shop's or rehabilitation facility's plans for assuming the full cost of staffing at the termination of the grant, (i) in the case of a grant for a private, nonprofit workshop, assurance that applicable Federal and State wage and hour standards will be observed or, in the case of a grant for a workshop operated by a State, county or municipal government, assurance that the workshop will comply with wage and hour standards specified by the Commissioner, which will be at least equal to those imposed by the Federal Fair Labor Standards Act, (j) assurance that the workshop or rehabilitation facility meets safety standards specified by the Commissioner, (k) assurance that salaries are commensurate with the duties performed, (1) proposed starting date for the staffing project, (m) an agreement to make such financial and administrative reports and to keep such records and accounts as the Commissioner may require and to make such records and accounts available for audit purposes, and (n) such other information as the Commissioner may require. Initial staffing grant applications may be submitted either in conjunction with a construction grant application or independently.

§ 402.44 Approval of State agency.

(a) The applicant shall be responsible for securing the advice and assistance of the appropriate State vocational rehabilitation agency or agencies. Each application shall be reviewed by the appropriate State vocational rehabilitation agency or agencies for approval. Approved applications shall be forwarded to the regional representative for Vocational Rehabilitation Administration review for approval.

(b) The approval by the State vocational rehabilitation agency or agencies shall contain or be accompanied by a statement indicating the relationship of the project to the purposes and priorities established in the State workshops and rehabilitation facilities plan and shall indicate the manner and extent to which the project will increase the scope and effectiveness of rehabilitation programs within the State with specific reference to the program of the vocational rehabilitation agency.

(c) Each applicant shall be notified in writing of the action on the application. Where an application is disapproved by the State agency, the applicant shall be

notified by the State agency, giving the reasons for disapproval, and the State agency shall forward a copy of its letter to the Vocational Rehabilitation Administration.

§ 402.45

Federal financial participation.

The amount of Federal financial participation under an initial staffing grant shall be related directly to the date of the commencement of the operation of the workshop or rehabilitation facility. The date of commencement of operation of a workshop or rehabilitation facility shall be that date on which the first client is admitted for services after the completion of the related construction project or such earlier date after completion of such project as is specified in the approved application for the initial staffing grant. A grant shall not exceed 75 per centum of eligible compensation costs (including salary and fringe benefits) for the period ending with the close of the 15th month following the month in which such operation commenced, 60 per centum of such costs for the first year thereafter, 45 per centum of such costs for the second year thereafter, and 30 per centum of such costs for the third year thereafter.

§ 402.46 Payments.

Payment of the Federal share of the costs of the initial staffing project shall be made quarterly, or for such other period as the Commissioner may determine, as an advance for estimated costs or as reimbursement to the grantee. The initial payment shall be made shortly after the application has been approved.

§ 402.47 Termination.

If for any reason the grantee discontinues an approved project, the grantee shall notify the regional representative and the State agency in writing, giving the reasons for termination, an accounting of funds granted for the project, and other pertinent information. The grant may be terminated, in whole or in part, at any time at the discretion of the Commissioner. The grantee and the State agency will be given prompt notice of the termination, including the reasons therefor. Such termination shall not affect obligations incurred prior to the termination of the grant. Upon termination or completion of a project, the proportion of unexpended funds attributable to the Federal grant shall be refunded.

Any public or other nonprofit workshop which has been in operation for at least 12 months (or an organization directly responsible for operation of such a workshop) shall be eligible to apply for a workshop improvement grant. Every application shall demonstrate a reasonable expectation that the grant will enable the workshop to make substantial progress towards meeting the standards of the Commissioner developed with the advice of the National Policy and Performance Council. In the case of workshops already meeting such standards of the Commissioner, the application shall demonstrate a reasonable expectation that the grant will make possible substantial improvement in the services of the workshop.

