Title 34—Education--Volume 1
PART 76—STATE-ADMINISTERED FORMULA GRANT PROGRAMS
§ 76.1   Programs to which this part applies.
(a) The regulations in this part apply to each State-administered formula grant program of the Department.
(b) If a State-administered formula grant program does not have implementing regulations, the Secretary implements the program under the applicable statutes and, to the extent consistent with the authorizing statute, under the GEPA and the regulations in this part. For the purposes of this part, the term State-administered formula grant program means a program whose applicable statutes or implementing regulations provide a formula for allocating program funds among eligible States.
§ 76.2   Exceptions in program regulations to part 76.
If a program has regulations that are not consistent with part 76, the implementing regulations for that program identify the sections of part 76 that do not apply.
§ 76.50   Basic requirements for subgrants.
(a) Under a program covered by this part, the Secretary makes a grant—
(1) To the State agency designated by applicable statutes and regulations for the program; or
(2) To the State agency designated by the State in accordance with applicable statutes and regulations.
(b) Unless prohibited by applicable statutes or regulations or by the terms and conditions of the grant award, a State may use State-administered formula grant funds—
(1) Directly;
(2) To make subgrants to eligible applicants, as determined by applicable statutes or regulations, or if applicable statutes and regulations do not address eligible subgrantees, as determined by the State; or
(3) To authorize a subgrantee to make subgrants.
(c) Grantees are responsible for monitoring subgrantees consistent with 2 CFR 200.332.
(d) Grantees, in cases where subgrants are prohibited by applicable statutes or regulations or the terms and conditions of a grant award, are authorized to contract, as needed, for supplies, equipment, and other services, in accordance with 2 CFR part 200, subpart D (2 CFR 200.317 through 200.326).
(e) No subgrant that a State chooses to make in accordance with paragraph (b) may change the amount of Federal funds for which an entity is eligible through a formula in the applicable Federal statute or regulation.
§ 76.51   A State distributes funds by formula or competition.
If applicable statutes and regulations authorize a State to make subgrants, the statute:
(a) Requires the State to use a formula to distribute funds;
(b) Gives the State discretion to select subgrantees through a competition among the applicants or through some other procedure; or
(c) Allows some combination of these procedures.
§ 76.52   Eligibility of faith-based organizations for a subgrant and nondiscrimination against those organizations.
(a)(1) A faith-based organization is eligible to apply for and to receive a subgrant under a program of the Department on the same basis as any other private organization.
(2)(i) In the selection of subgrantees, States—
(A) May not discriminate for or against a private organization on the basis of the organization's religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to favor or disfavor a similarly situated secular organization; and
(B) Must ensure that all decisions about subgrants are free from political interference, or even the appearance of such interference, and are made on the basis of merit, not on the basis of religion or religious belief, or a lack thereof.
(ii) Notices or announcements of award opportunities and notices of award or contracts must include language substantially similar to that in appendices A and B, respectively, to 34 CFR part 75.
(3) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by States in administering a Department program may require faith-based organizations to provide assurances or notices if they are not required of non-faith-based organizations. Any restrictions on the use of subgrant funds must apply equally to faith-based and non-faith-based organizations. All organizations that receive a subgrant from a State under a State-administered formula grant program of the Department, including organizations with religious character, motives, or affiliation, must carry out eligible activities in accordance with all program requirements, including those prohibiting the use of direct Federal financial assistance to engage in explicitly religious activities, subject to any accommodations that are granted to organizations on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws.
(4) No grant document, agreement, covenant, memorandum of understanding, policy, or regulation that is used by States may disqualify faith-based organizations from applying for or receiving subgrants under a State-administered formula grant program of the Department on the basis of the organization's religious character, motives, or affiliation, or lack thereof, or on the basis of conduct that would not be considered grounds to disqualify a similarly situated secular organization.
(5) Nothing in this section may be construed to preclude the Department from making an accommodation, including for religious exercise, with respect to one or more program requirements on a case-by-case basis in accordance with the Constitution and laws of the United States, including Federal civil rights laws.
(6) Neither a State nor the Department may disqualify an organization from participating in any Department program for which it is eligible on the basis of the organization's indication that it may request an accommodation with respect to one or more program requirements, unless the organization has made clear that the accommodation is necessary to its participation and the Department has determined that it would deny the accommodation.
(b) The provisions of § 76.532 apply to a faith-based organization that receives a subgrant from a State under a State-administered formula grant

 program of the Department.
(c)(1) A private organization that applies for and receives a subgrant under a program of the Department and engages in explicitly religious activities, such as worship, religious instruction, or proselytization, must offer those activities separately in time or location from any programs or services funded by a subgrant from a State under a State-administered formula grant program of the Department. Attendance or participation in any such explicitly religious activities by beneficiaries of the programs and services supported by the subgrant must be voluntary.
(2) The limitations on explicitly religious activities under paragraph (c)(1) of this section do not apply to a faith-based organization that provides services to a beneficiary under a program supported only by “indirect Federal financial assistance.”
(3) For purposes of 2 CFR 3474.15, this section, and §§ 76.712 and 76.714, the following definitions apply:
(i) Direct Federal financial assistance means financial assistance received by an entity selected by the Government or a pass-through entity (under this part) to carry out a service (e.g., by contract, grant, or cooperative agreement). References to “Federal financial assistance” will be deemed to be references to direct Federal financial assistance, unless the referenced assistance meets the definition of “indirect Federal financial assistance.”
(ii) Indirect Federal financial assistance means financial assistance received by a service provider when the service provider is paid for services rendered by means of a voucher, certificate, or other means of government-funded payment provided to a beneficiary who is able to make a choice of service provider. Federal financial assistance provided to an organization is indirect under this definition if—
(A) The government program through which the beneficiary receives the voucher, certificate, or other similar means of government-funded payment is neutral toward religion; and
(B) The organization receives the assistance wholly as the result of the genuine and independent private choice of the beneficiary, not a choice of the Government. The availability of adequate secular alternatives is a significant factor in determining whether a program affords a genuinely independent and private choice.
(iii) Federal financial assistance means assistance that non-Federal entities receive or administer in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, food commodities, direct appropriations, or other assistance, but does not include a tax credit, deduction, or exemption.
(iv) Pass-through entity means an entity, including a nonprofit or nongovernmental organization, acting under a contract, grant, or other agreement with the Federal Government or with a State or local government, such as a State administering agency, that accepts direct Federal financial assistance as a primary recipient or grantee and distributes that assistance to other organizations that, in turn, provide government-funded social services.
(v) Religious exercise has the meaning given to the term in 42 U.S.C. 2000cc-5(7)(A).
The definitions of direct Federal financial assistance and indirect Federal financial assistance do not change the extent to which an organization is considered a recipient of Federal financial assistance as those terms are defined under 34 CFR parts 100, 104, 106, and 110.
(d)(1) A faith-based organization that applies for or receives a subgrant from a State under a State-administered formula grant program of the Department will retain its independence, autonomy, right of expression, religious character, and authority over its governance. A faith-based organization that receives Federal financial assistance from the Department does not lose the protection of law.
(2) A faith-based organization that applies for or receives a subgrant from a State under a State-administered formula grant program of the Department may, among other things—
(i) Retain religious terms in its name;
(ii) Continue to carry out its mission, including the definition, development, practice, and expression of its religious beliefs;
(iii) Use its facilities to provide services without concealing, removing, or altering religious art, icons, scriptures, or other symbols from these facilities;
(iv) Select its board members on the basis of their acceptance of or adherence to the religious tenets of the organization; and
(v) Include religious references in its mission statement and other chartering or governing documents.
(e) An organization that receives any Federal financial assistance under a program of the Department shall not discriminate against a beneficiary or prospective beneficiary in the provision of program services, or in outreach activities related to such services, on the basis of religion or religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. However, an organization that participates in a program funded by indirect Federal financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization's program.
(f) If a State or subgrantee contributes its own funds in excess of those funds required by a matching or grant agreement to supplement federally funded activities, the State or subgrantee has the option to segregate those additional funds or commingle them with the funds required by the matching requirements or grant agreement. However, if the additional funds are commingled, this section applies to all of the commingled funds.
(g) A religious organization's exemption from the Federal prohibition on employment discrimination on the basis of religion, in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1, is not forfeited when the organization receives Federal financial assistance from the Department.
(h) The Department shall not construe these provisions in such a way as to advantage or disadvantage faith-based organizations affiliated with historic or well-established religions or sects in comparison with other religions or sects.
§ 76.53   Severability.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
§ 76.100   Effect of this subpart.
This subpart establishes general requirements that a State must meet to apply for a grant under a program covered by this part. Additional requirements are in applicable statutes and regulations for the program.
§ 76.101   State plans in general.
