[Federal Register Volume 60, Number 95 (Wednesday, May 17, 1995)]
[Rules and Regulations]
[Pages 26574-26592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11949]




[[Page 26573]]

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Part IV





Department of Labor





_______________________________________________________________________



Employment and Training Administration



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20 CFR Part 641



29 CFR Part 89



Senior Community Service Employment Program; Final Rule

Federal Register / Vol. 60, No. 95 / Wednesday, May 17, 1995 / Rules 
and Regulations 
[[Page 26574]] 

DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 641

Office of the Secretary

29 CFR Part 89

RIN 1205-AA29


Senior Community Service Employment Program

AGENCY: Employment and Training Administration and Office of the 
Secretary, Labor.

ACTION: Final rule.

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SUMMARY: The Employment and Training Administration (ETA) of the 
Department of Labor (DOL) is amending the regulations for the Senior 
Community Service Employment Program (SCSEP) to implement the Older 
American Act Amendments of 1984, 1987, and 1992 and to make clarifying 
changes. This regulation provides administrative and programmatic 
guidance and requirements for the implementation of the SCSEP.

EFFECTIVE DATE: June 30, 1995

FOR FURTHER INFORMATION CONTACT: Mr. Charles L. Atkinson, Chief, 
Division of Older Worker Programs. Telephone: (202) 219-4778 (this is 
not a toll-free number). Copies of this final rule are available in the 
following formats: electronic file on computer disk and audio tape. 
They may be obtained at the above office.

SUPPLEMENTARY INFORMATION:

A. Background

    As authorized by title V of the Older Americans Act (OAA), as 
amended (42 U.S.C. 3056, et seq.), the Senior Community Service 
Employment Program (SCSEP) fosters and promotes useful part-time 
opportunities in community service activities for persons with low 
incomes who are fifty-five years old or older. The Employment and 
Training Administration (ETA) of the Department of Labor (DOL or 
Department) administers the program by means of grant agreements with 
eligible organizations, such as governmental entities and certain 
public and private non-profit agencies and organizations. Pursuant to 
the OAA, the Department in 1973 established the SCSEP.
    The SCSEP regulations were last revised in 1976: 29 CFR part 89, 41 
FR 9006 (March 2, 1976). The SCSEP legislation has been amended by the 
following laws since the last revision of the regulation: Pub. L. 95-
478, section 105 (October 18, 1978); Pub. L. 97-115, section 12 
(December 29, 1981); Pub. L. 98-459, sections 501-05 (October 9, 1984); 
Pub. L. 100-175, sections 161-66 (December 7, 1987); and Pub. L. 102-
375, sections 502-11 (September 30, 1992) and Pub. L. 103-171 (December 
2, l993). On April 26, 1994, the Department published a notice of 
proposed rule making governing the SCSEP in the Federal Register (59 FR 
21875) for the purpose of soliciting public comments. The comments made 
in response to the April 26, 1994, Federal Register proposed rule have 
been considered in drafting this final rule. Also implemented are the 
1987 and 1992 amendments contained in Pub. L. 100-175 (December 7, 
1987) and Pub. L. 102-375 (September 30, 1992). This document issues 
the final rule to conform to the OAA and to make technical changes 
based on the Department's experience in administering the SCSEP.

B. Procedural Matters

    This final rule is not classified as a ``major rule'' under 
Executive Order 12866 concerning Federal regulations because it is not 
likely to result in: (1) An annual effect on the economy of $100 
million or more; (2) a major increase in cost or prices for consumers, 
individual industries, Federal, State, or local government agencies, or 
geographic regions; or (3) significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
United States-based enterprises to compete in domestic or export 
markets. Accordingly, no regulatory impact analysis is required.
    The Department of Labor has certified to the Chief Counsel for 
Advocacy, Small Business Administration, that pursuant to the 
Regulatory Flexibility Act at 5 U.S.C. 605(b), the final rule would not 
have a significant economic impact on a substantial number of small 
entities. No significant economic impact would be imposed on such 
entities by the final rule.

Paperwork Reduction Act

    Pursuant to the Paperwork Reduction Act, information collection 
requirements which must be imposed as a result of the final rule are 
being submitted separately to the Office of Management and Budget.

Catalogue of Federal Domestic Assistance Number

    This program is listed in the Catalogue of Federal Domestic 
Assistance at No. 17.235 ``Senior Community Service Employment 
Program.''

List of Subjects in 20 CFR Part 641

    Allotment, Allocation, Coordination, Dual eligibility, Cooperative 
relationships, Assessment, Eligibility, Individual development plan, 
Over-enrollment, Training, and Administrative requirements.

Format of Final Rule

    29 CFR part 89 is redesignated as 20 CFR part 641.

Major Changes

    A total of twenty-eight comments were received in response to the 
proposed rule. Sources of comments received by the close of the comment 
period were as follows: National SCSEP grantees (5); State units on 
aging (9); area agencies on aging (4); community-based organizations 
(3); public interest group (1); Federal agencies (2),; and State Job 
Service (2). In addition, two responses were received after the comment 
period from county officials, which were also considered.
    Based on the comments the Department has received, the majority 
reflect approval of the regulations; however, one public interest group 
was displeased with the Department's policy regarding unsubsidized 
employment. The comments addressed thirty different sections of the 
regulations with the bulk of the comments addressing nine sections. A 
number of the comments extended beyond the regulations to pose 
operational questions. Each of the comments and the respective 
regulatory sections are addressed below.


Sec. 641.101  Scope and purpose.

    Consistent with changes made in response to comments on 
Sec. 641.301 of this part regarding the purpose of the program, this 
section has been reworded to acknowledge that SCSEP provides community 
service and promotes transition to unsubsidized employment.


Sec. 641.102  Definitions.

