stated, capable of being attained by the proposed procedures, and capable of being measured;

(ii) Provision is made for adequate evaluation of the effectiveness of the project and for determining the extent to which the objectives are accomplished;

(iii) Where appropriate, provision is made for satisfactory inservice training connected with project services; and

(iv) Provision is made for disseminating the results of the project and for making materials, techniques, and other outputs resulting therefrom available to the general public and specifically to those concerned with the area of education with which the project is itself concerned.

(20 U.S.C. 1221c(b)(1).)

§ 100a.27 Disposition of applications.

(a) On the basis of the review of an application pursuant to § 100a.26, the Commissioner will either (1) select the application for funding in whole or in part, for such amount of funds and subject to such conditions as he may deem necessary or desirable for the completion of the approved project, (2) not select the application for funding, or (3) defer action on the application for such reasons as lack of funds or a need for further review.

(b) An application which is deferred or not selected for funding is not precluded from reconsideration or resubmission.

(c) The Commissioner will notify the applicant in writing of the disposition of its application. A notification of grant award or contract document will be issued to notify the applicant of a project application selected for funding.

(d) If the Commissioner awards a grant, the grant shall be subject to, and the grant award document will incorporate, the grant terms and conditions set forth in appendix A to this subchapter, pursuant to § 100a.290. If the Commissioner awards a contract, the contract award document shall include whatever provisions are required by Federal law or regulations, including the regulations of the applicable Federal program.

(20 U.S.C. 1221c(b)(1).)

§ 100a.28 Amendments.

The grant or contract must be appropriately amended prior to any material change in the administration of an approved project, or in organization, policies, or operations affecting an approved project. Substantive amendments will be subject to approval in the same manner as original applications. Project amendments may be initiated by the Commissioner if changes are made in Federal appropriations or laws governing such projects. If such amendment constitutes a partial termination of the award, the procedures contained in § 100a.495 shall apply.

(20 U.S.C. 1221c(b)(1); 1232c.)

§ 100a.29 Budget revisions and minor deviations.

(a) State and local governments. (1) This paragraph applies only to recipients which are State and local governments (as defined in § 100.1 of this subchapter).

(OMB Circular No. A-102, attachment K.) (2) As used in this paragraph:

(i) "Direct cost object class budget categories" include only the following: (a) Personnel;

(b) Fringe benefits;
(c) Travel;

(d) Equipment;
(e) Supplies;

Contractual;

(g) Construction; and
(h) Other.

(ii) "Construction" means solely or primarily for construction.

(iii) "Nonconstruction" means not solely or primarily for construction. (OMB Circular No. A-102, exhibit M-3, 5.)

(3) For nonconstruction grants and contracts, State and local government recipients shall request prior approval promptly from the Commissioner for budget revisions whenever:

(i) The revision results from changes in the scope or the objectives of the project;

(ii) The revision indicates the need for additional Federal funding;

(iii) The budget is over $100,000 and the cumulative amount of transfers

among direct cost object class budget categories exceeds or is expected to exceed $10,000, or 5 percent of the budget, whichever is greater. The same criteria apply to the cumulative amount of transfees among projects, functions, and activities when budgeted separately for a grant or contract, except that no transfer is permissible which could cause any Federal appropriation, or part thereof, to be used for purposes other than those intended;

(iv) The budget is $100,000 or less, and the cumulative amount of transfers among direct cost object class budget categories exceeds or is expected to exceed 5 percent of the budget. The same criteria apply to the cumulative amount of transfers among projects, functions, and activities when budgeted separately for a grant or contract, except that no transfer is permissible which would cause any Federal appropriation, or part thereof, to be used for purposes other than those intended;

(v) The revisions involve the transfer of amounts budgeted for indirect costs to absorb increases in direct costs; or

(vi) The revisions pertain to the addition of items requiring prior approval in accordance with the provisions of appendix B of this subchapter.

(OMB Circular No. A-102, attachment K, 12.)

(4) Budget revisions for nonconstruction grants or contracts, other than those revisions set forth in paragraph (a)(3) of this section, do not require approval by the Commissioner. Budget revisions which do not require such approval include (i) the use of recipient funds in furtherance of project objectives over and above the recipient minimum share (if any) included in the approved budget and (ii) the transfer of amounts budgeted for direct costs to absorb authorized increases in indirect costs.

(OMB Circular No. A-102, attachment K, 2.)

(5) For construction grants and contracts, State and local government recipients shall request prior approval promptly from the Commissioner for budget revisions whenever;

(i) The revision results from changes in the scope or objective of the project; or

(ii) The revision increases the budgeted amounts of Federal funds needed to complete the project.

(OMB Circular No. A-102, attachment K, 2.)

(6)(i) For both construction and nonconstruction grants and contracts, State and local government recipients shall notify the Commissioner promptly whenever the amount of Federal authorized funds is expected to exceed the needs of the recipient by more than $5,000 or 5 percent of the Federal grant or contract, whichever is greater.

