Subpart A-Definitions
Definitions.

As used in this part:

(a) "Act" means the National Defense Education Act of 1958, as amended, 20 U.S.C. Ch. 17.

(b) "Commissioner" means the United States Commissioner of Education, Department of Health, Education, and Welfare.

(c) "Department" means the Department of Health, Education, and Welfare.

(d) "Elementary school" means 8 school which provides elementary education, as determined under State law.

(e) "Fiscal year," as used with respect to reporting and accounting requirements, means the period beginning on the first day of July and ending on the following June 30. (The calendar year of the ending date is used to designate the fiscal year.)

(f) "Junior college" means an institution of higher education which (1) is organized and administered principally to provide a two-year program which is acceptable for full credit toward a bachelor's degree; (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 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.

(i) "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. educational (k) "State 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 nationally recognized accrediting agency or association or, if not so ac

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credited, 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
Provisions

(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 junior colleges and technical institutes of such State; (3) that the State agency 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 basis for determining the propriety of State and local expenditures in which Federal participation is requested.

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

(d) Amendments. The administration 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 include, 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 programs 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.

The State plan shall set forth the authority of the State educational agency under State law to submit the State plan and to administer and supervise the programs set forth therein, including a description of the functional relationship

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) 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 and other agencies participating in the State plan will be audited; and, when

the audit is to be carried out at the local level, how the State agency will secure information necessary to assure proper use of funds expended under sections 503 and 504(a) of the Act by such educational agencies.

§ 143.7 Duties and qualifications of State personnel in professional positions.

(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.

§ 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 in the expenditures made by local agencies for a guidance and counseling, or testing, program if the program has not been approved by the State agency prior to the incurrence of the obligation.

(b) Equipment from a Communist country. Annual appropriation acts for the Department of Health, Education, and Welfare have provided that no part of the funds appropriated for "Defense Educational Activities" shall be avail

able for the purchase of teaching equipment or equipment suitable for use for teaching, in certain subjects, which can be identified as originating in or having been exported from a Communist country, unless such equipment is unavailable from any other source. Such a prohibition applies to expenditures with respect to which Federal participation is requested from allotments under section 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 as would negate their public character.

§ 143.14 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

tures.

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

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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.

§ 143.16 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 agencies.

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 §§ 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 supporting claims for Federal grants or relating to the accountability of the grantee agency for expenditure of such grants and relating to the expenditure of matching funds: (1) For three years after the close of the fiscal year in which the expenditure was made; (2) until the State