application may be approved unless it is accompanied by the written comments of a committee properly constituted in accordance with this section or a certification by such agency that such committee has been formed and was afforded the opportunity to review and comment upon the application (as required by this paragraph) but failed to submit any comments with respect thereto within the period afforded for such review.

(b) For the purposes of this section a biracial committee may be a committee which has been formed pursuant to an order of a Federal or State court for the desegregation of the school system of such agency.

(c) (1) A local educational agency which does not have a committee as described in paragraph (b) of this section (or which desires to establish a new committee for the purposes of this part) shall establish a committee under this paragraph. Such agency shall designate at least five civic or community organizations each of which shall select a member of the committee. The civic or community organizations which participate in the selection process shall, when taken together rather than considered individually, be broadly representative of the minority and nonminority communities to be served. (The following organizations, if they exist in the district served by the local educational agency, should be among those invited to select a member of the biracial advisory committee: Title I Advisory Committee; Community Action Agency or Head Start Program; Model Cities Agency; Parent-Teacher Association; and the National Association for the Advancement of Colored People, Urban League, or other civil rights or human relations organization active in the community.)

(2) A committee formed under this paragraph must be composed of equal numbers of nonminority group members and members from each significant minority group represented in the community. (For example, in a school district containing both Negro and Spanishsurnamed communities, the committee should be composed of equal numbers of Negro, Spanish-surnamed American and nonminority group members.) At least 50 percent of the members of the committee shall be parents of children directly affected by the requirements described in 181.3(a). In addition to members appointed to the committee by civic or community organizations, a local educa

tional agency shall select the minimum number of additional persons as may be necessary to meet the requirements of this subparagraph.

(d) Each application by a local educational agency for assistance under the program shall contain an assurance that such agency will consult at least once a month with its biracial committee established under this section (in formal meetings of such committee) with respect to policy matters arising in the administration and operation of any project for which funds are made available under the program, and that it will provide such committee with a reasonable opportunity to periodically observe (upon prior and adequate notice to such agency at such time or times as such committee and agency may agree) and comment upon all project-related activities.

(e) The names of the members of said biracial advisory committee shall be published in a newspaper of general circulation or otherwise made public prior to the submission of an application under this part.

(f) No amendment to the project of a local educational agency shall be approved, and no additional funds made available under the program, unless the biracial advisory committee has been given an opportunity to comment upon such amendment of or addition to the project. Amendments or additions suggested by the biracial advisory committee shall be forwarded by the local educational agency, with or without comment by such agency, to the Commissioner for his consideration.

(20 U.S.C. 1231d)

§ 181.8 Student advisory committees.

The application of a local educational agency shall contain an assurance that, no later than 30 days after the opening of the 1971-72 acadamic year or after the approval of such application, whichever occurs later, a student advisory committee will be formed from secondary grade students in each school affected by the project which offers secondary instruction. Each such committee shall be composed of equal numbers of each significant minority and nonminority group in the affected school. The members of each such committee shall be selected by the student body or the student government of such school. Representatives of the local educational agency shall periodically consult with the student advisory

In determining whether to provide assistance under the program, or in fixing the amount thereof, the Commissioner will consider such criteria as he deems pertinent, including

(a) The applicant's relative need for assistance;

(b) The relative promise of the project or projects to be assisted in carrying out the purpose of the program;

(c) The extent to which the proposed project deals comprehensively and effectively with problems faced by the local educational agency in achieving and maintaining a desegregated school system;

(d) The extent and impact of the desegregation achieved or to be achieved;

(e) The number of minority students in the school district;

(f) In the case of applicants which have previously received assistance under the program, the relative effectiveness of the projects conducted under the program prior to July 1, 1971, and other factors relating to the performance of such applicant under such program.

§ 181.11 Review by State educational

agency.

The Commissioner will not approve an application for assistance pursuant to § 181.6 without first affording the appropriate State educational agency a reasonable opportunity to review and make recommendations with respect to such application.

§ 181.12 Non-Federal contributions.

In view of the emergency nature of the program and the fact that most local educational agencies have already determined their budgets for the 1971-72 academic year, the Commissioner will not

require an applicant to contribute to the costs of the project if the application is accompanied by an assurance satisfactory to him that the applicant does not have available adequate resources for that purpose.

