§ 171.5

Criteria for standards and methods to determine relative priorities of eligible projects.

(a) Each State plan shall set forth separately the standards and methods for determining the relative priorities of eligible projects for: (1) Acquisition of laboratory and other special equipment and materials; and (2) television equipment and materials for closed-circuit direct instruction.

(b) The standards applicable to projects for acquisition of laboratory and other special equipment and materials shall in every case include the following, each of which shall be assigned at least the indicated percentage of the total point scores possible for all standards applicable to such projects:

(1) The average of the basic educational and general expenditures per semester credit hour equivalent (with priority advantage given to lower averages), at the institution or branch campus for which the project is submitted, for the three completed institutional fiscal years (or for the completed years, if less than three) immediately preceding the closing date for which the application is filed with the State commission (at least 25 percent of total weight).

(2) Whether or not the equipment and materials to be purchased under the project are to be placed and used in: (1) Existing classrooms (as defined in paragraph (g) of § 171.1) or audiovisual centers; or (ii) classrooms (as defined in paragraph (g) § 171.1) or audiovisual centers to be made available by new construction and/or by major rehabilitation or conversion of existing facilities. Points for this standard shall be awarded according to the percentage of the total equipment and materials budget which is for equipment and materials to be placed and used in existing classrooms or audiovisual centers, with maximum points awarded for projects for which 100 percent of the budget is for such purposes (at least fifteen percent of total weight).

(3) The capacity/enrollment ratio (as defined in paragraph (f) of § 171.1) at the institution or branch campus for which the project is submitted, as of the fall term which opened preceding the closing date for which the application is filed (at least ten percent of total weight, with priority advantage given to lower ratios.)

(c) The standards applicable to projects for acquisition of television equip

ment and materials for closed-circuit direct instruction shall in every case include the standards listed below, each of which shall be assigned at least the indicated percentage of the total point scores possible for all standards applicable to such projects.

(1) The average of the basic educational and general expenditures per semester credit hour equivalent (with priority advantage given to lower averages) at the institution or branch campus for which the project is submitted, for the three completed institutional fiscal years (or for the completed years, if less than three) immediately preceding the closing date for which the application is filed with the State commission (at least 25 percent of total weight).

(2) The ability of the applicant to effectively utilize educational television as evidenced by the number of planned additional undergraduate level courses to be programed for closed-circuit instruction at the institution or branch campus covered by the project as of the opening of the second fall term after the fall term which opened preceding the closing date for which the application is filed (with higher priority value awarded for a greater number of additional courses to be programed). As used here, "course" means a particular course offering (such as "English I") rather than an individual section of the same course (at least 15 percent of total weight).

(3) The ability of the applicant to effectively utilize educational television as evidenced by the projected number of additional student enrollments in undergraduate level courses to be programed for closed-circuit instruction at the institution or branch campus covered by the project as of the opening of the second fall term after the fall term which opened preceding the closing date for which the application is filed (at least ten percent of total weight, with higher priority value awarded to a greater number of additional student enrollments).

(d) The State plan may include additional standards for determining relative priorities of either category of projects, which are not inconsistent with the criteria set forth in paragraphs (b) and (c) of this section and which will carry out the purposes of the Act.

(e) The methods for application of the standards shall provide for the assignment of point values for each standard applied, and shall provide specific objective methods for determining the number of points which each application considered shall be awarded for each standard. Unless otherwise provided for in the State plan, applications for institutions or branch campuses which have not been in operation for at least one academic year preceding the academic year in which the application is filed shall receive one-half of the points provided in the State plan for the standards required by paragraphs (b) (1) and (3) and (c) (1) of this section. Except as provided in paragraph (b) (2) of this section, the assignment of points for each standard may be by any one of the following methods, or by similar objective methods, a different one of which may be used in connection with each standard:

(1) Applications may be ranked according to relative performance for the standard, and assigned a point score for relative rank (e.g., 10 points for placement in the highest 10 percent, 9 points for placement in the second highest 10 percent, 8 points for placement in the third highest 10 percent, etc.).

(2) Applications may be compared to a scoring table for the standard and assigned points accordingly (e.g., for capacity/enrollment ratio, a scoring table might provide for 10 points for a ration of 100 or less, 9 points for a ratio of 101 to 150, 8 points for a ratio of 151 to 200, 7 points for a ratio of 201 to 250, 6 points for a ratio of 251 to 300, 5 points for a ratio of 301 to 350, etc.). In connection with standards required by paragraphs (b) (1) and (3) and (c) (1) of this section, State plans may provide for separate scoring scales for applications for different sizes or different educational or functional types of institutions or branch campuses, if such tables are supported by objective normative data based on recent research and analysis.

(3) Applications may be compared to a fixed requirement for the standard, and assigned points if they meet the requirement or denied points if they do not. This type of scoring should be used where comparison against the standard involves a "yes-no" decision.