(a) Except as provided in paragraph (b) of this section, a State that makes subgrants to local educational agencies under a program subject to this part must have on file with the Secretary a State plan that meets the requirements of section 441 of GEPA (20 U.S.C. 1232d), which may include information about how the State intends use continuous improvement strategies in its program implementation based on periodic review of research, data, community input, and other feedback.
(b) The requirements of section 441 of GEPA do not apply to a State plan submitted for a program under the Elementary and Secondary Education Act of 1965.
§ 76.102   Definition of “State plan” for this part.
As used in this part, State plan means any document that applicable statutes and regulations for a State-administered formula grant program require a State to submit in order to receive funds for the program. To the extent that any provision of this part conflicts with program-specific implementing regulations related to the plan, the program-specific implementing regulations govern.
§ 76.103   Multiyear State plans.
Unless otherwise specified by statute, regulations, or the Secretary, each State plan is effective for a period of more than one fiscal year, to be determined by the Secretary or by regulations.
§ 76.104   A State shall include certain certifications in its State plan.
(a) A State shall include the following certifications in each State plan:
(1) That the plan is submitted by the State agency that is eligible to submit the plan.
(2) That the State agency has authority under State law to perform the functions of the State under the program.
(3) That the State legally may carry out each provision of the plan.
(4) That all provisions of the plan are consistent with State law.
(5) That a State officer, specified by title in the certification, has authority under State law to receive, hold, and disburse Federal funds made available under the plan.
(6) That the State officer who submits the plan, specified by title in the certification, has authority to submit the plan.
(7) That the agency that submits the plan has adopted or otherwise formally approved the plan.
(8) That the plan is the basis for State operation and administration of the program.
(b) [Reserved]
§ 76.106   State documents are public information.
A State shall make the following documents available for public inspection:
(a) All State plans and related official materials.
(b) All approved subgrant applications.
(c) All documents that the Secretary transmits to the State regarding a program.
§ 76.125   What is the purpose of these regulations?
(a) Sections 76.125 through 76.137 of this part contain requirements for the submission of an application by an Insular Area for the consolidation of two or more grants under the programs described in paragraph (c) of this section.
(b) For the purpose of §§ 76.125-76.137 of this part the term Insular Area means the Virgin Islands, Guam, American Samoa,  or the Commonwealth of the Northern Mariana Islands.
(c) The Secretary may make an annual consolidated grant to assist an Insular Area in carrying out one or more State-administered formula grant programs of the Department, consistent with applicable law.
§ 76.126   What regulations apply to the consolidated grant applications for insular areas?
The following regulations apply to those programs included in a consolidated grant:
(a) The regulations in §§ 76.125 through 76.137; and
(b) The regulations that apply to each specific program included in a consolidated grant for which funds are used.
§ 76.127   What is the purpose of a consolidated grant?
An Insular Area may apply for a consolidated grant for two or more State-administered formula grant programs . This procedure is intended to:
(a) Simplify the application and reporting procedures that would otherwise apply for each of the programs included in the consolidated grant; and
(b) Provide the Insular Area with flexibility in allocating the funds under the consolidated grant to achieve any of the purposes to be served by the programs that are consolidated.
§ 76.128   What is a consolidated grant?
A consolidated grant is a grant to an Insular Area for any two or more State-administered formula grant programs. The amount of the consolidated grant is the sum of the allocations the Insular Area receives under each of the programs included in the consolidated grant if there had been no consolidation.
§ 76.129   How does a consolidated grant work?
(a) An Insular Area shall use the funds it receives under a consolidated grant to carry out, in its jurisdiction, one or more of the programs included in the grant.
(b) An Insular Area shall comply with the statutory and regulatory requirements that apply to each program under which funds from the consolidated grant are expended.
§ 76.130   How are consolidated grants made?
(a) The Secretary annually makes a single consolidated grant to each Insular Area that meets the requirements of §§ 76.125 through 76.137 and each program under which the grant funds are to be used and administered.
(b) The Secretary may decide that one or more programs cannot be included in the consolidated grant if the Secretary determines that the Insular Area failed to meet the program objectives stated in its plan for the previous fiscal year in which it carried out the programs.
(c) Under a consolidated grant, an Insular Area may use a single advisory council for any or all of the programs that require an advisory council.
(d) Although Pub. L. 95-134 authorizies the Secretary to consolidate grant funds that the Department awards to an Insular Area, it does not confer eligibility for any grant funds. The eligibility of a particular Insular Area to receive grant funds under a Federal education program is determined under the statutes and regulations that apply to that program.
§ 76.131   How does an insular area apply for a consolidated grant?
(a) An Insular Area that desires to apply for a grant consolidating two or more State-administered formula grant programs shall submit to the Secretary an application that:
(1) Contains the assurances in § 76.132; and
(2) Meets the application requirements in paragraph (c) of this section.
(b) The submission of an application that contains these requirements and assurances takes the place of a separate State plan or other similar document required by this part or by applicable statutes and regulations for programs included in the consolidated grant.
(c) An Insular Area shall include in its consolidated grant application a program plan that:
(1) Contains a list of the State-administered formula grant programs  to be included in the consolidated grant;
(2) Describes the State-administered formula grant programs under which the consolidated grant funds will be used and administered;
(3) Describes the goals, objectives, activities, and the means of evaluating program outcomes for the programs for which the Insular Area will use the funds received under the consolidated grant during the fiscal year for which it submits the application, including needs of the population that will be met by the consolidation of funds; and
(4) Contains a budget that includes a description of the allocation of funds—including any anticipated carryover funds of the program in the consolidated grant from the preceding year—among the programs to be included in the consolidated grant.
§ 76.132   What assurances must be in a consolidated grant application?
(a) An Insular Area shall include in its consolidated grant application assurances to the Secretary that it will:
(1) Follow policies and use administrative practices that will insure that non-Federal funds will not be supplanted by Federal funds made available under the authority of the programs in the consolidated grant;
(2) Comply with the requirements (except those relating to the submission of State plans or similar documents) in the applicable statutes and implementing regulations for the programs under which funds are to be used and administered, (except requirements for matching funds);
(3) Provide for proper and efficient administration of funds in accordance with the authorizing statutes and implementing regulations for those programs under which funds are to be used and administered;
(4) Provide for fiscal control and fund accounting procedures to ensure proper disbursement of, and accounting for, Federal funds received under the consolidated grant;
(5) Submit an annual report to the Secretary containing information covering the program or programs for which the grant is used and administered, including the financial and program performance information required under 2 CFR 200.328 and 200.329.
(6) Provide that funds received under the consolidated grant will be under control of, and that title to property acquired with these funds will be in, a public agency, institution, or organization. The public agency shall administer these funds and property;
(7) Keep records, including a copy of the State Plan or application document under which funds are to be spent, which show how the funds received under the consolidated grant have been spent.
(8) Adopt and use methods of monitoring and providing technical assistance to any agencies, organizations, or institutions that carry out the programs under the consolidated grant and enforce any obligations imposed on them under the applicable statutes and regulations.
(9) Evaluate the effectiveness of these programs in meeting the purposes and objectives in the applicable statutes under which program funds are used and administered;
(10) Conduct evaluations of these programs at intervals and in accordance with procedures the Secretary may prescribe; and
(11) Provide appropriate opportunities for participation by local agencies, representatives of the groups affected by the programs, and other interested institutions, organizations, and individuals in planning and operating the programs.
(b) These assurances remain in effect for the duration of the programs they cover.
§ 76.133   What is the reallocation authority?
(a) After an Insular Area receives a consolidated grant, it may reallocate the funds in a manner different from the allocation described in its consolidated grant application. However, the funds cannot be used for purposes that are not authorized under the programs in the consolidated grant under which funds are to be used and administered.
(b) If an Insular Area decides to reallocate the funds it receives under a consolidated grant, it shall notify the Secretary by amending its original application to include an update of the information required under § 76.131.
§ 76.134   What is the relationship between consolidated and non-consolidated grants?
(a) An Insular Area may request that any State-administered formula grant programs be included in its consolidated grant and may apply separately for assistance under any other of those programs for which it is eligible.
(b) Those programs that an Insular Area decides to exclude from consolidation—for which it must submit separate plans or applications—are implemented in accordance with the applicable applicable statutes and regulations. The excluded programs are not subject to the provisions for allocation of funds among programs in a consolidated grant.
§ 76.135   Are there any requirements for matching funds?
The Secretary waives all requirements for matching funds for those programs that are consolidated by an Insular Area in a consolidated grant application.
§ 76.136   Under what programs may consolidated grant funds be spent?
Insular Areas may only use and administer funds under State-administered formula grant programs during a fiscal year for which the Insular Area is entitled to receive funds under an appropriation for that program.
§ 76.137   How may carryover funds be used under the consolidated grant application?
Any funds under any applicable program which are available for obligation and expenditure in the year succeeding the fiscal year for which they are appropriated must be obligated and expended in accordance with the consolidated grant application submitted by the Insular Area for that program for the succeeding fiscal year.
