but who is qualified to evaluate the application.

(c) The board reviews the application to decide if:

(1) The special circumstances under § 75.219(a) are satisfied;

(2) The application rates high enough, based on the selection criteria, priorities, and other requirements that apply to the program, to deserve selection; and

(3) Selection of the application will not have an adverse impact on the budget of the program.

(d) The board forwards the results of its review to the Secretary.

(e) If each of the conditions in paragraph (c) of this section is satisfied, the Secretary may select the application for funding.

(f) Even if the Secretary does not select the application for funding, the applicant may submit its application under the procedures in Subpart C of this part.

(Authority: 20 U.S.C. 1221e-3(a)(1))

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, and amended at 45 FR 86297, Dec. 30, 1980]

§ 75.222 Procedures the Department uses under § 75.219(b).

If

the special circumstances of § 75.219(b) appear to exist for an application, the Secretary may select the application for funding if:

(a) The Secretary has documentary evidence that the special circumstances of § 75.219(b) exist; and

(b) The Secretary has a statement that explains the circumstances of the mishandling.

(Authority: 20 U.S.C. 1221e-3(a)(1))

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, and amended at 52 FR 27804, July 24, 1987]

PROCEDURES TO MAKE A GRANT

§ 75.230 How the Department makes a grant; purpose of 88 75.231-75.236.

If the Secretary selects an application under §§ 75.217, 75.220, or 75.222, the Secretary follows the procedures in 88 75.231-75.236 to set the amount and determine the conditions of a grant. Sections 75.235-75.236 also apply to grants under formula grant programs.

CROSS-REFERENCE. See § 75.200 How applications for new grants are selected for funding.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.231 Additional information.

After selecting an application for funding, the Secretary may require the applicant to submit additional information.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.232 The cost analysis; basis for grant amount.

(a) Before the Secretary sets the amount of a grant, the Secretary does a cost analysis of the project. The Secretary:

(1) Verifies the cost data in the detailed budget for the project;

(2) Evaluates specific elements of costs; and

(3) Examines costs to determine if they are necessary, reasonable, and allowable under applicable statutes and regulations.

(b) The Secretary uses the cost analysis as a basis for determining the amount of the grant to the applicant. The cost analysis shows whether the applicant can achieve the objectives of the project with reasonable efficiency and economy under the budget in the application.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.233 Setting the amount of the grant.

The Secretary may fund up to 100 percent of the allowable costs in the budget. In deciding what percent of the allowable costs to fund, the Secretary considers:

(a) Matching or cost sharing requirements that apply; and

(b) Any other financial resources available to the applicant.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.234 The conditions of the grant. The Secretary makes a grant to an applicant only after determining:

(a) The approved costs; and (b) Any special conditions.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.235 The notification of grant award.

(a) To make a grant, the Secretary issues a notification of grant award and sends it to the grantee.

(b) The notification of grant award sets the amount of the grant and gives other information about the grant. (Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.236 Effect of the grant.

The grant obligates both the Federal Government and the grantee to the requirements that apply to the grant. (Authority: 20 U.S.C. 1221e-3(a)(1))

CROSS-REFERENCE. See 34 CFR Part 74, Subpart L-Programmatic Changes and Budget Revisions.

APPROVAL OF MULTI-YEAR PROJECTS

§ 75.250 Project period can be up to 60 months.

The Secretary may approve a project period of up to 60 months. (Authority: 20 U.S.C. 1221e-3(a)(1); 42 U.S.C. 4252(a))

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, and amended at 52 FR 27804, July 24, 1987]

§ 75.251 The budget period.

(a) The Secretary usually approves a budget period of not more than 12 months, even if the project has a multi-year project period.

(b) If the Secretary approves a multi-year project period, the Secretary:

(1) Makes a grant to the project for the initial budget period; and

(2) Indicates his or her intention to make contination awards to fund the remainder of the project period. (Authority: 20 U.S.C. 1221e-3(a))

§ 75.253 Continuation of 8 multi-year project after the first budget period.

