submission of project applications by local educational agencies or to limit dates to one or two per year. Before establishing submission dates, the State agency should give consideration to the funding and fiscal policies of the State, the school year calendar, the State's fiscal year, and the anticipated funding level.

(b) States may wish to consider using January or February as periods for submission of project applications from local educational agencies for the following reasons: information regarding appropriations is more likely to be available; considering time necessary for review, approval, and negotiation, the budget periods would then more nearly parallel budget development and staff recruitment in the local school district; funding near the end of a fiscal year would allow program administrators at the State level more latitude in funding from the prior fiscal year or the new fiscal year; and midyear project termination, with its concomitant staff release problems would be alleviated.

(20 U.S.C. 844); (45 CFR 118.23(b))

§ 1.2 Letter of intent.

A State may wish to use the "letter of intent" system which permits the local educational agency to submit a letter indicating its intent to submit a formal proposal. The letter should include an abstract of the intended proposal.

(20 U.S.C. 844); (45 CFR 118.23(b))

PART 2-FUNDING PROCESS

§ 2.1 Project period.

(a) Under § 118.27(a) of the regulations the State educational agency is required to formulate a general policy concerning the total period of time for which a project may be supported with funds under Title III (project period). In order to conserve funds for new projects, the State would want the project period generally not to exceed three (3) years. The State's policy on project periods should emphasize the necessity for phasing out Federal support of local projects and for gradual incorporation of project activities into the regular school program.

(b) It is recommended that the project period exceed three years only in two situations:

(1) For those projects which have been evaluated and validated by the State educational agency as successfully meeting their objectives and actually demonstrating a solution to one of the critical educational needs of the State, and upon recommendation of the State advisory council, a grant for an additional period of time for purposes of serving as a demonstration site for poten

tial adopters may be approved as part of the State educational agency dissemination program; and

(2) In cases where it is determined that a time extension is required to assure adequate completion of the project, and when an extension is requested in writing at least sixty (60) days prior to the end of the project period, the project may be extended for a period not to exceed ninety (90) days utilizing unexpended project funds.

§ 2.2 Grant terms and conditions.

Each grant document used by a State educational agency should have specific terms and conditions which are attached to the grant document to assist the State in the development of the grant document.

(20 U.S.C. 844); (45 CFR 118.27)

PART 3-PROJECT DESIGN AND ACTIVITIES

§3.1 Project design.

(a) The proposal. The project proposal should define the entire scope of work that the applicant wishes to accomplish during the project period. A project may consist of one or a combination of the following major activities: planning programs, conducting one or more pilot programs, or conducting operational activities. If groups of students within a school district have demonstrably different but similarly pressing needs, the local educational agency may, through an innovative or exemplary demonstration project, serve more than one need as separate components of a coordinated project proposal.

(b) Project functions. Project functions may be categorized in general terms-planning programs, conducting pilot programs, conducting operational programs-and described as follows:

(1) Planning programs. In formulating a solution to a problem or in designing a new program, adequate planning is a vitally important function and a proper objective under Title III of the Act. Planning normally involves utilization of persons with expertise in the areas involved, including representatives from public and private nonprofit elementary and secondary schools and the best material resources available to assist in the design of pilot and operational activities. For example, since the primary educational resource is the local educational agency, representative teachers and other school personnel whose professional activities would be affected by a particular project, should be directly involved in all stages of its development.

(2) Pilot programs. Conducting pilot programs to test the feasibility of innovative designs on a small scale can be a valuable part of development, provided that objectives and procedures are clearly stated and

that results of the effort will give definite direction to a later demonstration of the innovation if it proves to have promise.

(3) Operational programs. An operational program is a full-scale demonstration of an educational innovation which should include measurable objectives, a comprehensive evaluation system, an effective management system, staff development activities, provisions for community involvement, and an adequate dissemination program. It should emphasize effective use of technology combined with new and better utilization of manpower rather than the acquisition of hardware or the extensive construction of new facilities. For example, feasible alternatives to building new facilities might be the more effective use of existing facilities, the remodeling of existing structures, or the leasing of facilities.

(20 U.S.C. 844a(b)(7)); (45 CFR 118.23, 118.25)

§3.2 Project activities.

(a) Professional staff development.

(1) Professional staff development programs or inservice education activities involving Title III staff members and other appropriate school personnel are important in meeting project objectives. Staff development programs should be directly related to enhancing those staff competencies and attitudes which will contribute to the attainment of project goals.

(2) Title III project funds can be used for the employment of consultants, payment of stipends to participants, essential travel, and other direct costs necessary for the effective conduct of staff development programs.

(3) The following are examples of criteria that could be used to determine the adequacy of professional staff development activities in a local project: (i) Extent to which the activities are part of an organized, continuing process with definitive objectives; (ii) extent to which the activities are based on the assessed needs of the local educational agency; (iii) extent to which plans for staff development activities involve training of personnel at each level in the local educational agency, i.e., decision-makers, project staff, and teachers cooperating in projects; and (iv) extent to which staff development activities include provisions for determining effectiveness of those activities.