    There were a total of fifteen comments that dealt with ten 
definitions.
    There were three identical comments on ``authorized position''. The 
thrust of the comments was to request that the regulation include a 
required annual adjustment by the Department concerning the value of 
each position. Because Congressional action controls the appropriations 
levels which, in turn, determine the amount of funds available for 
authorized positions, this unit cost concern will continue to be dealt 
with on an administrative basis. Therefore, [[Page 26575]] no change is 
made to this regulatory provision.
    There were two similar comments on the ``dual eligibility'' 
definition which requested the Department update the proposed 
regulations by including Section 204(d) of the Job Training Partnership 
Act (JTPA) so that the regulations will reflect the JTPA amendment to 
the OAA. The language at Sec. 641.102 is amended to reflect coverage of 
both sections 203 and 204(d) by adding a citation to Title II-A.
    One commenter requested that the Department alter the terminology 
throughout to use the term ``grantee or subgrantee'' rather than 
``recipient or subrecipient''. As a result of this comment, the 
definitions for ``recipient and subrecipient'' are replaced by the term 
``grantee or subgrantee'' and these terms are used throughout the 
regulations.
    Three commenters requested the Department to revise the definition 
of ``enrollee'' in order to: acknowledge the services provided by 
grantees, overcome potential misunderstandings vis-a-vis JTPA, and 
address the employee aspect of the enrollee. The Department 
acknowledges the need to incorporate additional information regarding 
grantee-performed services so a more accurate picture of the services 
will be provided. However, the Department does not think that changing 
the definition will accomplish this objective. Therefore, the goal of 
more accurately reflecting the services will be addressed 
administratively via reporting changes, if there is sufficient demand 
to do so. Suggestions for reporting changes that would more accurately 
reflect what is being accomplished at the project level are welcomed. 
The Department has clarified the enrollee/trainee relationship with 
JTPA through the issuance of an administrative directive. Furthermore, 
the JTPA regulations now clarify this relationship.
    The status of an enrollee as an employee is a complex concern that 
cannot be addressed easily. While the authorizing legislation is silent 
on this matter, for the last two years Congressional intent regarding 
the enrollee role has clearly been expressed in the following 
appropriations report language: ``they [enrollees] are not employees of 
the U.S. Department of Labor, or State or national sponsors 
administering the Senior Community Service Program.'' It is likely that 
the report language will continue to be used and grantees and 
subgrantees can cite the reports when corresponding with other Federal 
and State agencies. However, since the appropriations language applies 
only to the period of the appropriations, since report language is not 
binding and since these regulations apply solely to the OAA, the report 
language cannot bind non-Department of Labor regulatory agencies. No 
useful propose would be served by incorporating the report language in 
the regulations. Consistent with the comments received on Sec. 641.310 
which recommended the deletion of the word ``employment'' from the term 
``community service employment assignment'', this word is deleted in 
the definition of the term ``enrollee'' to avoid misunderstandings 
between enrollees and staff.
    There was one comment that requested the definition of ``host 
agency'' be altered to add the word ``exclusively'' after the word 
``used'' and before the phrase ``as a place for sectarian religious 
instruction; and substitute the word ``training'' for ``work'' site. 
Neither suggestion is incorporated into the definition since the 
suggested changes may create further problems of interpretation rather 
than clarify the definition. The addition of the word ``exclusively'' 
as it applies to sectarian religious instruction would extend the 
definition beyond its present intent and the use of the word 
``training'' instead of ``job'' site would establish an emphasis beyond 
community service.
    Two commenters requested relief from the requirement to calculate 
an applicant's income using either the preceding six-month or twelve-
month period as it applies to the definition of ``low income'' because 
they believe elimination of this requirement would permit the grantee 
or subgrantee to deal with homeless persons or other emergencies more 
expediently. The Department believes that such a change would be 
inconsistent with eligibility determinations for other employment and 
training programs and create additional linkage problems; therefore, 
this change is not incorporated. However, as a result of reviewing this 
definition, it was noted that there was no reference to the family's 
income. This shortcoming is corrected by adding the phrase ``of the 
family'' after the word ``income''.
    There were three comments on the definition of ``poor employment 
prospects'' which addressed various aspects of this term. Two of the 
commenters wanted additional language that would include individuals 
living in rural and urban areas. Since the proposed definition 
permitted additional categories to be identified and persons living in 
isolated areas have special problems in finding employment, this term 
is amended by adding the phrase, ``or residing in socially and 
economically isolated rural or urban areas where employment 
opportunities are limited.''. The remaining comment pointed out the 
health problems of older Americans which may prevent them from 
performing many jobs. It is true that some older Americans do have 
health problems which would prevent them from being employed, but the 
objective of the program is to obtain employment for all individuals 
who are enrolled; therefore, no change is made to establish any 
limitations.
    There was a proposal to add a new definition of ``similar public 
occupations'' to address possible misunderstandings on enrollee wages. 
The addition of such a term may create confusion with the ``maintenance 
of effort'' requirements found in Sec. 641.325, rather than solving a 
possible misunderstanding on enrollee wages. No position should be 
established which in any way would indicate maintenance of effort 
violations. Positions established under SCSEP should be designed 
specifically for the enrollee and not represent ongoing duties that 
have previously been performed by staff of the host agency.
    Finally, there was a recommendation to expand the definition of 
``residence'' to include the word, ``address'' so as to be able to work 
with homeless individuals more easily. Although the present definition 
does not preclude working with the homeless, the phrase ``or address'' 
is added to overcome possible limiting interpretations.


Sec. 641.201  Allocation of funds.

    There were two comments regarding language changes to paragraph (c) 
of this section, which were: (1) To drop the phrase, ``and the amount 
allotted to each project''; and (2) to add the phrase, ``or a project 
sponsor designated by the Department''. As a result of these requests, 
both changes are made. The suggested deletion more correctly states the 
current practice of not requiring the amount allotted to be identified. 
The suggestion to add the language on the project sponsor acknowledges 
the option available to Governors to relinquish the State share of the 
allocations to national grants.


Sec. 641.205  Responsibility review.

    There were three comments on this section. Two of the comments 
sought relief from the 90-day requirement for the submission of the 
final closeout documents in paragraph (c)(5). This requirement is part 
of the administrative requirements for closeouts applicable to all DOL 
programs which are contained [[Page 26576]] at 29 CFR 95.71 or 29 CFR 
97.50, as appropriate; therefore, no change is made to this paragraph. 
However, if additional time is needed to prepare the closeout 
documents, waivers can be provided administratively. The third comment 
suggested strengthening this section by adding several new 
``responsibility'' provisions from the Federal Acquisition Regulation 
which deal with contracts. This is a grant program, and the present set 
of provisions contained in this section provide sufficient authority to 
ensure that grantees are responsible entities. Clarifications are 
provided for paragraphs (a) and (c)(9). The phrase ``included in (b) 
and (c) below'' is added to ensure the reader understands that the 13 
responsibility tests consist of both paragraphs. The word ``have'' is 
deleted along with the ``ed'' from the word ``maintained'' in paragraph 
(c)(9) to maintain parallel sentence structure.


Sec. 641.207  Negotiation.

    The phrase ``planned occupational categories of SCSEP'' is removed 
and the phrase ``community service'' is substituted to overcome any 
misunderstandings in paragraph (b)(1) about the intent of this 
paragraph.


Sec. 641.301  Grant operations.

    There was one comment relating to the purpose of the program. The 
comment recommended expanding the task of the grantees to include the 
development of appropriate training, as well as work assignments. Since 
the grantees already explore the training needs of the individual as 
part of the assessment, this expanded language is unnecessary. The 
legislatively-mandated purpose of the program is community service. 
This suggested addition may confuse project operators rather than 
clarify; therefore, it is not adopted. The word ``dual'' is substituted 
for the word ``primary'' in paragraph (b) to acknowledge that there is 
more than one program purpose and the phrase, ``and to provide useful 
community service'' is deleted since ``community service'' is already 
used in the same sentence. As noted in the comments addressed in 
Sec. 641.310 and acknowledged in the definition of enrollee, the word 
``employment'' is deleted in paragraph (b) to prevent confusion between 
the enrollees and the staff about whether the enrollee is assigned to a 
community service position or a job. The phrase ``and will promote 
unsubsidized employment opportunities'' is added the last sentence in 
paragraph (b) consistent with the change to the word ``dual'' above.


Sec. 641.302  Grantee responsibilities.

    There were a total of eight comments which addressed three separate 
areas of this section. Four of the comments questioned the need to 
provide documentation on an individual's eligibility for the program. 
While this concern is valid, the need to ensure that only eligible 
persons are served outweighs this concern. The operating guidance on 
documentation will be widely circulated for comment prior to the 
implementation of this provision. The remaining four comments sought 
language clarifications. The commenters asked the DOL to clarify that 
wages are to be paid for community service. As a result of the request, 
the word ``remit'' in the opening paragraph is substituted for the word 
``provide'' and the phrase ``for community service assignments and 
provide'' is added while the phrase ``skill acquisition or'' is 
deleted. One commenter suggested the regulations directly quote the OAA 
rather than paraphrasing it in paragraph (a)(3) to clearly state the 
legislative intent of whom is to be served. For consistency, a portion 
of the language from section 502(b)(1)(M) of the OAA is quoted rather 
than paraphrased. Lastly, a commenter suggested that a specific number 
of monitoring trips be inserted in paragraph (b). Rather than establish 
a regulatory numerical requirement for monitoring visits for grantees, 
that concern will continue to be dealt with administratively.


Sec. 641.303  Cooperative relationships.

    In order to avoid any potential confusion regarding local 
consultations, the specific wording from 502(d)(1) of the OAA is 
inserted in paragraph (b)(5).
Sec. 641.304  Recruitment and selection of enrollees.

    There were five comments on this section. Three of the commenters 
asked that the requirement for listing vacancies with the Job Service 
be altered to a requirement to notify the Job Service of vacancies so 
there is no confusion about the intent. Another commenter wanted all 
private sector jobs listed with the Job Service. The remaining 
commenter did not want to be hindered by having to notify the Job 
Service. The language is altered by omitting the phrase ``listing of 
vacancies with'' and inserting in its place the term, ``notifying'' and 
adding the phrase ``when vacancies occur'' in the first paragraph of 
this section. This is to notify the Job Service of SCSEP vacancies only 
when they occur since SCSEP grantees cannot control internal State 
employment security agencies' procedures to list positions.