§ 76.140   Amendments to a State plan.
(a) If the Secretary determines that an amendment to a State plan is essential during the effective period of the plan, the State must make the amendment.
(b) A State must also amend a State plan if there is a significant and relevant change in the information or the assurances in the plan.
(c) If a State amends a State plan, to the extent consistent with applicable law, the State must use the same procedures as those it must use to prepare and submit a State plan, unless the Secretary prescribes different procedures for submitting amendments based on the characteristics and requirements of a particular State-administered formula grant program.
§§ 76.141-76.142   [Reserved]
§ 76.201   A State plan must meet all statutory and regulatory requirements.
The Secretary approves a State plan if it meets the requirements of the Federal statutes and regulations that apply to the plan.
§ 76.202   Opportunity for a hearing before a State plan is disapproved.
The Secretary may disapprove a State plan only after:
(a) Notifying the State;
(b) Offering the State a reasonable opportunity for a hearing; and
(c) Holding the hearing, if requested by the State.
§ 76.235   The notification of grant award.
(a) To make a grant to a State, the Secretary issues and sends to the State a notification of grant award.
(b) The notification of grant award tells the amount of the grant and provides other information about the grant.
§ 76.260   Allotments are made under applicable statutes or regulations.
(a) The Secretary allots program funds to a State in accordance with applicable statutes or implementing regulations for the program.
(b) Any reallotment to other States will be made by the Secretary in accordance with applicable statutes or implementing regulations for that program.
§ 76.261   Reallotted funds are part of a State's grant.
Funds that a State receives as a result of a reallotment are part of the State's grant for the appropriate fiscal year. However, the Secretary does not consider a reallotment in determining the maximum or minimum amount to which a State is entitled for a following fiscal year.
§ 76.300   Contact the State for procedures to follow.
An applicant for a subgrant can find out the procedures it must follow by contacting the State agency that administers the program.
See subparts E and G of this part for the general responsibilities of the State regarding applications for subgrants.
§ 76.301   Local educational agency application in general.
(a) A local educational agency (LEA) that applies for a subgrant under a program subject to this part must have on file with the State an application that meets the requirements of section 442 of GEPA (20 U.S.C. 1232e).
(b) The requirements of section 442 of GEPA do not apply to an LEA's application for a program under the ESEA.
§ 76.302   The notice to the subgrantee.
A State shall notify a subgrantee in writing of:
(a) The amount of the subgrant;
(b) The period during which the subgrantee may obligate the funds; and
(c) The Federal requirements that apply to the subgrant.
§ 76.303   Joint applications and projects.
(a) Two or more eligible parties may submit a joint application for a subgrant.
(b) If the State must use a formula to distribute subgrant funds (see § 76.51), the State may not make a subgrant that exceeds the sum of the entitlements of the separate subgrantees.
(c) If the State funds the application, each subgrantee shall:
(1) Carry out the activities that the subgrantee agreed to carry out; and
(2) Use the funds in accordance with Federal requirements.
(d) Each subgrantee shall use an accounting system that permits identification of the costs paid for under its subgrant.
§ 76.304   Subgrantee shall make subgrant application available to the public.
A subgrantee shall make any application, evaluation, periodic program plan, or report relating to each program available for public inspection.
§ 76.400   State procedures for reviewing an application.
A State that receives an application for a subgrant shall take the following steps:
(a) Review. The State shall review the application.
(b) Approval—entitlement programs. The State shall approve an application if:
(1) The application is submitted by an applicant that is entitled to receive a subgrant under the program; and
(2) The applicant meets the requirements of the applicable statutes and regulations that apply to the program.
(c) Approval—discretionary programs. The State may approve an application if:
(1) The application is submitted by an eligible applicant under a program in which the State has the discretion to select subgrantees;
(2) The applicant meets the requirements of the applicable statutes and regulations that apply to the program; and
(3) The State determines that the project should be funded under the authorizing statute and implementing regulations for the program.
(d) Disapproval—entitlement and discretionary programs. If an application does not meet the requirements of the applicable statutes and regulations that apply to a program, the State shall not approve the application.
§ 76.401   Disapproval of an application—opportunity for a hearing.
(a) State educational agency hearing regarding disapproval of an application. When financial assistance is provided to (or through) a State educational agency (SEA) consistent with an approved State plan and the SEA takes final action by disapproving or failing to approve an application for a subgrant in whole or in part, the SEA must provide the aggrieved applicant with notice and an opportunity for a hearing regarding the SEA's disapproval or failure to approve the application.
(b) Applicant request for SEA hearing. (1) The aggrieved applicant must request a hearing within 30 days of the final action of the SEA.
(2) The aggrieved applicant's request for a hearing must include, at a minimum, a citation to the specific State or Federal statute, rule, regulation, or guideline that the SEA allegedly violated when disapproving or failing to approve the application in whole or in part and a brief description of the alleged violation.
(3) The SEA must make available, at reasonable times and places to each applicant, all records of the SEA pertaining to the SEA's failure to approve the application in whole or in part that is the subject of the applicant's request for a hearing under this paragraph (b).
(c) SEA hearing procedures. (1) Within 30 days after it receives a request that meets the requirements of paragraphs (b)(1) and (2) of this section, the SEA must hold a hearing on the record to review its action.
(2) No later than 10 days after the hearing, the SEA must issue its written ruling, including findings of fact and reasons for the ruling.
(3) If the SEA determines that its action was contrary to State or Federal statutes, rules, regulations, or guidelines that govern the applicable program, the SEA must rescind its action in whole or in part.
(d) Procedures for appeal of SEA action to the Secretary. (1) If an SEA does not rescind its final action disapproving or failing to approve an application in whole or in part after the SEA conducts a hearing consistent with paragraph (c) of this section, the applicant may appeal the SEA's final action to the Secretary.
(2) The applicant must file a notice of appeal with the Secretary within 20 days after the applicant has received the SEA's written ruling.
(3) The applicant's notice of appeal must include, at a minimum, a citation to the specific Federal statute, rule, regulation, or guideline that the SEA allegedly violated and a brief description of the alleged violation.
(4) The Secretary may issue interim orders at any time when considering the appeal, including requesting the hearing record and any additional documentation, such as additional documentation regarding the information provided pursuant to paragraph (d)(3) of this section.
(5) After considering the appeal, the Secretary issues an order either affirming the final action of the SEA or requiring the SEA to take appropriate action, if the Secretary determines that the final action of the SEA was contrary to a Federal statute, rule, regulation, or guideline that governs the applicable program.
(e) Programs administered by State agencies other than an SEA. Under programs with an approved State plan under which financial assistance is provided to (or through) a State agency that is not the SEA, that State agency is not required to comply with this section unless specifically required to do so by Federal statute or regulation.
§ 76.500   Constitutional rights, freedom of inquiry, and Federal statutes and regulations on nondiscrimination.
(a) A State and a subgrantee must comply with the following statutes and regulations:
Table 1 to § 76.500( a )
(b)(1) Each State or subgrantee that is an institution of higher education, as defined in 20 U.S.C. 1002(a), that is public and that is legally required to abide by the First Amendment to the U.S. Constitution (hereinafter “public institution”), must also comply with the First Amendment to the U.S. Constitution, including protections for freedom of speech, association, press, religion, assembly, petition, and academic freedom, as a material condition of the Department's grant. The Department will determine that a public institution has not complied with the First Amendment only if there is a final, non-default judgment by a State or Federal court that the public institution or an employee of the public institution, acting in his or her official capacity, violated the First Amendment. A final judgment is a judgment that the public institution chooses not to appeal or that is not subject to further appeal. Absent such a final, non-default judgment, the Department will deem the public institution to be in compliance with the First Amendment.
(2) Each State or subgrantee that is a public institution also must submit to the Secretary a copy of the final, non-default judgment by that State or Federal court to conclude the lawsuit no later than 45 calendar days after such final, non-default judgment is entered.
(c)(1) Each State or subgrantee that is an institution of higher education, as defined in 20 U.S.C. 1002(a), that is private (hereinafter “private institution”) must comply with its stated institutional policies regarding freedom of speech, including academic freedom. The Department will determine that a private institution has not complied with these stated institutional policies only if there is a final, non-default judgment by a State or Federal court to the effect that the private institution or an employee of the private institution, acting on behalf of the private institution, violated its stated institutional policy regarding freedom of speech or academic freedom, as a material condition of the Department's grant. A final judgment is a judgment that the private institution chooses not to appeal or that is not subject to further appeal. Absent such a final, non-default judgment, the Department will deem the private institution to be in compliance with its stated institutional policies.
(2) Each State or subgrantee that is a private institution also must submit to the Secretary a copy of the final, non-default judgment by that State or Federal court to conclude the lawsuit no later than 45 calendar days after such final, non-default judgment is entered.
