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is accredited as a junior college by a nationally recognized accrediting agency or association or, if not so accredited, is an institution whose credits are accepted, on transfer, by not less than three institutions which are so accredited, for credit on the same basis as if transferred from an institution so accredited; and (6), if a branch of an institution of higher education offering four or more years of higher education, is located in a community different from, and beyond a reasonable commuting distance from, the community in which the main campus of the parent institution is located.

(g) "Local educational agency" means a board of education or other legally constituted local school authority having administrative control and direction of public elementary or secondary schools in a city, county, township, school district; or other political subdivision in a State, or any other public institution or agency having administrative control and direction of a public elementary or secondary school.

(h) "Public," as applied to any school or institution, includes a school or institution of any agency of the United States. except that no such school or institution

shall be eligible to receive any grant, loan, or other payment under the Act.

(1) "Secondary school" means a school which provides a secondary education, as determined under State law.

(j) "State" means a State of the Union, Puerto Rico, the District of Columbia, the Canal Zone, Guam, American Samoa, or the Virgin Islands.

(k) "State educational agency" or "State 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.

(1) "Technical institute" means an institution of higher education which (1) is organized and administered principally to provide a two-year program in engineering, mathematics, or the physical or biological sciences which is designed to prepare the student to work as a technician and at a semiprofessional level in engineering, scientific, or other technological fields which require the understanding and application of basic engineering, scientific, or mathematical principles or knowledge; (2) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the

recognized equivalent of such a certificate; (3) is legally authorized within the State to provide a program of education beyond secondary education; (4) is a public or other nonprofit institution; (5) is accredited as a technical institute by 8 nationally recognized accrediting agency or association or, if not so accredited, is an institution whose credits are accepted, on transfer, by not less than three institutions which are so accredited, for credit on the same basis as if transferred from an institution so accredited; and (6), if a branch of an institution of higher education offering four or more years of higher education, is located in a community different from, and beyond a reasonable commuting distance from, the community in which the main campus of the parent institution is located.

Subpart B-State Plan-General

§ 143.2 State plan.

(a) Purpose. A basic condition for the payment of Federal funds to a State under sections 501-504 of the Act is a State plan meeting the requirements of sections 503 (a) and 1004(a) of the Act

by providing (1) a program for testing students, as specified in subpart F of these regulations, in the public elementary and secondary schools or in the public junior colleges and technical institutes of such State, and, to the extent authorized by law in other elementary and secondary schools and in other junior colleges and technical institutes in such State; (2) a program of guidance and counseling, as specified in subpart G of these regulations, in the public elementary and secondary schools or public of such State; (3) that the State agency junior colleges and technical institutes will be the sole agency for administering the plan; (4) that the State agency will make such reports as the Commissioner deems necessary; and (5) for fiscal control and fund accounting procedures as specified in these regulations.

(b) Effect of State plan. The plan, when approved by the Commissioner, shall constitute the basis on which Federal grants will be made, as well as a State and local expenditures in which basis for determining the propriety of Federal participation is requested.

(c) Submission. The State plan and all amendments thereto shall be submitted to the Commissioner by a duly authorized ofcer of the State educational agency. The plan shall indicate the official or officials authorized to submit plan material.

The administra- between the State agency and (a) local educational agencies, and (b) junior colleges and technical institutes. Citations to, or copies of, all directly pertinent statutes and interpretations of law by appropriate State officials, whether by regulation, policy statement, opinion of the appropriate State legal officer, or court decision, shall be furnished as part of the plan. All copies shall be certified as correct by an appropriate official. If the agency is not authorized under State law to expend funds for testing students in any one or more elementary or secondary schools, or junior colleges or technical institutes, in the State, the authorized officer of the agency shall so certify, indicating the institutions or types of institutions thus excluded and giving the legal basis for his conclusion. In such cases, the Commissioner will arrange for testing such students under the authority contained in section 504 (b)

(d) Amendments. tion of the programs shall be kept in conformity with the approved State plan. Whenever there is any material change in the content or administration of a program, or when there has been a change in pertinent State law or in the organization, policies, or operations of the State educational agency affecting a program under the plan, the State plan shall be appropriately amended.

