(c) For the purposes of this section, the authority granted to the Commissioner in part D of this Act shall apply to the Secretary.

(d) The Secretary may appoint, for terms not to exceed three years, without regard to the provisions of title 5 of the United States Code governing appointments in the competitive service, not more than five technical employees to administer this section who may be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates.

(e) There are authorized to be appropriated $10,000,000 for the fiscal year ending June 30, 1973, $50,000,000 for the fiscal year ending June 30, 1974, and $75,00,000 for the fiscal year ending June 30, 1975, for the purposes of this section. (20 U.S.C. 1221d) Enacted June 23, 1972, P.L. 92-318, sec. 301(a)(2), Stat. 327.

86

[From the Federal Register, vol. 38, No. 58, Mar. 27, 1973]

PROPOSED REGULATIONS UNDER SECTION 404, CEPA

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

Fund for the Improvement of Postsecondary Education

[45 CFR Ch. XV]

SUPPORT FOR IMPROVEMENT OF POSTSECONDARY EDUCATION

Notice of proposed rule making

Pursuant to the authority contained in section 404 of the General Education Provisions Act (20 U.S.C. 1221d), "Support for improvement of postsecondary education," notice is hereby given that the Secretary of Health, Education, and Welfare proposes to amend Title 45 of the Code of Federal Regulations by adding a new Part 1501, as set forth below. The new part would be included in a new chapter XV of title 45. The proposed regulations would establish criteria for the awarding of assistance under this program and the procedures by which eligible applicants would apply for such assistance.

Interested persons are invited to submit written comments, suggestions, or objections regarding the proposed regulations to the office administering the program, the Fund for the Improvement of Postsecondary Education, Department of Health, Education, and Welfare, 400 Maryland Avenue, SW., Room 3139, Washington, DC 20202. Such responses to this notice will be available for public inspection at the above office on Mondays through Fridays between 9 a.m. and 5:30 p.m. Ali relevant material received not later than April 26, 1973 will be considered.

Dated: March 22, 1973.

CASPAR W. WEINBERGER,

Secretary of Health, Education, and Welfare.

Title 45 of the Code of Federal Regulations is amended by adding a new chapter XV, which contains a new Part 1501, to read as follows:

CHAPTER XV--FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE

AUTHORITY: Sec. 404 of the General Education Provisions Act, as added by sec. 301 (a) (2) of Public Law 92-318, 86 Stat. 327 (20 U.S.C. 1221d), unless otherwise noted.

§ 1501.1 Purpose.

The purpose of the regulations in this part is to implement the provisions of section 404 of the General Education Provisions Act, as amended, which provides for grants to, and contracts with, institutions of postsecondary education and other public and private educational institutions and agencies to improve postsecondary educational opportunities. The program is administered by the Fund for the Improvement of Postsecondary Education, a unit within the Office of the Assistant Secretary for Education of the Department of Health, Education, and Welfare, with the advice of a Board of Advisors. (20 U.S.C. 1221d.) § 1501.2 Applicability of civil rights provisions.

(a) Federal financial assistance under this part is subject to the regulations in part 80 of this title, issued by the Secretary of Health, Education, and Welfare and approved by the President, to effectuate the provisions of title VI of the Civil Rights Act of 1964 (Public Law 88-352). (42 U.S.C. 2000d.)

(b) Federal financial assistance under this part is also subject to the provisions of title IX of the Education Amendments of 1972 (prohibition of sex discrimination), and any regulations issued thereunder. (20 U.S.C. 1681-86; Public Law 92-318, section 906.)

§ 1501.3 Definitions.

As used in this part

"Fiscal year" means a period beginning on July 1 and ending on the following June 30. (A fiscal year is designated in accordance with the calendar year in which the ending date of the fiscal year occurs.)

"Fund" means the Fund for the Improvement of Postsecondary Education, the unit within the Office of the Assistant Secretary for Education of the Department of Health, Education, and Welfare which administers the program covered by this part.

"Institution of postsecondary education" means an educational institution which admits as regular students only persons who have completed or left elementary or secondary school.

"Local government" means a local unit of government including specifically a county, municipality, city, town, township, local public authority, special district, intrastate district, council of governments, sponsor group representative organization, and other regional or interstate government entity, or any agency or instrumentality of a local government, exclusive of institutions of postsecondary education and hospitals.

"Nonexpendable personal property" means tangible personal property, including equipment, having a useful life of more than 1 year and an acquisition cost of $300 or more per unit.

"Nonprofit" means owned and operated by one or more nonprofit corporations or associations no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual.

"Personal property" means property of any kind, tangible or intangible, except real property.

"Private" means not under public supervision or control.

