Subpart Q-Monitoring and Reporting of Program Monitoring by State agencies. 100b.433 Performance reports for construc- 100b.434 Significant developments between 100b.436 100b.495 Termination of program. AUTHORITY: Sec. 403(b) (1), Pub. L. 90247, 86 Stat. 327 (20 U.S.C. 1221c(b) (1)), unless otherwise noted. SOURCE: 38 FR 30679, Nov. 6, 1973, unless otherwise noted. Subpart A-General § 100b.10 Scope. Except to the extent inconsistent with an applicable statute or regulation, the provisions contained in this part apply to all Federal programs of assistance authorized under the following authorities: (a) Financial assistance to local educational agencies for the education of children of low-income families under title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 241a); (b) School library resources, textbooks, and other instructional materials under title II of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 821); (c) Supplementary educational centers and services; guidance, counseling, and testing under title III of the Elementary and Secondary Education Act of 1965, except section 306 thereof (20 U.S.C. 841); (d) Assistance to States for education of handicapped children under part B of the Education of the Handicapped Act (20 U.S.C. 1411); (e) State vocational education programs, research and training in vocational education, exemplary programs and projects, and residential vocational schools-State programs; and consumer and homemaking education, cooperative Vocational education programs, and work-study programs for vocational education students under part B, sections 131(b), 142(d), and 152; and parts F, G, and H, respectively, of the Vocational Education Act of 1963 (20 U.S.C. 1262, 1281(b), 1302(d), 1322, 1341, 1351, and 1371); (f) Programs under the Adult Education Act (except special experimental demonstration projects and teacher training under sections 309 and 314 thereof) (20 U.S.C. 1201); (g) Programs under the Library Services and Construction Act (20 U.S.C. 351); (h) Community service and continuing education program under title I of the Higher Education Act of 1965 (20 U.S.C. 1001); (i) Financial assistance for strengthening instruction in science, mathematics, modern foreign languages, and other critical subjects under title III of the National Defense Education Act of 1958 (20 U.S.C. 441); (j) Training under section 231(a) of the Manpower Development and Training Act (42 U.S.C. 2601 (a)); and (k) Attracting and qualifying teachers to meet critical teacher shortages under part B-2 of the Education Professions Development Act (20 U.S.C. 1108). (20 U.S.C. 1221c(b) (1).) Subpart B-State Plans § 100b.15 Governor's comments. Prior to the submission to the Commissioner of any State plan, State application, or of any amendment thereto, the State agency shall afford the Governor of such State an opportunity to comment on the relationship of such State plan, application, or amendment to comprehensive and other State plans and programs. The Governor shall be afforded a period of not less than 45 days in which to make such comments. Any such comments, or, if the Governor makes no comments, a statement to that effect, shall be attached to such plan, application, or amendment when the same is submitted to the Commissioner. (OMB Circular No. A-95.) § 100b.29 Budget revisions and minor deviations. (a) Needs of State governments. The State agency shall notify the Commissioner promptly whenever the amount of Federal authorized funds is expected to exceed the needs of the State agency by more than $5,000 or 5 percent of the amount of Federal authorized funds, whichever is greater. (OMB Circular No. A-102, attachment K, 2.) (b) Deviations from approved budgets. Expenditures of State agencies and subgrantees will not be considered ineligible for Federal financial participation solely because of minor deviations from an approved project: Provided, That the expenditures in question are made in connection with such project under an approved State plan (or approved State application, as the case may be), in accordance with the applicable Federal statute and regulations, and the total Federal share will not exceed the State's allotment. (20 U.S.C. 1221c (b) (1).) (a) Federal financial participation is available only with respect to obligations incurred under an approved State plan (or State application, as the case may be), or amendments thereto. The State plan, application, or amendments thereto shall be considered to be in effect as of the date on which they are submitted to the Federal Government by the State in substantially approvable form, but in no event shall the effective date be earlier than July 1 of the fiscal year for which they are submitted. The State agency will be apprised of the effective date in the notice of approval sent to the State agency by the Commissioner. (b) Federal funds, except funds made available expressly for the development of State plans, shall not be available for obligation with respect to binding commitments (other than those relating to personal services, utility services, travel, or the