(d) As a material condition of the Department's grant, each State or subgrantee that is a public institution shall not deny to any student organization whose stated mission is religious in nature and that is at the public institution any right, benefit, or privilege that is otherwise afforded to other student organizations at the public institution (including but not limited to full access to the facilities of the public institution, distribution of student fee funds, and official recognition of the student organization by the public institution) because of the religious student organization's beliefs, practices, policies, speech, membership standards, or leadership standards, which are informed by sincerely held religious beliefs.
(e) A State or subgrantee that is a covered entity as defined in 34 CFR 108.3 shall comply with the nondiscrimination requirements of the Boy Scouts of America Equal Access Act, 20 U.S.C. 7905, 34 CFR part 108.
§ 76.530   General cost principles.
The general principles to be used in determining costs applicable to grants, subgrants, and cost-type contracts under grants and subgrants are specified at 2 CFR part 200, subpart E—Cost Principles.
§ 76.532   Use of funds for religion prohibited.
(a) No State or subgrantee may use its grant or subgrant to pay for any of the following:
(1) Religious worship, instruction, or proselytization.
(2) Equipment or supplies to be used for any of the activities specified in paragraph (a)(1) of this section.
(b) [Reserved]
§ 76.533   Acquisition of real property; construction.
No State or subgrantee may use its grant or subgrant for acquisition of real property or for construction unless specifically permitted by  applicable statutes or implementing regulations for the program.
§ 76.534   Use of tuition and fees restricted.
No State or subgrantee may count tuition and fees collected from students toward meeting matching, cost sharing, or maintenance of effort requirements of a program.
§ 76.560   General indirect cost rates and cost allocation plans; exceptions.
(a) The differences between direct and indirect costs and the principles for determining the general indirect cost rate that a grantee may use for grants under most programs are specified in the cost principles for—
(1) All grantees, other than hospitals and commercial (for-profit) organizations, at 2 CFR part 200, subpart E;
(2) Hospitals, at 45 CFR part 75, appendix IX; and
(3) Commercial (for-profit) organizations, at 48 CFR part 31.
(b) Except as specified in paragraph (c) of this section, a grantee must have a current indirect cost rate agreement or approved cost allocation plan to charge indirect costs to a grant. To obtain a negotiated indirect cost rate agreement or approved cost allocation plan, a grantee must submit an indirect cost rate proposal or cost allocation plan to its cognizant agency.
(c) A grantee that meets the requirements in 2 CFR 200.414(f) may elect to charge the de minimis rate of modified total direct costs (MTDC) specified in that provision, which may be used indefinitely. The de minimis rate may not be used on programs that have statutory or regulatory restrictions on the indirect cost rate. No documentation is required to justify the de minimis rate.
(1) If the grantee has established a threshold for equipment that is lower than the amount specified in the Uniform Guidance, the grantee must use that threshold to exclude equipment from the MTDC base.
(2) For purposes of the MTDC base and application of the 10 percent rate, MTDC includes up to the amount specified in the definition of MTDC in the Uniform Guidance of each subaward, each year.
(d) If a grantee is required to, but does not, have a federally recognized indirect cost rate or approved cost allocation plan, the Secretary may permit the grantee to charge a temporary indirect cost rate of 10 percent of budgeted direct salaries and wages.
(e)(1) If a grantee fails to submit an indirect cost rate proposal or cost allocation plan to its cognizant agency within the required 90 days, the grantee may not charge indirect costs to its grant from the end of the 90-day period until it obtains a federally recognized indirect cost rate agreement applicable to the grant.
(2) If the Secretary determines that exceptional circumstances warrant continuation of a temporary indirect cost rate, the Secretary may authorize the grantee to continue charging indirect costs to its grant at the temporary rate specified in paragraph (d) of this section even though the grantee has not submitted its indirect cost rate proposal within the 90-day period.
(3) Once a grantee obtains a federally recognized indirect cost rate that is applicable to the affected grant, the grantee may use that indirect cost rate to claim indirect cost reimbursement for expenditures made on or after the date on which the grantee submitted its indirect cost proposal to its cognizant agency or the start of the project period, whichever is later. However, this authority is subject to the following limitations:
(i) The total amount of funds recovered by the grantee under the federally recognized indirect cost rate is reduced by the amount of indirect costs previously recovered under the temporary indirect cost rate specified in paragraph (d) of this section.
(ii) The grantee must obtain prior approval from the Secretary to shift direct costs to indirect costs in order to recover indirect costs at a higher negotiated indirect cost rate.
(iii) The grantee may not request additional funds to recover indirect costs that it cannot recover by shifting direct costs to indirect costs.
(f) The Secretary accepts a negotiated indirect cost rate or approved cost allocation plan but may establish a restricted indirect cost rate or cost allocation plan compliant with §§ 76.564 through 76.569 for a grantee to satisfy the statutory requirements of certain programs administered by the Department.
§ 76.561   Approval of indirect cost rates and cost allocation plans.
(a) If the Department of Education is the cognizant agency, the Secretary approves an indirect cost rate or cost allocation plan for a State agency and for a subgrantee 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, must approve an indirect cost rate for each local educational agency that requests it to do so.
(c) The Secretary generally approves indirect cost rate agreements annually. Indirect cost rate agreements may be approved for periods longer than a year if the Secretary determines that rates will be sufficiently stable to justify a longer rate period.
§ 76.562   Reimbursement of indirect costs.
(a) Reimbursement of indirect costs is subject to the availability of funds and statutory or administrative restrictions.
(b) The application of the negotiated indirect cost rate (determination of the direct cost base) or cost allocation plan (charging methodology) must be in accordance with the agreement/plan approved by the grantee's cognizant agency.
(c) Indirect costs for joint applications and projects (see § 76.303) are limited to the amount derived by applying the rate of the applicant, or a restricted rate when applicable, to the direct cost base for the grant in keeping with the terms of the applicant's federally recognized indirect cost rate agreement and program requirements.
§ 76.563   Restricted indirect cost rate—programs covered.
Sections 76.564 through 76.569 apply to programs with a statutory requirement prohibiting the use of Federal funds to supplant non-Federal funds, and to subgrants under these programs.
§ 76.564   Restricted indirect cost rate formula.
(a) An indirect cost rate for a grant covered by §§ 76.563 or 75.563 is determined by the following formula: Restricted indirect cost rate = (General management costs + Fixed costs) ÷ (Other expenditures).
(b) General management costs, fixed costs, and other expenditures must be determined under §§ 76.565 through 76.567.
(c) Under the programs covered by § 76.563, a grantee or subgrantee that is not a State or local government agency—
(1) Must use a negotiated restricted indirect cost rate computed under paragraph (a) of this section or cost allocation plan that complies with the formula in paragraph (a) of this section; or
(2) May elect to use an indirect cost rate of 8 percent of the modified total direct costs (MTDC) base if the grantee or subgrantee does not have a negotiated restricted indirect cost rate. MTDC is defined in 2 CFR 200.1. If the Secretary determines that the grantee or subgrantee would have a lower rate as calculated under paragraph (a) of this section, the lower rate must be used for the affected program.
(3) If the grantee has established a threshold for equipment that is lower than the amount specified in the Uniform Guidance, the grantee must use that threshold to exclude equipment from the MTDC base.
(4) For purposes of the MTDC base and application of the 8 percent rate, MTDC includes up to the amount specified in the definition of MTDC in the Uniform Guidance of each subaward, each year.
(d) Indirect costs that are unrecovered as a result of these restrictions may not be charged directly, used to satisfy matching or cost-sharing requirements, or charged to another Federal award.
§ 76.565   General management costs—restricted rate.
(a) As used in § 76.564, general management costs means the costs of activities that are for the direction and control of the grantee's affairs that are organization-wide. An activity is not organization-wide if it is limited to one activity, one component of the grantee, one subject, one phase of operations, or other single responsibility.
(b) General management costs include the costs of performing a service function, such as accounting, payroll preparation, or personnel management, that is normally at the grantee's level even if the function is physically located elsewhere for convenience or better management. The term also includes certain occupancy and space maintenance costs as determined under § 76.568.
(c) The term does not include expenditures for—
(1) Divisional administration that is limited to one component of the grantee;
(2) The governing body of the grantee;
(3) Compensation of the chief executive officer of the grantee;
(4) Compensation of the chief executive officer of any component of the grantee; and
(5) Operation of the immediate offices of these officers.
(d) For purposes of this section—
(1) The chief executive officer of the grantee is the individual who is the head of the executive office of the grantee and exercises overall responsibility for the operation and management of the organization. The chief executive officer's immediate office includes any deputy chief executive officer or similar officer along with immediate support staff of these individuals. The term does not include the governing body of the grantee, such as a board or a similar elected or appointed governing body; and
(2) Components of the grantee are those organizational units supervised directly or indirectly by the chief executive officer. These organizational units generally exist one management level below the executive office of the grantee. The term does not include the office of the chief executive officer or a deputy chief executive officer or similar position.
