the institution shall be regarded as evidence that such items are reasonably usable on the institution's other work. Any acceptance of common items as allocable to the terminated portion of the project should be limited to the extent that the quantities of such items on hand, in transit, and on order are in excess of the reasonable quantitative requirements of other work.

(b) Costs continuing after termination.— If in a particular case, despite all reasonable efforts by the institution certain costs cannot be discontinued immediately after the effective date of termination, such costs are generally allowable within the limitations set forth in this document, except that any such costs continuing after termination due to the negligence or willful failure of the institution to discontinue such costs shall be considered unallowable.

(c) Initial costs.-Initial costs, including starting load and preparatory costs, are allowable, subject to the following:

(1) Starting load costs are costs of a nonrecurring nature arising in the early stages of operation, investigation or production and not fully absorbed because of the termination. Such costs may include the cost of labor and material, and related indirect cost attributable to such factors as:

(a) Excessive spoilage resulting from inexperienced labor;

(b) Idle time and subnormal production occasioned by testing and changing methods of processing;

(c) Employee training; and

(d) Unfamiliarity or lack of experience with the project, materials, manufacturing processes and techniques.

(2) Preparatory costs are costs incurred in preparing to perform the terminated project including costs of initial plant rearrangement and alterations, management and personnel organization, production planning and similar activities, but excluding special machinery and equipment and starting load costs.

(3) If initial costs are claimed and have not been segregated on the institution's books, segregation for settlement purposes shall be made from cost reports and schedules which reflect the high unit cost incurred during the early stages of the project.

(4) When the settlement proposal is on the inventory basis, initial costs should normally be allocated on the basis of total end items called for by the project immediately prior to termination; however, if the project includes end items of a diverse nature, some other equitable basis may be used, such as machine or labor hours.

(5) When initial costs are included in the settlement proposal as a direct charge, such costs shall not also be included in overhead.

(6) Initial costs attributable to only one project shall not be allocated to other projects.

(d) Loss of useful value.

Loss of useful value of special tooling and special machinery and equipment is generally allowable if:

(1) Such special tooling, machinery or equipment is not reasonably capable of use in the other work of the institution;

(2) The interest of the Government is protected by transfer of title or by other means deemed appropriate by the awarding agency; and

(3) The loss of useful value as to any one terminated project is limited to that portion of the acquisition cost which bears the same ratio to the total acquisition cost as the terminated portion of the project bears to the entire terminated project and other Government projects for which the special tooling and special machinery and equipment was acquired.

(e) Rental costs.-Rental costs under unexpired leases are generally allowable where clearly shown to have been reasonably necessary for the performance of the terminated project less the residual value of such leases, if:

(1) The amount of such rental claimed does not exceed the reasonable use value of the property leased for the period of the project and such further period as may be reasonable; and

(2) The institution makes all reasonable efforts to terminate, assign, settle, or otherwise reduce the cost of such lease.

There also may be included the cost of alterations of such leased property, provided such alterations were necessary for the performance of the project, and of reasonable restoration required by the provisions of the lease.

(f) Settlement expenses.-Settlement expenses including the following are generally allowable:

(1) Accounting, legal, clerical, and similar costs reasonably necessary for

(a) The preparation and presentation to awarding agency of settlement claims and supporting data with respect to the terminated portion of the project, and

(b) The termination and settlement of subcontracts; and

(2) Reasonable costs for the storage, transportation, protection, and disposition of property acquired or produced for the project.

(g) Subcontractor claims.-Subcontractor claims, including the allocable portion of claims which are common to the project and to other work of the institution are generally allowable.

43. Trade, business, technical, and professional activity costs.-(a) Memberships.— This category includes costs of memberships

in trade, business, technical, and professional organizations. Such costs are allowable.

(b) Subscriptions.-This item includes cost of subscriptions to trade, business, professional, or technical periodicals. Such costs are allowable.

(c) Meetings and conferences.-This item includes costs of meals, transportation, rental of facilities for meetings, and costs incidental thereto, when the primary purpose of the incurrence of such costs is the dissemination of technical information or stimulation of production. Such costs are allowable.

44. Training and educational costs.—(a) The costs of training courses taken by a bona fide employee to acquire basic skills which he should bring to the job or to qualify a person for duties other than those related.

(b) Costs of on-the-job training and parttime education, at an undergraduate or postgraduate college level, related to the job requirements of bona fide employees, identified in (1) through (5) below, are allowable. (1) Training materials;

(2) Textbooks;

(3) Fees charged by the educational institution;

(4) Tuition charged by the educational institution, or in lieu of tuition, instructors' salaries and the related share of indirect cost of the educational institution to the extent that the sum thereof is not in excess of the tuition which would have been paid to the participating educational institution; and

(5) Straight-time compensation of each employee for time spent attending classes during working hours not in excess of 156 hours per year where circumstances do not permit the operation of classes or attendance at classes after regular working hours.

(c) Costs of tuition, fees, training materials and textbooks (but not subsistence, salary, or any other emoluments) in connection with full-time scientific and medical education at a postgraduate (but not undergraduate) college level related to the job requirements of bona fide employees for a total period not to exceed 1 school year for each employee so trained, are allowable when approved in writing by the awarding agency.

(d) Grants to educational or training institutions, including the donation of facilities or other properties, scholarships, or fellow

ships, are considered contributions and are unallowable.

45. Transportation costs.-Transportation costs include freight, express, cartage, and postage charges relating either to goods purchased, in process, or delivered. These costs are allowable. When such costs can readily be identified with the items involved, they may be directly costed as transportation costs or added to the cost of such items (see G.22.).