(f) The method for application of the standards shall provide also for determination of relative priorities on the basis of the total of the points earned by each application for each applicable standard and shall specify factors to be applied to determining which application

shall receive the higher priority in the case of identical scores for applications where funds available in the applicable State allotment are insufficient to provide full Federal shares for both or all of the tied applications.

(g) The standards and methods for determining relative priorities must be developed on the basis of information which is to be submitted on the application form prescribed by the Commissioner, required by the State commission to be submitted in connection with the filing of an application, or contained in reports or publications readily available to the State commission and the institutions within the State. In no event shall an institution's readiness to admit outof-State students or the number of such out-of-State students be considered as a priority factor adverse to such institution, and in no event may the nature of the control or sponsorship of the institution be considered as a priority factor either in favor of, or adverse to, an institution.

§ 171.6

Criteria for standards and methods to determine Federal shares of eligible projects.

(a) Each State plan shall set forth separately the standards and methods for determining the Federal shares of eligible projects for: (1) Acquisition of laboratory and other special equipment and materials; and (2) television equipment and materials for closed-circuit direct instruction. Except as provided in paragraph (b) of this section, the Federal share to be provided for by such standards and methods shall not exceed 50 percent of the project cost.

(b) The State plan may provide for Federal shares of up to 80 percent of the project cost for institutions proving insufficient resources to otherwise participate in the program under this part and inability to acquire such resources. Any such provision in a State plan shall include specification of objective criteria which will have to be satisfied before such a determination will be made by the State commission. The Federal share may in no case be increased above 50 percent except where such provisions are included in the State plan as approved.

(c) Standards and methods for determining the Federal share pursuant to paragraphs (a) and (b) of this section: (1) Must be objective and simple to apply; (2) may involve the use only of data which are to be submitted on the application form prescribed by the Commissioner, required by the State commission to be submitted in connection with the filing of an application, or contained in reports or publications readily available to the State commission and the institutions of higher education within the State; (3) must be such as will enable an applicant to calculate in advance (on the assumption that sufficient funds will be available to cover all applications) the estimated Federal share which the State commission will certify to the Commissioner if it recommends the project for a Federal grant; and (4) must be consistent with the criteria published by the Commissioner with respect to the determination of relative priorities among projects and be promotive of the purposes of title VI.

§ 171.7 Fiscal control and fund accounting procedures.

(a) State commissions. Each State plan shall contain specific information regarding fiscal control and fund accounting procedures, as required by the Commissioner to ensure proper disbursement of and accounting for Federal funds which may be paid to the State commission for expenses necessary for the proper and efficient administration of the State plan.

(b) Institutions. Applicants shall maintain adequate and separate accounting and fiscal records and accounts of all funds provided from any source to pay the cost of equipment, materials, and minor remodeling for each approved project, and audit of such records by the Commissioner's designated representatives shall be permitted and facilitated by applicants at any reasonable time. In addition, applicants shall make available for audit purposes financial accounting records and analyses which substantiate the total amount of pertinent expenditures for equipment, materials and minor remodeling for the particular institution or branch campus for the Federal fiscal year in which the grant is awarded, as well as the total amount of such expenditures for the preceding fiscal year.

§171.8 Retention of records.

(a) State Commissions. (1) Accounts and documents supporting expenditures for expenses of State Commissions shall be maintained until notification of completion of Federal audits for the fiscal year concerned or for a period of 5 years

after the end of such fiscal year, whichever is sooner, except that such records shall be maintained until any questions raised on audit have been resolved.

(2) State commissions shall: Establish a complete case file on each application received; inform applicants of official actions and determinations, by letter or similar type of correspondence; and retain records regarding each case for at least 2 years after final action with respect to the application is taken by the State commission. In addition, each State commission shall maintain a full record of all proceedings by which it establishes relative priorities and recommended Federal shares for eligible projects considered according to each specified closing date and shall retain such records for at least 2 years after each such closing date.

(b) Institutions. All accounting records relating to approval projects and to verification of the applicant's maintenance of effort, as specified in paragraph (b) of § 171.7, including bank deposit slips, cancelled checks and other supporting documents and contract awards (or microfilm facsimiles thereof), shall be retained intact by the applicant for audit or inspection by authorized representatives of the Federal government for a period of 3 years after completion of the project or until the applicant is notified of the government's audit, whichever is later.

[31 F.R. 4795, Mar. 22, 1966, as amended at 34 F.R. 8110, May 23, 1969]

§ 171.9 State plans.

(a) The Commissioner shall approve a State plan only after he has received satisfactory assurance and explanation regarding the basis on which the State commission submitting the plan meets the requirements of section 601 of the Act. A State plan submitted in accordance with section 601 of the Act shall be submitted on forms or in a format supplied by the Commissioner and shall contain all provisions required by the Commissioner pursuant to section 603 of the Act and other sections of the regulations in this part, together with such additional organizational and administrative information as the Commissioner may request.

