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verification of the project. The examiner should determine, for example, whether the baseline data, the types of instruments to be used, and the quantity of evaluation data to be collected are adequate and whether instruments and procedures are included for the evaluation of product, operational process, and management process objectives.

(11) While the examination is being conducted, the outside examiner should work closely with the prospective project evaluator as well as with the planning director and his staff. The examiner should be given draft materials for the formal proposal as they are developed and copies of specific evaluation instruments as they are selected or designed. In making his critique of the proposed evaluation design, the examiner must be careful to maintain objectivity and detachment, lest he later find himself in the position of auditing his own work. Designing and modifying the evaluation system is not his function.

(3) The verification plan and a performance contract for the operational period also should be developed during the developmental period.

(c) Evaluation of documents. (1) Throughout the project period, the local school district should provide the examiner with project evaluation documents at scheduled times. Prior to his onsite visits, the examiner needs adequate time for a detailed analysis of the evaluation documents, the formulation of questions to be raised with the project director and the evaluator, and the determination of the specific sampling to be conducted during the visit. In turn, the local educational agency will generally need time to arrange and confirm with the examiner his onsite visit schedule. Since it is obvious that the examiner cannot possibly examine all of the project evaluative data, he will need to work largely from tabulations, data analyses, and written interpretations and summaries of the evaluation made available to him by the local educational agency during the project period.

(2) In addition to providing the examiner with the evaluation reports, the local educational agency should submit to him a description of the data analysis techniques and procedures used by the project evaluator, any recommendations for revisions of the evaluation design which have been proposed as a result of a particular phase of the evaluation cycle, and any recommendations for program modifications which have been suggested as a result of the evaluation.

(d) Onsite visits. (1) The examiner's review of the written documents prior to his visit will establish a framework for the scope and emphases of his onsite work, which may consist largely of spot checking and sampling what has been reported in the documents. The critique of the evaluation reports is an important preliminary activity, but it is

through the onsite visits that the examiner can actually verify the results of the evaluation and assess the appropriateness of the evaluation procedures.

(2) Before concluding his onsite visit, the examiner should discuss any major discrepancy findings with the local educational agency, so that procedures for their correction and for appropriate follow-up activities by the examiner can be established as soon as possible. If, for example, some phase of the evaluation had not been completed on schedule and, therefore, could not be veri filed, the examiner migat plan to verify that phase at a later date; or if the procedures for some phase of the evaluation are to be modified substantially, a reexamination of that phase might be appropriate at some time prior to the next regularly scheduled complete verification.

(e) Reports. (1) The major task of the examiner after he completes his onsite visit is the preparation of verification reports, which should include his comments, critiques and recommendations with regard to the project evaluation.

(2) It is recommended that an interim and a final report be written initially as draft documents, to be presented to and discussed with the local educational agency prior to formal submission to the appropriate local personnel and in turn to the Office of Education. Provision for a meeting to discuss the draft audit report would enable both the examiner and the local educational agency to raise final questions concerning its content, accuracy, and completeness. The meeting can serve as the occasion for a review of the entire educational program verification process and the degree to which both have fulfilled their responsibilities.

(20 U.S.C. 887(b) (3); 45 CFR 124.5(d)) PART 9-DISSEMINATION

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An effective dissemination program is vital to the success of the Dropout Prevention Program and to the success of each project. Since the Dropout Prevention Program is a demonstration program which seeks to develop models that can be emulated and adapted across the Nation, it is important that validated information about these projects be widely disseminated. The educational community should be made aware of these projects and their progress so that successful approaches and solutions can be shared, mistakes avoided, and cooperative efforts stimulated. The general public should also be made aware of these efforts to find solutions to the school dropout problem, since public understanding of the project and support for it are essential to its continuation and expansion.