(a) The Secretary may make a continuation award for a budget period after the first budget period of an approved multi-year project if:

(1) The Congress has appropriated sufficient funds under the program;

(2) The Secretary is satisfied that the grantee will satisfactorily complete the budget period that is about to end;

(3) The grantee has submitted every report that it must submit before the date of the continuation award; and

(4) Continuation of the project is in the best interest of the Federal Government.

(b) Subject to the criteria in paragraph (a) of this section, in selecting applications for funding under a program the Secretary gives priority to contination awards over new grants.

(c) In determining the amount of a continuation award, the Secretary reduces the amount of funds needed for the next budget period by the amount of funds that remain available from the current budget period.

(d) A grantee that is in the final budget period of a project period may seek continued assistance for the project under the procedures for selecting new projects.

CROSS-REFERENCE. See Subpart C-How to Apply for a Grant.

(Authority: 20 U.S.C. 1221e-3(a)(1))

CROSS-REFERENCE. See § 75.117 Information needed for a multi-year project; and § 75.118 Application for a continuation award.

MISCELLANEOUS

§ 75.260 Allotments and reallotments.

(a) Under some of the programs covered by this part, the Secretary allots funds under a statutory or regulatory formula.

(b) Any reallotment to other grantees will be made by the Secretary in accordance with the authorizing statute for that program.

(Authority: 20 U.S.C. 1221e-3(a)(1))

[45 FR 22497, Apr. 3, 1980. Redesignated at 45 FR 77368, Nov. 21, 1980, and amended at 52 FR 27804, July 24, 1987]

§ 75.261 Extension of a project period.

The Secretary may extend a project period if:

(a) Special or unusual circumstances will delay completion of the project;

(b) The grantee provides the Secretary with a written request for the extension at least 45 days before the end of the project period;

(c) The grantee states the reasons why it needs the extension;

(d) The extension does not violate any statute or regulations;

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.511 Waiver of requirement for a fulltime project director.

(a) If regulations under a program require a full-time project director, the Secretary may waive that requirement under the following conditions: (1) The project will not be adversely affected by the waiver.

(2) (i) The project director is needed to coordinate two or more related projects; or

(ii) The project director must teach a minimum number of hours to retain faculty status.

(b) The waiver either permits the grantee:

(1) To use a part-time project director; or

(2) Not to use any project director. (c) (1) An applicant or a grantee may request the waiver.

(2) The request must be in writing and must demonstrate that a waiver is appropriate under this section.

(3) The Secretary gives the waiver in writing. The waiver is effective on the date the Secretary signs the waiver. (Authority: 20 U.3.C. 1221e-3(a)(1))

CROSS-REFERENCE. See 34 CFR 74.103(c) Changes in key people in a research project.

§ 75.515 Use of consultants.

(a) Subject to Federal statutes and regulations, a grantee shall use its general policies and practices when it hires, uses, and pays a consultant as part of the project staff.

(b) The grantee may not use its grant to pay a consultant unless:

(1) There is a need in the project for the services of that consultant; and

(2) The grantee cannot meet that need by using an employee rather than a consultant.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.516 Compensation of consultantsemployees of institutions of higher education.

If an institution of higher education receives a grant for research or for educational services, it may pay a consultant's fee to one of its employees only in unusual circumstances and only if:

(a) The work performed by the consultant is in addition to his or her regular departmental load; and

(b) (1) The consultation is across departmental lines; or

(2) The consultation involves a separate or remote operation.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.517 Changes in key staff members.

A grantee shall comply with 34 CFR 74.103(c)(2) concerning replacement or lesser involvement of any key project staff, whether or not the grant is for research.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.518 Minimum wage rates.

The grantee shall pay a project staff member not less than any minimum wage required under Federal Law. (Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.519 Dual compensation of staff.

A grantee may not use its grantee to pay a project staff member for time or work for which that staff member is compensated from some other source of funds.

(Authority: 20 U.S.C. 1221e-3(a)(1))

CONFLICT OF INTEREST

§ 75.524 Conflict of interest: Purpose of § 75.525.

(a) The conflict of interest regulations of the Department that apply to a grant are in § 75.525.

(b) These conflict of interest regulations do not apply to a "government" as defined in 34 CFR 74.3.

NOTE: A government must provide a conflict of interest assurance under the standard application required by Subpart N of 34 CFR Part 74 (Forms for Applying for Grants).

(c) The regulations in § 75.525 do not apply to a grantee's procurement contracts. The conflict of interest regulations that cover those procurement contracts are in 34 CFR Part 74.

$75.525 Conflict of interest: Participation in a project.

(a) A grantee may not permit a person to participate in an administrative decision regarding a project if:

(1) The decision is likely to benefit that person or a member of his or her immediate family; and

(2) The person:

(i) Is a public official; or

(ii) Has a family or business relationship with the grantee.

(b) A grantee may not permit any person participating in the project to use his or her position for a purpose that is or gives the appearance of being-motivated by a desire for a private financial gain for that person or for others.

(Authority: 20 U.S.C. 1221e-3(a)(1))

ALLOWABLE COSTS

§ 75.530 General cost principles.

The general principles to be used in determining costs applicable to grants and cost-type contracts under grants are referenced in Subpart Q of 34 CFR Part 74 (Cost Principles).

(Authority: 20 U.S.C. 1221e-3(a)(1))

CROSS-REFERENCE. See 34 CFR Part 74, Subpart G-Matching or Cost Sharing.

§ 75.531 Limit on total cost of a project.

A grantee shall insure that the total cost to the Federal Government is not more than the amount stated in the notification of grant award.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.532 Use of funds for religion prohibited.

(a) No grantee may use its grant to pay for any of the following:

(1) Religious worship, instruction, or proselytization.

(2) Equipment or supplies to be used for any of those activities.

(3) Construction, remodeling, repair, operation, or maintenance of any facility or part of a facility to be used for any of those activities.

(4) An activity of a school or department of divinity.

(b) As used in this section, “school or department of divinity" means an institution or a component of an institution whose program is specifically for the education of students to:

(1) Prepare them to enter into a religious vocation; or

(2) Prepare them to teach theological subjects.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.533 Acquisition of real property; con

struction.

No grantee may use its grant for acquisition of real property or for construction unless specifically permitted by the authorizing statute or implementing regulations for the program. (Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.534 Training grants-automatic increases for additional dependents. The Secretary increases an educational training grant to cover the cost of additional dependents not specified in the notification of grant award if:

(a) Allowances for those dependents are authorized by the program statute and are allowable under the grant; and (b) Appropriations are available to cover the cost.

(Authority: 20 U.S.C. 1221e-3(a)(1))

INDIRECT COST RATES

875.560 General indirect cost rates; exceptions.

(a) Appendices C-F to 34 CFR Part 74 describe the differences between direct and indirect costs and include the principles for determining the general indirect cost rate that a grantee may use for grants under most programs.

(b) Sections 75.562-75.568 provide restrictions on indirect cost rates under certain programs.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.561 Approval of indirect cost rates.

(a) The Secretary approves an indirect cost rate for a grantee other than a local educational agency. For the purposes of this section, the term "local educational agency" does not include a State agency.

(b) Each State educational agency, on the basis of a plan approved by the Secretary, shall approve an indirect cost rate for each local educational agency that requests it to do so.

(c) Each indirect cost rate must be approved annually.

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.562 Indirect cost rates for educational training projects.

(a) The Secretary may approve an indirect cost rate for an educational training project at the lesser of:

(1) The actual indirect cost rate of the grantee; or

(2) Eight percent of the total direct costs of the project.

(b) This section does not apply to: (1) A State (as defined in 34 CFR 74.3); or

(2) A local government (as defined in 34 CFR 74.3).

(Authority: 20 U.S.C. 1221e-3(a)(1))

§ 75.563 Restricted indirect cost rate-programs covered.

Sections 75.564-75.568 apply to each program that has a statutory requirement not to use Federal funds to supplant non-Federal funds. These programs include the following: