plan not affected by the State's failure to comply with such requirements, and that certification for payment will be modified to that extent.

$104.51 Method of payment.

Payments will be made in advance to a State of the amount to which the Commissioner certifies the State is entitled for the fiscal year, taking into account necessary adjustments for previously made overpayments and underpayments. Under the Smith-Hughes Act, payments to the State will be made quarterly; under title I of the George-Barden Act, payments will be made semiannually; and under the other acts, payments will be made in such installments and at such times as the Commissioner may determine to be reasonably required for expenditures by the States of the funds so allotted.

$104.52 Effect of Federal payments.

(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 Commissioner to withhold funds by reason of the failure of the State to observe, before or after such administrative action, any Federal require

ments.

(b) Settlement of accounts. The final amount to which the State is entitled for any period is determined on the basis of expenditures under the State plan with respect to which Federal financial participation is author

ized.

$194.53 Disposition of unexpended Federal funds and reallotment.

(a) Wherever any portion of any annual allotment to any State under the acts has not been expended in the State for the purpose provided for in the regulations, State plan, and acts, and has not been reallotted to other States pursuant to paragraphs (b) and (c) of this section during the fiscal year in which such allotment is made, a sum equal to such portion shall be deducted from the next following payment of funds allotted to such State for the following fiscal year.

(b) Reallotment under the George-Barden Act. (1) Under titles II and III of the George-Barden Act, the amount of any allotment to a State which is certified, on or before a date fixed by the Commissioner, as not being required for carrying out the State's plan or program thereunder, shall be reallotted to other States. Such a reallotment shall be made under title II pursuant to section 202(b), and under title III pursuant to section 302 (b) of the GeorgeBarden Act.

(2) Reallotments will be made in proportion to the original allotments to the States for the same fiscal year, except that subject to the provisions of subparagraph (3) of this paragraph, (i) no reallotment will be made to any State which has certified that it will not require the full amount of its allotment for such year, and (ii) the total of the amounts and the amounts reallotted to a State will not exceed the amount which it has certified will be needed for such year.

(3) Any State which (i) has certified that it will not require the full amount of its allotment, or (ii) has certified as to the amount in excess of its original allotment which will be required to carry out the State plan for a fiscal year, may nevertheless amend such certification by filing the

appropriate form with the Commissioner on or before a date fixed pursuant to subparagraph (1) of this paragraph. The amended certification will then be used in computing all reallotments for that fiscal year made subsequent to such date.

(c) Reallotment under the 1963 Act. (1) Pursuant to sections 3(c) and 13(a) (2) of the 1963 act, any amount of any State's allotment which the Commissioner determines is not required for carrying out the State's plan shall be reallotted to other States on such dates as the Commissioner may fix. Such determination by the Commissioner shall be made on the basis of (i) a certified statement submitted by the State affirming that the State does not require the full amount of its original allotment to carry out its plan, (ii) reports and information acquired by the Commissioner either from the State board or from independent investigation indicating that the State does not require the full amount of its original allotment to carry out its plan, or (iii) both. Within a reasonable time prior to the date fixed for reallotment of funds, the Commissioner shall notify the State of his determination affecting the State's allotment and either modify the amount certified for payment to the State or, if payment has already been made, direct the State to return to the United States whatever amount the Commissioner determines the State does not need.

(2) Reallotment shall be made to other States in proportion to their original allotment for the fiscal year in which the original allotment was made; except that, subject to the provisions in subparagraph (3) of this paragraph, such reallotments to such other States shall be reduced to the extent which the Commissioner estimates such State needs and will be able to use under its plan for such fiscal year. The total of such reduction shall then be allotted among those States not suffering such a reduction in proportion to their original allotment. Such estimate by the Commissioner shall be made on the basis of (i) the certified statement submitted by the State pursuant to subparagraph (1) of this paragraph affirming that the State does not require the full amount of its original allotment to carry out its plan, (ii) a request for reallotment by the State and its supporting certified statement indicating the amount of additional funds it needs and will be able to use effectively to carry out its plan, (iii) reports and information acquired by the Commissioner either from the State board or from independent investigation, or (iv) any two or all of the above. Within a reasonable time before the date fixed for reallotment, the Commissioner shall notify the State of the amount of reallotted funds (if any) the State shall receive.