§ 181.13 Submission and disposition of application.

The Commissioner will notify each applicant of the approval, disapproval, or other disposition of the application.

§ 181.14 General terms and conditions. Grants provided pursuant to this part will be subject to the General Terms and Conditions for the Emergency School Assistance Program, published as Appendix A to this part. Activities carried out under the authority of title II of the Economic Opportunity Act of 1964 will be carried out in conformance with the Memorandum of Understanding between the Office of Economic Opportunity and the Department of Health, Education, and Welfare, published as Appendix B to this part.

(a) (1) Assistance under the program may be terminated in whole or in part if the Commissioner determines after affording the recipient reasonable notice and an opportunity for a full and fair hearing, that the recipient has failed to carry out its approved project proposal in accordance with the applicable law and the terms of such assistance or has otherwise failed to comply with any law, regulation, assurance, term or condition applicable to the program. Assistance under this program may be suspended during the pendency of a termination proceeding initiated pursuant to this paragraph: Provided, That the recipient is afforded reasonable notice and opportunity to show cause why such action should not be taken.

(2) Proceedings with respect to the termination of a grant shall be initiated by the mailing to the recipient of a notice by certified mail, return receipt requested, informing the recipient of the Government's request for termination and the specific grounds therefor, together with information regarding the time, place, and nature of the hearing and the legal authority and jurisdiction under which the hearing is to be held and such other information with respect to the conduct of such proceedings as the Commissioner may determine. If the

Commissioner determines for good cause that suspension of assistance during the pendency of such proceedings is necessary, said notice shall, in addition to the matters described above, inform the recipient of such determination and shall offer the recipient an opportunity to show cause why such action should not be taken.

(3) A notice of suspension of assistance shall advise the recipient, in addition to the matters described in subparagraph (2) of this paragraph, that any new expenditures or obligations made or incurred in connection with the program during the period of the suspension will not be recognized by the Government in the event the assistance is ultimately terminated. Expenditures to fulfill legally enforceable commitments made prior to the notice of suspension, in good faith and in accordance with the recipient's approved program or project, and not in anticipation of suspension or termination, shall not be considered new expenditures.

(4) Termination of assistance shall be effected by the delivery to the recipient of a final order of termination, signed by the Commissioner or his designee, or upon an initial decision of a hearing examiner becoming final without appeal to or review by the Commissioner.

(5) In the event assistance is terminated under this section, financial obligations incurred by the recipient prior to the effective date of such termination will be allowable to the extent they would have been allowable had such assistance not been terminated, except that no obligations incurred during the period in which such assistance was suspended pursuant to subparagraph (1) of this paragraph and no obligations incurred in anticipation of suspension or termination will be allowed. Within 60 days of the effective date of termination of assistance under this section, the recipient shall furnish an itemized accounting of funds expended, obligated, and remaining. Within 30 days of a request therefor, the recipient shall remit to the Government any accounts found due.

(b) (1) If the recipient requests an opportunity to show cause why a suspension of assistance pursuant to paragraph (a) (1) of this section should not be continued or imposed, the Commissioner will, within 7 days after receiving such

request, hold an informal meeting for such purpose.

(2) Hearings respecting the termination of assistance pursuant to this section shall be conducted pursuant to the provisions of the Administrative Procedure Act (5 U.S.C. 554-557). Proposed findings of fact, conclusions of law, and briefs will be submitted to the presiding officer within 20 days of the conclusion of the hearing.

(3) The initial decision of a hearing examiner regarding the termination of a grant under the program shall become the decision of the Commissioner without further proceedings unless there is an appeal to, or review on motion of, the Commissioner made in writing no later than 15 days after receipt by the party requesting such appeal or review of the decision of the hearing examiner. A request for appeal or review under this section shall be accompanied by exceptions to the hearing examiner's decision, proposed findings, supporting reasons and briefs. The adverse party shall submit its reply no later than 15 days after the submission of such request for appeal or review. The Commissioner shall issue a final decision in the case of such appeal or review no later than 30 days after the final submission of the above materials by the parties. The Commissioner may delegate his functions under this subparagraph to an appellate review council established and appointed by him.