§ 76.566   Fixed costs—restricted rate.
As used in § 76.564, fixed costs means contributions of the grantee to fringe benefits and similar costs, but only those associated with salaries and wages that are charged as allowable indirect costs, including—
(a) Retirement, including State, county, or local retirement funds, Social Security, and pension payments;
(b) Unemployment compensation payments; and
(c) Property, employee, health, and liability insurance.
§ 76.567   Other expenditures—restricted rate.
(a) As used in § 76.564, other expenditures means the grantee's total expenditures for its federally- and non-federally-funded activities in the most recent year for which data are available. The term also includes direct occupancy and space maintenance costs as determined under § 76.568 and costs related to the chief executive officers of the grantee and components of the grantee and their offices (see § 76.565(c) and (d)).
(b) The term does not include—
(1) General management costs determined under § 76.565;
(2) Fixed costs determined under § 76.566;
(3) Subawards exceeding the amount specified in the definition of Modified Total Direct Cost in the Uniform Guidance each, per year;
(4) Capital outlay;
(5) Debt service;
(6) Fines and penalties;
(7) Contingencies;
(8) Other distorting items; and
(9) Election expenses. However, the term does include election expenses that result from elections required by an applicable Federal statute.
§ 76.568   Occupancy and space maintenance costs—restricted rate.
(a) As used in the calculation of a restricted indirect cost rate, occupancy and space maintenance costs means such costs as—
(1) Building costs whether owned or rented;
(2) Janitorial services and supplies;
(3) Building, grounds, and parking lot maintenance;
(4) Guard services;
(5) Light, heat, and power;
(6) Depreciation, use allowances, and amortization; and
(7) All other related space costs.
(b) Occupancy and space maintenance costs associated with organization-wide service functions (accounting, payroll, personnel) may be included as general management costs if a space allocation or use study supports the allocation.
(c) Occupancy and space maintenance costs associated with functions that are not organization-wide must be included with other expenditures (denominator) in the indirect cost formula. These costs may be charged directly to affected programs only to the extent that statutory supplanting prohibitions are not violated. This reimbursement must be approved in advance by the Secretary.
§ 76.569   Using the restricted indirect cost rate.
(a) Under the programs referenced in §§ 75.563 and 76.563, the maximum amount of indirect costs recovery under a grant is determined by the following formula: Indirect costs = (Restricted indirect cost rate) × (Total direct costs of the grant minus capital outlays, subawards exceeding amount specified in the definition of Modified Total Direct Cost in the Uniform Guidance each, per year, and other distorting or unallowable items as specified in the grantee's indirect cost rate agreement)
(b) If a grantee uses a restricted indirect cost rate, the general management and fixed costs covered by that rate must be excluded by the grantee from the direct costs it charges to the grant.
§ 76.580   Coordination with other activities.
A State and a subgrantee shall, to the extent possible, coordinate each of its projects with other activities that are in the same geographic area served by the project and that serve similar purposes and target groups.
§ 76.591   Federal evaluation—cooperation by a grantee.
A grantee shall cooperate in any evaluation of the program by the Secretary.
§ 76.592   Federal evaluation—satisfying requirement for State or subgrantee evaluation.
If a State or a subgrantee cooperates in a Federal evaluation of a program, the Secretary may determine that the State or subgrantee meets the evaluation requirements of the program.
§ 76.600   Where to find the construction regulations.
(a) A State or a subgrantee that requests program funds for construction, or whose grant or subgrant includes funds for construction, must comply with the rules on construction that apply to applicants and grantees under 34 CFR 75.600 through 75.618.
(b) The State must perform the functions of the Secretary for subgrantee requests under 34 CFR 75.601 (Approval of the construction).
(c) The State must perform the functions that the Secretary performs under 34 CFR 75.614(b). The State may consult with the State Historic Preservation Officer and Tribal Historic Preservation Officer to identify and evaluate historic properties and assess effects. The Secretary will continue to participate in the consultation process when:
(1) The State determines that “Criteria of Adverse Effect” applies to a project;
(2) There is a disagreement between the State and the State Historic Preservation Officer or Tribal Historic Preservation Officer regarding identification and evaluation or assessment of effects;
(3) There is an objection from consulting parties or the public regarding findings, determinations, the implementation of agreed-upon provisions, or their involvement in a National Historic Preservation Act Section 106 review (see 36 CFR part 800); or
(4) There is the potential for a foreclosure situation or anticipatory demolition as specified in Section 110(k) of the National Historic Preservation Act (see 36 CFR part 800).
(d) The State must provide to the Secretary the information required under 34 CFR 75.614(a) (Preservation of historic sites).
(e) The State must submit periodic reports to the Secretary regarding the State's review and approval of construction or real property projects containing information specified by the Secretary consistent with 2 CFR 200.329(d).
§ 76.650   Participation of private school children, teachers or other educational personnel, and families.
If a program provides for participation by private school children, teachers or other educational personnel, and families, and the program is not otherwise governed by applicable regulations, the grantee or subgrantee must provide, as applicable, services in accordance with the requirements under §§ 76.651 through 76.662.
§ 76.651   Responsibility of a State and a subgrantee.
(a)(1) A subgrantee shall provide students enrolled in private schools with a genuine opportunity for equitable participation in accordance with the requirements in §§ 76.652-76.662 and in the authorizing statute and implementing regulations for a program.
(2) The subgrantee shall provide that opportunity to participate in a manner that is consistent with the number of eligible private school students and their needs.
(3) The subgrantee shall maintain continuing administrative direction and control over funds and property that benefit students enrolled in private schools.
(b)(1) A State shall ensure that each subgrantee complies with the requirements in §§ 76.651-76.662.
(2) If a State carries out a project directly, it shall comply with these requirements as if it were a subgrantee.
§ 76.652   Consultation with representatives of private school students.
A subgrantee must consult with appropriate private school officials in accordance with the requirements in § 299.7.
§ 76.653   Needs, number of students, and types of services.
A subgrantee shall determine the following matters on a basis comparable to that used by the subgrantee in providing for participation of public school students:
(a) The needs of students enrolled in private schools.
(b) The number of those students who will participate in a project.
(c) The benefits that the subgrantee will provide under the program to those students.
§ 76.654   Benefits for private school students.
(a) Comparable benefits. The program benefits that a subgrantee provides for students enrolled in private schools must be comparable in quality, scope, and opportunity for participation to the program benefits that the subgrantee provides for students enrolled in public schools.
(b) Same benefits. If a subgrantee uses funds under a program for public school students in a particular attendance area, or grade or age level, the subgrantee shall insure equitable opportunities for participation by students enrolled in private schools who:
(1) Have the same needs as the public school students to be served; and
(2) Are in that group, attendance area, or age or grade level.
(c) Different benefits. If the needs of students enrolled in private schools are different from the needs of students enrolled in public schools, a subgrantee shall provide program benefits for the private school students that are different from the benefits the subgrantee provides for the public school students.
§ 76.655   [Reserved]
§ 76.656   Information in an application for a subgrant.
An applicant for a subgrant shall include the following information in its application:
(a) A description of how the applicant will meet the Federal requirements for participation of students enrolled in private schools.
(b) The number of students enrolled in private schools who have been identified as eligible to benefits under the program.
(c) The number of students enrolled in private schools who will receive benefits under the program.
(d) The basis the applicant used to select the students.
(e) The manner and extent to which the applicant complied with § 76.652 (consultation).
(f) The places and times that the students will receive benefits under the program.
(g) The differences, if any, between the program benefits the applicant will provide to public and private school students, and the reasons for the differences.
§ 76.657   Separate classes prohibited.
A subgrantee may not use program funds for classes that are organized separately on the basis of school enrollment or religion of the students if:
(a) The classes are at the same site; and
(b) The classes include students enrolled in public schools and students enrolled in private schools.
§ 76.658   Funds not to benefit a private school.
(a) A subgrantee may not use program funds to finance the existing level of instruction in a private school or to otherwise benefit the private school.
(b) The subgrantee shall use program funds to meet the specific needs of students enrolled in private schools, rather than:
(1) The needs of a private school; or
(2) The general needs of the students enrolled in a private school.
§ 76.659   Use of public school personnel.
A subgrantee may use program funds to make public personnel available in other than public facilities:
(a) To the extent necessary to provide equitable program benefits designed for students enrolled in a private school; and
(b) If those benefits are not normally provided by the private school.
§ 76.660   Use of private school personnel.
A subgrantee may use program funds to pay for the services of an employee of a private school if:
(a) The employee performs the services outside of his or her regular hours of duty; and
(b) The employee performs the services under public supervision and control.
§ 76.661   Equipment and supplies.
(a) Under some program statutes, a public agency must keep title to and exercise continuing administrative control of all equipment and supplies that the subgrantee acquires with program funds. This public agency is usually the subgrantee.
