action to recover any such improperly expended funds in accordance with $55.25.

(b) If the employing agency is another unit of government, the Program Agent may provide the funds through a subgrant.

(c) No agency or institution other than an eligible applicant may become an employing agency, except that public agencies which are combinations of Federal, State, or general local government or agencies thereof may qualify.

(d) Federal agencies acting as employing agencies may employ participants only in accordance with laws governing Federal employment. In the case of positions subject to the jurisdiction of the Civil Service Commission, employment of participants must be in accordance with applicable Commission regulations. However, employees of other employing agencies who are not Federal employees may perform work for a Federal agency if the agency gives its consent.

(e) Employing agencies may delegate authority to employ to other employing agencies: Provided, The unit of government responsible to the Secretary accepts responsibility pursuant to paragraph (a) of this section. Notice and an opportunity to review the agreement between the employing agency and its delegates shall be provided to the Secretary.

$53.6 Assurances.

The following commitments by the Program Agent must be part of the grant application. Failure to comply with them may lead to the withholding or denial of grant funds:

(a) Agreement by the Program Agent to give special consideration to the filling. of jobs which provide sumcient prospects for advancement or suitable continued employment by providing complementary training and manpower services designed to (1) promote the advancement of participants to employment or training opportunities suitable to the individuals involved, whether in the public or private sector of the economy, (2) provide participants with skills for which there is an anticipated high demand, or (3) provide participants with self-development skills. Nothing contained in this paragraph shall be construed to preclude persons or programs for whom the foregoing goals are not feasible or appropriate.

(b) Agreement by the Program Agent that, to the extent feasible, public service jobs shall be provided in occupational felds which are most likely to expand within the public or private sector as the unemployment rate recedes.

(c) Agreement by the Program Agent to give due consideration to persons who have participated in manpower training programs for whom employment opportunities are not otherwise immediately available.

(d) Agreement by the Program Agent that it and the employing agencies responsible to it will have the goal of placing half of the participants in continuing positions with the Program Agent or em

RULES AND REGULATIONS

ploying agency financed from funds other than grant funds under the Act. The Program Agent and the employing agencies responsible to it shall utilize at least half the vacancies occurring in suitable occupations in such continuing positions for this purpose, except where this is prohibited by hiring practices required by law, regulation or collective bargaining agreement and the Program Agent or employing agency has submitted a statement explaining the prohibition.

(e) Agreement by the Program Agent that agencies and institutions to whom financial assistance will be made available under the Act will undertake analysis of job descriptions and a reevaluation of skill requirements at all levels of employment, including merit system requirements and practices relating thereto, in accordance with applicable guidelines issued by the U.S. Civil Service

Commission.

(1) Agreement by the Program Agent that the program will, to the maximum extent feasible, contribute to the elimination of artificial barriers to employ ment and occupational advancement that restrict employment opportunities for the disadvantaged, in accordance with applicable guidelines issued by the U.S. Civil Service Commission.

(g) Agreement by the Program Agent that (1) in the event the Secretary or an appropriate agency designated by him advises after a periodic review of the program authorized under section 11(a) of the Act that the job in which a participant has been placed will not provide sumcient prospects for advancement or suitable continued employment, the Program Agent will make maximum efforts to locate employment or training opportunities providing such prospects, and that it will offer such a person appropriate assistance in securing placement in the opportunity he chooses after appropriate counseling, and (2) when the Secretary advises that the rate of national unemployment is receding toward 4.5 percent, or financial assistance will no longer be available for any other rea son, the Program Agent or the employing agency will make maximum efforts to locate employment or training opportunities not supported under the Act for each participant, and will offer such a person appropriate assistance in securing placement in the opportunity which he chooses after appropriate counseling.

(h) Agreement that where appropriate the Program Agent will, and will require the employing agencies to, maintain or provide linkages with upgrading and other manpower programs for the purpose of (1) providing those persons employed in public service jobs under the Act who want to pursue work with the employer, in the same or similar work, with opportunities to do so and to find permanent, upwardly mobile careers in that field, and (2) providing those persons so employed, who do not wish to pursue permanent careers in such field, with opportunities to seek, prepare for, and obtain work in other fields.