(c) The procedures established by this section shall not preclude the Commissioner from pursuing any other remedies authorized by law. Proceedings pursuant to Part 80 of this title with respect to the eligibility of an applicant for assistance under title VI of the Civil Rights Act (42 U.S.C. 2000d) shall be governed by the regulations in that part and Part 81.

(42 U.S.C. 2944)

§ 181.16 Effect of Federal action.

No official, agent, or employee of the Office of Education or the Department of Health, Education, and Welfare shall have the authority to waive or alter any provision of these regulations or other relevant Act or regulation, and no action or failure to act on the part of such official, agent, or employee shall operate. in derogation of the Commissioner's right to enforcement of said provisions in accordance with their terms.

24. Labor standards.

25. Equal employment opportunity. 26. Use of consultants.

1. Definitions. As used in the grant documents relating to this award, the following terms shall have the meaning set forth below:

a. "Commissioner" means the U.S. Commissioner of Education.

b. "Grantee" means the agency, institution, or organization named in the grant as the recipient of the grant award.

c. "Grants Officer" means the employee of the U.S. Office of Education who has been delegated authority to execute or amend the grant document on behalf of the Government.

d. "Project Officer" means the employee of the U.S. Office of Education who is responsible for monitoring the project of the Grantee to assure compliance with the terms and conditions of the grant.

e. "Project Director" is the person responsible for directing the project of the Grantee.

f. "Project" is the identified activity or program approved by the Commissioner for support.

g. "Project Period" means the length of time specified in the Notification of Grant Award for which a project is approved.

h. "Budget Period" means the period of time (within or coterminous with the project period specified in the Notification of Grant Award), during which project costs may be charged against the grant. A budget period

is generally twelve (12) months but may be for a different period of time, if appropriate.

i. "Budget" means the amount of funds approved by the Office of Education for designated services, materials, and other items.

2. Scope of the project. The project to be carried out hereunder shall be consistent with the proposal as approved for support by the Commissioner and referred to in the Notification of Grant Award and shall be performed in accordance with this approved project proposal. No substantive changes in the program of a project shall be made unless the Grantee submits (at least 30 days prior to the effective date of the proposed change) an appropriate amendment thereto, along with a justification for the change, and this amendment is approved in writing by the Grants Officer.

3. Limitations on costs. a. The total costs to the Government for the performance of the grant shall not exceed the amount set forth in the Notification of Grant Award or any appropriate modification thereof. The Government shall not be obligated to reimburse the Grantee for costs incurred in excess of such amount unless and until the Grants Officer shall have notified the Grantee in writing that such amount has been increased and shall have specified in a revised Grant Award a revised amount which shall thereupon constitute the revised total cost of performance of the grant.

b. When and to the extent that the amount set forth in the grant has been increased, costs incurred by the Grantee prior to notification of such increase, in excess of the previous amount, shall be allowable to the same extent as if such costs had been incurred after notification of such increase in the amount.

c. The Grantee may transfer funds among the various cost categories in the negotiated budget to the extent necessary to assure the effectiveness of the project, except that, no transfers may be made which alter the approved project.

d. Funds for the production of motion picture films for viewing by the general public area not authorized until prior written approval is received from the Grants Officer.

4. Allowable costs. a. Expenditures of the Grantee may be charged to this grant only if they: (1) Are incurred subsequent to the effective date of the project indicated in the Notification of Grant Award, which shall be no earlier than the date upon which the award document is signed by the Grants Officer, and (2) conform to the approved project proposal.

b. Funds obtained under this grant shall not be used for the construction of new facilities or for major structural changes in or additions to existing facilities.

c. Subject to paragraphs (a) and (b), allowability of costs incurred under this grant shall be determined in accordance with

the principles and procedures set forth in the documents identified below, as amended prior to the date of the award.