(e) Certificate of the State educational agency. The State plan and all amendments thereto shall include as an attachment a certificate of the officer of the State educational agency authorized to submit the State plan to the effect that the plan or amendment has been adopted by the State agency and that the plan, or plan as amended, will constitute the basis for operation and administration of the program in which Federal participation under sections 501-504(a), inclusive, will be requested.

(f) Certificate of the State Attorney

General or other appropriate State legal
officer. The State plan shall also in-
clude, as an attachment, a certificate by
the appropriate State legal officer to the
effect that the State agency named in
the plan is the "State educational
agency" as defined in § 143.1(k) which
has authority under State law to submit
the State plan and to carry out the pro-
grams described therein as the sole State
agency responsible for administering the
plan, and that all of the plan provisions
are consistent with State law.
§ 143.3

State agency for administration. (a) Designation. The State plan shall give the official name of the agency which will be the sole agency for administering the plan. Such agency shall meet the criteria set forth in § 143.1(k) defining "State educational agency."

(b) Organization. The State plan shall describe, by chart or otherwise, the organization of the State staff for the administration of the programs set forth in the plan. The lines of authority within the administrative unit or units responsible for the programs under the plan shall be shown, together with the administrative relationships of such unit or units to the rest of the State educational agency and to other related agencies.

§ 143.4

Authority of State agency,

of the Act.

§ 143.5 Custody of funds.

The State plan shall designate the officer who will receive and provide for the custody of all funds to be expended under applicable State laws and regulations on requisition or order of the State agency.

§ 143.6 State fiscal procedures.

(a) State administration. The State plan shall provide for the fiscal administration of the plan by describing such fiscal control and fund accounting procedures as may be necessary to assure proper disbursement of and accounting for Federal funds paid to the State under the plan, including such funds paid by the State to the local and other participating educational agencies. Such administration shall be conducted in accordance with applicable State laws, policies, and procedures, which shall be identified in the plan or set forth in an appendix. Accounts and supporting documents relating to any program involving Federal participation shall be adequate to permit an accurate and expeditious audit of the program.

(b) Audit of local and other participating educational agencies. All expenditures claimed for Federal participation shall be audited either by the State or by appropriate auditors at the local level. The State plan shall indicate how the accounts of local educational agencies The State plan shall set forth the au- and other agencies participating in the thority of the State educational agency State plan will be audited; and, when under State law to submit the State plan the audit is to be carried out at the local and to administer and supervise the pro- level, how the State agency will secure grams set forth therein, including a information necessary to assure proper description of the functional relationship use of funds expended under sections

81-559 0-67-4

503 and 504(a) of the Act by such educational agencies.

administrative provisions of its approved State plan, the Commissioner will con§ 143.7 Duties and qualifications of duct periodic reviews of the administraState personnel in professional position of programs under Title V-A of the


(a) Staff. The State plan shall describe the duties of State administrative and supervisory positions under the plan. The State plan shall also set forth the minimum experience, education and other related qualifications required of all State personnel to be engaged in professional administration and supervision of guidance and counseling, and testing, programs. If State statutes or regulations establish such positions and give such information, the plan shall include citation to such statutes, or set forth in an appendix copies of pertinent regulations.

(b) Advisory committee. If a State advisory committee on guidance and counseling, or testing, is established, the plan shall describe the general composition and method of establishment of the committee and its duties.

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§ 143.11 Fiscal Audits.

The State educational agency's program expenditure records are to be audited by the Department to determine whether the State agency has properly accounted for Federal funds.

Subpart C-Federal Financial

§ 143.12 Effective date of plan.

Since the Federal Government participates only in amounts expended under the State plan, there can be no Federal participation in any expenditure made before the plan or applicable amendment thereto is in effect. For the purposes of this part, the earliest date on which the plan or applicable amendment thereto may be considered in effect is the date on which it is received in substantially approvable form by the Commissioner. § 143.13 Federal participation in general.

