share and the non-Federal share, for carrying out the program activities provided for in an approved application for a Head Start program.

"Budget period" means the interval of time, into which a multi-year period of assistance (project period) is divided for budgetary and funding purposes.

"Community" means a city, county, a multi-city or multi-county unit within a state, an Indian reservation, or any neighborhood or other geographic area (irrespective of boundaries or political subdivisions) which provides a suitable organizational base and possesses the commonality of interest needed to operate a Head Start program.

“Delegate agency” means a public or private non-profit organization or agency to which a grantee has delegated all or part of its responsibility for operating a Head Start program.

"Development and administrative costs" are all costs other than those which are incurred in carrying out the education, health, social service, and parent involvement functions prescribed in Part 1304 of this chapter. These costs include, but are not limited to, the personnel and other costs of overall planning, coordination, general program direction, accounting, auditing, bonding, insurance, and the allocated costs of occupying, operating, and maintaining the space utilized for these purposes.

"Head Start Agency" or "grantee" means a local public or private nonprofit agency designated to operate a Head Start program by the responsible HHS official, in accordance with Part 1302 of this chapter.

"Head Start program” means a program, funded under the Act and carried out by a Head Start agency or a delegate agency, that provides ongoing comprehensive child development services.

"Independent auditor" means an individual accountant or an accounting

firm, public or private agency, association, corporation, or partnership, that is sufficiently independent of the agency being audited to render objective and unbiased opinions, conclusions, and judgments.

“Major disaster” means any natural disaster or catastrophe which is of such severity and magnitude as to directly affect the capability of the Head Start agency of agencies providing Head Start programs to the damaged community to continue the programs without an increase in the Federal share above 80 percent.

"Responsible HHS official" means the official of the Department of Health and Human Services who has authority to make grants under the Act.

"Total costs" means the sum of all approved costs incurred in operating a Head Start program during an approved budget period.

Subpart B—General Requirements § 1301.10 General.

(a) Except as specified in paragraph (b) of this section, the following HHS regulations shall apply to all grants made under the Act:

45 CFR Part 16 Department grant appeals process (except as provided in § 1301.34)

45 CFR Part 46 Protection of Human Subjects

45 CFR Part 74 Administration of grants 45 CFR Part 75 Informal grant appeals procedures (Indirect cost rates and other cost allocations)

45 CFR Part 80 Nondiscrimination under programs receiving Federal assistance through the Department of Health and Human Services-Effectuation of Title VI of the Civil Rights Act of 1964

45 CFR Part 81 Practice and procedure for hearings under Part 80

45 CFR Part 84 Nondiscrimination on the basis of handicap in Federally assisted programs.

spect to audit requirements for all Head Start agencies.

§ 1301.11 Insurance and bonding.

(a) Private nonprofit Head Start agencies and their delegate agencies shall carry reasonable amounts of student accident insurance, liability insurance for accidents of their premises, and transportation liability insurance.

(b) Private nonprofit Head Start and delegate agencies shall make arrangements for bonding officials and employees authorized to disburse program funds.

§ 1301.12 Annual audit of Head Start programs.

(a) An audit of the Head Start program covering the prior budget period of each Head Start agency and its delegate agencies, if any, shall be made by an independent auditor to determine:

(1) Whether the agency's financial statements are accurate;

(2) Whether the agency is complying with the terms and conditions of the grant; and

(3) Whether appropriate financial and administrative procedures and controls have been installed and are operating effectively. Head Start agencies shall either include delegate agency audits as a part of their own audits or provide for separate independent audits of their delegate agencies.

(b) Upon a written request showing necessity, the responsible HHS official may approve a period other than the prior budget period to be covered by

the annual audit.

(c) Unless otherwise approved by the responsible HHS official, the report of the audit shall be submitted to the responsible HHS official, in the manner and form prescribed by him or her,

(1) Section 1301.11 of this subpart supersedes § 74.15 of Part 74 with respect to insurance and bonding of private, non-profit Head Start agencies; and

(2) Section 1301.12 of this subpart supersedes § 74.61 of Part 74 with re

period.

§ 1301.13 Accounting system certification.

(a) Upon request by the responsible HHS official, each Head Start agency or its delegate agency shall submit an accounting system certification, prepared by an independent auditor, stat

ing that the accounting system or systems established by the Head Start agency, or its delegate, has appropriate internal controls for safeguarding assets, checking the accuracy and reliability of accounting data, and promoting operating efficiency.

(b) A Head Start agency shall not delegate any of its Head Start program responsibilities to a delegate agency prior to receiving a certification that the delegate agency's accounting system meets the require ments specified in paragraph (a) of this section.

Subpart C-Federal Financial Assistance

§1301.20 Matching requirements.

(a) Federal financial assistance granted under the act for a Head Start program shall not exceed 80 percent of the total costs of the program, unless:

(1) An amount in excess of that percentage is approved under section 1301.21; or

(2) The Head Start agency received Federal financial assistance in excess of 80 percent for any budget period falling within fiscal year 1973 or fiscal year 1974. Under the circumstances described in clause

(3) Of the preceding sentence, the agency is entitled to receive the same percentage of Federal financial assist ance that it received during such budget periods.

(b) The non-Federal share will not be required to exceed 20 percent of the total costs of the program.

§ 1301.21 Criteria for increase in Federal financial assistance.

The responsible HHS official, on the basis of a written application and any supporting evidence he or she may require, will approve financial assistance in excess of 80 percent if he or she concludes that the Head Start agency has made a reasonable effort to meet its required non-Federal share but is unable to do so; and the Head Start agency is located in a county:

(a) That has a personal per capita income of less that $3,000 per year; or (b) That has been involved in a major disaster.

Subpart D-Personnel and General Administration

§ 1301.30 General requirements.

Head Start agencies and delegate agencies shall conduct the Head Start program in an effective and efficient manner, free of political bias or family favoritism. Each agency shall also provide reasonable public access to information and to the agency's records pertaining to the Head Start program. § 1301.31 Personnel policies.

(a) Head Start agencies must establish and implement personnel policies for themselves and their delegate agencies. At a minimum, such policies must govern the following: staff qualifications, recruitment and selection, classification of positions, salaries, employee benefits (including leave, holidays, overtime, and fringe benefits), conflicts of interest, official travel, career development, performance evaluations, and employee management relations (including employee grievances and adverse actions).

(b) The policies must be in writing, approved by the Head Start Policy Council or Committee, and made available to all Head Start grantee and delegate agency employees.

(c) The policies must require that all prospective employees must sign a declaration prior to employment which lists:

(1) All pending and prior criminal arrests and charges related to child sexual abuse and their disposition;

(2) Convictions related to other forms of child abuse and/or neglect; and

(3) All convictions of violent felonies.

(d) The declaration required by paragraph (c) of this section may exclude:

(1) Traffic fines of $50.00 or less;

(2) Any offense, other than any offense related to child abuse and/or child sexual abuse or violent felonies, committed before the prospective employee's 18th birthday, which was finally adjudicated in a juvenile court or under a youth offender law;