Sec. 641.305  Enrollment eligibility.

    There were a total of eleven comments on this section. In addition, 
in order to clarify eligibility, a change is made to paragraph (a)(2) 
to clarify that re-enrollment is appropriate when an enrollee leaves 
the SCSEP or unsubsidized employment through no fault of the enrollee, 
for example, if the enrollee becomes ill. Two commenters asked that 
section 204(d)(2)(A) of the JTPA be cited to reflect consistency with 
the technical amendments to the OAA. As a result of the 1994 technical 
amendments to the OAA which impact on the JTPA, paragraph (d)(2) of 
this section is altered to broaden the reference to include a citation 
to Title II-A of the JTPA so it is clear that it applies to both 
section 203 and 204(d). Two commenters asked that the regulations 
acknowledge that the enrollment eligibility requirements could be 
changed by other Federal laws. Paragraph (c) of this section is altered 
by adding the phrase ``unless required by Federal law''. In paragraph 
(b)(2), one commenter identified an incorrect citation to Sec. 641.103 
which is corrected to read Sec. 641.102. Also in paragraph (b)(2), a 
second sentence is added to permit disabled persons to be considered as 
a family of one for income eligibility purposes. Two commenters asked 
that the twelve-month recertification requirement be dropped. It is the 
Department's intent that re-certifications be conducted every twelve 
months if an enrollee continues in the program; therefore, the 
requirement is retained. One commenter expressed concern about the 
eligibility documentation requirement previously addressed under 
Sec. 641.302(c), Grantee responsibility, above. As previously 
indicated, specific administrative requirements will be widely 
circulated for comment in order to limit, to the extent possible, 
burdens being placed on grantees. One commenter asked for a 
clarification on the meaning of the term ``permanent address''. To 
overcome any limiting reference, the word ``permanent'' is removed from 
the definition for residence, as previously noted.


Sec. 641.306  Enrollment priorities.

    There were five comments relating to this section. Two commenters 
indicated support for the changes. One commenter pointed out a 
grammatical error in paragraph (a)(3) which is amended to read ``seek'' 
rather than ``seeks''. There were two requests for clarification of 
paragraph (a)(3) regarding who may return to the program. In response, 
individuals may potentially return to the program if they are not at 
fault in [[Page 26577]] losing their unsubsidized job or if they have 
become ill and are forced to leave their unsubsidized employment. 
Paragraph (a)(3) is amended to reflect this clarification with the 
addition of the phrase, ``through no fault of their own''. The 
provision on vacant positions in paragraph (c) is clarified by adding 
the sentence ``[T]he priorities do not apply to the experimental 
private sector projects.'' to prevent any misunderstanding about the 
non-application of enrollment priorities to the experimental project 
positions that are authorized in Sec. 641.326. Also, the phrase 
``community service'' is added before the word ``position'' to be 
consistent with the addition of the new sentence. Also, in this 
paragraph, the word ``and'' replaces the word ``but'' to more clearly 
state the intent.


Sec. 641.308  Orientation.

    Paragraph (a) of this section is amended by adding language to 
acknowledge that orientation cannot always be conducted prior to the 
commencement of a community service assignment. The word ``for'' 
replaces the word ``to'' in paragraph (a) to improve readability. 
Paragraph (b) is amended by substituting the word ``an'' for the word 
``the'', and adding the phrase, ``similar to the one'', for clarity. 
Paragraph (c) is amended to read ``[T]he grantee or subgrantee shall 
ensure that host agencies provide adequate supervision and adequate 
orientation and instruction regarding, among, other things, job duties 
and safe working procedures''.
Sec. 641.309  Assessment and reassessment.

    There were six comments on this section requesting clarifications 
of paragraphs (a), (b), (d), (e), and (g). Paragraph (a) is revised by 
inserting the phrase, ``and community service objectives'' in addition 
to ``employment'' and ``training'' to ensure that the community service 
aspect of the program is highlighted. The phrase ``for each 
individual'' is shifted to the end of the sentence so it is clear that 
it applies to both the assignment and objectives. A new paragraph (b) 
is added to address the assessment of physical capabilities and the 
remaining paragraphs are renumbered (c)-(h). An assessment of physical 
ability is a pre-employment medical inquiry and, therefore, must 
conform to the prescriptions of Section 504 of the Rehabilitation Act 
of 1973, as amended (section 504), the Americans with Disabilities Act 
of 1990 (ADA) and their respective implementing regulations. See, e.g., 
29 CFR 32.15, the section of the Department's section 504 regulations 
that addresses pre-employment inquiries. Prior to the offer of a 
particular community service assignment, disability-related inquiries 
may not be made. Generally, the assessment of physical ability is 
limited to an inquiry as to whether the enrollee is capable, with or 
without a reasonable accommodation, of performing the functions of the 
job (essential and/or marginal). Enrollees may also be asked to 
describe or demonstrate how they would perform these functions. Once a 
bona fide community service assignment offer has been made, medical 
inquiries, including medical examinations, may be made. However, these 
inquiries are subject to section 504 of the Rehabilitation Act, the 
ADA, and their implementing regulations. For example, with respect to 
medical examinations, 29 CFR 32.15 provides that the examination must 
be a routine part of the host agency's selection process for the job in 
question and must be performed by a physician qualified to make 
functional assessments. If a particular medical test is a prerequisite 
to placement into a community service assignment, including a medical 
test that is required by a local ordinance or State law, it is 
recommended that it be conducted at the same time as the physical 
examination described in paragraph (b)(4) of this section.
    The former paragraph (b) (now paragraph (c)) is not altered to 
incorporate suggested language on other appropriate employment and 
training opportunities since this is a community service program. In 
the new paragraph (e) (formerly paragraph (d)), the acronym ``IDP'' 
replaces the phrase, ``service strategy'', in order to avoid confusion 
with the term, ``individual service strategy'', used under JTPA. Also 
the phrase ``program year'' is deleted from the new paragraph (e) and 
replaced by the phrase ``a 12-month period'' to overcome situations 
where an enrollee may be in the program for only brief periods. In the 
new paragraph (f), (formerly paragraph (e)) the phrase ``upon 
completion of the review'' is deleted to ensure that grantees 
understand that alternative assignments may be permitted at any point 
while working with an enrollee. The new paragraph (h) (formerly 
paragraph (g)) is amended by adding language to clarify that the 
phrase, ``recent assessment'' means an assessment done within the last 
year.


Sec. 641.310  Community service assignments.

    There were five comments on this section. Two commenters requested 
the deletion of the word ``employment'' from the title, the text of 
this section and elsewhere in the final rule. The word ``employment'' 
is removed from the title and this section, as well as elsewhere in the 
final rule, to emphasize that the community service assignment does not 
constitute an enrollee's job. The term ``community service assignment'' 
is used throughout the regulation. In a similar manner, the word 
``placed'' is substituted for the word ``employed'' in paragraph (a)(1) 
in order to ensure parallel construction. One commenter requested that 
the phrase ``as soon as possible'' in Sec. 641.310(a) be deleted since 
it is not always possible to refer an enrollee to a community service 
assignment. This provision is retained since this is consistent with 
the Department's intent that there be no lengthy delays in enrollment 
after receipt of orientation. Two commenters requested clarifying the 
provision in Sec. 641.310(a)(1) by stating that project sponsors may 
provide enrollees with opportunities to assist in the administration of 
the SCSEP. This change is incorporated into paragraph (a)(1) in lieu of 
the last two sentences of the paragraph since the revised sentence more 
accurately communicates Departmental policy. The phrase, ``if 
appropriate according to the IDP'' is added to ensure consistency with 
Sec. 641.308. The last two sentences of paragraph (a)(1) are deleted. 
The 1300 hour provision in paragraph (b) is also retained. The second 
sentence in paragraph (b)(2) is moved to become the second sentence in 
paragraph (b)(3) since both paragraphs refer to periods of less than 20 
hours. There were two comments on Sec. 641.310(d). There was one 
suggestion to permit the use of SCSEP funds for reasonable 
accommodations. This suggestion is incorporated into Sec. 641.403 since 
that section deals with allowable costs, but it is recognized that due 
to limited availability of administrative funds, it may not be 
practical to do this except in limited situations. There also was a 
suggestion that Sec. 641.310(d) be amended by inserting a sentence on 
work place conditions to address ergonomically sound conditions to 
prevent repetitive motion injuries such as carpal tunnel syndrome. This 
suggestion is not adopted since the comment is limited primarily to 
office occupations and the work place is much broader for the title V 
program. However, a bulletin will be issued on the broader issue of 
workplace safety and sound ergonomic design concerns as suggested by 
the commenter. [[Page 26578]] 


Sec. 641.311  Enrollee wages and fringe benefits.

    There were eleven comments on this section. Five addressed concerns 
regarding the use of physical examinations given in order to assess an 
enrollee's physical ability and need for any supportive service(s). The 
assessment of an enrollee's physical ability and the physical 
examination provided to enrollees as a program benefit are two separate 
activities. As a result, assessment of an enrollee's physical ability 
is moved to Sec. 641.309 in order to group all activities on assessment 
in a single section. Since physical examinations are a fringe benefit, 
they are addressed in this section. Therefore, paragraph (b)(3) is 
amended to reflect this change and it is numbered as (i) for the 
examination and (ii) for the waiver.
    Paragraph (b)(3) of this section addresses the physical examination 
that is provided to enrollees as a fringe benefit. The physical 
examination must be offered within 60 working days after commencement 
of the community service assignment instead of before the first day of 
compensated participation. It is not an eligibility criterion, nor 
should the results of the examination be taken into consideration when 
determining a community service assignment. The physician who conducts 
the examination should only give a copy directly to the enrollee rather 
than to program staff. An enrollee should not have to request a copy, 
as suggested by one commenter. One commenter indicated that the impact 
of the physical examinations upon the administrative budget category 
needs to be considered. Since the regulation is changed to authorize 
charging the cost of the physical examination to the enrollee wages and 
fringe cost category, the regulations provide additional flexibility, 
rather than limiting flexibility, and no further change is made. 
Another commenter suggested SCSEP funds could be used to insure 
reasonable accommodation for participants at the host agency. As 
indicated above, such expenditures will be deemed allowable, within 
funding limitations.
    The Department was also asked to consider additional regulatory 
changes that would exempt the SCSEP program from payment of 
unemployment compensation taxes to States. In addition, the Department 
was asked to substitute the phrase ``host work site'' for the word 
``employer'' at Sec. 641.311 (a)(3) and include a new definition at 
Sec. 641.102 for similar public occupations. Neither of these 
suggestions are implemented for two reasons. First, with regard to 
unemployment compensation, these regulations cannot alter the federal 
or State unemployment compensation laws that regulate this area of 
concern since such determinations must be made individually by State 
employment security agencies. (Since the issuance of a directive on the 
SCSEP by the Unemployment Insurance Service, the underlying question of 
unemployment compensation legislation has been virtually eliminated). 
Second, as indicated in response to the comments on definitions, 
community service assignments for enrollees must be free from any 
potential charges of non-maintenance of effort which could be inferred 
by limiting the application of prevailing rates of pay to a single work 
site of the host work site.
    Finally, a typographical error on the word ``waiver'' is corrected 
in paragraph (b)(2).
Sec. 641.312  Enrollee supportive services.

    There were ten comments received that dealt with the need to 
clarify the unallowability of enrollee transportation costs. Two of 
these expressed a concern, that the unallowability of such costs would 
be a hardship for host agencies. Another commenter wanted the option to 
pay transportation costs eliminated since it could serve as a 
disincentive to enrollees seeking unsubsidized employment. The 
remaining seven commenters requested a clarification of the regulations 
to make it clear that SCSEP funds can be used to pay for enrollee 
travel when they are working in a SCSEP administrative capacity. Since 
section 502(b)(1)(L) of the OAA only authorizes the payment of 
necessary transportation costs of eligible individuals which may be 
incurred in the employment in any project funded under this title, the 
Department amends Sec. 641.312(5)(ii) to read ``[G]rant funds may not 
be expended to support the transportation costs of host agencies or 
programs funded other than under title V of the OAA, except where 
provided by federal law''. Because federal appropriations law prevents 
funds from one grant being used to defray the expenses incurred under a 
separate grant, this provision clarifies that SCSEP funds cannot be 
used for certain host-agency travel costs which are to be met under 
another federal grant or local program. However, enrollee travel to and 
from the work site, in selected cases, is necessary in isolated 
settings where no transportation is available and that option is 
retained. There was one comment received that suggested the regulations 
should require grantees and subgrantees to make reasonable 
accommodations for enrollees with disabilities at host agencies. The 
Department fully supports efforts to accommodate individuals with 
disabilities. However, in order to protect the limited funds available 
for this program, the regulation requires that the expenditure be made 
with ``administrative'' funds to the extent that funding permits.


Sec. 641.313  Training.

    There were a total of ten comments on this section. As suggested by 
two commenters, the ``prior to and in preparation for actual community 
service assignment'' phrase in paragraph (a) is removed since training 
before commencement of a community service assignment is not always 
practical or possible. In addition, paragraph (a) is amended by adding 
language that states a grantee is to provide ``or arrange for training 
that is specific to an enrollee's community service assignment''. Three 
of the commenters requested an increase in training hours. Paragraph 
(b) is amended to now provide up to 500 hours of training for enrollees 
``per grant year'' and the word ``orientation'' is deleted to overcome 
potential confusion with Sec. 641.308, Orientation. Also, as suggested 
by a commenter, the original paragraph (c) is deleted since it is a 
duplication of paragraph (a) and the remaining paragraphs are 
renumbered to (c)-(h). The new paragraph (f) (formerly paragraph (g)) 
is prefaced by deleting the phrase, ``at no cost to the project'' and 
adding the phrase, ``whenever possible'' to acknowledge it is not 
always possible. In addition this paragraph is amended by deleting the 
phrase, ``at no cost to title V'' to more clearly state the intent of 
the OAA. There were two comments dealing with training costs under 
SCSEP. Since it is not encouraged for grantees and subgrantees to use 
SCSEP funds for training, due to the limited funding available, 
paragraph (f) is amended to read that grantees and subgrantees shall 
seek training ``whenever possible at reduced or no costs to title V''. 
Paragraph (g) is amended to remove the ``al'' from the word ``self-
development'' to improve the readability. Two commenters suggested 
rewording paragraph (h) to more positively state this provision. The 
Department agrees with the suggestion and paragraph (h) is amended to 
read: ``Joint programming, including co-enrollment, when appropriate, 
between title V programs and programs authorized under the Job Training 
Partnership Act, the Community Services Block Grant Act, or the Carl D. 
Perkins Act is strongly encouraged''. [[Page 26579]] 


Sec. 641.314  Placement into unsubsidized employment.

    There were three comments on this section. Two of those comments 
dealt with an unsubsidized employment goal of the program. The first 
commenter raised a question about whether the increased emphasis on the 
unsubsidized employment goal would detract from the original intention 
of the SCSEP being a community service program. The second commenter 
suggested that individual goals be established for each grantee 
depending upon specific local situations. Since the unsubsidized 
employment goal remains unchanged and continues as a goal, rather than 
a firm requirement, it is retained as a single measure. The other 
comment sought a change on enrollee placement ``follow-up'', set forth 
in paragraph (d), that would reduce the follow-up time frame to one 
month from the current 90 days as a means to reinforce successful 
placement of the former enrollee. This suggestion is an excellent 
operational procedure and would assist grantees in working with 
employers by identifying enrollee employment-related problems, as well 
as areas where the grantee can better assist the employer. 
Nevertheless, the Department is not including such a numerical 
requirement in the regulations since a one-month follow-up requirement 
may not be possible in all instances. Paragraph (b) is revised to 
insert the word ``project's'' before the word ``annual'' to clarify 
that the goal applies to the total grant period as opposed to a monthly 
or quarterly requirement. Also, the phrase, ``within the project year'' 
is deleted from paragraph (b) to prevent a misinterpretation.


Sec. 641.315  Maximum duration of enrollment.

    There were nine comments on this section with seven supporting this 
provision. However, one commenter requested that this section be 
omitted since, in the commenter's opinion, it is contrary to the 
original goals of the program. The Department thinks that since this 
section will provide grantees with additional flexibility, it is in the 
best interest of the program to retain this provision. To prevent 
misinterpretation, another commenter suggested the following language 
be added to this section: ``Time limits on enrollment shall be 
reasonable and IDP's shall provide for transition to unsubsidized 
employment or other assistance before the maximum enrollment duration 
has expired.'' This change is incorporated since it is the intent of 
the regulations to retain a customer focus which should be consistent 
with the enrollee's IDP.


Sec. 641.316  Individual development plan-related terminations.

    Eight comments were received on this section with seven supporting 
the provision. The remaining comment expressed concerns about 
implementation of the IDP requirement that will have to be addressed 
once the regulations are effective. This comment deals with issues 
beyond the scope of the regulations which will be addressed in an 
administrative issuance. As with the other administrative issuances, 
the Department plans to widely circulate drafts for comment prior to 
issuing operational guidance.
Sec. 641.317  Status of enrollees.

    Four commenters requested clarification of the employment status of 
enrollees when they are working at community service assignments. They 
suggested that in addition to enrollees not being considered federal 
employees, they should also not be considered employees of the grantees 
or their subgrantees. As explained earlier, in the definitions section, 
the Department would like to clarify this through regulations since it 
would overcome many misunderstandings and would also eliminate the need 
for administrative interpretations regarding employee/enrollee status 
by various governmental units. However, without specific language in 
the program legislation, regulatory guidance binding on other agencies 
administering other statutes cannot be issued in these regulations. 
Also, the language used by the appropriations committee for the past 
two years in the passage of these appropriations bills has the effect 
of implementing these suggestions on a year-to-year basis. Of course, 
subsequent authorizing legislation could statutorily clarify employee/
enrollee employment status.


Sec. 641.318  Over-enrollment.

    There was one comment received regarding this section. It suggested 
substituting the word ``temporary'' for ``short-term'' to overcome any 
misunderstandings on the intent of the term. The Department agrees and 
this section is amended to reflect this clarification. The citation in 
paragraph (b)(2) is corrected to read section 502(b)(1)(P) instead of 
502(b)(1)(O).


Sec. 641.321  Political activities.

    Paragraph (a)(1) is amended by substituting the phrase ``they are'' 
for the phrase ``enrollee is'' since this provision applies to both 
enrollees and staff, as stated at the beginning of this provision. 
Paragraph (b)(1) is amended by substituting ``Special Counsel (OSC)'' 
for ``Personnel Management (OSC)'' to clarify which office has current 
responsibility for interpreting the Hatch Act; the U.S. Office of the 
Special Counsel (OSC) is located at 1730 M Street, NW., Suite 300, 
Washington, DC 20036-4505. Paragraph (b)(2) is amended by substituting 
the word ``have'' for the phrase, ``be submitted for approval to'' to 
overcome any potential misunderstandings about the need to seek 
individual approvals of the notice to be displayed and provided to the 
enrollees.


Sec. 641.323  Nepotism.

    There was one comment requesting the Department extend the waiver 
provision set forth in paragraph (a) to isolated rural areas. The 
Department thinks that rural areas are similar enough in population 
density to Native American reservations to justify extending the 
provision to rural areas; thus, this provision is added to paragraph 
(a). Also, paragraph (a) is amended by inserting the phrase, ``who 
works'' to clarify the person referenced in this paragraph. The phrase, 
``the total service population is 2,000 or less and is isolated, or 
where there is a history of dependence on public assistance'' is 
deleted since these factors do not apply directly to the SCSEP program.


Sec. 641.324  Enrollee and applicant complaint resolution.
    There was one comment questioning whether this section applied to 
host agencies. This section does not apply to host agencies. Because 
this is not a consideration requiring regulatory guidance, there is no 
change to the regulations.


Sec. 641.326  Experimental private sector training projects.

    Paragraph (g) is amended by substituting a citation to title II-A 
of the JTPA for the old citation to section 204(d). Paragraph (h) is 
amended by adding the word ``national'' before the word ``grantee'' to 
ensure that it is understood that this provision applies only to 
national grantees; and by deleting the word ``formulas'' to eliminate 
any possible misunderstandings on the distribution of the State 
allocation for experimental private sector training projects. A new 
paragraph (i) is added to acknowledge that non-federal matching is not 
required specifically for projects under this section.


Sec. 641.402  Administrative requirements.

    Paragraph (a) is amended by providing the present citation for the 
Department's administrative requirements. The former citation was 
[[Page 26580]] 41 CFR part 29-70 and the present citation is 29 CFR 
part 95.


Sec. 641.403  Allowable costs.

    There were three comments on this section. Two identified incorrect 
citations. The paragraph addressing ``allowable fringe benefits costs'' 
is incorrectly cited as ``(d)(3)''. This paragraph is amended to 
reflect that the proper citation is paragraph (e). Under the same 
paragraph, the term ``workers'' is substituted for the term 
``workman's'' in order to use the correct term. The remaining comment 
expresses a concern that listing fringe benefits deemed allowable in 
paragraph (e) might result in enrollee disincentives to leave the 
program for unsubsidized employment. The listing does not establish 
enrollee entitlements. However, it is the Department's judgment that it 
is more helpful than it is harmful to list the types of allowable 
fringe benefits; therefore, this listing is retained. Paragraphs 
(b)(2)(iii) and (4) are amended by deleting the phrase ``as not subject 
to OMB Circular A-122'' to eliminate potential misinterpretations of 
this confusing phrase. A new Sec. 641.403(d)(4) is added to provide 
that grantee funds may be used to provide physical and programmatic 
accessibility and reasonable accommodation, as required by section 504 
of the Rehabilitation Act of 1973, as amended, and the Americans with 
Disabilities Act of 1990.


Sec. 641.404  Classification of cost.

    There were three comments on this section. One commenter questioned 
permitting enrollees to perform administrative functions, since these 
are not reflected in the administrative costs. The Department is 
retaining the provision permitting the use of enrollees to perform 
administrative functions. It has been a longstanding practice for 
grantees to maximize the number of enrollees by exposing them to 
administrative functions. This has been a win-win practice for both the 
grantee and the enrollees. To acknowledge existing policy, new language 
is added in Sec. 641.310(a)(1) of the regulations to reflect that the 
use of enrollees to perform administrative functions is an allowable 
activity.
    Another commenter requested that those training costs incurred to 
train sub-grantees not be counted against the administrative cost 
category. Since such expenditures cannot be applied against another 
cost category, the current provision is retained. The last comment 
sought inclusion of enrollee training costs as an enrollee wage and 
fringe benefit. Since the program is focused on community service, 
enrollee training outside of SCSEP is sought only when appropriate to 
meet the needs of the enrollee. Paragraph (b) is amended by inserting 
the phrase, ``including hours of'' before the word ``training'' to 
clarify that this phrase applies to both community service and 
training. Paragraph (c)(6) is amended to add the phase ``such as 
tuition'' to ensure that there is no misunderstanding regarding the use 
of the word ``training'', as used under paragraph (b).


Sec. 641.405  Limitations on federal funds.

    The citation in paragraph (a) is corrected to read (b) instead of 
(6). Also, in this paragraph, the phrase ``and periods during which 
limitation'' is deleted since this phrase was intended as transitional 
language intended to apply to the 1985 draft proposed regulations and 
does not currently apply. In paragraph (b)(1), the word ``grant'' is 
altered to read ``project'', consistent with the legislative language. 
The sole comment received was on paragraph (b)(2) of this section. The 
commenter pointed out that the ``75 percent rule'' regarding 
expenditure of funds on enrollee wages and fringe benefits limited the 
flexibility to utilize resources for the section 502(e) experimental 
programs. The 75 percent limitation is retained since the basic program 
objective is to put as much of the funds as possible into the hands of 
the enrollee rather than divert funds to administrative functions.


Sec. 641.406  Administrative cost waiver.

    The word ``and'' is substituted for the word ``the'' in the last 
sentence of the initial paragraph since there is a series of items. To 
improve reading of the regulation, the initial three sections are 
designated as paragraph (a) and the remaining information on waivers is 
designated as paragraph (b). Therefore, paragraphs (a)-(e) are 
renumbered as (1)-(5).


Sec. 641.407  Non-federal share of project costs.

    This section is amended to provide the present citation for the 
calculation of the non-federal share. The regulations now are found at 
29 CFR 97.24 or 29 CFR 95.23 instead of 41 CFR 29-70.206 (1984). In 
addition, this section is revised to assign each item on the list of 
exceptions to the matching requirement to a separately designated 
clause. Also the reference to the 502(e) projects is moved to 
Sec. 641.326(i) so all items on this topic are in a single section.


Sec. 641.408  Budget changes.

    This section is amended to provide the present citation for 
revision of budget and program plans. The present cite at 29 CFR 95.25, 
Revision of budget and program plans, is added and the previous cite at 
41 CFR 29-70.211 (1984), Modifications and Budget Revisions Procedure, 
is deleted.


Sec. 641.409  Grantee fiscal and performance reporting requirements.

    There were two comments on this section. One commenter suggested 
clarifying language at paragraph (c) in order to acknowledge that 
several Governors currently provide their State funding to national 
grantees for operation of the SCSEP program. The Department agrees with 
this clarification and amends paragraph (c) by adding ``or another 
project sponsor designated by the Department''. The second commenter 
asked if the Cash Transaction Report referred to in paragraph (b)(3) 
was necessary. Based on a review of other methods for obtaining 
information for draw downs of funds, the Department thinks that 
existing reports will suffice. Therefore, this report is discontinued 
upon the effective date of these regulations. Paragraphs (a) and (b) 
are amended to provide the new citation for reporting requirements and 
waivers for late reports are acknowledged, consistent with present 
practice. The present citations for paragraph (a) can be found at 29 
CFR 95.91 and the previous citation of 41 CFR 29-70.209 3 (1984) is 
deleted. The present citation for paragraph (b) can be found at 29 CFR 
95.52 and the previous cites of 41 CFR-29 70.207 2(a) (1984) and 41 CFR 
29-70.208 (1984) are deleted.


Sec. 641.410  Subgrant agreements.

    Paragraph (c) is amended to provide the present citation for 
grantee procurement. The present citation can be found at 29 CFR 95.40 
through 95.48 and the previous citation of 41 CFR 29-70.216 (1984) is 
deleted.


Sec. 641.411  Program income.

    This section is amended to provide the present citation for program 
income. The present citation can be found at 29 CFR 95.24 and the 
previous citation of 41 CFR 29-70.205 (1984) is deleted.


Sec. 641.414  Grant closeout procedures.

    This section is amended to provide the present citation for grant 
closeout procedures. The present citation can be found at 29 CFR 97.50 
or 29 CFR 95.71, as appropriate, and the previous citation of CFR part 
97 is deleted.

[[Page 26581]]

Other

    There were other comments that did not fall within any section. 
They are as follows:
    1. Residential Health Positions. It was suggested that priority in 
the distribution of eligible slots be given to individuals in 
residential health care facilities. Since there is no legislative basis 
for providing such a priority, in the interest in local flexibility, we 
have chosen not to adopt an additional priority.
    2. Administrative Costs. It was pointed out by two commenters that 
the 13.5 percent administrative cost limitation has remained static, 
while additional administrative responsibilities have been added. 
Congress recognized the administrative burdens they were creating in 
the passage of the 1992 amendments. The House report acknowledged that 
if additional administrative requirements, such as assessment and 
coordination, forced grantees to seek a waiver from the 13.5 percent 
level to the 15 percent ceiling, such a request should be accommodated.
    3. Paperwork Reduction Act. A question was raised about why the 
older worker programs cannot use the same administrative forms as other 
employment and training programs. The regulations mandate the 
submission of necessary information. However, they do not mandate any 
particular forms. Since the Department encourages closer cooperation 
and coordination between programs within a State, such an approach 
within a State represents a goal the Department supports.
    4. Social Security Eligibility. A suggestion was made that SCSEP 
income should not count in calculating eligibility for Supplemental 
Security Income under the Social Security program. Since the SCSEP 
regulations cannot impact on the legislation of other programs, this 
suggestion is not incorporated into these regulations.
    5. Eligibility Criteria. A suggestion was made that the 
Department's guidelines on the SCSEP program's eligibility criteria 
need to be updated. The Department concurs with this observation and 
commits itself to issuing updated guidelines to replace an existing 
bulletin. Since these criteria are of an administrative nature, they 
are not incorporated into the regulations.
    6. Congressional Intent. One comment was received which questioned 
the Department's implementation of the 1992 amendments' emphasis on 
placing individuals in unsubsidized employment. The unsubsidized 
employment goal of the program has remained the same for the last nine 
years and these regulations do not alter this goal. Furthermore, the 
program can only serve a small percentage of all persons who 
potentially qualify for the program. Without turnover of the enrollees, 
no additional persons could be served beyond those currently enrolled. 
On a practical basis, many of those individuals who are served by the 
program need more than 20 hours a week of employment at the minimum 
wage to maintain themselves. Therefore, the modest placement goal 
encouraging projects to seek unsubsidized positions for such 
participants is retained. This option must be available to serve 
individuals who require unsubsidized employment.

List of Subjects 20 CFR Part 641

    Aged, employment and grant programs--Labor.

20 CFR Part 89

    Aged, employment and grant programs--Labor.

Final Rule

    Under the Secretary's authority, 5 U.S.C. 301 and Reorganization 
Plan No. 14 of 1950, 5 U.S.C. appendix, 29 CFR part 89 is redesignated 
as 20 CFR part 641 and revised to read as follows:

PART 641--SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM

Subpart A--Introductory Provisions

641.101  Scope and purpose.
641.102  Definitions.

Subpart B--Grant Planning and Application Procedures

641.201  Allocation and allotment of title V funds.
641.202  Eligibility for title V funds.
641.203  Soliciting applications for title V funds.
641.204  Grant application requirements.
641.205  Responsibility review.
641.206  Grant application review.
641.207  Negotiation.
641.208  Rejection of grant application or project components.
641.209  Award of funds.

Subpart C--Grant Operations

641.301  General.
641.302  Grantee responsibilities.
641.303  Cooperative relationships.
641.304  Recruitment and selection of enrollees.
641.305  Enrollment eligibility.
641.306  Enrollment priorities.
641.307  [Reserved]
641.308  Orientation.
641.309  Assessment and reassessment of enrollees.
641.310  Community service assignments.
641.311  Enrollee wages and fringe benefits.
641.312  Enrollee supportive services.
641.313  Training.
641.314  Placement into unsubsidized employment.
641.315  Maximum duration of enrollment.
641.316  Individual development plan-related terminations.
641.317  Status of enrollees.
641.318  Over-enrollment.
641.319  [Reserved]
641.320  Political patronage.
641.321  Political activities.
641.322  Unionization.
641.323  Nepotism.
641.324  Enrollee and applicant complaint resolution.
641.325  Maintenance of effort.
641.326  Experimental private sector training projects.
Subpart D--Administrative Standards and Procedures for Grantees and 
Limitations on Federal Funds
641.401  General.
641.402  Administrative requirements.
641.403  Allowable costs.
641.404  Classification of costs.
641.405  Limitations on federal funds.
641.406  Administrative cost waiver.
641.407  Non-federal share of project costs.
641.408  Budget changes.
641.409  Grantee fiscal and performance reporting requirements.
641.410  Subgrant agreements.
641.411  Program income accountability.
641.412  Equipment.
641.413  Audits.
641.414  Grant closeout procedures.
641.415  Department of Labor appeals procedures for grantees.