(1) Exhibit X-2-65-1 of the Department of Health, Education, and Welfare Grants Administration Manual, if the Grantee is an institution of higher education; or

(2) Chapter 5-60 of the Department of Health, Education, and Welfare Grants Administration Manual, if the Grantee is a State or local government agency; or

(3) Exhibit X-2-68-1 of the Department of Health, Education, and Welfare Grants Administration Manual, if the Grantee is a nonprofit institution, as defined therein.

d. In accordance with the policy of the Department of Health, Education, and Welfare, if the Grantee has an audited indirect cost rate that has been approved by the Division of Grants Administration Policy, this approved rate may be applied to both the Federal and non-Federal share of allowable direct costs of the project. When an indirect cost rate is applied to either the Federal or non-Federal share of project costs, no item normally included in the Grantee's indirect cost pool (such as supervision, accounting, budgeting, or maintenance) shall be listed as a direct cost of the project. Procedures for establishing Indirect Cost Rates are covered in Department of Health, Education, and Welfare brochures: OASC-1, A Guide for Educational Institutions; OASC-5, A Guide for Non-Profit Institutions; and OASC-6, A Guide for State Government Agencies.

5. Accounts and Records-a. Accounts. The Grantee shall maintain accounts, records and other evidence pertaining to all costs incurred, and revenues or other applicable credits acquired under this grant. The system of accounting employed by the Grantee shall be in accordance with generally accepted accounting principles generally used by State or local agencies or institutions of higher education, or nonprofit organizations, as appropriate, and will be applied in a consistent manner so that the project expenditures can be clearly identified.

b. Cost sharing records. The Grantee's records shall demonstrate that any contribution made to the project by the Grantee is not less, in proportion to the charges against the grant, than the percentage specified in the grant or any subsequent revision thereof.

c. Examination of records. All records directly relating to transactions under this grant are subject to inspection and audit by the Department of Health, Education, and Welfare and by the General Accounting Office at all reasonable times during the period of retention provided for in paragraph (d) below.

d. Disposition of records. Except as provided in paragraph (e), all pertinent records and books of accounts related to this grant in the possession of the Grantee shall be preserved by the Grantee for a period of three (3) years after the end of the budget period, if audit by or on behalf of the De

partment has occurred by that time; or if audit by or on behalf of the Department has not occurred by that time, the records must be retained until audit or until five (5) years following the end of the budget period, whichever is earlier.

e. Questioned expenditures. Records relating to any litigation or claim arising out of the performance of this grant, or costs and expenses of this grant to which exception has been taken as a result of inspection or audit shall be retained by the Grantee until such litigation, claim, or exception has been disposed of.

6. Fund control. No funds shall be released to any public or private nonprofit agency, or combination thereof, unless the Grantee has submitted to the Grants Officer eithera. a statement from an appropriate public financial officer certifying that the Grantee has established an accounting system with internal controls adequate to safeguard its assets, check the accuracy and reliability of accounting data, promote operating efficiency and encourage compliance with prescribed management policies, and that such officer shall be responsible for maintaining this accounting system; or

b. an opinion from a Certified Public Accountant or a duly licensed public accountant stating that the Grantee has established such an accounting system.

7. Preliminary audit. Within three (3) months after the effective date of the grant, the Grantee will secure a preliminary audit survey of its accounting system and will submit a report thereon to the Grants Officer.

8. Payment procedures. a. To obtain Federal funds, the Grantee must submit Forms 5141, Quarterly Estimated Requirements for Federal Cash, and OE-5140, with attachment 5232-A, Monthly/Quarterly Report of Disbursement of Federal Cash. Instructions for completing the forms are printed on the reverse side. The report of cash disbursements is to be submitted as a quarterly report and is due by the 10th day of the month following the end of a calendar quarter.

Inquiries regarding payment shall be addressed to the Director, Finance Division, U.S. Office of Education, 400 Maryland Avenue SW., Washington, DC 20202.

b. Any funds remaining unobligated at the expiration of the Budget period shall within ninety (90) days of the date of expiration of the said period be refunded by check made payable to the U.S. Office of Education. All refunds must reference the Grant Number shown on the Notification of Grant Award. 9. Reports. The Grantee shall submit the following reports to the Office of Education.

a. Evaluation. 1. Completed form furnished by HEW (see § 181.6 (a) (4) (ix) of regulations-October 15.

2. Interim report-May 1.

3. Final report-ninety (90) days after expiration of the budget period.

b. Statistical Informations (forms and instructions to be submitted to grantee by DHEW). 1. The initial report will be due