Applications for workshop improvement grants may be made at any time. Applications shall be made in the form and detail required by the Commissioner. The project application shall include (a) a detailed description of existing needs for improvement; (b) a statement of the extent to which the workshop improvement grant will make possible such improvement; (c) a proposed project budget; (d) in the case of a grant for a private, nonprofit workshop, assurance that applicable Federal and State wage and hour standards will be observed or, in the case of a grant for a workshop operated by a State, county or municipal government, assurance that the workshop will comply with wage and hour standards specified by the Commissioner, which will be at least equal to those imposed by the Federal Fair Labor Standards Act; (e) assurance that the workshop meets safety standards prescribed by regulations of the Secretary of Labor; (f) an agreement to make such admin

istrative and financial reports and to keep such records and accounts as the Commissioner may require and to make such records and accounts available for audit purposes; (g) a description of plans for maintaining the improvement after the expiration of the period of Federal assistance; and (h) such other information as the Commissioner may require. Applications for grants for salary assistance shall also include (i) a description of how existing staff are and will be utilized; (j) description of qualifications and utilization of additional staff; and (k) assurance that salaries of staff assisted through the grant will be commensurate with the duties performed. § 402.53 Technical assistance consulta

tion.

The Commissioner may require that a technical assistance consultation precede the award of any workshop improvement grant in the amount of $5,000 or more. Such consultation shall be performed by a consultant acceptable to both the Commissioner and the appropriate State agency.

§ 402.54 Review by State agency.

(a) The applicant shall be responsible for securing the advice and assistance of the appropriate State vocational rehabilitation agency or agencies. Each application shall be reviewed by the appropriate State vocational rehabilitation agency or agencies prior to forwarding to the regional representative for Vocational Rehabilitation Administration review for approval.

(b) The State vocational rehabilitation agency or agencies shall indicate its recommendations for approval or disapproval, which shall contain or be accompanied by a statement indicating the relationship of the project to the purposes and priorities established in the State workshops and rehabilitation facilities plan and shall indicate the manner and extent to which the project will increase the scope and effectiveness of rehabilitation programs within the State with specific reference to the program of the vocational rehabilitation agency.

(c) Each applicant shall be notified in writing of the action on the application, by the Vocational Rehabilitation Administration.

expenditures under approved projects: (a) Staff salary assistance (including fringe benefits) in the employment of additional staff; (b) staff development activities, including educational leave; (c) studies by a recognized expert or consultant concerning the professional or business practices within the workshop; (d) purchase or rental of equipment; and (e) other forms of assistance to workshops to carry out the purposes of this subpart as may be approved in the application. Federal financial participation shall not be available to pay costs of acquiring, constructing, expanding, remodeling or altering any building. Federal participation shall not exceed 90 per centum of the total project cost. § 402.56 Grant awards.

All grant awards shall be in writing, shall set forth the amount of funds granted, and shall constitute for such amounts the encumbrance of Federal funds available for such purpose on the date of the award. The initial award shall also specify the project period (not in excess of 3 years) for which support is contemplated if the activity is satisfactorily carried out and Federal funds are available. For continuation support, grantees must make separate application in the form and detail prescribed by the Commissioner.

§ 402.57 Distribution of funds.

Federal funds available for workshop improvement grants will be distributed initially each year to each region on the basis of population, with a view to making grants available for workshops in each State. Funds may be redistributed from time to time during the year if they are not to be used within the region.

§ 402.58 Payments.

Payments of the Federal share of the cost of the workshop improvement project shall be made quarterly, or for such other period as the Commissioner may determine, as an advance for estimated costs or as reimbursement to the grantee. The initial payment shall be made shortly after the application has been approved.

§ 402.59 Reports.

The grantee shall submit to the regional representative and to the State agency periodic activity reports describing the effect of the grants in improving

If for any reason the grantee discontinues an approved project, the grantee shall notify the regional representative and the State agency in writing, giving the reasons for termination, an accounting of funds granted for the project, and other pertinent information. The grant may be terminated, in whole or in part, at any time at the discretion of the Commissioner. The grantee and the State agency will be given prompt notice of the termination, including the reasons therefor. Such termination shall not affect obligations incurred prior to the termination of the grant. Upon termination or completion of a project, the proportion of unexpended funds attributable to the Federal grant shall be refunded.