Subpart E--Interagency Agreements
641.501  Administration.

Subpart F--Assessment and Evaluation

641.601  General.
641.602   Limitation.

    Authority: 42 U.S.C. 3056(b)(2).

Subpart A--Introductory Provisions


Sec. 641.101  Scope and purpose.

    Part 641 contains the regulations of the Department of Labor for 
the Senior Community Service Employment Program (SCSEP) under title V 
of the OAA. The dual purposes of a SCSEP project are to provide useful 
part-time community service assignments for persons with low incomes 
who are 55 years old or older while promoting transition to 
unsubsidized employment. This part, and other pertinent regulations 
expressly incorporated by reference, set forth all regulations 
applicable to the SCSEP.


Sec. 641.102  Definitions.

    The following definitions apply to this part:
    OAA means the Older Americans Act of 1965, as amended (42 U.S.C. 
3001 et seq.).
    Area agency on aging means an area agency on aging designated under 
section 305(a)(2)(A) of the OAA or a [[Page 26582]] State agency 
performing the functions of an area agency on aging under section 
305(b)(5) of the OAA.
    Authorized position means an enrollment opportunity during a 
program year. The number of authorized positions is derived by dividing 
the total amount of funds appropriated during a program year by the 
national average unit cost per enrollee for that program year as 
determined by the Department. The national average unit cost includes 
all administration costs, other enrollee costs, and enrollee wage and 
fringe benefit costs. An allotment of the total dollars for the grantee 
is divided by the national unit cost to determine the total number of 
authorized positions for each grant agreement.
    Community service means social, health, welfare, and educational 
services (particularly literacy tutoring); legal assistance, and other 
counseling services, including tax counseling and assistance and 
financial counseling; library, recreational, day care and other similar 
services; conservation, maintenance, or restoration of natural 
resources; community betterment or beautification; pollution control 
and environmental quality efforts; weatherization activities; and 
includes inter-generational projects; but is not limited to the above. 
It excludes building and highway construction (except that which 
normally is performed by the project sponsor) and work which primarily 
benefits private, profitmaking organizations. [Section 507(2) of the 
OAA.]
    Department and DOL mean the United States Department of Labor, 
including its agencies and organizational units.
    Disability means a physical or mental impairment of an individual 
that substantially limits one or more major life activities; a record 
of such impairment; or being regarded as having such an impairment. [29 
CFR parts 32 and 34.]
    Dual eligibility means individuals eligible under title V who are 
enrolled in a joint program established under a written financial or 
non-financial agreement to jointly operate programs with JTPA are 
deemed to satisfy the requirements of all JTPA programs funded under 
Title II-A of the JTPA.
    Eligible individual means a person who is 55 years of age, or 
older, and who has a low income as defined in this section. [Section 
507(1) of the OAA.]
    Eligible organization means an organization which is legally 
capable of receiving and using Federal funds under the OAA and entering 
into a grant or other agreement with the Department to carry out the 
provisions of title V of the OAA. [Section 502(b)(1) of the OAA.]
    Employment and training program(s) means publicly funded efforts 
designed to offer employment, training and/or placement services which 
enhance an individual's employability. The term is used in this part to 
include, but is not limited to, the JTPA or similar legislation and 
State or local programs of a similar nature.
    Enrollee means an individual who is eligible, receives services, 
and is paid wages for engaging in community service assignments under a 
project.
    Grantee means an eligible organization which has entered into a 
grant agreement with the Department under this part.
    Greatest economic need means the need resulting from an income 
level at or below the poverty line based on guidelines provided by the 
Department.
    Greatest social need, as defined at section 102(a)(30) of the OAA, 
means the need caused by noneconomic factors which include:
    (1) Physical and mental disabilities;
    (2) Language barriers; and
    (3) Cultural, social, or geographical isolation, including 
isolation caused by racial or ethnic status.
    Host agency means a public agency or a private non-profit 
organization, other than a political party or any facility used or to 
be used as a place for sectarian religious instruction or worship, 
exempt from taxation under the provisions of section 501(c)(3) of the 
Internal Revenue Code of 1986, which provides a work site and 
supervision for an enrollee.
    Individual development plan means a plan for an enrollee which 
shall include an employment goal, achievement objectives, and 
appropriate sequence of services for the enrollee based on an 
assessment conducted by the grantee or subgrantee and jointly agreed 
upon by the enrollee.
    JTPA means the Job Training Partnership Act (29 U.S.C. 1501 et 
seq.).
    Low income means an income of the family which, during the 
preceding six months on an annualized basis or the actual income during 
the preceding 12 months, whichever is more beneficial to the applicant, 
is not more than 125 percent of the poverty levels established and 
periodically updated by the U.S. Department of Health and Human 
Services. In addition, an individual who receives, or is a member of a 
family which receives, regular cash welfare payments shall be deemed to 
have a low income for purposes of this part.
    Poor employment prospects means the unlikelihood of an otherwise 
eligible individual obtaining employment without the assistance of this 
or other employment and training programs. Persons with poor employment 
prospects include, but are not limited to, those without a substantial 
employment history, basic skills, English-language proficiency, or 
displaced homemakers, school dropouts, disabled veterans, homeless or 
residing in socially and economically isolated rural or urban areas 
where employment opportunities are limited.
    Program year means the one-year period covered by a grant agreement 
beginning July 1 and ending on June 30.
    Project means an undertaking by a grantee or subgrantee, pursuant 
to a grant agreement between the Department and the grantee, which 
provides for community service opportunities for eligible individuals 
and the delivery of associated services.
    Reallocation means a redistribution of funds by a grantee.
    Reallotment means the redistribution of allotted title V funds by 
the Department from one State to another State(s) or from one grantee 
to another grantee.
    Residence means an individual's declared dwelling place or address. 
No requirement pertaining to length of residency prior to enrollment 
shall be imposed.
    SCSEP means the Senior Community Service Employment Program as 
authorized under title V of the OAA.
    State agency on aging means the sole agency designated by the 
State, in accordance with regulations of the Assistant Secretary on 
Aging, pursuant to section 305(a)(1) of the 0AA.
    Subgrantee means the legal entity to which a subgrant is awarded by 
a grantee and which is accountable to the grantee (or higher tier 
subgrantee) for the use of the funds provided.
    Title V of the OAA means 42 U.S.C. 3056 et seq.

Subpart B--Grant Planning and Application Procedures


Sec. 641.201  Allotment and allocation of title V funds.

    (a) Allotment. The Secretary shall allot funds for projects in each 
State in accordance with the distribution requirements contained in 
section 506(a) of the OAA.
    (b) Within-State apportionment. The amount allotted for projects 
within a State shall be apportioned among areas within the State in an 
equitable manner, taking into consideration:
    (1) The proportion which eligible individuals in each such area 
bears to the total number of such persons, respectively, in that State; 
[[Page 26583]] 
    (2) The relative distribution of such individuals residing in rural 
and urban areas within the State; and
    (3) The relative distribution of such individuals who are 
individuals with the greatest economic need, such individuals who are 
minority individuals, and such individuals with greatest social need.
    (c) Annual report of funds allocated by state. The State agency for 
each State receiving funds or a sponsor designated by the Department 
shall report at the beginning of each fiscal year on such State's 
status relative to section 506(c) of the OAA. Each State's report shall 
include names and geographic locations of all projects receiving title 
V funds for projects in the State. All grantees and subgrantees 
operating in a State shall provide information necessary to compile the 
report. [Section 506(d) of the OAA.]


Sec. 641.202  Eligibility for title V funds.

    Agencies and organizations eligible to receive title V funds shall 
be those specified in sections 502(b) and 506(a) of the OAA.


Sec. 641.203  Soliciting applications for title V funds.

    The Department may solicit or request organizations to submit 
applications for funds.


Sec. 641.204  Grant application requirements.