rental of equipment or facilities) entered into, or with respect to personal services, utility services, travel, or the rental of equipment or facilities rendered or performed by a State agency, prior to the effective date of the State plan (or State application, as the case may be). (20 U.S.C. 1221c(b) (1).) proval or obligation by those agencies will be regarded as obligating the Government of the United States in the amounts specified. Federal appropriations so obligated will remain available for obligation as prescribed in § 100b.55. (31 U.S.C. 200.) § 100b.53 Payments. (a) Payment methods and adjustments. Payments to State agencies may be made in installments, and in advance or by way of reimbursement pursuant to Subpart E of this part, with necessary adjustments on account of overpayments or underpayments, as the Commissioner may determine. (b) Violations. A payment for expenditures which fail to meet the requirements of any of the provisions of applicable Federal statutes or regulations may be taken into account in the determination of any such overpayments and any adjustments relating thereto. (c) Adjustment of records. Each State agency and subgrantee, in its maintenance of expenditure accounts, records, and reports, shall promptly make any necessary adjustments in its records to reflect refunds, credits, underpayments, or overpayments, resulting from Federal or State administrative reviews and audits or otherwise. Such adjustments shall be set forth in any financial reports required to be filed with the Commissioner. (20 U.S.C. 1232d.) § 100b.55 Obligation by recipients. (a) Period for obligation. Except as otherwise provided by statute, Federal funds made available for a fiscal year shall remain available for obligation in accordance with paragraph (c) of this section during that fiscal year. Federal funds for construction of school facilities shall remain available for obligation for that purpose for a reasonable period of time as determined by the Commissioner. (b) Carryovers. In accordance with section 414(b) (20 U.S.C. 1225(b)) of the General Education Provisions Act (P.L. 90-247, title IV, as amended), any Federal funds made available, which are not obligated and expended prior to the beginning of the fiscal year succeeding the fiscal year for which they were made available, shall remain available for obligation and expenditure by the recipient during such succeeding fiscal year. (c) Determinations of obligation. For the purposes of this section, an obligation of funds will be considered to have been incurred by a recipient on the basis of documentary evidence of binding commitments for the acquisition of goods or property, for the construction of facilities, or for the performance of work. However, the obligation of funds for personal services, for services performed by public utilities, for travel, and for the rental of equipment and facilities shall be considered to have been obligated as of the time such services were rendered, such travel was performed, and such rented equipment and facilities were used, respectively. (20 U.S.C. 1232c (b)(1).) § 100b.58 Tuition and fees. Tuition and fees collected from students enrolled in courses may not be included as part of the Federal or nonFederal share of expenditures under any Federal program. (20 U.S.C. 1221c(b) (1).) Federal funds shall not be used for the making of any payment for religious worship or instruction, or for the construction, operation, or maintenance of so much of any facility as is used or to be used for sectarian instruction or as a place for religious worship. (Lemon v. Kurtzman, 403 U.S. 602 (1971).) Subpart E-Grant Payment Requirements § 100b.60 Scope of subpari. This subpart sets forth the methods of making grant payments to State agencies. These methods will minimize the time elapsing between the disbursement by a State agency and the transfer of funds from the United States Treasury to the State agency, whether such disbursement occurs prior to or subsequent to the transfer of funds. (20 U.S.C. 1232d; OMB Circular No. A-102, Attachment J.) § 100b.61 Definitions. As used in this subpart: "Advance by Treasury check" is a payment made by a Treasury check to a State agency upon its request or through the use of predetermined payment schedules before payments are made by the State agency. "Letter of credit" is an instrument certified by an authorized official of the Office of Education which authorizes a State agency to draw funds when needed from the Treasury, through a Federal Reserve Bank and the State agency's commercial bank, in accordance with the provisions of Treasury Circular No. 1075. "Percentage of completion method" refers to a system under which payments are made to the recipient of a construction grant according to a schedule which relates the amount and timing of each payment primarily or solely to the actual percentage of completion of the construction work under the grant rather than to the State agency's actual rate of disbursements. "Reimbursement by Treasury check" is a payment made to a State agency with a Treasury check upon