(b) All proposed amendments to the State plan shall be submitted to the Commissioner for his approval in such form and in accordance with such instructions as are established for that purpose. Such amendments shall apply uniformly to all applications to be considered together as of any closing date, and, unless otherwise provided in the State plan, shall become effective immediately upon approval by the Commissioner, except that in no event shall any amendment which affects the standards and methods for determining priorities or Federal shares or any amendment providing for an additional closing date or for the change in an existing closing date become effective sooner than 60 days after the date the proposal to make such amendment is received by the Commissioner and 30 days after the date of the Commissioner's approval of the amendments as a part of the State plan: Provided, however, That amendments which are required by amendments of the Act or are designed to promptly implement amendments of the Act may be made effective immediately upon their approval by the Commissioner.

§ 171.10 Requirement for economical methods of purchase.

All equipment, materials, and minor remodeling work, the cost of which is to be charged to an approved project, shall be procured in an economical manner consistent with sound business practice. Proposed methods of purchase shall be set forth by the applicant as part of each project application, and shall include specific justification for any proposal to follow procedures other than open, competitive bidding.

§ 171.11

Determination of costs eligible

for Federal participation.

(a) Costs eligible for Federal participation in connection with any project shall include only those costs to the applicant which are determined to be eligible in accordance with paragraphs (c) and (d) of § 171.3, are consistent with the plan for improvement of undergraduate instruction set forth in the approved application, are incurred in an economical manner consistent with sound business practice, and are for items which are not overly elaborate or extravagant. Expenditures in which Federal participation is claimed also may include the cost of raw or processed materials or component parts to be made into finished products or into complete equipment units, including the cost (above and beyond salaries of any regular employees of the applicant) of making and assembling such equipment.

(b) Such determinations shall be finally made by the Commissioner at the time a final audit is made of the completed project and related financial accounts.

(c) In any case where the costs eligible for Federal participation, as determined by the final audit, exceed those provided for in the grant agreement for the project, the Federal share entitlement of the applicant shall be limited to that provided by the grant agreement.

(d) In any case where the costs eligible for Federal participation, as determined by the final audit, are less than those provided for in the grant agreement, the Commissioner shall redetermine the amount of the Federal share entitlement of the applicant in accordance with the maximum Federal share which would have been recommended for the project, based on the lesser eligible cost, under State plan provisions in effect at the time the project was recommended for a grant, if sufficient funds had been available in the State allotment at that time to provide the maximum possible Federal share provided for by the plan under such circumstances. If such redetermined Federal share entitlement is less than the amount provided in the grant agreement, the grant shall be reduced accordingly, and any overpayment of Federal funds, plus any interest earned thereon, shall immediately be due to the Government of the United States. If such redetermined Federal share is equal to or greater than the amount of the Federal share provided in the grant agreement, the final settlement shall be based on the Federal share amount provided in the grant agreement.

§ 171.12 Payment of grant funds on approved projects.

The Commissioner shall provide for payment of grant funds for the project pursuant to such methods as the Commissioner determines will best make the funds available as needed and eliminate unnecessary expense to the Federal Government.

tion Act of 1965, as amended (20 U.S.C. 1001). (20 U.S.C. 1001 Note.)

(b) "Commissioner" means the U.S. Commissioner of Education, Department of Health, Education, and Welfare.

(c) "Community service program" means an educational program, activity, or service offered by an institution(s) of higher education and designed to assist in the solution of community problems in rural, urban, or suburban areas with particular emphasis on urban and suburban problems. "Community service program" may include but is not limited to a research program, an extension or continuing education activity, or a course, provided, however, that such courses are extension or continuing education courses and are either fully acceptable toward an academic degree, or of college level as determined by the institution offering such courses.

(1) "Educational service" means an aspect of the community service program involving the resources of an institution(s) of higher education, including equipment and library materials used in support of efforts to solve community problems.

(2) "Educational research program" means an experimental activity or demonstration carried out on an objective and systematic basis using the resources of an institution(s) of higher education to identify and develop new, expanding, or improved approaches to the solution of community problems.

(3) "Extension and continuing education" refers to the extension and continuance of the teaching and research resources of an institution of higher education to meet the unique educational needs of the adult population who have either completed or interrupted their formal training. Instructional methods include, but are not limited to, formal classes, lectures, demonstrations, counseling and correspondence, radio, television, and other innovative programs of instruction and study organized at a time and geographic location enabling individuals to participate. Programs of continuing and extension education assist the individual to meet the tasks imposed by the complexities of our society in fulfilling his role in the world of work, as an informed and responsible citizen, and in his individual growth and development.

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