(20 U.S.C. 887(a); 45 CFR 124.16)

APPENDIX A-DROPOUT PREVENTION PROJECTS

MODIFIED APPLICATION PROCEDURES AND
FUNDING CRITERIA FOR FISCAL YEAR 1976

(a) Funding criteria. In awarding grants from fiscal year 1976 funds for Dropout Prevention projects pursuant to Pub. L. 89-10, section 807 (20 U.S.C. 887) and Title 45 CFR Part 124, the Commissioner of Education will give priority to projects which rank high based on the criteria set forth in Title 45 Part 100a and section 100a.26, and Part 124, section 124.15, and which, in addition, are designed to assist dropout and potential dropout students in selecting and pursuing gainful careers. With respect to the project's potential for assisting dropout and potential dropout students in selecting and pursuing gainful careers, the following factors will be considered:

(1) The extent to which the project provides for integration into the applicant's existing academic curriculum of careeroriented subject matter, career counseling, and occupational placement;

(2) The adequacy of the applicant's proposal for developing career-oriented curriculum materials, techniques for implementing these materials, and career-oriented field experiences for students;

(3) The extent to which the project provides for consultation with parents with respect to project activities;

(4) The extent to which the project provides for consultation by the applicant with a cross-section of business, industrial, and community leaders and representatives of educational institutions with respect to career developments;

(5) The extent to which the project provides for the contribution by the business and industrial community with respect to Occupational placement, technical advice, and funds;

(6) The extent to which the project's model is susceptible of being adopted by other local educational agencies;

(7) The extent to which the applicant will consult with organizations and associations (in addition to those listed in items (4) and (5)) which have demonstrated experience in on or more of items (1) through (6).

(20 U.S.C. 887)

(b) Modified application procedure. Applicants for grants to be funded pursuant to Pub. L. 89-10, section 807 from fiscal year 1976 appropriations are not required to submit a preapplication proposal as set forth in Title 45 CFR, Part 124, sections 124.3 and 124.4. Grants under section 807 from fiscal year 1976 appropriations will be awarded to local educational agencies only upon submission to the Commissioner of an application for assistance which has been approved by the appropriate State agency as required by Title 45 CFR Part 124, section 124.4, and

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(a) The provisions contained in this part are applicable to grants to local educational agencies for planning and establishing special programs and projects, supplementary educational centers and services and guidance, counseling, and testing programs pursuant to section 306 of title III of the Elementary and Secondary Education Act of 1965. Regulations applicable to grants to States pursuant to title III of the Act are contained in part 118 of this title.

(b) Assistance provided under this part is subject to applicable provisions contained in Subchapter A of this chapter (General Provisions for Office of Education Programs) relating to fiscal, administrative, property management

and other matters.

(20 U.S.C. 844b)

§ 126.2 Definitions.

As used in this part:

"Act" means the Elementary and Secondary Education Act of 1965, Pub. L. 89-10, as amended.

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"Children with specific learning disabilities" means those children who have a disorder in one or more of the basic psychological processes involved in understanding or in using language, spoken or written, which disorder may manifest itself in imperfect ability to listen, think, speak, read, write, spell, or do mathematical calculations. Such disorders include such conditions as perceptual handicaps, brain injury, minimal brain dysfunction, dyslexia, and developmental asphasia. Such term does not include children who have learning problems which are primarily the result of visual, hearing, or motor handicaps, of mental retardation, of emotional disturbance, or of environmental disadvantage. (20 U.S.C. 843 (b) (3), 844b (b))

"Construction" means (a) the erection of new or the expansion of existing structures, and the acquisition and installation of equipment therefor; (b) the acquisition of existing structures not owned by the agency making application for assistance under the Act; (c) the remodeling or alteration (including the acquisition, installation, modernization, or replacement of equipment) of existing structures; or (d) a combination of any two or more of the foregoing.

(20 U.S.C. 844b, 881(b))

"Cultural and educational resources" includes State educational agencies, institutions of higher education, private schools, public and nonprofit private agencies such as libraries, museums, musical and artistic organizations, educational radio and television, and other cultural and educational resources. (20 U.S.C. 844(a), 844b)

"Dissemination" means communications with people about the operation and outcomes of demonstrations of exemplary practices in education in order to facilitate the adoption and replication of tested educational innovations in the host school system and other school systems in the State.