(ii) The notification required in paragraph (a)(6)(i) of this section will not be required when applications for additional funding are submitted for continuing grants and contracts and those applications include the recipient's estimate of what the unobligated balance of federally-authorized funds will be at the end of the current period.

(OMB Circular No. A-102, attachment K, 2.)

(7) When requesting approval for budget revisions, recipients shall use the budget forms which were used in the application. However, recipients may request by letter the approvals required by paragraph (a)(3)(vi) of this section.

(8) Within 30 days from the date of receipt of the request for budget revisions, the Commissioner will review the request and notify the recipient as to whether or not the budget revisions have been approved. If the revision is still under consideration at the end of that 30-day period, the Commissioner will inform the recipient in writing as to when the recipient may expect the Commissioner's decision.

(OMB Circular No. A-102, attachment K, 3.)

(b) Recipients other than State and local governments. Minor deviations from the project of a recipient other than a State or local government (as defined in § 100.1 of this subchapter) are permitted without the necessity for an approved amendment or revision where (1) they do not result in expenditures in excess of the total

amount granted, (2) there is not any material change in the content or the administration of the approved project, and (c) expenditures are otherwise made in accordance with, and for kinds of expenditures authorized in, the approved application.

(20 U.S.C. 1221c(b)(1).)

§ 100a.30 Service contracts.

(a) Each project application shall provide that the activities and services for which Federal financial assistance is sought will be administered by, or under the supervision of, the applicant.

(b) The applicant shall not transfer to others responsibility in whole or in part for the use of Federal funds or for the conduct of project activities, but may enter into contracts or arrangements with others for carrying out a portion of any such activities pursuant to Subpart I of this part.

(c) In applying for Federal assistance, the applicant shall indicate in the application any intention it may have of entering into contracts or other arrangements with individuals or organizations to conduct any portion of any activity proposed in the application. The applicant shall not enter into any such contract or arrangement unless the intention to do so is included in the approved application or an approved amendment or revision thereto.

(20 U.S.C. 1221c(b)(1), 1232c(b)(1).)

§ 100a.31 Preapplications.

Where he deems it necessary or desirable for the efficient administration of a Federal program, the Commissioner may require any applicant for assistance under such program to submit a preapplication for review prior to the acceptance of an application submitted under § 100a.15. (20 U.S.C. 1221c(b)(1).)

Subpart C-Application Forms for State and Local Governments

§ 100a.40 Authorized forms and instructions.

(a) Only those forms specified in 88 100a.41 through 100a.45, inclusive,

and such supplementary or other forms as may from time to time be authorized by the Commissioner may be used by State and local governments in applying for Federal assistance.

(b) All applicable standard instructions for use in connection with the forms specified in §§ 100a.41 through 100a.45, inclusive, shall be followed.

(c) State and local governments shall submit the number of copies of their application as prescribed by the Commissioner.

(d) Except as provided by § 100a.29 (a)(7), all requests by these recipients for changes, continuations, and supplements to approved applications shall be submitted on the same form as the original application. For those purposes, only the affected pages of the forms should be submitted.

(OMB Circular No. A-102, Attachment M.) § 100a.41 Preapplication for Federal assistance.

(a) The preapplication for Federal assistance form prescribed by Attachment M of OMB Circular No. A-102, will be used to:

be

(1) Establish communication tween State and local government applicants and the Office of Education; (2) Determine these applicants' eligibility;

(3) Determine how well the project can compete with similar applications from others; and

(4) Eliminate any proposals which have little or no chance for Federal funding before applicants incur significant expenditures for preparing an application.

(b) Preapplications shall be mandatory for all construction, land acquisition, or land development projects for which the need for Federal funding exceeds $100,000.

(c) Any State or local government applicant shall have the right to submit a preapplication even when not required by the Commissioner.

(OMB Circular No. A-102, Attachment M.) § 100a.42 Notice of preapplication review action.

The Notice of Preapplication Review Action form prescribed by Attachment M of OMB Circular No. A-102 will be

used by the Commissioner to inform State and local government applicants of the results of the review of the preapplications submitted by them. The Commissioner will send a notice to the applicant within 45 days of the receipt of the preapplication form. When the review cannot be made within 45 days, the applicant will be informed by letter as to when the review will be completed.

(OMB Circular No. A-102, Attachment M.)

§ 100a.43 Application for Federal assistance (nonconstruction projects). The application for Federal Assistance (Nonconstruction Programs) form prescribed by Attachment M of OMB Circular No. A-102 shall be used by State and local governments to apply for Federal assistance, except where the forms specified in §§ 100a.44 and 100a.45 are to be used.

(OMB Circular No. A-102, Attachment M.)

ance

§ 100a.44 Application for Federal assistance (for construction projects). The Application for Federal Assist(for Construction Programs) form prescribed by Attachment M of OMB Circular No. A-102 shall be used by State and local governments to apply for any award whose purpose is solely or primarily construction, land acquisition, or land development. (OMB Circular No. A-102, Attachment M.)