(b) The subgrantee may place equipment and supplies in a private school for the period of time needed for the project.
(c) The subgrantee shall ensure that the equipment or supplies placed in a private school:
(1) Are used only for the purposes of the project; and
(2) Can be removed from the private school without remodeling the private school facilities.
(d) The subgrantee shall remove equipment or supplies from a private school if:
(1) The equipment or supplies are no longer needed for the purposes of the project; or
(2) Removal is necessary to avoid use of the equipment of supplies for other than project purposes.
§ 76.662   Construction.
A subgrantee shall ensure that program funds are not used for the construction of private school facilities.
§§ 76.663-76.6775   [Reserved]
§ 76.681   Protection of human subjects.
If a State or a subgrantee uses a human subject in a research project, the State or subgrantee shall protect the person from physical, psychological, or social injury resulting from the project.
§ 76.682   Treatment of animals.
If a State or a subgrantee uses an animal in a project, the State or subgrantee shall provide the animal with proper care and humane treatment in accordance with the Animal Welfare Act of 1970.
§ 76.683   Health or safety standards for facilities.
A State and a subgrantee shall comply with any Federal health or safety requirements that apply to the facilities that the State or subgrantee uses for a project.
§ 76.684   Severability.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
§ 76.700   Compliance with the U.S. Constitution, statutes, regulations, stated institutional policies, and applications.
A State and a subgrantee shall comply with § 76.500, the State plan, applicable statutes, regulations, and approved applications, and shall use Federal funds in accordance with those statutes, regulations, plan, and applications.
§ 76.701   The State or subgrantee administers or supervises each project.
A State or a subgrantee shall directly administer or supervise the administration of each project.
§ 76.702   Fiscal control and fund accounting procedures.
A State and a subgrantee shall use fiscal control and fund accounting procedures that ensure proper disbursement of and accounting for Federal funds.
§ 76.703   When a State may begin to obligate funds.
(a)(1) The Secretary may establish, for a program subject to this part, a date by which a State must submit for review by the Department a State plan and any other documents required to be submitted under guidance provided by the Department under paragraph (b)(3) of this section.
(2) If the Secretary does not establish a date for the submission of State plans and any other documents required under guidance provided by the Department, the date for submission is three months before the date the Secretary may begin to obligate funds under the program.
(b)(1) This paragraph (b) describes the circumstances under which the submission date for a State plan may be deferred.
(2) If a State asks the Secretary in writing to defer the submission date for a State plan because of a Presidentially declared disaster that has occurred in that State, the Secretary may defer the submission date for the State plan and any other document required under guidance provided by the Department if the Secretary determines that the disaster significantly impairs the ability of the State to submit a timely State plan or other document required under guidance provided by the Department.
(3)(i) The Secretary establishes, for a program subject to this part, a date by which the program office must deliver guidance to the States regarding the contents of the State plan under that program.
(ii) The Secretary may only establish a date for the delivery of guidance to the States so that there are at least as many days between that date and the date that State plans must be submitted to the Department as there are days between the date that State plans must be submitted to the Department and the date that funds are available for obligation by the Secretary on July 1, or October 1, as appropriate.
(iii) If a State does not receive the guidance by the date established under paragraph (b)(3)(i) of this section, the submission date for the State plan under the program is deferred one day for each day that the guidance is late in being received by the State.
The following examples describe how the regulations in § 76.703(b)(3) would act to defer the date that a State would have to submit its State plan.
(c)(1) For the purposes of this section, the submission date of a State plan or other document is the date that the Secretary receives the plan or document.
(2) The Secretary does not determine whether a State plan is substantially approvable until the plan and any documents required under guidance provided by the Department have been submitted.
(3) The Secretary notifies a State when the Department has received the State plan and all documents required under guidance provided by the Department.
(d) If a State submits a State plan in substantially approvable form (or an amendment to the State plan that makes it substantially approvable), and submits any other document required under guidance provided by the Department, on or before the date the State plan must be submitted to the Department, the State may begin to obligate funds on the date that the funds are first available for obligation by the Secretary.
(e) If a State submits a State plan in substantially approvable form (or an amendment to the State plan that makes it substantially approvable) or any other documents required under guidance provided by the Department after the date the State plan must be submitted to the Department, and—
(1) The Department determines that the State plan is substantially approvable on or before the date that the funds are first available for obligation by the Secretary, the State may begin to obligate funds on the date that the funds are first available for obligation by the Secretary; or
(2) The Department determines that the State plan is substantially approvable after the date that the funds are first available for obligation by the Secretary, the State may begin to obligate funds on the earlier of the two following dates:
(i) The date that the Secretary determines that the State plan is substantially approvable.
(ii) The date that is determined by adding to the date that funds are first available for obligation by the Secretary—
(A) The number of days after the date the State plan must be submitted to the Department that the State plan or other document required under guidance provided by the Department is submitted; and
(B) If applicable, the number of days after the State receives notice that the State plan is not substantially approvable that the State submits additional information that makes the plan substantially approvable.
(f) Additional information submitted under paragraph (e)(2)(ii)(B) of this section must be signed by the person who submitted the original State plan (or an authorized delegate of that officer).
(g)(1) If the Department does not complete its review of a State plan during the period established for that review, the Secretary will grant pre-award costs for the period after funds become available for obligation by the Secretary and before the State plan is found substantially approvable.
(2) The period established for the Department's review of a plan does not include any day after the State has received notice that its plan is not substantially approvable.
The following examples describe how the regulations in § 76.703 would be applied in certain circumstances. For the purpose of these examples, assume that the grant program established an April 1 due date for the submission of the State plan and that funds are first available for obligation by the Secretary on July 1.
(h) After determining that a State plan is in substantially approvable form, the Secretary informs the State of the date on which it could begin to obligate funds. Reimbursement for those obligations is subject to final approval of the State plan.
§ 76.704   New State plan requirements that must be addressed in a State plan.
(a) This section specifies the State plan requirements that must be addressed in a State plan if the State plan requirements established in statutes or regulations change on a date close to the date that State plans are due for submission to the Department.
(b)(1) A State plan must meet the following requirements:
(i) Every State plan requirement in effect three months before the date the State plan is due to be submitted to the Department under 34 CFR 76.703; and
(ii) Every State plan requirement included in statutes or regulations that will be effective on or before the date that funds become available for obligation by the Secretary and that have been signed into law or published in the Federal Register as final regulations three months before the date the State plan is due to be submitted to the Department under 34 CFR 76.703.
(2) If a State plan does not have to meet a new State plan requirement under paragraph (b)(1) of this section, the Secretary takes one of the following actions:
(i) Require the State to submit assurances and appropriate documentation to show that the new requirements are being followed under the program.
(ii) Extend the date for submission of State plans and approve pre-award costs as necessary to hold the State harmless.
(3) If the Secretary requires a State to submit assurances under paragraph (b)(2) of this section, the State shall incorporate changes to the State plan as soon as possible to comply with the new requirements. The State shall submit the necessary changes before the start of the next obligation period.
§ 76.707   When obligations are made.
The following table shows when a State or a subgrantee makes obligations for various kinds of property and services.
§ 76.708   When certain subgrantees may begin to obligate funds.
(a) If applicable statutes and regulations for a program require a State to make subgrants on the basis of a formula (see § 76.51(a)), the State may not authorize an applicant for a subgrant to obligate funds until the later of the following two dates:
(1) The date that the State may begin to obligate funds under § 76.703; or
(2) The date that the applicant submits its application to the State in substantially approvable form.
(b) Reimbursement for obligations under paragraph (a) of this section is subject to final approval of the application.
(c) If applicable statutes and regulations for a program give the State discretion to select subgrantees, the State may not authorize an applicant for a subgrant to obligate funds until the subgrant is made. However, the State may approve pre-agreement costs in accordance with the cost principles in 2 CFR part 200, subpart E-Cost Principles.
§ 76.709   Funds may be obligated during a “carryover period.”
(a) If a State or a subgrantee does not obligate all of its grant or subgrant funds by the end of the fiscal year for which Congress appropriated the funds, it may obligate the remaining funds during a carryover period of one additional fiscal year.
(b) The State shall return to the Federal Government any carryover funds not obligated by the end of the carryover period by the State and its subgrantees.
§ 76.710   Obligations made during a carryover period are subject to current statutes, regulations, and applications.
A State and a subgrantee shall use carryover funds in accordance with:
(a) The Federal statutes and regulations that apply to the program and are in effect for the carryover period; and
(b) Any State plan, or application for a subgrant, that the State or subgrantee is required to submit for the carryover period.
§ 76.711   Requesting funds by ALN number.
If a program is listed in the Assistance Listings and assigned an Assistance Listing Number (ALN), a State, when requesting funds under the program, shall identify that program by the ALN.
§ 76.712   Beneficiary protections: Written notice.
