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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 exсерtions 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.

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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 either

a. 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 ninety (90) days after date of award, and should represent information applicable to the current school year.

2. The final report will be due ninety (90) days after the expiration of the budget period, and is to represent information applicable to the subsequent school year.

10. Printing and duplicating. All printing and duplicating authorized under this grant are subject to the limitations and restrictions contained in the current issue of the U.S. Government Printing and Binding Regulations if done for the use of the Office of Education within the meaning of those Regulations. (U.S. Government Printing and Binding Regulations)

11. Extension of project period or budget period. When progress under the grant is delayed and circumstances make it necessary to request an extension of either the project period or the budget period, or both, without additional funds, it is the policy of the Office of Education to consider such extensions upon written request.

12. Applicability of State and local laws and institutional procedures regarding expenditure of funds. Except to the extent otherwise provided for in this document or any document incorporated herein by reference, nothing herein or therein shall be construed so as to alter the applicability to the Grantee of any State or local law, rule, regulation, or any institutional procedure which would otherwise pertain to the expenditure of funds.

13. Copyright and publication. a. The term "materials" as used herein means writings, sound recordings, films, pictorial reproductions, drawings, or other graphic representations, computer programs, and works of any similar nature produced under this grant. The term does not include financial reports, cost analysis, and similar information incidental to grant administration.

b. It is the policy of the Office of Education that the results of activities supported by it should be utilized in the manner which would best serve the public interest. To that end, except as provided in paragraph (c), the Grantee shall not assert any rights at common law or in equity or establish any claim to statutory copyright in such materials; and all such materials shall be made freely available to the Government, the education community, and the general public.

c. Notwithstanding the provisions of paragraph (b) above, upon request of the Grantee or his authorized designee, arrangements for copyright of the materials for a limited period of time may be authorized by the Commissioner, through the Grants Officer, upon a showing satisfactory to the Office of Education that such protection will result in more effective development or dissemination of the materials and would be in the public interest.

d. With respect to any materials for which the securing of a copyright protection is authorized under paragraph (c), the Grantee hereby grants a royalty-free, nonexclusive

and irrevocable license to the Government to publish, translate, reproduce, deliver, perform, use, and dispose of all such materials.

e. To the extent the Grantee has the right and permission to do so, the Grantee hereby grants to the Government a royalty-free, nonexclusive and irrevocable license to use in any manner, copyrighted material not first produced in the performance of this grant but which is incorporated in the materials. The Grantee shall advise the Grants Officer of any such copyrighted material known to it not to be covered by such license.

14. Acknowledgment and disclaimer in publication. Any publication or presentation resulting from or primarily related to the project being performed hereunder shall contain the following acknowledgment:

The project presented or reported herein was performed pursuant to a Grant from the U.S. Office of Education, Department of Health, Education, and Welfare. However, the opinions expressed herein do not necessarily reflect the position or policy of the U.S. Office of Education, and no official endorsement by the U.S. Office of Education should be inferred.

15. Patent rights-a. Policy. In accordance with Department of Health, Education, and Welfare Regulations (45 CFR Subtitle A, Parts 6 and 8), all inventions made in the course of or under any Office of Education grant shall be promptly and fully reported to the Assistant Secretary (Health and Scientific Affairs), Department of Health, Education, and Welfare.

The grantee institution and the principal investigator shall neither have nor make any commitments or obligations which conflict with the requirements of this policy.

b. Determination. Determination as to ownership and disposition of invention rights, including whether a patent application shall be filed, and if so, the manner of obtaining, administering, and disposing of rights under any patent application or patent which may be issued shall be made either:

(1) By the Assistant Secretary (Health and Scientific Affairs) whose decision shall be considered as final, or

(2) Where the institution has a separate formal institutional agreement with the Office of Education or the Department, by the grantee institution in accordance with such agreement.