(20 U.S.C. 843(b)(4), 844a(a)(1)
(b)(1)(B)(i) and (ii)); (45 CFR 118.22(c))
(b) Educational accountability.

and

In an effort to assure the quality of the Title III projects, an accountability system should be instituted at the local agency level which will include the following twelve (12) factors:

(1) Community involvement: The utilization of members of concerned community groups in appropriate phases of project activity to facilitate: project access to community resources; community understanding of project objectives, procedures, and accomplishments; and the discharge of project responsibilities to relevant community client, service, and support groups;

(2) Developmental assistance: The means for providing adequate resources in project planning, implementation, operation, and evaluation by drawing upon community, business, industrial, labor, educational, scientific, artistic, social/welfare, and governmental agencies for expertise and services necessary to effective operations;

(3) Needs assessment: The identification of the educational needs of children in the cognitive, effective, and psychomotor domains of learning;

(4) Change strategies: The development of effective strategies for systematic change in the educational enterprise and the incorporation of the strategies in project operations;

(5) Management systems: The adaptation of the systems approach, through such techniques as Management by Objectives (MBO), Program Planning and Budget System (PPBS), Program Evaluation and Review Techniques (PERT), and Critical Path Method (CPM), to educational project management at the local, State, and Federal levels;

(6) Performance objectives: The specification of project objectives in a comprehensive, precise manner which indicates measures and means for assessing the degree of attainment of predetermined standards;

(7) Performance budgeting: The allocation of fiscal resources in accordance with project objectives to be realized, rather than by objects or functions to be supported;

(8) Performance contracting: The arrangement for technical assistance in project operations through contracts which condition compensation upon the accomplishment of specified performance objectives;

(9) Staff development: The determination of the nature and extent of staff development needed for the successful implementation of the accountability concept at the local, State, and Federal levels, and the design and conduct of indicated development activities;

(10) Comprehensive evaluation: The establishment of systems of performance control based on the continuous assessment of project operational and management processes and resultant products;

(11) Cost effectiveness: The analysis of unit results obtained in relation to unit resources consumed under alternative approaches to project operation, as a determinant in continued project planning; and

which is empowered to conduct educational planning or research.

(k)-(1) [Reserved]

(m) "Special project grants" means grants made from funds reserved by the Commissioner pursuant to section 505 of the Act.

(n) "State" means, in addition to the several States of the Union, the Commonwealth of Puerto Rico, the District of Columbia, Guam, American Samoa, the Virgin Islands, and the Trust Territory of the Pacific Islands.

(o) "State educational agency," or "State agency," means the State board of education or other agency or officer primarily responsible for the State supervision of public elementary and secondary schools, or, if there is no such officer or agency, an officer or agency designated by the Governor or by State law.

(20 U.S.C. 865, 881)

[34 FR 7242, May 2, 1969, as amended at 36 FR 8950, May 15, 1971; 38 FR 30659, Nov. 6, 1973]

Subpart B-Basic Grants (Grants
From Apportioned Funds)

§ 119.2 State applications.

(a) Purpose and content. The principal condition for a basic grant of Federal funds apportioned to a State under title V-A of the Act is the submission by the State through the State educational agency of an application to the Commissioner. Any State desiring to receive a basic grant shall submit an application for each fiscal year on such date as the Commissioner may fix, and in accordance with such procedures as the Commissioner may prescribe.

(b) Submission and approval. An application and all amendments thereto shall be submitted to the Commissioner for his approval by a duly authorized officer of the State educational agency. The application shall indicate the official or officials authorized to submit application material. If found by the Commissioner to be in conformity with the provisions and purposes of the Act and the regulations in this part, the application for that fiscal year will be approved subject to the limits of available appropriations. The

Commissioner will not finally disapprove an application, or any modification thereof, except after reasonable notice and opportunity for a hearing has been afforded to the State educational agency. An approved application shall form the basis for making payments to a State under title V-A of the Act.

Amendments.

(c) An application must be appropriately amended whenever (1) there is a material change in a pertinent State law or in the organization, policies, or operations of the State educational agency affecting the application or any activities described therein, (2) there is a material change in the content or administration of any such activity, or (3) any activity is added or deleted. (Minor deviations referred to in § 119.40 are not deemed to be "material changes" for the purposes of this paragraph.) The submission and approval of amendments shall follow the same procedures and have the same effect specified for an application in paragraph (b) of this section. All applications submitted after the initial application within the same fiscal year shall have the effect of an amendment to the initial application.