(a) An organization providing social services to beneficiaries under a Department program supported by direct Federal financial assistance must give written notice to a beneficiary or prospective beneficiary of certain protections. Such notice must be given in the manner and form prescribed by the Department. This notice must state that—
(1) The organization may not discriminate against a beneficiary or prospective beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice;
(2) The organization may not require a beneficiary or prospective beneficiary to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by a beneficiary in such activities must be purely voluntary;
(3) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance; and
(4) A beneficiary or prospective beneficiary may report an organization's violation of these protections, including any denials of services or benefits by an organization, by contacting or filing a written complaint with the Department.
(b) The written notice described in paragraph (a) of this section must be given to a prospective beneficiary prior to the time they enroll in the program or receive services from the program. When the nature of the service provided or exigent circumstances make it impracticable to provide such written notice in advance of the actual service, an organization must provide the notice at the earliest available opportunity.
(c) The Department may determine that the notice described in paragraph (a) of this section must inform each beneficiary or prospective beneficiary of the option to seek information from the Department, or a State agency or other entity administering the applicable program, as to whether there are any other federally funded organizations in their area that provide the services available under the applicable program.
(d) The notice that an organization uses to notify beneficiaries or prospective beneficiaries of the rights under paragraphs (a) through (c) of this section must include language substantially similar to that in appendix C to 34 CFR part 75.
§ 6.713   [Reserved]
§ 76.714   Subgrants, contracts, and other agreements with faith-based organizations.
If a grantee under a State-Administered Formula Grant program of the Department has the authority under the grant or subgrant to select a private organization to provide services supported by direct Federal financial assistance, as defined in § 76.52(c)(3), under the program by subgrant, contract, or other agreement, the grantee must ensure compliance with applicable Federal requirements governing contracts, grants, and other agreements with faith-based organizations, including, as applicable, §§  76.52 and 76.532 and 2 CFR 3474.15. If the pass-through entity is a nongovernmental organization, it retains all other rights of a nongovernmental organization under the program's statutory and regulatory provisions.
§ 76.720   State reporting requirements.
(a) This section applies to a State's reports required for monitoring and continuous improvement, including 2 CFR 200.328 (Financial reporting) and 2 CFR 200.329 (Monitoring and reporting program performance), and other reports required by the Secretary and approved by the Office of Management and Budget (OMB) under the Subpart 1 of Chapter 35 (sections 3501-3521) of Title 44, U.S. Code, commonly known as the “Paperwork Reduction Act.”
(b) A State must submit these reports annually unless—
(1) The Secretary allows less frequent reporting; or
(2) The Secretary requires a State to report more frequently than annually, including reporting under 2 CFR 3474.10 and 2 CFR 200.207 (Specific conditions) and 2 CFR 3474.10 (Clarification regarding 2 CFR 200.207) or 2 CFR 200.302 Financial management and 200.303 Internal controls.
(c)(1) A State must submit these reports in the manner prescribed by the Secretary, including submitting any of these reports electronically and at the quality level specified in the data collection instrument.
(2) Failure by a State to submit reports in accordance with paragraph (c)(1) of this section constitutes a failure, under section 454 of GEPA , 20 U.S.C. 1234c, to comply substantially with a requirement of law applicable to the funds made available under that program.
(3) For reports that the Secretary requires to be submitted in an electronic manner, the Secretary may establish a transition period of up to two years following the date the State otherwise would be required to report the data in the electronic manner, during which time a State will not be required to comply with that specific electronic submission requirement, if the State submits to the Secretary—
(i) Evidence satisfactory to the Secretary that the State will not be able to comply with the electronic submission requirement specified by the Secretary in the data collection instrument on the first date the State otherwise would be required to report the data electronically;
(ii) Information requested in the report through an alternative means that is acceptable to the Secretary, such as through an alternative electronic means; and
(iii) A plan for submitting the reports in the required electronic manner and at the level of quality specified in the data collection instrument no later than the date two years after the first date the State otherwise would be required to report the data in the electronic manner prescribed by the Secretary.
§ 76.722   Subgrantee reporting requirements.
A State may require a subgrantee to submit reports in a manner and format that assists the State in complying with the requirements under 34 CFR 76.720, in carrying out other responsibilities under the program, engaging in periodic review and continuous improvement of the State's plan, and supporting the subgrantee in engaging in periodic review and continuous improvement of the subgrantee's plan.
§ 76.730   Records related to grant funds.
A State and a subgrantee shall keep records that fully show:
(a) The amount of funds under the grant or subgrant;
(b) How the State or subgrantee uses the funds;
(c) The total cost of the project;
(d) The share of that cost provided from other sources; and
(e) Other records to facilitate an effective audit.
§ 76.731   Records related to compliance.
A State and a subgrantee shall keep records to show its compliance with program requirements.
§ 76.732   Records related to performance.
(a) A grantee must keep records of significant project experiences and results.
(b) The grantee must use the records under paragraph (a) to—
(1) Determine progress in accomplishing project objectives;
(2) Inform periodic review and continuous improvement of the project plans; and
(3) Revise those project objectives, if necessary.
§ 76.740   Protection of and access to student records; student rights in research, experimental programs, and testing.
(a) Most records on present or past students are subject to the requirements of section 444 of GEPA and its implementing regulations under 34 CFR part 99.(Section 444 of GEPA (20 U.S.C. 1232g) is commonly referred to as the “Family Educational Rights and Privacy Act of 1974” or “FERPA”.)
(b) Under most programs administered by the Secretary, research, experimentation, and testing are subject to the requirements of section 445 of GEPA (20 U.S.C. 1232h; commonly known as the “Protection of Pupil Rights Amendment” or “PPRA”)and its implementing regulations at 34 CFR part 98.
§ 76.760   More than one program may assist a single activity.
A State or a subgrantee may use funds under more than one program to support different parts of the same project if the State or subgrantee meets the following conditions:
(a) The State or subgrantee complies with the requirements of each program with respect to the part of the project assisted with funds under that program.
(b) The State or subgrantee has an accounting system that permits identification of the costs paid for under each program.
§ 76.761   Federal funds may pay 100 percent of cost.
A State or a subgrantee may use program funds to pay up to 100 percent of the cost of a project if:
(a) The State or subgrantee is not required to match the funds; and
(b) The project can be assisted under applicable statutes and regulations.
§ 76.770   A State shall have procedures to ensure compliance.
Each State shall have procedures for reviewing and approving applications for subgrants and amendments to those applications, for providing technical assistance, for evaluating projects, and for performing other administrative responsibilities the State has determined are necessary to ensure compliance with applicable statutes and regulations.
§ 76.783   State educational agency action—subgrantee's opportunity for a hearing.
(a) A subgrantee may request a hearing if it alleges that any of the following actions by the State educational agency violated a State or Federal statute or regulation:
(1) Ordering, in accordance with a final State audit resolution determination, the repayment of misspent or misapplied Federal funds;
(2) Terminating further assistance for an approved project; or
(3) Failing to provide funds in amounts in accordance with the requirements of applicable statutes and regulations.
(b) The procedures in 76.401(a) through (d) apply to any request for a hearing under this section.
§ 76.784   Severability.
If any provision of this subpart or its application to any person, act, or practice is held invalid, the remainder of the subpart or the application of its provisions to any person, act, or practice shall not be affected thereby.
§ 76.785   What is the purpose of this subpart?
The regulations in this subpart implement section 4306 of the Elementary and Secondary Education Act of 1965 (ESEA), which requires States to take measures to ensure that each charter school in the State receives the funds for which it is eligible under a covered program during its first year of operation and during subsequent years in which the charter school expands its enrollment.
§ 76.786   What entities are governed by this subpart?
The regulations in this subpart apply to—
(a) State educational agencies (SEAs) and local educational agencies (LEAs) that fund charter schools under a covered program, including SEAs and LEAs located in States that do not participate in the Department's Charter School State Entity Grant Program;
(b) State agencies that are not SEAs, if they are responsible for administering a covered program. State agencies that are not SEAs must comply with the provisions in this subpart that are applicable to SEAs; and
(c) Charter schools that are scheduled to open or significantly expand their enrollment during the academic year and wish to participate in a covered program.
§ 76.787   What definitions apply to this subpart?
For purposes of this subpart—
Academic year means the regular school year (as defined by State law, policy, or practice) and for which the State allocates funds under a covered program.
Charter school has the same meaning as provided in section 4310(2) of the ESEA (20 U.S.C. 7221i(2))
Charter school LEA means a charter school that is treated as a local educational agency for purposes of the applicable covered program.
Covered program means a State-administered formula grant program, except that the term does not include a program or portion of a program under which an SEA awards subgrants on a discretionary, noncompetitive basis.
Local educational agency has the same meaning for each covered program as provided in applicable statutes and regulations for the program.
Significant expansion of enrollment means a substantial increase in the number of students attending a charter school due to a significant event that is unlikely to occur on a regular basis, such as the addition of one or more grades or educational programs in major curriculum areas. The term also includes any other expansion of enrollment that the SEA determines to be significant.