request for reimbursement from the State agency. (20 U.S.C. 1232d; OMB Circular No. A-102, Attachment J.) § 100b.62 Payment methods for nonconstruction grants. (a) Letters of credit will be used to pay State agencies when all of the following conditions exist: (1) There is or will be a continuing relationship between the State agency and the responsible department finance office for at least a twelve-month period and the total amount of advances to be received from the finance office is $250,000 or more, as prescribed by Treasury Circular No. 1075; (2) The State agency has established, or demonstrated to the Commissioner, the willingness and ability to establish procedures that will minimize the time elapsing between the transfer of funds from the Treasury and their disbursement by the State agency; and (3) The State agency's financial management system meets the standards for fund control and accountability prescribed in Subpart P of this part. (b) Advances by Treasury check will be used, in accordance with the provisions of Treasury Circular No. 1075, when the State agency meets all of the requirements specified in paragraph (a) of this section except those in paragraph (a) (1) of this section. (c) Reimbursement by Treasury check will be the preferred (although not mandatory) method when the State agency does not meet the requirements specified in either or both of paragraphs (a) (2) and (a) (3) of this section. This method may also be used when the major portion of the program is accomplished through private market financing or Federal loans, and the Federal assistance constitutes a minor portion of the program. (d) State agencies will be authorized to submit no less often than monthly their requests for advances or reimbursements when letters of credit or predetermined automatic Treasury check advances are not used. (20 U.S.C. 1232d, OMB Circular No. A-102, Attachment J.) § 100b.63 Payment methods for construction grants. (a) The percentage of completion method will not be used to pay construction grants. (b) Reimbursement by Treasury check shall be the preferred method when the State agency does not meet the requirements specified in § 100b.62(a) (2) and (3), and may be used for any other construction grant except where the Commissioner has entered into an agreement with a State agency to use a letter of credit for all Federal assistance, including assistance for construction. (c) When the reimbursement by Treasury check method is used, State agencies will be authorized to submit no less often than monthly their requests for reimbursement. (d) When the reimbursement by Treasury check method is not used, § 100b.62 (a) and (b) shall be applicable to the construction grant. Implementing procedures under § 100b.62 (a) and (b) will be insofar as possible the same for construction grants as for nonconstruction grants awarded to the same State agency. (20 U.S.C. 1232d; OMB Circular No. A-102, Attachment J.) § 100b.64 Withholding of payments. Unless otherwise required by law, payments for proper charges incurred by State agencies will not be withheld unless the grant is suspended pursuant to law, or the State agency is indebted to the United States, and collection of the indebtedness will not impair the accomplishment of the objectives of any grant program sponsored by the United States. When an indebtedness is to be collected, the Commissioner may, upon reasonable notice to the State agency, withhold from the State agency the right to receive payments under the grant or Subpart P of this part sets forth the procedures and forms for requesting advances or reimbursements. (20 U.S.C. 1232d; OMB Circular No. A-102, Attachment J.) Subpart F-Cash Depositories § 100b.70 Physical segregation and eligibility. Except as provided in § 100b.71, (a) Physical segregation of cash depositories for Federal funds which are provided to a State agency is not required; and (b) There will be no eligibility requirements for cash depositories in which Federal funds are deposited by State agencies or their subgrantees. (OMB Circular No. A-102, Attachment A.) § 100b.71 Checks-paid basis letter or credit. A separate bank account shall be used when payments under letter of credit are made on a “check-paid” basis in accordance with agreements entered into by a State agency, the Federal Government, and the banking institutions involved. A checks-paid basis letter of credit is one under which funds are not drawn from the Treasury until the State agency's checks have been presented to its bank for payment. (OMB Circular No. A-102, Attachment A.) § 100b.72 Minority-owned banks. Consistent with the national goal of expanding opportunities for minority business enterprises, State agencies are encouraged to use minority-owned banks. (OMB Circular No. A-102, Attachment A.) Subpart G-Cost Principles § 100b.80 Scope of subpart. This subpart establishes the principles to be used (except to the extent inconsistent with an applicable Federal statute or regulation) in determining allowability of costs under Federal programs subject to this part, including sub-grants and |