(d) Certificate of the State educational agency. An application and all amendments thereto must include as an attachment a certificate of the officer of the State educational agency authorized to submit the application to the effect that the application has been adopted by the State agency and that the application will constitute the basis for operation and administration of the activities in which Federal participation under basic grants will be required.

(e) Certificate of the State attorney general. The application shall include as an attachment a certificate by the State's attorney general, or other official designated in accordance with State law to advise the State educational agency on legal matters, to the effect that the applicant is the State educational agency and that the applicant has authority under State law to submit the application.

[34 FR 7242, May 2, 1969, as amended at 36 FR 8950, May 15, 1971]

§ 119.3 Procedures for application review and disposition.

The Commissioner will approve an application only upon his determination that such an application meets the requirements of the Act and the regulations in this part. This means that:

(a) Each activity and part thereof proposed in an application or an amendment thereto provides for the development, improvement, or expansion of activities which make a significant contribution toward strengthening the leadership resources of the State educational agency, or which make a significant contribution toward strengthening its ability to participate effectively in identifying and meeting the needs of elementary and secondary education in the State.

(b) An application and all amendments thereto and each activity proposed therein complies with and conforms to applicable provisions of this subpart and subpart D.

§ 119.4 State educational agency.

(a) Designation. The application shall give the official name of the State educational agency that will be the agency responsible for administering the activities set forth in the application.

(b) Organization. The application shall describe by chart the organizational structure of the State educational agency responsible for administering the activities described therein, and a description of the unit or units responsible for such administration, the principal functions assigned to each, the lines of authority within such unit or units and the administrative relationships of such a unit or units to the rest of the State educational agency. If an activity in an application will expand or alter the organizational structure of the State educational agency, the application shall indicate that part of the structure to be affected.

§ 119.5 Supplementation of State effort.

(a) The application of a State shall contain or be accompanied by an assurance that Federal funds made available under the application will

supplement and, to the extent practicable, increase the amount of State funds that would in the absence of such Federal funds be made available for activities which meet the conditions of section 503 of the Act and §§ 119.2 and 119.3 in this part.

(b) In determining whether the assurance referred to in paragraph (a) of this section is adequate, the Commissioner may request additional data from the applicant such as: (1) The amount of State funds (including, in the case of programs supported by Federal funds, the State share of all expenditures pursuant to such programs) to be expended by the State educational agency for activities which meet the conditions of section 503 of the Act and §§ 119.2 and 119.3 as compared with (2) the amount of State funds expended by the State educational agency in the preceding fiscal year or years, as appropriate, for such activities, with allowances for unusual capital expenditures, such as the acquisition of data processing or other major items of equipment, and adjustments to reflect changes in the scope of the responsibilities of the State educational agency.

(20 U.S.C. 864)

[34 FR 7422, May 2, 1969, as amended at 36 FR 8950, May 15, 1971]

§ 119.6 State fiscal management.

The application shall set forth such fiscal control and fund accounting procedures as may be necessary to assure proper disbursement of, and accounting for, Federal funds paid to the State pursuant to the application, including any such funds paid by the State to agencies, institutions, and organizations for the purpose of carrying out activities under title V-A of the Act. Subject to the provisions of § 119.44, such fiscal management shall be in accordance with applicable State laws, policies, and procedures. Accounts and supporting documents relating to any application involving Federal financial participation shall be adequate to permit an accurate and expeditious audit.

(20 U.S.C. 864)

[36 FR 8950, May 15, 1971]

§ 119.8 Federal payments.

Federal payments will be made available to the States after:

(a) The State has on file in the Office of Education an approved application covering the activities for which payment is to be made;

(b) The pertinent reports required by § 119.7 in this part have been reviewed; and

(c) The Commissioner is satisfied that the State needs the funds and will be able to carry out the activities contained in the application.

(20 U.S.C. 1232d)

[34 FR 1242, May 2, 1969, as amended at 38 FR 30659, Nov. 6, 1973]

§ 119.9 Reapportionment.

Pursuant to section 502(b)(1) of the

Act:

(a) The amount apportioned to any State for any fiscal year under section 502(a) of the Act which the Commissioner determines will not be required for that year shall be available for reapportionment, on such dates during that year as the Commissioner may fix, to other States in proportion to the amounts originally apportioned to such other States for that year, but with the proportionate amount for any of the other States being reduced to the extent it exceeds the sum the Commissioner determines the State needs or will be able to use for that year.

(b) The amounts to be so reapportioned will be determined by the Commissioner on the basis of (1) reports filed by the States of the amounts required to carry out the State application approved by the Commissioner, and (2) such other information as he may have available. Each State agency shall, if requested, submit to the Commissioner, on such date or dates as he may specify, a report or reports showing the anticipated need during the current fiscal year for the amount previously apportioned or any amount needed in addition thereto, and such other information as the Commissioner may request.

[34 FR 1242, May 2, 1969, as amended at 36 FR 8951, May 5, 1971]