(3) Any State which the Commissioner has determined, either on the basis of certified statements from the State or from other reports or information available to him, (i) does not require the full amount of its original allotment to carry out its plan, or (ii) does not need or will not be able to use effectively the full amount of its proportionate share of funds to be reallotted, may, on or before the date fixed for reallotment, request that the Commissioner reconsider his determination affecting the original allotment or anticipated reallotment to such State, and submit with his request additional supporting information and data. If the Commissioner's determination is based in whole or in part on certified statements submitted by the State itself, the State may submit to the Commissioner an amend nient to such certification on or before the date fixed for reallotment. The Commissioner, in making his reallotment of funds to the States, shall take into consideration all such amendments and additional information furnished by the State with their requests for reconsideration of the Commissioner's

determination. All decisions made by the Commissioner regarding the reallotment of funds are final once reallotment is made.

§ 104.54 Interest.

Interest earned on Federal funds paid to a State shall accrue to the benefit of the United States Government. The State board shall submit, as a part of its annual fiscal report, a statement showing the amounts of Federal funds received under the acts during the fiscal year covered by the report, and the amount of interest earned on such funds during such year. Checks in the amount of interest earned must be made payable to the U.S. Office of Education and mailed to the Fiscal Management Section, or reported as an unexpended balance in the annual fiscal report.

§ 104.55 State annual reports.

(a) Annual estimate of projected program plans-(1) Content. The State board, in accordance with procedures established by the Commissioner, shall submit an annual estimate containing a description of the activities to be carried on under the plan during the ensuing fiscal year, including information regarding the use to be made of transferred funds pursuant to $104.28. Such description shall include the estimated annual receipts and expenditures for activities under the plan, indicating the estimated receipts and expenditures for each semiannual fiscal period and the amount of State and local funds available to pay the non-Federal share of the amount estimated. Such information shall be forwarded on forms furnished to the State board by the U.S. Office of Education. (2) Effect of estimates. Subsequent payment of Federal funds to the States will not be precluded because of deviations in actual State expenditures during the fiscal year from those submitted in the estimate for such fiscal year, provided that they are otherwise made in accordance with the approved State plan and the acts and regulations.

(b) Annual report of program activities. On or before September 1 of each year, each State board shall submit, in accordance with procedures established by the Commissioner, an annual report describing the activities carried out under the State plan and setting forth the total receipts and expenditures of funds for the previous fiscal year. This report shall consist of three parts: fiscal, statistical, and descriptive.

(1) The fiscal report shows the expenditures for each of the several purposes provided for in the acts, that the Federal funds expended for each purpose in the State have been matched by State or local funds or both, and that all other fiscal conditions of the acts have been met. Expenditures of State and local funds which meet the requirements of the acts, regulations, and State plan and are therefore eligible for Federal financial participation are to be included. Such information shall be forwarded on forms furnished to the State board by the U.S. Office of Education.

(2) The statistical report includes supporting data with respect to vocational education classes for which expenditures are reported in the fiscal report. Such data shall be forwarded on forms furnished to the State board by the U.S. Office of Education.

(3) The descriptive report is a narrative account of the program of vocational education within the State during the fiscal year, describing conditions and situations in the program for which fiscal or statistical data have been reported. The U.S. Office of Education will provide a suggested outline of this report for the States.

Subpart E-Smith-Hughes and George-Barden Acts:
Special Provisions.

GENERAL

§ 104.56 Applicability of regulations to existing programs under the SmithHughes, George-Barden, and supplementary acts.

In addition to the general requirements in Subparts A to D governing vocational education under all the acts, the provisions in Subpart E govern vocational education under the Smith-Hughes, George-Barden, and supplementary acts as amended by subsections (b), (c), (d), and (e) of section 10 of the 1963 act.