(a) Nature. The Federal Government will pay from each State's allotment, as reduced by expenditures required pursuant to section 504(b) of the Act, onehalf of the total amount expended under the approved State plan: (1) By the State and local agencies in the establishment, maintenance, or extension of guidance and counseling, and testing, programs approved under the State plan; (2) for State agency supervisory or related services in the fields of guidance and counseling, and testing; and (3) for administration of the State plan. There can be no Federal financial participation cles for a guidance and counseling, or in the expenditures made by local agentesting, program if the program has not been approved by the State agency prior to the incurrence of the obligation.

The State plan shall provide that the State agency will participate in such periodic consultations and will make such reports to the Commissioner at such time, in such form, and containing such in(b) Equipment from a Communist formation as the Commissioner may con- country. Annual appropriation acts for sider reasonably necessary to enable him the Department of Health, Education, to perform his duties under Fart A, Title and Welfare have provided that no part V, of the Act and will keep such records of the funds appropriated for "Defense and afford such access thereto, and will comply with such other requirements, as Educational Activities" shall be availthe Commissioner may find necessary to able for the purchase of teaching equipassure the correctness and verification ment or equipment suitable for use for of such reports. teaching, in certain subjects, which can be identified as originating in or having § 143.10 Continuing review of State ad- been exported from a Communist country, unless such equipment is unavailable

ministration. In order to assist the State educational from any other source. Such a prohibiagency in adhering to statutory require- tion applies to expenditures with respect ments and to the substantive legal and to which Federal participation is re

quested from allotments under section § 143.16 502 or section 1008 of the Act.

(c) Public nature of funds. The expenditures to be considered in computing Federal financial participation must be made from public funds. Public funds do not include contributions by private organizations or individuals unless such contributions are deposited in accordance with State law to the account of a unit or agency of State or local government without such conditions or restrictions 25 would negate their public character.

8143.14 Proration of costs.

Federal financial participation is available only with respect to that portion of any expenditure which is attributable to an activity under the State plan. The State plan shall specify the basis for identifying and the method to be used in prorating State level expenditures to include only those attributable solely to State plan activities. The State educational agency shall include in its annual description of projected activities submitted to the Commissioner for each fiscal year its estimated prorated expenditures for salaries attributable to State plan activities. The State educational agency must also maintain records (documented on a before- and afterthe-fact basis) to substantiate the proration of expenditures for applicable items such as salaries, travel, rent and equipment.

§ 143.15 Accounting basis for expendi


Subject to the provisions and limitations of the Act and this part, Federal financial participation will be available only for expenditures made under the plan in accordance with applicable State laws, rules, regulations, and standards governing expenditures of State and local funds. Each State shall use the accounting basis (cash, accrual or obligation) applicable to its State or local accounting. The State plan shall specify for State and for local level expenditures the particular accounting basis to be so used and shall set forth or

incorporate by reference the applicable State laws, rules, and regulations which constitute the basis for defining and establishing how and when transactions made by the State and other participating agencies are considered to be expenditures. If the State or other participating agencies utilize other than a cash accounting basis, the State plan shall indicate the time period or other factors governing the liquidation of obligations.

Use of State rule in determining the fiscal year's allotment to which an expenditure is chargeable. Each allotment to a State under section 502 or 1008 of the Act is made with respect to a fiscal year commencing on July 1 and ending the following June 30. State and local laws and regulations shall be followed in determining to which fiscal year an expenditure by the State or local agency is chargeable for the purpose of earning the allotment.

§ 143.17

Transfer of funds to local


State plans shall set forth the policies and procedures to be used in the payment of funds to local agencies or other school authorities pursuant to an approved plan program, either (a) as a reimbursement for actual expenditures or (b) as an advance prior to expenditures. Advances shall not be eligible for inclusion as expenditures for the purposes of earning Federal financial participation until adequate evidence of actual expenditures for approved programs has been received and verified by the State educational agency. (See 88 143.13 and 143.15.) Reimbursement or payment need not be uniform to all local agencies (i.e., the State plan may provide a method by which the ratio of reimbursement to total expenditures may be adjusted on an individual basis to meet local needs).

§ 143.18 Disposal of records.