§ 100a.45 Application for Federal assistance (short form).

The Application for Federal Assistance (Short Form) form subscribed by Attachment M of OMB Circular No. A-102 shall be used to apply for any single-purpose, one-time award of less than $10,000 not requiring clearinghouse approval, an environmental impact statement, or the relocation of persons, businesses, or farms.

(OMB Circular No. A-102, Attachment M.)

Subpart D-Federal Financial
Participation

§ 100a.50 Amount of award.

Federal assistance may be provided to meet all or part of the allowable

costs of projects which meet the requirements contained in the applicable Federal statutes and regulations.

(20 U.S.C. 1221c(b)(1).)

100a.51 Limitations on costs.

The amount of the award shall be set forth in the grant award or contract document. The total cost to the Federal Government will not exceed the amount set forth in the grant award or contract document. The Federal Government shall not be obligated to reimburse the recipient for costs incurred in excess of such amount unless and until the Commissioner has notified the recipient in writing that such amount has been increased and has specified such increased amount in a revised grant award or contract document pursuant to § 100a.28. Such revised amount shall thereupon constitute the revised maximum total cost to the Federal Government of the performance of the grant or contract.

(31 U.S.C. 200.)

§ 100a.52 Federal obligation.

The issuance of a grant award or contract document will be regarded as an obligation of the Federal Government in the amount of the award.

(31 U.S.C. 200.)

§100a.53 Payments.

(a) Payment methods and adjustments. Payments pursuant to grants, contracts, or other arrangements may be made in installments, and in advance or by way of reimbursement, pursuant to Subpart E of this part, with necessary adjustments on account of overpayments or underpayments, as the Commissioner may determine.

(b) Violations. A payment under any such grant, contract, or other arrangement for expenditures which fail to meet the requirements of any of the provisions of applicable Federal statutes, regulations, or the approved project application (including any terms and conditions applicable thereto), may be taken into account in the determination of any such overpay

ments and any adjustments relating thereto.

(c) Adjustment of records. Each recipient, in its maintenance of project expenditure accounts, records, and reports shall promptly make any necessary adjustments in its records to reflect refunds, credits, underpayments, or overpayments, resulting from Federal or State administrative reviews and audits or otherwise. Such adjustments shall be set forth in any financial reports required to be filed with the Commissioner.

(20 U.S.C. 1232c(a)(1), 1232d.)

§ 100a.54 Duration of project.

(a) The amount of the award shall remain available for obligation by the recipient during the period specified in the grant award or contract document or until otherwise suspended or terminated. Such period may be extended by revision of the grant or contract without additional funds pursuant to paragraph (b) of this section where otherwise permitted by law.

(b) When it is determined that special or unusual circumstances will delay the completion of the project beyond the period for obligation, the recipient must in writing request the Commissioner to extend such period and shall indicate the reasons therefor.

(20 U.S.C. 1221(c)(b)(1), 1232c(b)(3).)

§ 100a.55 Obligation by recipients.

Obligations will be considered to have been incurred by a recipient on the basis of documentary evidence of binding commitments for the acquisition of goods or property or for the performance of work, except that funds for personal services, for services performed by public utilities, for travel, and for the rental of facilities, shall be considered to have been obligated as of the time such services were rendered, such travel was performed, and such rented facilities were used, respectively.

(20 U.S.C. 1232c(b)(2); 31 U.S.C. 200.)

Subpart E-Grant Payment Requirements

§ 100a.60 Scope of subpart.

This subpart sets forth the methods of making grant payments to recipients. These methods will minimize the time elapsing between the disbursement by a recipient and the transfer of funds from the United States Treasury to the recipient, whether such disbursement occurs prior to or subsequent to the transfer of funds.

(20 U.S.C. 1232d; OMB Circular No. A-102, Attachment J.)

§ 100a.61 Definitions.

As used in this subpart:

"Advance by Treasury check" is a payment made by a Treasury check to a recipient upon its request or through the use of predetermined payment schedules before payments are made by the recipient.

"Letter of credit" is an instrument certified by an authorized official of the Federal Government which authorizes a recipient to draw funds when needed from the Treasury, through Federal Reserve Bank and the recipient's commercial bank, in accordance with the provisions of Treasury Circular No. 1075.

"Percentage of completion method" refers to a system under which payments are made to the recipient for construction according to a schedule which relates the amount and timing of each payment primarily or solely to the actual percentage of completion of the construction work under the grant or contract rather than to the recipient's actual rate of disbursements.

"Reimbursement by Treasury check" is a payment made to a recipient with a Treasury check upon request for reimbursement from the recipient.

(20 U.S.C. 1232d; OMB Circular No. A-102, Attachment J.)

§ 1008.62 Payment methods for nonconstruction projects.

(a) Letters of credit will be used to pay recipients when all of the following conditions exist: