of home economics subjects. § 104.42 Matching purposes within specific allotments of Federal funds.

(a) Allotment under section 3 of the 1963 Act. (1) Funds allotted to the States under section 3 of the 1963 Act may be allocated by the States to each of the matching purposes set forth in § 104.41 (b) in accordance with the policles and procedures set forth by the State board in its State plan pursuant to § 104.6, provided that

(1) At least 333 percent of each State's allotment for any fiscal year ending prior to July 1, 1968, and at least 25 percent of each State's allotment for

each subsequent fiscal year may be used only:

(a) For vocational education for persons who have completed or left high school and who are available for fulltime study in preparation for entering the labor market as specified in § 104.41 (b) (2); or

(b) For constructing area vocational education school facilities as specified in § 104.41 (b) (5); or

(c) For both.

(ii) At least 3 percent of each State allotment may be used only for ancillary services and activities as specified in § 104.41(b) (6).

(2) The Commissioner may, upon the request of a State, permit the State to use a smaller percentage of its allotment in any fiscal year for one or more of the matching purposes specified in subparagraph (1) of this paragraph if he determines that such smaller percentage will adequately meet such purposes in the State.

(b) Allotment under section 13 of the 1963 Act. Funds allotted to the States under section 13 of the 1963 Act for work-study programs may be allocated by the States to each matching purpose set forth in § 104.41(c), provided that no more than 1 percent of such allotment or $10,000 (whichever is the greater) may be used for development and administration of the supplementary State plan as specified in § 104.41 (c) (2).

(c) Allotments under Smith-Hughes and George-Barden Acts. (1) Funds allotted under section 3 of the SmithHughes Act for the salaries of teachers of trade, home economics, and industrial subjects may be allocated by the States to each of the matching purposes specified in § 104.41(e) (2), (3) (1) and (ii), and (4) (i) and (ii), provided that

(i) No more than 20 percent of such allotment may be used for salaries of teachers of home economics subjects as specified in § 104.41(e) (3) and (4).

(ii) At least one-third of the portion of the allotment allocated to salaries of teachers of home economics subjects may be used only for salaries of such teachers for time spent in part-time schools or classes as specified in § 104.41 (e) (3) (i) and (e) (4) (1).

(2) Funds allotted for teacher training under section 4 of the Smith-Hughes Act may be allocated by the States to each of the matching purposes specified in § 104.41(e) (5), (6), and (7), provided

that no less than 20 percent and no more than 60 percent of such allotment be allocated to each such matching purpose.

(3) Funds allocated by the States under the Smith-Hughes Act for salaries of teachers of home economics subjects pursuant to subparagraph (1)(i) of this paragraph, and funds allotted to the States under section 3(b) of the GeorgeBarden Act for vocational education in home economics may be allocated by the States to each of the matching purposes specified in § 104.41 (d) (2) and (3) and (e) (3) and (4), provided that in each fiscal year beginning after June 30, 1965, at least 10 percent of such allocations or allotments may be used only for home economics for gainful employment as specified in § 104.41(d) (2) and (e) (3). [29 F.R. 12339, Aug. 28, 1964, as amended at 30 FR. 8269, June 29, 1965]

ALLOWABLE EXPENDITURES

§ 104.43 Allowable expenditures for programs and services.

(a) Federal funds allotted to the States under section 3 of the 1963 Act and under the George-Barden Act may be used for programs of vocational instruction, vocational guidance and counseling services, programs of pre-employment and in-service teacher training (including requisite professional and subject matter training), research, demonstration, and experimental programs, and administration, supervision, and other ancillary services, all meeting the standards and requirements provided in the State plan pursuant to §§ 104.13 to 104.21. Such funds may be applied to the following expenditures which are reasonably attributable to such programs and services:

(1) Salaries of professional vocational education personnel for time spent on activities reasonably related to vocational education programs and services under the State plan. Such salaries shall include educational and sabbatical leave to the extent provided for in § 104.46 and employees' contributions to retirement, workmen's compensation, and welfare funds. (See § 104.49 (b) (3) for employers' contributions.)

(2) Fees and approved expenses of consultants, advisory committees, and other persons or groups acting in an advisory capacity to the State board and, with the approval of the State board, to local educational agencies.

(3) Travel and transportation expenses to the extent provided in § 104.47. (4) Acquisition, maintenance, and repair of instructional equipment, supplies, and teaching aids to the extent provided in § 104.48.

(5) Other related expenses to the extent provided in § 104.49.

(b) In determining which expenditures are to be included in each of the four matching purposes of vocational education under section 4(a) of the 1963 Act as specified in § 104.41 (b) (1) through (4), there may be applied to each such matching purpose the following expenditures as specified in paragraph (a) of this section:

(1) Those attributable to vocational instruction.

(2) Those attributable to vocational guidance and counseling services.

(3) Those attributable to vocational teacher training.

(4) Those attributable to vocational administration and supervision on the local level.

(c) In determining which expenditures are included in the matching purpose of ancillary services and activities under the 1963 Act as specified in § 104.41 (b) (6), there may be applied to such matching purpose the following expenditures as specified in paragraph (a) of this section:

(1) Those attributable to vocational guidance and counseling services.

(2) Those attributable to vocational teacher training.

(3) Those attributable to vocational research, demonstration, and experimental projects.

(4) Those attributable to vocational administration, supervision, and other ancillary services and activities on both the State and local levels.

(d) In determining what expenditures are included in each of the matching purposes under the George-Barden Act specified in § 104.41 (d), there shall be applied to each purpose those expenditures specified in paragraph (a) of this section which can be reasonably attributed to each such matching purpose, to the extent provided in the sections referred to therein.

(e) Federal funds allotted to the States under the Smith-Hughes Act may be applied to the following expenditures:

(1) Salaries of teachers, supervisors or directors of agricultural subjects, and teachers of trade, home economics, and industrial subjects as specified in § 104.41

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