(20 U.S.C. 843 (c) (3), 844b)

"Exemplary," as applied to an educational program, project, service, or activity means one designed to serve as a model for a regular school program. (20 U.S.C. 843 (b) (2), 844b)

"Handicapped children" means those children who are mentally retarded, hard

of hearing, deaf, speech impaired, visu-
ally handicapped, seriously emotionally
disturbed, crippled, or other health im-
paired and who by reason thereof require
special education and related services.
The term includes children with specific
learning disabilities to the extent that
such children are health impaired chil-
dren who by reason thereof require spe-
cial education and related services.
(20 U.S.C. 844b (b))

"Innovative," as applied to an educational program, project, service, or activity means one utilizing new or improved ideas, practices, or techniques. (20 U.S.C. 843(b) (3), 844b)

"Local educational agency" or "local education agency" means a public board of education or other public authority legally constituted within a State for either administrative control or direction of, or to perform a service function for, public elementary schools in a city, county, township, school district, or other political subdivision of a State, or such combination of school districts or counties as is recognized in a State as an administrative agency for its public elementary or secondary schools. The term also includes any other public institution or agency having administrative control and direction of a public elementary or secondary school, including a State operated school for the deaf, blind, mentally retarded, emotionally disturbed or crippled. "Service Function" as used in this paragraph means an educational service which is performed by a legal entity-such as an intermediate agency-whose jurisdiction does not extend to the whole of the State and which is authorized to provide consultative, advisory or educational program services to public elementary or secondary schools, or which has regulatory functions over agencies having administrative control or direction of public elementary or secondary schools, rather than a service which is performed by a cultural or educational

resource.

(20 U.S.C. 844b, 881 (f))

"Private school" means a nonprofit school which is operated or controlled by other than a public authority, and which complies with State compulsory school attendance laws or is otherwise recognized or accredited by some procedure customarily used in the State as having

curricula similar to that required of comparable public schools.

(20 U.S.C. 843(b)(4), 844(b)(2)(B), 844b, 845(1))

"Seriously emotionally disturbed children" means (a) Those children who exhibit one or more of the following characteristics over a long period of time and to a marked degree:

(1) An inability to learn that which cannot be explained by intellectual, sensory, or health factors;

(2) An inability to build or maintain satisfactory interpersonal relationships with peers and teachers;

(3) Inappropriate types of behavior or feelings under normal circumstances;

(4) General pervasive mood of unhappiness or depression; and/or

(5) A tendency to develop physical symptoms, pains, or fears associated with personal or school problems.

(b) This term does not include those children who are socially maladjusted. (20 U.S.C. 843 (b) (3), 844b(b))

"State educational agency" means the State board of education or other agency or officer primarily responsible for the State supervision of public elementary and secondary schools, or, if there is no such officer or agency, an officer or agency designated by the Governor or by State law.

(20 U.S.C. 844b, 881 (k))

"Testing," in relation to activities undertaken pursuant to section 303(b) (4) of the Act means the use of tests which measure abilities from which aptitudes for an individual's educational or career development may be validly inferred.

(20 U.S.C. 843(b)(4), 844a(b) (1) (B) (1), 844b)

$126.3 Program purpose and availability of funds.

(a) Amounts not available to the State. From the amount allotted to any State under section 302 of the Act for any fiscal year which is (1) not available to that State under a State plan fully or partially approved by the Commissioner pursuant to section 305 of the Act, or which is (2) not available to that State because there is no approved State plan, the Commissioner may make grants to local educational agencies in such State for programs, or projects (including programs or projects for handicapped children) which meet the purposes and requirements of section 306

of the Act and the regulations in this part.

(b) Amounts not required by the State. The amount of any State's allotment under title III of the Act for any fiscal year which the Commissioner determines will not be required by such State for the period for which that amount is available shall be available for grants pursuant to section 306 of the Act in such State. If the Commissioner further determines that such amount is not needed in such State for grants pursuant to section 306 of the Act, that amount may, in the Commissioner's discretion, either be used for grants pursuant to section 306 of the Act in other States or reallotted to other States pursuant to section 302(c) of the Act. Grants from allotments made pursuant to this paragraph may be made during the fiscal year of the original allotment and the succeeding fiscal year. (20 U.S.C. 842 (c) and (d), 844b, 845) § 126.4 Applications for grants.