Subpart F-Technical Assistance to Workshops

§ 402.65 Furnishing of technical assist

ance.

Technical assistance authorized in section 13(c) of the act will be furnished, directly, or by contract with State vocational rehabilitation agencies or experts or consultants or groups thereof to provide technical assistance and consultation to public and other nonprofit workshops. Such technical assistance will be in such areas as plant layout, contract procurement, wage standards, industrial engineering, systems accounting, planning for efficient production on new contracts, work simplification, labor relations, quality control, and the provision of professional services. A workshop desiring technical assistance shall make its request through the appropriate State vocational rehabilitation agency.

§ 402.66 Recommendations and reports.

A workshop which receives technical consultation will be furnished with the recommendations of the consultant. A copy of the recommendations will also be furnished to the appropriate State agency. The workshop will be expected to give a prompt report concerning the consultation and a report 6 months afterwards as to what has been done about the recommendations.

Each appointed member shall hold office for a term of 4 years except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which his predecessor is appointed shall be appointed for the remainder of such term; and except that, of the members first appointed, three shall hold office for a term of 3 years, three shall hold office for a term of 2 years, and three shall hold office for a term of 1 year, as designated by the Secretary at the time of appointment. No member of the Council shall be eligible for reappointment until a year has elapsed after the end of his preceding term.

The Council shall (a) advise the Commissioner with respect to the policies and criteria to be used in determining whether or not to make grants for projects for training services under Subpart H of this part; (b) make recommendations with respect to workshop improvement and the extent to which the program under Subpart E of this part is effective in accomplishing its purpose; and (c) perform such other services with respect to workshops as the Commissioner may request. The Commissioner shall make available to the Council such technical, administrative and other assistance as it may require to carry out its functions.

§ 402.73 Per diem payments.

Appointed members of the Council, while attending meetings or conferences thereof or otherwise serving on business of the Council, shall be entitled to re

Under section 13(a) of the act, grants may be made during the period July 1, 1966, through June 30, 1971, to States and public and other nonprofit organizations and agencies to pay 90 per centum of the cost of projects for providing training services, leading to gainful employment, to handicapped individuals in public or other nonprofit workshops and rehabilitation facilities.

§ 402.76 Future regulations.

One of the functions of the National Policy and Performance Council (see Subpart G of this part) is to advise the Secretary with respect to the policies and criteria to be used in determining whether or not to make grants for training services. Accordingly, regulations governing such grants will be prepared at a later date, after the National Policy and Performance Council has been organized and had an opportunity to make its recommendations.

§ 403.2

Non-Federal funds.

In the case of any project under this part for which Federal funds are granted to pay part of the cost, the matching grantee funds may not consist of other Federal funds or of non-Federal funds that are applied to match other Federal funds. No Federal financial assistance may be furnished under this part for activities for which payment is made under Part 401 of this chapter, part 402 of this chapter, or other authority. § 403.3 Consultant fees.

Fees or honoraria for special consultants may not be paid in connection with activities under this part to individuals who are regular full-time employees of the State or the Federal Government or of federally sponsored projects, except that such full-time employees of institutions of higher learning may receive fees or honoraria in accordance with generally applicable policies of the institution and within limits specified by the Vocational Rehabilitation Administration. This section shall be applicable to awards of funds made after the publication of these regulations.

§ 403.4 Audit and review.

(a) All fiscal transactions relating to Federal financial assistance under this part are subject to audit by the Department of Health, Education, and Welfare to determine whether or not expenditures have been made in accordance with the act, the regulations, and other requirements.

(b) From time to time members of the staff of the Vocational Rehabilitation Administration review administrative, fiscal and program methods and practices in connection with activities under this part, and make constructive suggestions for the improvement of such methods and practices.

Subpart B-Grants for Special Projects Under Section 4(a)(1) of the Act § 403.10 Purpose.

Special project grants authorized in section 4(a) (1) of the act shall be made for the purpose of paying part of the cost of organized, identifiable activities which are undertaken to seek solutions to vocational rehabilitation problems common to all or several States, or to contribute to the development of more effective vocational rehabilitation services in all or several States. Types of proj