Subpart E-How a Subgrant Is Made to an Applicant § 76.400 State procedures for reviewing an application. A State that receives an application for a subgrant shall take the following steps: (a) Review. The State shall review the application. (b) Approval-entitlement programs. The State shall approve an application if (1) The application is submitted by an applicant that is entitled to receive a subgrant under the program; and (2) The applicant meets the requirements of the Federal statutes and regulations that apply to the program. (c) Approval-discretionary programs. The State may approve an application if— (1) The application is submitted by an eligible applicant under a program in which the State has the discretion to select subgrantees; (2) The applicant meets the requirements of the Federal statutes and regulations that apply to the program; and (3) The State determines that the project should be funded under the authorizing statute and implementing regulations for the program. (6) Assistance to States for Education of Handicapped Children. (7) State Vocational Education Programs. (b) Other programs-hearings not required. Under the other programs listed in § 76.1, a State agency-other than a State educational agency-is not required to provide an opportunity for a hearing regarding the agency's disapproval of an application. (c) If an applicant for a subgrant alleges that any of the following actions of a State educational agency violates a State or Federal statute or regulation, the State educational agency and the applicant shall use the procedures in paragraph (d) of this section: (i) Disapproval of or failure to approve the application or project in whole or in part. (ii) Failure to provide funds in amounts in accordance with the requirements of statutes and regulations. (d) State educational agency hearing procedures. (1) If the applicant applied under a program listed in paragraph (a) of this section, the State educational agency shall provide an opportunity for a hearing before the agency disapproves the application. (2) If the applicant applied under a program not listed in paragraph (a) of this section, the State educational agency shall provide an opportunity for a hearing either before or after the agency disapproves the application. (3) The applicant shall request the hearing within 30 days of the action of the State educational agency. (4) (i) Within 30 days after it receives a request, the State educational agency shall hold a hearing on the record and shall review its action. (ii) No later than 10 days after the hearing the agency shall issue its written ruling, including findings of fact and reasons for the ruling. (iii) If the agency determines that its action was contrary to State or Federal statutes or regulations that govern the applicable program, the agency shall rescind its action. (5) If the State educational agency does not rescind its final action after a review under this paragraph, the applicant may appeal to the Secretary. The applicant shall file a notice of the appeal with the Secretary within 20 days after the applicant has been notified by the State educational agency of the results of the agency's review. If supported by substantial evidence, findings of fact of the State educational agency are final. (6) (i) The Secretary may also issue interim orders to State educational agencies as he or she may decide are necessary and appropriate pending appeal or review. (ii) If the Secretary determines that the action of the State educational agency was contrary to Federal statutes or regulations that govern the applicable program, the Secretary issues an order that requires the State educational agency to take appropriate action. (7) Each State educational agency shall make available at reasonable times and places to each applicant all records of the agency pertaining to any review or appeal the applicant is conducting under this section, including records of other applicants. (8) If a State educational agency does not comply with any provision of this section, or with any order of the Secretary under this section, the Secretary immediately terminates all assistance to the State educational agency under the applicable program. (e) Other State agency hearing procedures. State agencies that are required to provide a hearing under paragraph (a) of this section-other than State educational agencies—are not required to use the procedures in paragraph (d) of this section. Subpart Q of 34 CFR Part 74 references the general cost principles that apply to grants, subgrants, and costtype contracts under grants and subgrants. (20 U.S.C. 1221e-3(a)(1)) CROSS-REFERENCE. See 34 CFR Part 74, Subpart G-Matching or Cost Sharing. § 76.532 Use of funds for religion prohibited. (a) No State or subgrantee may use its grant or subgrant to pay for any of the following: (1) Religious worship, instruction, or proselytization. (2) Equipment or supplies to be used for any of the activities specified in paragraph (a)(1) of this section. (3) Construction, remodeling, repair, operation, or maintenance of any facility or part of a facility to be used for any of the activities specified in paragraph (a)(1) of this section. (4) An activity of a school or department of divinity. (b) As used in this section, "school or department of divinity" means an institution or a component of an institution whose program is specifically for the education of students to (1) Prepare them to enter into a religious vocation; or (2) Prepare them to teach theological subjects. (20 U.S.C. 1221e-3(a)(1)) § 76.533 Acquistion of real property; con struction. No State or subgrantee may use its grant or subgrant for acquisition of real property or for construction unless specifically permitted by the authorizing statute or implementing regulations for the program. (20 U.S.C. 1221e-3(a)(1)) § 76.534 Use of tuition and fees restricted. No State or subgrantee may count tuition and fees collected from students toward meeting matching, cost sharing, or maintenance of effort requirements of a program. (20 U.S.C. 1221e-3(a)(1)) INDIRECT COST RATES § 76.560 General indirect cost rates; exceptions. (a) Appendices C-F to 34 CFR Part 74 include (1) A description of the difference between direct and indirect costs; and (2) The principles for determining the general indirect cost rate that a State or subgrantee may use under some programs. (b) Section 76.562 provides restrictions on indirect cost rates under certain programs. (20 U.S.C. 1221e-3(a)(1)) § 76.561 Approval of indirect cost rates. (a) The Secretary approves an indirect cost rate for a State agency and for a subgrantee other than a local educational agency. For the purposes of this section, the term "local educational agency" does not include a State agency. (b) Each State educational agency, on the basis of a plan approved by the Secretary, shall approve an indirect cost rate for each local educational agency that requests it to do so. (c) Each indirect cost rate must be approved annually. (20 U.S.C. 1221e-3(a)(1)) § 76.563 Restricted indirect cost rate-programs covered. A State and a subgrantee shall use a restricted indirect cost