(1) Agreement that (1) neither the Program Agent nor any person with re

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sponsibilities in the operation of the program will discriminate with respect any employee of the program, or participant or any applicant for partic. pation in such program, because of race, creed, color, or national origin, sex, age, political amliation, or beliefs, (2) no program under the Act will involve political activities and neither the program, the funds provided therefor, nor the personnel employed in the administration thereof, shall be, in any way or to any extent, engaged in the conduct of political activities in contravention of chapter 15 of title 5, of the United States Code, and (3) participants in the program will not be employed in the canstruction, operation or maintenance of so much of any facility as is used or to be used for sectarian instruction or as a place for religious worship.

§ 55.7 Selection of participants.

(a) All persons employed pursuant to this Act, shall be participants, except for necessary supervisory, and full-time technical and administrative personnel who may be selected from participants or others.

(b) Priority shall be given to the unemployed over the underemployed.

(c) Each Program Agent shall be responsible for assuring (1) that participants will be chosen on an equitable basis, in accordance with the purposes of the Act, from among significant segments of the population in the area of unemployed and underemployed person unemployed and underemployed perso and (2) that preference will be given ing (not necessarily in this order): (1) who are any one or more of the followspecial veterans; (ii) young persons 18 years and older entering the labor force: (ii) 45 years of age or over; (iv) migrant farmworkers; (v) persons whose native tongue is not English and whose ability to speak English is limited; (vi) persons from families with incomes below the poverty level or welfare recipients; (vii) persons who have become unemployed or underemployed as a result of technological change or whose most recent employment was with Federal contractors who have cut back in employment because of shifts in Federal expenditure, such as in the defense, aerospace or construction industries; or (viii) others who come from socioeconomic backgrounds generally associated with substantial unemployment and underemployment.

(d) All job vacancies under the proemployees are being recalled, shall be gram, except those to which former listed with the Employment Service at

least 48 hours before such vacancies are filled during which period the Employment Service will first refer special veterans and secondarily other veterans of the Vietnam era. A list of such job openings will also be made available to any other public or private organizations or agencies, including veteran' organizations, for making them know to special veterans.

(e) Participants whose most recent employment was with the Program

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Agent or any employing agency receiving nancial assistance through the Proam Agent must have been unemployed .or 30 days or longer prior to being employed pursuant to the Act.

(f) Program Agents and employing agencies shall select all participants from among those eligible individuals who reside in the geographical area over which the Program Agent has jurisdiction. When a State government is given funds for expenditure within the geographic area of another Program Agent, the participants it selects must reside in that geographical area. This paragraph is subject to exceptions in individual cases provided the total number of participants residing in each Program Agent's area remains the same. This paragraph does not apply to individuals recalled to their former jobs.

§ 55.10 Comments by units of general government or labor organizations. (a) Grant applications, except applications for initial funding, must be accompanied by:

(1) A statement that a copy of the application, except for initial funding. including the proposed distribution of funds, has been furnished to the Governor, and to the major units of general local government within the jurisdiction as listed, and a summary has been published in two newspapers of general circulation in the area for the benefit of other units of general local government. Notice to the Governor may be given in

ordance with the procedures estabed under the Intergovernmental Joperation Act of 1968. The published notice shall specify where the application may be examined in full, and invite comment to the Program Agent and/or the Secretary. Both actual and constructive notice shall state that consideration will be given only to comments received within the time period specified in paragraph (b) of this section.

(2) A summary of the application containing the information required in subparagraph (1) of this paragraph plus the date by which comments must be received has been sent to any labor organizations representing employees engaged in similar work in the same area as that proposed to be performed under any program to be funded under the application. For purposes of this section, "area" means that geographical area over which the employing agency exercises general political jurisdiction.

(3) The dates of actual notice and of notice by publication.

(4) A copy of any comments on the application submitted to the Program Agent by the Governor of the State, a unit of general local government, or any labor organization in response to an invitation under subparagraph (2) of this paragraph. Comments received after the application is submitted shall also be sent to the Secretary, and the application shall contain an assurance that they will To forwarded.

) In making his determination ther or not to approve an application, we Secretary shall consider any com

RULES AND REGULATIONS

ments by the Governor, a unit of general local government or a labor organization receiving notice under paragraph (a) (2) of this section, which is filed with him or with the Program Agent within 3 days of the date specified under paragraph (a)(3) of this section, or within 15 days of such date provided it has been preceded within 3 days of such date by a notice of intent to file.

$ 35.11 Action upon application.