"Public," as applied to an institution or agency, means that the institution or agency is a legally constituted organization of government under public administrative control and direction, except that an institution or agency of the Federal Government shall not be considered a public institution or agency. "Recipient" means an applicant receiving assistance under this part. "State" means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, any territory or possession of the United States, or any agency or instrumentality of a State exclusive of State institutions of postsecondary education and hospitals. (20 U.S.C. 1221d) § 5101.4. Eligibility for assistance.

Institutions of postsecondary education, combinations thereof, and other public and private educational institutions and agencies are eligible to receive assistance under this part. The fact that an applicant has been only recently established will not in itself prejudice such applicant's application. (20 U.S.C. 1221d) § 1501.5 Types of assistance.

Public and nonprofit applicants may receive assistance in the form of grants or contracts, depending on the nature and objectives of their proposals. An

applicant which is not public or nonprofit may receive assistance only in the form of contracts. Grants may be made to a combination of institutions of postsecondary education only if all institutions in the combination are public or nonprofit. Assistance may support a proposal in its entirety or may be conditioned upon the provision of funds from other sources, including the applicant itself. Assistance may be awarded in one payment or in a number of payments, not necessarily equal, over a period of time. (20 U.S.C. 1221d)

§ 1501.6 Criteria for evaluating applications.

An application for assistance under this part shall be evaluated in terms of the extent to which the proposal therein :

(a) Has the potential for advancing one or more of the following general aims and objectives of the Fund:

(1) To provide effective educational options not generally available;

(2) To increase the cost-effectiveness of educational services;

(3) To achieve far-reaching improvements in postsecondary education;

(4) To promote learner-centered improvements in postsecondary education; (b) Is directed at furthering one or more of the following program objectives: (1) To provide new approaches to teaching and learning, specifically through projects which:

(i) Focus on one or more of the following purposes: (a) Education for social responsibility, (b) education for productive lives through career preparation, or (c) education for the enhancement of personal satisfaction; and

(ii) (a) Employ one or more of the following techniques or processes to achieve these purposes: (1) The integration of learning experiences, (2) the individualization of educational services, or (3) the improvement of teaching/ learning techniques; or

(b) Develop and implement new kinds of education assessment to measure and achieve these purposes;

(2) To provide educational services for new clientele, specifically through projects which:

(i) Serve one or more of the following groups: (a) Young people who academically ranked in the lower half of the high school population or, if they did not attend high school, the elementary school population, (b) adults and parttime learners, (c) minorities, or (d) women; and

(ii) Employ programs and services responsive to new clientele, specifically efforts to achieve: (a) Accommodation of education to the needs and potentials of the clientele, (b) remediation of the clientele's skills and knowledge, or (c) access of the clientele to existing programs and services.

(3) To revitalize institutional missions, specifically through projects involving one or more of the following activities:

(i) The introduction of new structures or activities designed to channel institutional energies more effectively toward the implementation or refinement of an institution's existing mission, or

(ii) The phasing out of programs or activities no longer central to an institution's mission. A proposal directed at furthering this objective will be evaluated by the Fund in terms of the extent to which it (a) will serve an important social objective, (b) will be central to the institution's principal mission, (c) will have a long-term effect on the institution, and (d) will actively involve and be supported by constituencies relevant to the institution's mission. (4) To implement new missions, specifically through projects which: (i) Redirect missions of existing institutions, or

(ii) Create new institutions.

(5) To encourage openness in postsecondary education, specifically through projects involving the improvement of one or more of the following:

(i) The nature of information about postsecondary education and the ways in which such information is communicated to students, educational institutions, and makers of educational policy.

(ii) The standards, practices, and structures used in recognizing and evaluating the performance of individuals and institutions in postsecondary education, and the utilization of the judgments thereby made by other educational and social institutions and agencies.

(iii) The forms and techniques by which financial support for postsecondary education is provided, particularly those which affect incentives for teachers and structure relationships among teachers and learners.

(iv) The ways in which postsecondary education is regulated by public agencies.

(c) Meets the following criteria:

(1) Is feasible, has sound project design, and is likely to attain expected results with expected expenditures;

(2) Will, if appropriate, be supported financially by sources other than the Fund, including the applicant itself; and

(3) Has the potential for having available financial resources for continuation beyond the period of Fund support, if appropriate.

(20 U.S.C. 1221d)

§ 1501.7 Applications for assistance.

(a) An application for assistance under this part must be filed with the Fund on or before the closing date or dates announced by the Fund for each fiscal year.

(b) Except as provided in paragraph (d) of this section, an application must have a title page providing the following information:

(1) Name and address of applicant.

(2) Name, address, title, phone number, and signature of applicant's authorizing officer.

(3) Name, address, title, and phone number of proposed project director. (4) Dates of proposed project, including evaluation time.

(7) A brief, one-paragraph description of the proposal.

(c) Except as provided in paragraph (d) of this section, an application must contain the following information, in a format to be selected by the applicant: (1) A diagnosis of the problem addressed, including a description of the problem and, as applicable, a discussion of pertinent empirical data and past attempts to deal with the problem.