(a) The provisions in Subparts A to D (but not Subpart E) shall apply to vocational education under the State plan in those States which receive allotments under the 1963 act and transfer all funds allotted under the Smith-Hughes, George-Barden, and supplementary acts to the allotment under section 3 of the 1963 act pursuant to § 104.28.

(b) The provisions in Subparts A to D and the Subpart E shall apply to vocational education under the State plan in those States which either

(1) Receive no allotment under the 1963 act but transfer all or part of the funds allotted under the Smith-Hughes, George-Barden, and supplementary acts to the allotment under section 3 of the 1963 act; or

(2) Receive allotments under the 1963 act but transfer no furds or only part of the funds allotted under the Smith-Hughes, George-Barden, and supplementary acts to the allotment under section 3 of the 1963 act.

(c) The regulations in 45 CFR Parts 102 and 103, shall continue to apply to programs in States which neither receive an allotment under the 1963 act nor transfer any funds allotted under the Smith-Hughes, George-Barden, and supplementary acts to the allotment under section 3 of the 1963 act. In such cases a State may

(1) Retain its current State plan under the Smith-Hughes, GeorgeBarden, and supplementary acts, amending it to the extent it chooses to take advantage of the amendments to the Smith-Hughes, George-Barden, and supplementary acts in subsections (b), (c), (d), and (e) of section 10 of the 1963 act, and

(2) Transfer funds from one allotment under the Smith-Hughes, GeorgeBarden, and supplementary acts to another such allotment as provided for in section 10(a) of the 1963 act and in § 104.28.

§ 104.57 Condition for payment of Federal funds under the Smith-Hughes Act.

(a) Payment of a State's allotment of Federal funds for salaries of teachers, directors, and supervisors of agricultural subjects under section 2

of the Smith-Hughes Act is subject to the condition that the State accepts and makes full use of at least the minimum share (20 percent) of the State's teacher-training allotment under section 4 of the Smith-Hughes Act for training of teachers, supervisors, and directors of agricultural subjects.

(b) Payment of a State's allotment of Federal funds for salaries of teachers of trade, home economics, and industrial subjects under section 3 of the Smith-Hughes Act is subject to the condition that the State accepts and makes full use of

(1) At least the minimum share (20 percent) of the State's teachertraining allotment under section 4 of the Smith-Hughes Act for training of teachers of trade and industrial subjects, and

(2) At least the minimum share (20 percent) of the State's teacher-training allotment under section 4 of the Smith-Hughes Act for training of teachers of home economics subjects.

§ 104.58 Interrelationships among the various education fields.

Funds may be used to develop and operate vocational programs that draw on knowledge and skills from two or more vocational education fields provided for in separate allotments to the States under the Smith-Hughes Act and the George-Barden Act and this subpart.

§ 104.59 Minimum age of enrollment.

Except as indicated in § 104.72, Smith-Hughes and title I George-Barden funds may be used only for such vocational instruction as is designed to meet the needs of persons over 14 years of age. Since this requirement is in terms of the age level for which the education is "designed," enrollment of persons who have attained a 9th grade status, as well as those who have attained the age of 14, is permitted.

AGRICULTURAL EDUCATION

§ 104.60 Vocational education in agriculture.

Vocational education in agriculture under the State plan shall be designed to meet the needs of persons over 14 years of age who have entered upon or are preparing to enter: (a) Upon the work of the farm or farm home, or (b) any occupation involving knowledge and skills in agricultural subjects, whether or not such occupation involves work of the farm or of the farm home.

§ 104.61 Agricultural occupations defined.

An agricultural occupation means an occupation involving knowledge and skills in agricultural subjects, which has the following characteristics:

(a) The occupation includes the functions of producing, processing, and distributing agricultural products and includes services related thereto.

(b) The occupation requires competencies in one or more of the primary areas of plant science, soil science, animal science, farm management, agricultural mechanization, and agricultural leadership.