§ 76.788
(a) Notice. At least 120 days before the date a charter school LEA is scheduled to open or significantly expand its enrollment, the charter school LEA or its authorized public chartering agency must provide its SEA with written notification of that date.
(b) Information. (1) In order to receive funds, a charter school LEA must provide to the SEA any available data or information that the SEA may reasonably require to assist the SEA in estimating the amount of funds the charter school LEA may be eligible to receive under a covered program.
(2)(i) Once a charter school LEA has opened or significantly expanded its enrollment, the charter school LEA must provide actual enrollment and eligibility data to the SEA at a time the SEA may reasonably require.
(ii) An SEA is not required to provide funds to a charter school LEA until the charter school LEA provides the SEA with the required actual enrollment and eligibility data.
(c) Compliance. Except as provided in § 76.791(a), or applicable statutes or regulations, a charter school LEA must establish its eligibility and comply with all applicable program requirements on the same basis as other LEAs.
§ 76.789   What are an SEA's responsibilities under this subpart?
(a) Information. Upon receiving notice under § 76.788(a) of the date a charter school LEA is scheduled to open or significantly expand its enrollment, an SEA must provide the charter school LEA with timely and meaningful information about each covered program in which the charter school LEA may be eligible to participate, including notice of any upcoming competitions under the program.
(b) Allocation of Funds. (1) An SEA must allocate funds under a covered program in accordance with this subpart to any charter school LEA that—
(i) Opens for the first time or significantly expands its enrollment during an academic year for which the State awards funds by formula or through a competition under the program;
(ii) In accordance with § 76.791(a), establishes its eligibility and complies with all applicable program requirements; and
(iii) Meets the requirements of § 76.788(a).
(2) In order to meet the requirements of this subpart, an SEA may allocate funds to, or reserve funds for, an eligible charter school LEA based on reasonable estimates of projected enrollment at the charter school LEA.
(3)(i) The failure of an eligible charter school LEA or its authorized public chartering agency to provide notice to its SEA in accordance with § 76.788(a) relieves the SEA of any obligation to allocate funds to the charter school within five months.
(ii) Except as provided in § 76.792(c), an SEA that receives less than 120 days' actual notice of the date an eligible charter school LEA is scheduled to open or significantly expand its enrollment must allocate funds to the charter school LEA on or before the date the SEA allocates funds to LEAs under the applicable covered program for the succeeding academic year.
(iii) The SEA may provide funds to the charter school LEA from the SEA's allocation under the applicable covered program for the academic year in which the charter school LEA opened or significantly expanded its enrollment, or from the SEA's allocation under the program for the succeeding academic year.
§ 76.791   On what basis does an SEA determine whether a charter school LEA that opens or significantly expands its enrollment is eligible to receive funds under a covered program?
(a) For purposes of this subpart, an SEA must determine whether a charter school LEA is eligible to receive funds under a covered program based on actual enrollment or other eligibility data for the charter school LEA on or after the date the charter school LEA opens or significantly expands its enrollment.
(b) For the year the charter school LEA opens or significantly expands its enrollment, the eligibility determination may not be based on enrollment or eligibility data from a prior year, even if the SEA makes eligibility determinations for other LEAs under the program based on enrollment or eligibility data from a prior year.
§ 76.792   How does an SEA allocate funds to eligible charter school LEAs under a covered program in which the SEA awards subgrants on a formula basis?
(a) For each eligible charter school LEA that opens or significantly expands its enrollment on or before November 1 of an academic year, the SEA must implement procedures that ensure that the charter school LEA receives the proportionate amount of funds for which the charter school LEA is eligible under each covered program.
(b) For each eligible charter school LEA that opens or significantly expands its enrollment after November 1 but before February 1 of an academic year, the SEA must implement procedures that ensure that the charter school LEA receives at least a pro rata portion of the proportionate amount of funds for which the charter school LEA is eligible under each covered program. The pro rata amount must be based on the number of months or days during the academic year the charter school LEA will participate in the program as compared to the total number of months or days in the academic year.
(c) For each eligible charter school LEA that opens or significantly expands its enrollment on or after February 1 of an academic year, the SEA may implement procedures to provide the charter school LEA with a pro rata portion of the proportionate amount of funds for which the charter school LEA is eligible under each covered program.
§ 76.793   When is an SEA required to allocate funds to a charter school LEA under this subpart?
Except as provided in §§ 76.788(b) and 76.789(b)(3):
(a) For each eligible charter school LEA that opens or significantly expands its enrollment on or before November 1 of an academic year, the SEA must allocate funds to the charter school LEA within five months of the date the charter school LEA opens or significantly expands its enrollment; and
(b)(1) For each eligible charter school LEA that opens or significantly expands its enrollment after November 1, but before February 1 of an academic year, the SEA must allocate funds to the charter school LEA on or before the date the SEA allocates funds to LEAs under the applicable covered program for the succeeding academic year.
(2) The SEA may provide funds to the charter school LEA from the SEA's allocation under the program for the academic year in which the charter school LEA opened or significantly expanded its enrollment, or from the SEA's allocation under the program for the succeeding academic year.
§ 76.794   How does an SEA allocate funds to charter school LEAs under a covered program in which the SEA awards subgrants on a discretionary basis?
(a) Competitive programs. (1) For covered programs in which the SEA awards subgrants on a competitive basis, the SEA must provide each eligible charter school LEA in the State that is scheduled to open on or before the closing date of any competition under the program a full and fair opportunity to apply to participate in the program.
(2) An SEA is not required to delay the competitive process in order to allow a charter school LEA that has not yet opened or significantly expanded its enrollment to compete for funds under a covered program.
(b) Noncompetitive discretionary programs. The requirements in this subpart do not apply to discretionary programs or portions of programs under which the SEA does not award subgrants through a competition.
§ 76.796   What are the consequences of an SEA allocating more or fewer funds to a charter school LEA under a covered program than the amount for which the charter school LEA is eligible when the charter school LEA actually opens or significantly expands its enrollment?
(a) An SEA that allocates more or fewer funds to a charter school LEA than the amount for which the charter school LEA is eligible, based on actual enrollment or eligibility data when the charter school LEA opens or significantly expands its enrollment, must make appropriate adjustments to the amount of funds allocated to the charter school LEA as well as to other LEAs under the applicable program.
(b) Any adjustments to allocations to charter school LEAs under this subpart must be based on actual enrollment or other eligibility data for the charter school LEA on or after the date the charter school LEA first opens or significantly expands its enrollment, even if allocations or adjustments to allocations to other LEAs in the State are based on enrollment or eligibility data from a prior year.
§ 76.797   When is an SEA required to make adjustments to allocations under this subpart?
(a) The SEA must make any necessary adjustments to allocations under a covered program on or before the date the SEA allocates funds to LEAs under the program for the succeeding academic year.
(b) In allocating funds to a charter school LEA based on adjustments made in accordance with paragraph (a) of this section, the SEA may use funds from the SEA's allocation under the applicable covered program for the academic year in which the charter school LEA opened or significantly expanded its enrollment, or from the SEA's allocation under the program for the succeeding academic year.
§ 76.799   Do the requirements in this subpart apply to LEAs?
(a) Each LEA that is responsible for funding a charter school under a covered program must comply with the requirements in this subpart on the same basis as SEAs are required to comply with the requirements in this subpart.
(b) In applying the requirements in this subpart (except for §§ 76.785, 76.786, and 76.787) to LEAs, references to SEA (or State), charter school LEA, and LEA must be read as references to LEA, charter school, and public school, respectively.
§ 76.900   Waiver of regulations prohibited.
(a) No official, agent, or employee of the Department may waive any regulation that applies to a Department program unless the regulation specifically provide that it may be waived.
(b) No act or failure to act by an official, agent, or employee of the Department can affect the authority of the Secretary to enforce regulations.
§ 76.901   Office of Administrative Law Judges.
(a) The Office of Administrative Law Judges, established under Part D (20 U.S.C. 1234-1234h) of GEPA, has the following functions:
(1) Recovery of funds hearings under section 452 of GEPA.
(2) Withholding hearings under section 455 of GEPA.
(3) Cease and desist hearings under section 456 of GEPA.
(4) Any other proceeding designated by the Secretary under section 451 of GEPA.
(b) The regulations of the Office of Administrative Law Judges are at 34 CFR part 81.
§ 76.902   Judicial review.
After a hearing by the Secretary, a State is usually entitled—generally by the statute that required the hearing—to judicial review of the Secretary's decision.
§ 76.910   Cooperation with audits.
A grantee or subgrantee shall cooperate with the Secretary and the Comptroller General of the United States or any of their authorized representatives in the conduct of audits authorized by Federal law. This cooperation includes access without unreasonable restrictions to records and personnel of the grantee or subgrantee for the purpose of obtaining relevant information.