Where identification with the materials received cannot readily be made, inbound transportation costs may be charged to the appropriate indirect cost accounts if the institution follows a consistent, equitable procedure in this respect. Outbound freight, if reimbursable under the terms of the grant or contract shall be treated as a direct cost. 46. Travel costs.-(a) Travel costs include costs of transportation, lodging, subsistence, and incidental expenses, incurred by institution personnel in a travel status while on official business.

(b) Travel costs may be based upon actual costs incurred, or on a per diem or mileage basis in lieu of actual costs, or on a combination of the two, provided the method used does not result in an unreasonable charge. The difference in cost between first-class and less than first-class air accommodations is unallowable except when less than firstclass air accommodations are not reasonably available to meet necessary mission requirements, such as where less than first-class accommodations would (1) require circuitous routing, (2) require travel during unreasonable hours, (3) greatly increase the duration of the flight, (4) result in additional costs which would offset the transportation savings, or (5) offer accommodations which are not reasonably adequate for the medical needs of the traveler.

(c) Travel costs incurred in the normal course of overall administration of the business are allowable and shall be treated as indirect costs.

(d) Travel costs directly attributable to specific grant or contract performance are allowable and may be charged to the grant or contract in accordance with the principle of direct costing (see section C).

(e) Costs of personnel movement of a special or mass nature are allowable only when authorized or approved in writing by the sponsoring agency.

(20 U.S.C. 1221c(b), 31 U.S.C. 628.)

§ 101.1 Purposes for which grants are made.

The Morrill, Nelson and BankheadJones appropriations for the landgrant colleges and universities may be applied to instruction in agriculture, the mechanic arts, the English language and the various branches of mathematical, physical, natural, and economic science, with special reference to their applications in the industries of life, and to the facilities for such instruction, and a portion thereof may be used for providing courses for the special preparation of instructors for teaching the elements of agriculture and the mechanic arts.

§ 101.2 Manner in which funds are channeled to the States.

The Federal funds for the landgrant colleges and universities are channeled to the institutions as follows: From a study of the information contained in reports covering the preceding year from the presidents and treasurers of the land-grant colleges and universities together with further investigation if necessary, it is determined whether the several States and Territories are entitled to participate in the Federal appropriations. On or before July 1 each year the Secretary of Health, Education, and Welfare certifies to the Secretary of the Treasury

as to each State and Territory whether it is entitled to receive its share of the annual appropriation for the landgrant colleges and universities, and the amount it is entitled to receive. On or before July 31 the Secretary of the Treasury pays to each State and Territory, to the State or Territorial treasurer, or to such officer as has been designated by the laws of the State or Territory to receive it, the amount it is entitled to receive. Immediately upon request of the appropriate officials of the land-grant colleges or universities the State or Territorial treasurers or other officers designated to receive the grants pay the money over to the treasurers of the land-grant institutions.

§ 101.3 Forms for reports from land-grant colleges and universities.

The following forms, prepared by the Office of Education, are used by the presidents and treasurers of the land-grant colleges and universities for their annual reports to the office:

8-041 Part I Staff and Students for the Academic Year. Contains five schedules: AStaff; B-Students; C-Enrollments and Degrees; D-Distribution of Degrees in Colleges of Arts and Sciences; E-Preparing for Teaching. 104 items. 4 pages.

8-041 Part II Financial Report for the Fiscal Year. Contains five schedules: A-Receipts Specifically Designated for Additions to Physical Plant and Additions to Endowments and to Other Nonexpendable Funds; B-General Income; C-Bond Issues and Other Borrowings; D-Expenditures by Function or Purposes; E-Fund and Plant Values. 58 items. 4 pages.

8-041 Part II Schedule G, Federal Funds. 15 items. 1 page.

8-041 Part III Land-Grant Fund, First Morrill Act of 1862. 19 items. 2 pages.

8-041 Part IV Supplementary Morrill Funds. 1 page. Itemized report of Receipts and Disbursements of Morrill, Nelson and Bankhead-Jones funds.

§ 101.4 Withholding of grants.

In the event that the Secretary of Health, Education, and Welfare withholds certification from a State or Territory of its share of the appropriation, he reports the facts and reasons therefor to the President of the

NATIONAL AND STATE OCCUPATIONAL INFORMATION COORDINATING COMMITTEES

Sec.

104.121 Establishment of National Occupational Information Coordinating Committee.

104.122 Requirement to establish State occupational information coordinating committees.

104.123 Duties of the State occupational informational coordinating committee.

GENERAL APPLICATION

104.141 Requirement for filing a general

application.

DEVELOPMENT OF FIVE-YEAR STATE PLAN 104.161 Submission of five-year State plan. 104.162 Representation required in the development of the five-year State plan. 104.163 Meetings of participating representatives.

104.164 State board adoption of the fiveyear State plan.

104.165 Public hearings on the five-year State plan.

104.171 Certification of plans.

104.181 Content of five-year State plan. 104.182 Procedures to assure compliance with the general application.

104.183 Assessment of employment oppor

tunities.

104.184 Goals to meet employment needs. 104.185 Funding to meet employment needs.

104.186 Funding to meet program (purpose) needs.

104.187 Policies for eradicating sex discrimination.

104.188 Coordination between manpower training programs and vocational education programs.

DEVELOPMENT OF ANNUAL PROGRAM PLAN AND ACCOUNTABILITY REPORT

104.202 Due date of annual program plan. 104.203 Due date of annual accountability report.

104.204 Representation required in the development of the annual program plan and accountability report.

104.205 Meetings of participating representatives.

104.206 State board adoption of the annual program plan and accountability report. 104.207 Public hearings on the annual program plan and accountability report. 104.221 Content of annual program plan for fiscal year 1978.

104.222 Content of annual program plans for the fiscal years following 1978. 104.241 Content of the accountability report.