(a) An application for a grant from funds made available under section 9(a) (1) of the Act will be approved if (1) the Program Agent has the legal capacity to operate the program proposed, (2) the aplication meets the requirements of the statute and of the regulations in this part, and (3) the amount requested is not larger than the amount apportioned to the Program Agent filing the application.

(b) The Program Agent shall be notified of action taken on the application. If the application is accepted, the Secretary will execute and forward a grant document, which together with the application, the grant conditions, any appendices, and the regulations in this part shall constitute the grant agreement. If the application is denied, a notice of denial will be sent to the Program Agent accompanied by a brief statement of the grounds for denial.

(c) In the event an application is not filed within the time prescribed by the Secretary or is denied, or a grant is terminated in whole or in part during a fiscal year, the Secretary may make provision for the funds released by such failure to file, denial or termination to be used by one or more alternative Program Agents in furtherance of the purposes of the Act.

§ 55.15 Use of Federal funds.

(a) Federal funds will be granted on the basis of program applications, and may be used to meet not more than 90 percent of the cost of the program unless the Secretary waives the requirement for non-Federal share pursuant to § 55.16 (d) of these regulations in this part.

(b) Such funds may be expended only for purposes (1) permitted under the provisions of Subpart 1-15.7 of Title 41 of the Code of Federal Regulations, entitled "Principles for Determining Costs Applicable to Grants and Contracts with State and Local Government," and (2) rot barred under the remaining provisions of this part.

(c) Not less than 85 percent of the funds granted to a Program Agent, or the percent specified by the Secretary, shall be used for compensation and benefits to participants: Provided, That if initial funding is provided, the expenditures under such funding will be considered together with expenditures under a subsequent grant from funds apportioned under section 9(a) (1) of the Act for the same fiscal year for purposes of this paragraph.

a year plus fringe benefits to the extent they do not exceed those normally provided employees earning $12,000.

(2) Compensation for professional work to more than one-third of the participants, except that there is no maximum on the number of participating classroom teachers who may be paid from Federal funds. Additional exceptions may be made by the Secretary for good cause shown prior to the employment of such individuals.

(e) Federal funds shall not be used for acquisition, rental or leasing of supplies, equipment, materials or real property. whether these expenses are budgeted as direct costs, indirect costs, or overhead.

(f) Federal funds shall not be expended for work that would otherwise have been performed at Federal, State. or local expense, which will not result in an increase over the employment which would otherwise be available, which will result in the displacement of currently employed workers (including partial displacement such as a reduction in the hours of nonovertime work or wages or employment benefits), or which will impair existing contracts for services. § 55.16

Non-Federal share.

(a) Non-Federal share may be provided in cash or in kind, fairly evaluated, including, but not limited to, plant, equipment or services.

(b) Non-Federal share must be expended for a purpose which is allowable under the provisions of Subpart 1-15.7 of Title 41 of the Code of Federal Regulations entitled "Principles for Determining Costs Applicable to Grants and Contracts with State and Local Governments."

(c) Non-Federal participation may be derived from a variety of sources, including newly appropriated funds and previously appropriated funds and the time of personnel used by the Program Agent or the employing agency for the program. Voluntary services or space donated to the grantee from private sources may not be included as nonFederal share unless specifically accepted by the Secretary. Grantee contributions derived from other Federal funds, whether in cash or in kind, may not be used for the non-Federal share, except (1) when specifically permitted by the law under which the other Federal funds were made available, or (2) when an agency of the Federal Government is the employing agency.

(d) The secretary may waive the requirement for non-Federal share if it would cause a serious hardship for the Program Agent or prevent participation in the program by the Program Agent or an employing agency.

$55.17 Records, financial reports and

audits.

(1) Compensation to any participant at a full-time rate higher than $12,000

non-Federal share, and personnel and financial records, and submit such financial reports as are required by the

secretary to assure proper accounting for all program funds, including the nonFederal share. Such records and accounts shall be made available for audit purposes to the Department of Labor or the Comptroller General of the United States or any authorized representative of either, and shall be retained for 3 years after the expiration of the grant. § 55.18 Reports of effectiveness.

Program Agents shall submit periodic reports as required by the Secretary designed to measure the effectiveness of the program. In addition to any other requirements of the Secretary, such reports may be required to provide data on (a) the characteristics of participants, including age, sex, race, health, education level, and previous wage and employment experience; (b) their duration in employment situations, including information on the duration of employment of program participants for at least a year following termination of employment under the Act and comparable information on other employees or trainees of employing agencies; and (c) total dollar cost per participant, including a breakdown between the costs of wages, training, supportive services, fringe benefits, and administrative costs.