(a) General rule. The State educational agency shall provide for keeping accessible and intact all records sup

porting claims for Federal grants or relating to the accountability of the grantee and relating to the expenditure of matchagency for expenditure of such grants ing funds: (1) For three years after the close of the fiscal year in which the expenditure was made; (2) until the State agency is notified that such records are review; or (3) until the State agency is not needed for program administration notified of the completion of the Department's fiscal audit, whichever is later.

(b) Questioned expenditure. The records involved in any claim or expenditure which has been questioned shall be maintained until necessary adjustments have been reviewed and cleared by the Department.

(c) Records of equipment. Where nonconsumable equipment which costs $50 or more per unit is purchased with Federal financial participation, inventories and other records supporting accountability shall be maintained until

and reallotment.

the State agency is notified of the com- 8 143.22 Effect of Federal payments pletion of the Department's review and audit covering the disposition of such equipment.

§ 143.19


(a) No waiver. Neither the approval of the State plan nor any payment to the State pursuant thereto shall be deemed to waive the right or duty of the The State educational agency in its Commissioner to withhold funds by reamaintenance of program expenditure son of the failure of the State to observe. accounts, records, and reports shall before or after such administrative acpromptly make any necessary adjusttion, any Federal requirements. ments in its records to reflect refunds, amount to which the State is entitled (b) Settlement of accounts. The final credits, underpayments, or overpay for any period is determined on the basis ments, as well as any adjustments result- of expenditures under the State plan ing from Federal or State administrative with respect to which Federal financial reviews and audits. Such adjustments participation is authorized. shall be set forth in the State's financial reports filed with the Commissioner.

Subpart D-Federal Payment

§ 143.20 ports.

Estimates and financial re

(c) Reallotment. In order to provide a basis for reallotments by the Commissioner under section 502(b) of the Act. each State agency shall, if requested, submit to the Commissioner, by such date or dates as he may specify, a statement showing the anticipated need during the current fiscal year for the amount previously allotted, or any amount needed to be added thereto. Such further information as the Commissioner may request for the purpose of making reallotments shall be reflected in such statements. No allotment (or reallotment) of funds may be carried (2) Reports of estimated total ex- over for use during a subsequent fiscal penditures for activities under the plan year. during the fiscal year, and the amount § 143.23 of funds available to pay the non-Federal share of such expenditures;

(a) Reports. The State agency shall submit, in accordance with procedures established by the Commissioner:

(1) A description of the activities to be carried on under the plan during the fiscal year;

Certifying payments.

Payments will be certified periodically

(3) Following the end of the fiscal after: (a) The State has on file in the year, a report of the total expenditures Office of Education a plan approved by made under the plan during the fiscal the Commissioner(b) the pertinent estimates and reports required by §§ 143.20 year; and

(4) Such other estimates and reports and 143.22 (c) have been reviewed; and as are periodically needed to account (c) the Commissioner is satisfied that 'the State needs the funds and will be able properly for funds. (b) Effect of estimates. Expendi- to carry out the plan during the current tures will not be precluded from Federal fiscal year. financial participation because of minor § 143.24 deviations from the information submitted pursuant to paragraph (a) of this section if they are otherwise made in accordance with the approved plan and the regulations.

§ 143.21

Federal payments.

Interest on Federal grants.

Interest earned on Federal grants shall be credited to the United States. The State agency shall submit as a part of each annual financial report a statement showing the amount of interest carned on Federal funds during that period. Ordinarily such interest earnings will be considered in the adjustment of the Federal-State account; but for the last year of the program, payment of interest shall be made by the State to the


Payments will be made in advance to States with approved plans on the basis of estimates and reports referred to in 88 143.20 and 143.22 (c), with appropriate adjustments for underpayments or overpayments for any prior period. In settling accounts upon the termination Subpart E-State Supervisory Services of Title V-A of the Act, or the termination of the State plan, the State shall refund to the Commissioner any over- § 143.25 payment which might have been made under section 504(a) of the Act.

and Administration

Programs for supervisory serv

ices and administration.

The State plan shall describe the pro

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