A local educational agency shall file an application which, in addition to meeting the requirements contained in Subpart A of this Chapter (General Provisions for Office of Education Programs), shall contain or have attached thereto:

(a) A description of a program or project for carrying out one or more of the purposes described in section 303 of the Act (including, in the case of an application submitted by a local educational agency located in a State which has a State plan approved under section 305 of the Act, a description of how the project holds promise of making a substantial contribution to the solution of critical educational problems common to all or several States);

(b) A description of the policies and procedures which assure that in the planning of the project there has been, and in the establishment and carrying out thereof there will be, participation of persons broadly representative of the cultural and educational resources of the area to be served, including persons representative of the interests of potential beneficiaries;

(c) An assurance that the services for which funds under section 306 of the Act are sought will be administered by or under the supervision of the applicant;

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(d) A description of (1) such methods of administration as are necessary for

the proper and efficient operation of the project, (2) such fiscal control and accounting procedures as are necessary to assure proper disbursement of, and accounting for, Federal funds paid to the local educational agency under section 306 of the Act, and (3) the program accountability procedures to be used in the assurance of performance quality during the project period through the implementation of procedures and techniques such as: community involvement, technical assistance, needs assessment, change strategies, management systems, performance objectives, performance budgeting, performance contracting for services, staff development, comprehensive evaluation, program audit and costeffectiveness analysis.

(e) A description of the policies and procedures to assure that Federal funds made available under section 306 of the Act for a specified budget period will be so used to supplement and, to the extent practical, increase the level of funds that would be in the absence of such Federal funds, be made available by the applicant for the purposes described in section 303 of the Act, and in no case supplant such funds;

(f) A description of how the program or project will provide for the genuine and meaningful participation of private school children as required by § 126.6; and

(g) A description of the facilities available for the project and the use to which they will be put. If the project will involve construction or leasing of facilities, the proposal shall specify how such activity is consistent with, and why it is necessary to, the efficient operation of the proposed educational program. (20 U.S.C. 843, 844, 844a, 844b)

§ 126.5 Maintenance of fiscal effort.

No payments shall be made to a local educational agency under sectior. 306 of the Act unless the Commissioner finds that the combined fiscal effort of such agency and the State in which it is located with respect to the provision of free public elementary and secondary education by that agency for the fiscal year preceding the fiscal year for which assistance is sought under such section was not less than such combined fiscal effort for that purpose for the second fiscal year preceding the fiscal year for which such assistance is sought. For the purposes of this section, combined fiscal effort shall be deemed to be maintained

if current expenditures per pupil for elementary and secondary education of a local educational agency from State and local funds (determined on either an aggregate or a per pupil basis) for such preceding fiscal year equal or exceed such expenditures for such second preceding fiscal year. In the event of a decrease of current expenditures (determined on both an aggregate and a per pupil basis), the Commissioner will determine whether the maintenance of effort requirements have been fulfilled based upon consideration of the causes for such decrease (including such factors as changes in the value or availability of economic resources (tax bases) from which such expenditures are funded beyond the control of State or local authorities).

(20 U.S.C. 844b, 845(e))

§ 126.6 Participation by private school children.

(a) In each project approved under section 306 of the Act, provision shall be made for the effective participation in the project, on an equitable basis, of children enrolled in private schools in the areas to be served whose educational needs are of the type which the project is designed to meet. The number of such children to be served, in relation to the total number of such children with educational needs of the type the project is designed to meet shall be consistent with the number of public school children to be served, in relation to the total number of public school children in the area served with educational needs of the type the project is designed to meet.

(b) Whenever practicable, educational services shall be provided to private school children on publicly controlled premises. Any project to be carried out in public facilities and involving joint participation by children enrolled in private schools and children enrolled in public schools shall include such provisions as are necessary to avoid the separation of participating children by school enrollment or religious affiliation.

(c) Provisions for serving private school children shall not include: (1) The payment of salaries to teachers or other employees of private schools except for services performed outside regular hours of duty and under public supervision and control, (2) financing of the existing level of instruction in private schools, (3) the placement of equipment on private school

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