Patent applications shall not be filed on inventions under (1) above without prior written consent of the Assistant Secretary (Health and Scientific Affairs) or his representative. Any patent application filed by the Grantee on an invention made in the course of or under an Office of Education grant shall include the following statement in the first paragraph of the specification:

"The invention described herein was made in the course of, or under, a grant from the U.S. Office of Education, Department of Health, Education, and Welfare."

c. Reports and other requirements. A complete written disclosure of each invention in the form specified by the Assistant Secretary (Health and Scientific Affairs) shall be made by the Grantee promptly after conception or first actual reduction to practice, whichever occurs first under the grant. Upon request, the Grantee shall furnish such duly executed instruments (prepared by the Government) and such other papers as are deemed necessary to vest in the Government the rights reserved to it under this policy statement to enable the Government to apply for and prosecute any patent application, in any country, covering each invention where the Government has the right to file such application.

The Grantee shall furnish interim reports (Annual Invention Statements) prior to the continuation of any grant listing all inventions made during the budget period whether or not previously reported, or certifying that no inventions were made during the applicable period. Upon completion of the project period, the Grantee shall furnish a final invention report listing all inventions made during performance of work on the supported project or certifying that no inventions were made during that work.

d. Supplementary patent agreements. The Grantee shall obtain appropriate patent agreements to fulfill the requirements of this provision from all persons who perform any part of the work under the grant, except such clerical and manual labor personnel as will have no access to technical data, and except as otherwise authorized in writing by the Department.

The Grantee shall insert in each subcontract or agreement having experimental developmental, or research work as one of its purposes, a clause making this provision applicable to the subcontractor and its employees.

e. Definitions. As used in this provision, the stated terms are defined as follows for the purposes hereof:

(1) "Invention" or "invention or discovery" includes any art, machine, manufacture, design, or composition of matter, or any new and useful improvement thereof, or any variety of plant, which is or may be patentable under the Patent Laws of the United States.

(2) "Made" when used in relation to any invention or discovery means the conception or first actual reduction to practice of such invention in the course of the grant.

1. Inventions resulting from grants made in support of research by Federal employees. Inventions resulting from grants made in support of research by Federal employees shall be reported simultaneously to the Assistant Secretary (Health and Scientific Affairs) pursuant to terms of the grant and to the employing agency under the terms of Executive Order 10096 as amended. (45 CFR Parts 6 and 8)

16. Travel. Travel allowances shall be paid in accordance with applicable State and local

laws and regulations and grantee policies. If none of these are applicable, travel shall be done in accordance with Federal Government regulations. No foreign travel is authorized under the grant unless prior approval is received from the Grant Officer. Travel between the United States and Guam, American Samoa, Puerto Rico, the U.S. Virgin Islands, the Canal Zone, and Canada is not considered foreign travel.

17. Equipment. Title to, and accountability for, equipment shall be determined in accordance with Chapter 1-410, Management of Equipment and Supplies Acquired Under Project Grants, of the Department of Health, Education, and Welfare Grants Administration Manual.

18. Service contracts. The Grantee may enter into contracts or agreements (to the extent permitted by State and local law) for the provision of part of the services under this grant by other appropriate public or private agencies or institutions. Such contract or agreement shall incorporate these grant terms and all other rules and regulations applicable to the program, shall describe the services to be provided by the agency or institution, and shall contain provisions assuring that the Grantee will retain supervision and administrative control over the provision of services under the contract. Services to be provided by contract pursuant to this section shall be specified in the project proposal or in an amendment thereto, and the proposed contract shall be submitted to the Grants Officer and be approved by him in writing.

19. Health and safety standards. Whenever the Grantee, acting under the terms of the grant, shall rent, lease, purchase, or otherwise obtain classroom facilities (or any other facilities) which will be used by students and faculty, the Grantee shall comply with all health and safety regulations and laws applicable to similar facilities being used in that locality for such purpose.

20. Salary limitations and reporting requirements. a. Compensation paid from Federal or matching non-Federal funds to persons employed in carrying out the project shall be subject to the following limitations:

(1) In no case shall the rate of compensation be less than the Federal minimum wage rate, which is $1.60 per hour except as otherwise provided in section 6(a) (1) of the Fair Labor Standards Act of 1938.

(2) Except as provided in paragraph (1) the rate of compensation shall not exceed the average rate paid in the community where the project is carried out to persons providing substantially comparable services, or the average rate paid to such persons in the area of the employee's immediately preceding employment, whichever is higher.

(3) In no case shall the rate of compensation exceed $15,000 per year, unless the Grantee obtains a specific exception from this requirement from the Grants Officer. A Grantee applying for such an exception shall submit a written justification together with

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