§ 55.19

Participant compensation and working conditions.

(a) Participants shall be paid wages or a salary at a rate which is not lower than whichever is the highest of (1) the minimum wage which would be applicable to the employee under the Fair Labor Standards Act of 1938 if section 6(a)(1) of such Act applied to the participant and he were not exempt under section 13 thereof; (2) the State or local minimum wage for the most nearly comparable covered employment, or (3) the prevailing rate of pay for persons employed in similar public occupations by the same employer. In addition, participants shall receive the protection of the same workmen's compensation, health insurance, unemployment insurance, and other benefits as other employees of the employer similarly employed, and shall enjoy working conditions and promotional opportunities neither more nor less favorable than such other employees enjoy.

(b) No participant will be required or permitted to work in buildings or surroundings or under working conditions which are unsanitary or hazardous or dangerous to his health or safety. If specific standards applicable to the occupational health and safety of public employees in the jurisdiction of the Program Agent are promulgated under § 18 of the Occupational Safety and Health Act of 1970 (Public Law 91-596), such standards shall be applicable to participants.

(c) Every participant must be advised prior to entering upon employment of his rights and benefits in connection with his employment under the Act. § 35.20

Non-discrimination.

Any grant made pursuant to the Act is subject to Title VI of the Civil Rights

RULES AND REGULATIONS

Act of 1964 (42 U.S.C. 2000d), which provides that no person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. Any such grant is also subject to the rules to implement Title VI which were issued by the Secretary of Labor with the approval of the President (29 CFR Part 31). § 55.25

Adjustments in payments.

(a) If any funds are expended by a Program Agent or an employing agency in violation of the Act, the regulations, or grant conditions, the Secretary may make necessary adjustments in payments to the Program Agent or the employing agency, if the Federal or State government, on account of such unauthorized or illegal expenditures. If the employing agency is the Federal or State government he may make adjustments in payments to the employing agency. He may draw back unexpended funds which have been made available in order to assure that they will be used in accordance with the purposes of the Act, or to prevent further unauthorized or illegal expenditures, and he may withhold funds otherwise payable under the Act in order to recover any amounts expended illegally or for unauthorized purposes in the current or immediately prior fiscal year. If no further payments would otherwise be made under the Act during the current or subsequent fiscal year, the Secretary may request a repayment of funds used for unauthorized or illegal expenditures, and within 30 days after receipt of such request such repayment shall be made.

(b) No action taken by the Government under paragraph (a) of this section shall entitle the grantee to reduce either salaries and wages or supportive services for any participant or to expend less during the effective period of the grant than those sums called for in his grant budget either for salaries and wages or for supportive services for participants. Any such reduction in expenditures may be deemed sufficient cause for termination under 55.26. § 55.26

Termination of grant.

(a) If the Program Agent violates or permits an employing agency to violate. or if a unit of Federal or State government acting independently as employing agency, violates any provisions of the Act, the regulations, or grant terms or conditions which the Secretary has issued or shall subsequently issue during the period of the grant, the Secretary may terminate the grant in whole or in part unless the grantes causes such violation to be corrected within a period of 30 days after receipt of notice specifying the violation: or

(b) In his discretion the Secretary may terminate the grant in whole or in part.

(c) Termination shall be effected by a notice of termination which shall specify the extent of termination and

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the date upon which such termination becomes effective. Upon receipt of notice of termination, the grantee sha: (1) Discontinue further commitments grant funds to the extent that they relate to the terminated portion of the grant; (2) promptly cancel all subgrants, agreements, and contracts utilizing funds under this grant to the extent that they relate to the terminated portion of the grant: (3) settle, with the approval of the Secretary, all outstanding claims arising from such termination; (4) submit, within 6 months after the receipt of the notice of termination, a termination settlement proposal which shall include a final statement of all unreimbursed costs related to the terminated portion of the grant, but in case of terminations under paragraph (a) of this section will not include the cost of preparing a settlement proposal. Allowable costs shall be determined in accordance with 55.15.

Signed at Washington, this 12th day of August 1971. L. H. SILBERMAN, Acting Secretary of Labor. [FR Doc 71-11921 Filed 8-13-71:8:53 am