(2) A description of the proposed project, including its methodology and schedule, qualifications of the persons who would conduct it, its short-term and long-term objectives, and its specific allocation of available funds in the form of a budget.

(3) A statement as to (i) expected financial support, if any, during the period of Fund support from sources other than the Fund, including the applicant itself, and (ii) if appropriate, expected sources of financial support, including that of the applicant itself, after the period of Fund support has elapsed.

(4) A statement of the significance of the proposed project, with specific reference to the manner in which the project relates to the Fund's objectives.

(5) An evaluation plan, including the criteria by which the project will be evaluated, the methods and schedules for such evaluation, and the cost of such evaluation.

(d) A State or local government seeking assistance under this part must apply in accordance with such procedures, and using such forms, as the Fund may specially prescribe in conformity with pertinent directives of the Office of Management and Budget. Much of the material required of such applicants pursuant to such directives is similar to the material required of applicants proceeding under paragraphs (b) and (c) of this section.

(e) Prior to its disposition of applications for assistance under this part, the Fund may obtain the review and advice of qualified persons not employed by the Department of Health, Education, and Welfare. Any such review shall be in addition to the review of applications by the Fund in accordance with such procedures as it may establish, including consultation with the Board of Advisers to the Fund. (f) No application for assistance under this part to an institution of postsecondary education shall be approved until the Fund has submitted it to the State postsecondary education commission, if there is one, established or designated pursuant to section 1202 of the Higher Education Act of 1965 in the State in which the institution is located and afforded the commission an opportunity to submit its comments and recommendations as to the application to the Fund. (g) No application for assistance under this part shall be approved until the procedure for implementing the evaluation plan required under paragraph (c) of this section or, as applicable, paragraph (d) of this section has been established and a schedule for the submission of reports on such evaluation by the applicant

to the Fund has been agreed upon. (20 U.S.C. 1221d; OMB Circular No. A-102, Attachment M)

§ 1501.8 Retention of records.

(a) Records. Each recipient shall keep intact and accessible records relating to the receipt and expenditure of Federal funds (and to the expenditure of the recipient's contribution to the cost of the project, if any), including all accounting records and related original and supporting documents that substantiate direct and indirect costs charged to the award.

(b) Period of retention. (1) Except as provided in paragraph (b) (2) and (d) of this section, the records specified in paragraph (a) of this section shall be retained for 3 years after the date of the submission of the final expenditure report or, with respect to a grant or contract which is renewed annually, for 3 years after the date of the submission of an annual expenditure report.

(2) Records for nonexpendable personal property which was acquired with Federal funds shall be retained for 3 years after its final disposition.

(c) Microfilm copies. Recipients may substitute microfilm copies in lieu of original records in meeting the requirements of this section.

(d) Audit questions. The records involved in any claim or expenditure which has been questioned by Federal audit shall be further retained until resolution of any such audit questions.

(e) Audit and examination. The secretary of Health, Education, and Welfare and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access for the purpose of audit and examination to all such records and to any other pertinent books, documents, papers, and records of the recipient. (OMB Circular No. A-73; OMB Circular No. A-102, Attachment C; 20 U.S.C. 1221d)

§ 1501.9 Audits.

(a) All expenditures by recipients shall be audited by the recipient or at the recipient's direction to determine, at a minimum, the fiscal integrity of financial transactions and reports, and the compliance with laws and regulations.

(b) The recipient shall schedule such audits with reasonable frequency, usually annually, but not less frequently than once every 2 years, considering the nature, size, and complexity of the activity.

(c) Copies of audit reports shall be made available to the Fund to assure that proper use has been made of the funds expended. The results of such audits I will be used to review the recipient's records and shall be made available to Federal auditors. Federal auditors shall be given access to such records or other documents as may be necessary to review the results of such audits.

(d) Each recipient shall use a single auditor for all of its expenditures under Federal education assistance programs, regardless of the number of Federal agencies providing such assistance. (20 U.S.C. 1221d; OMB Circular No. A-102, Attachment G, 2, Attachment C, 1)

§ 1501.10 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 Fund 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. Such revised amount shall thereupon constitute the revised total cost of the performance of the grant or contract that may be borne by the Federal Government. (31 U.S.C. 200)

§ 1501.11 Reporting.

The recipient shall comply with the schedule for reporting on its evaluation of the project agreed upon pursuant to § 1501.7 (g). (20 U.S.C. 1221d; OMB Circular No. A-102, Attachment M)

§ 1501.12 Final accounting.

(a) In addition to such other accounting as the Fund may require the recipient shall render, with respect to the project, a full account of funds expended, obligated, and remaining.

(b) A report of such accounting shall be submitted to the Fund within 90 days of the expiration or termination of the grant or contract, and the recipient