rate, computed under 34 CFR 75.564-75.568, for each program listed in § 76.1 that has a statutory requirement not to use Federal funds to supplant non-Federal funds. These programs include the following: Program Financial Assistance to Local Educational Agencies To Meet the Special Educational Needs of Educationally Deprived Children. Grants to State Agencies for Programs To Meet the Special Educational Needs of Children in Institutions for Neglected or Delinquent Children. Grants to State Agencies for ment Program. Financial Assistance for School Library Resources, Textbooks, and other Instructional Materials. Supplementary Centers and Services, Guidance, Counseling, and Testing Programs. Strengthening Instruction on Academic Subjects in Public Schools. Authorizing statute Title I-A of the Elementary and Secondary Education Act. Sections 151-153 of the Elementary and Secondary Education Act. Sections 141-143 of the Elementary and Secondary Education Act. Title II of the Elementary and Secondary Education Act. Title II of the Elementary and Secondary Education Act (as in effect Sept. 30, 1978). Title I of the Elementary and Secondary Education Act (as in effect Sept. 30, 1978). Title III-A of the National Defense Education Act. § 76.580 Coordination with other activities. (a) A State and a subgrantee shall, to the extent possible, coordinate each of its projects with other activities that are in the same geographic area served by the project and that serve similar purposes and target groups. (b) A State and a subgrantee whose project includes activities to improve the basic skills of children, youth, or adults shall, to the extent possible, coordinate its project with other basic skills activities that are in the same geographic area served by the project. (c) For the purposes of this section, "basic skills" means reading, mathematics, and effective communication, both written and oral. (d) The State or subgrantee shall continue its coordination during the period that it carries out the project. (20 U.S.C. 1221e-3(a)(1); 2890) § 76.581 Methods of coordination. Depending on the objectives and requirements of a project, a grantee shall use one or more of the following methods of coordination: (a) Planning the project with organizations and individuals who have similar objectives or concerns. (b) Sharing information, facilities, staff, services, or other resources. (c) Engaging in joint activities such as instruction, needs assessment evaluation, monitoring, technical assistance, or staff training. (d) Using the grant or subgrant funds so as not to duplicate or counteract the effects of funds used under other programs. § 76.592 Federal evaluation-satisfying requirement for State or subgrantee evaluation. If a State or a subgrantee cooperates in a Federal evaluation of a program, the Secretary may determine that the State or subgrantee meets the evaluation requirements of the program. (20 U.S.C. 1226c; 1231a) CONSTRUCTION CROSS-REFERENCE. See 34 CFR Part 74, Subpart P-Procurement Standards. § 76.600 Where to find construction regulations. (a) A State or a subgrantee that requests program funds for construction, or whose grant or subgrant includes funds for construction, shall comply with the rules on construction that apply to applicants and grantees under 34 CFR 75.600-75.615. (b) The State shall perform the functions that the Secretary performs under §§ 75.602 (Preservation of historic sites) and 75.605 (Approval of drawings and specifications) of this title. (c) The State shall provide to the Secretary the information required under 34 CFR 75.602(a) (Preservation of historic sites). (20 U.S.C. 1221e-3(a)(1)) [45 FR 22517, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, and amended at 45 FR 86298, Dec. 30, 1980] (a) Under some programs, the authorizing statute requires that a State and its subgrantees provide for participation by students enrolled in private schools. Sections 76.651-76.662 apply to those programs and provide rules for that participation. These sections do not affect the authority of the State or a subgrantee to enter into a contract with a private party. (b) If any other rules for participation of students enrolled in private schools apply under a particular program, they are in the authorizing statute or implementing regulations for that program. (20 U.S.C. 1221e-3(a)(1)). NOTE: Some program statutes authorize the Secretary-under certain circumstances-to provide benefits directly to private school students. These "bypass" provisions-where they apply-are implemented in the individual program regulations. § 76.651 Responsibility of a State and a subgrantee. (a) (1) A subgrantee shall provide students enrolled in private schools with a genuine opportunity for equitable participation in accordance with the requirements in §§ 76.652-76.662 and in the authorizing statute and implementing regulations for a program. (2) The subgrantee shall provide that opportunity to participate in a manner that is consistent with the number of eligible private school students and their needs. (3) The subgrantee shall maintain continuing administrative direction and control over funds and property that benefit students enrolled in private schools. (b) (1) A State shall ensure that each subgrantee complies with the requirements in §§76.651-76.662. (2) If a State carries out a project directly, it shall comply with these requirements as if it were a subgrantee. (20 U.S.C. 1221e-3(a)(1)) § 76.652 Consultation with representatives of private school students. (a) An applicant for a subgrant shall consult with appropriate representatives of students enrolled in private schools during all phases of the development and design of the project covered by the application, including consideration of— (1) Which children will receive benefits under the project; (2) How the children's needs will be identified; (3) What benefits will be provided; (4) How the benefits will be provided; and (5) How the project will be evaluated. (b) A subgrantee shall consult with appropriate representatives of students enrolled in private schools before the subgrantee makes any decision that affects the opportunities of those students to participate in the project. (c) The applicant or subgrantee shall give the appropriate representatives a genuine opportunity to express their views regarding each matter subject to the consultation requirements in this section. (20 U.S.C. 1221e-3(a)(1)) § 76.653 Needs, number of students, and types of services. A subgrantee shall determine the following matters on a basis comparable to that used by the subgrantee in providing for participation of public school students: (a) The needs of students enrolled in private schools. (b) The number of those students who will participate in a project. (c) The benefits that the subgrantee will provide under the program to those students. (20 U.S.C. 1221e-3(a)(1)) § 76.654 Benefits for private school students. (a) Comparable benefits. The program benefits that a subgrantee provides for students enrolled in private schools must be comparable in quality, scope, and opportunity for participation to the program benefits that the |