    (a) Schedules. The Department shall establish, by administrative 
directive, schedules for submittal of grant preapplications and 
applications; the contents of grant applications, including goals and 
objectives; amounts of grants; and grant budget and narrative formats.
    (b) Intergovernmental reviews. Grant applicants shall comply with 
the requirements of the Department's regulation, at 29 CFR part 17, 
which implements the intergovernmental review of Department programs 
and activities. A Preapplication for Federal Assistance form (SF-424) 
filed as a result of the intergovernment review system shall contain an 
attachment which, at a minimum, lists the proposed number of authorized 
community service positions in each county, or other appropriate 
jurisdiction within the affected State. Whenever a national 
organization or other program grantee or subgrantee proposes to conduct 
projects within a planning and service area in a State, such 
organization or program grantee is responsible for sharing their 
applications with area agencies on aging and other SCSEP sponsors in 
the area prior to the award of the funds in accord with guidelines 
issued by the Department.
    (c) Subgrants. A grant applicant planning to award funds by 
subgrant shall:
    (1) Outline the nature and extent of the planned use of such funds; 
and
    (2) Assure that in the event that a subgrant agreement is canceled 
in whole or in part, the grantee will provide continuity of services to 
enrollees.


Sec. 641.205  Responsibility review.

    (a) In order to enter into and continue a grant relationship with 
DOL, an organization (applicant) shall be responsible. To determine 
responsibility, DOL conducts a preaward review of all grant applicants. 
As part of this review, DOL applies 13 basic responsibility tests to 
each applicant, included in paragraphs (b) and (c) of this section.
    (b) If a grant applicant fails either of the following two 
responsibility tests, it shall not be designated as a grantee:
    (1) The Department's efforts to recover debts from the applicant 
(for which three demand letters have been sent) established by final 
Department action have been unsuccessful, or the applicant has failed 
to comply with an approved repayment plan.
    (2) Fraud or criminal activity has been determined to exist within 
the organization.
    (c) Eleven additional basic responsibility tests are applied to 
each grant applicant. Failure to meet any one of these tests does not 
establish that the applicant is not responsible, unless the failure is 
substantial or persistent. These tests are as follows:
    (1) Serious administrative deficiencies have been identified, such 
as failure to maintain a financial management system as required by 
Federal regulations.
    (2) Willful obstruction of the monitoring process.
    (3) Failure to meet performance requirements.
    (4) Failure to correct deficiencies brought to the grantee's 
attention in writing as a result of monitoring activities, reviews, 
assessments, etc.
    (5) Failure to submit correct grant closeout documents within 90 
days after expiration of the grant, unless an extension has been 
requested and granted.
    (6) Failure to return outstanding cash advances within 90 days of 
the expiration date of the grant, unless an extension has been 
requested and granted, or the funds have been authorized to be retained 
for use on other grants.
    (7) Failure to submit correct required reports by established due 
dates.
    (8) Failure to properly report and dispose of government property 
as instructed by DOL.
    (9) Failure to maintain cost controls resulting in excess cash on 
hand.
    (10) Failure to timely comply with the audit requirements of 29 CFR 
part 96.
    (11) Final disallowed costs in excess of five percent of the grant 
award.


Sec. 641.206  Grant application review.

    (a) The Department shall review each timely grant application 
submitted by an eligible organization.
    (b) In reviewing and considering an application, the Department 
shall determine the following:
    (1) The availability of funds for the proposed grant;
    (2) Whether the application is in accordance with the Department's 
instructions;
    (3) Whether the application complies with the requirements of the 
OAA and this part;
    (4) Whether the application offers the best prospect of serving 
appropriate geographic areas; and
    (5) Whether the application demonstrates the effective use of 
funds.


Sec. 641.207  Negotiation.

    (a) The Department may negotiate with an eligible organization to 
arrive at a grant agreement if the application generally meets 
requirements set forth in this part.
    (b) The subjects of negotiation may include, but are not limited 
to, the following:
    (1) Project components, including community service assignments and 
geographic locations of authorized positions;
    (2) Subproject(s), if any;
    (3) Funding level, including all budget line items; and
    (4) Performance goals.


Sec. 641.208  Rejection of grant application or project components.

    (a) The Department may question any proposed project component if 
it believes that the component will not serve the purposes of the OAA; 
if negotiation does not produce a mutually acceptable conclusion, it 
may reject this grant application.
    (b) If the Department rejects an application, as set forth in 
paragraph (a) of this section, the Department may solicit applications 
from other eligible organizations in order to arrive at a grant 
agreement.
    (c) When an application is not approved, the Department shall 
notify the applicant within a reasonable time in writing and state the 
reason(s) for rejection. [[Page 26584]] 
    (d) Rejection of a proposal or application is a final Departmental 
action which is not subject to further administrative review. Rejection 
will not affect future consideration of the applicant for other 
projects as long as the organization meets the eligibility criteria.


Sec. 641.209  Award of funds.

    When the applicant is a unit of State government or a public or 
private non-profit organization, the award of funds to a grantee shall 
be accomplished through the execution of a grant agreement prepared by 
the Department. When the applicant is a unit of the Federal Government, 
other than the Department, the award of funds shall be accomplished 
through an interagency agreement.

Subpart C--Grant Operations


Sec. 641.301  General.

    (a) This subpart establishes basic grant operation standards and 
procedures to be followed by all organizations receiving title V funds 
for the purpose of operating SCSEP grant agreements and projects.
    (b) The dual purposes of an SCSEP project are to provide useful 
part-time community service assignments for persons with low incomes 
who are 55 years old or older while promoting transition to 
unsubsidized employment. Grantees and subgrantees shall develop 
appropriate work assignments for eligible individuals which will result 
in the provision of community services as defined in sections 502(b) 
and 507(2) of the OAA, and Sec. 641.102 and will promote unsubsidized 
employment opportunities.


Sec. 641.302  Grantee responsibilities.

    The grantee shall remit to eligible individuals wages, for 
community service assignments, and provide skill enhancement 
opportunities, periodic physical examinations, personal and employment-
related counseling, assistance in transition to unsubsidized employment 
where feasible, and other benefits as approved by the Department.
    (a) grantees are responsible for:
    (1) Following and enforcing the requirements set forth in the OAA 
and this part;
    (2) Implementing and carrying out projects in accordance with the 
provisions of the grant agreement; and
    (3) Assuring that, to the extent feasible, such projects will serve 
the needs of minority, limited English-speaking, and Indian eligible 
individuals, and eligible individuals who have the greatest economic 
need, at least in proportion to their numbers in the State, and take 
into consideration their rates of poverty and unemployment based on the 
best available information.
    (b) The grantee periodically shall monitor the performance of 
grant-supported activities to assure that project goals are being 
achieved and that the requirements of the OAA and this part are being 
met.
    (c) The grantee or subgrantee shall obtain and record the personal 
information necessary for a proper determination of eligibility for 
each individual and maintain documentation supporting the eligibility 
of enrollees.
    (d) Each grantee or subgrantee shall make efforts to provide 
equitable services among substantial segments of the population 
eligible for participation in SCSEP. Such efforts shall include, but 
not be limited to: outreach efforts to broaden the composition of the 
pool of those considered for participation, to include members of both 
sexes, various race/ethnic groups and individuals with disabilities.


Sec. 641.303  Cooperative relationships.

    (a) Each grantee or subgrantee shall, to the maximum extent 
feasible, cooperate with other agencies, including agencies conducting 
programs under the JTPA, to provide services to elderly persons, to 
persons with low incomes, and with agencies providing employment and 
training services.
    (b) The cooperation described in paragraph (a) of this section 
shall include, but not be limited to:
    (1) Selection of community service assignment occupational 
categories, work assignments, and host agencies to provide a variety of 
community service opportunities for enrollees and to produce a variety 
of federally funded services which respond to the community's total 
needs and initiatives.
    (2) Establishment of cooperative relations with the State agency on 
aging designated under section 305(a)(1) of the OAA and with area 
agencies on aging designated under section 305(a)(2) of the OAA for the 
purpose of obtaining services as authorized under titles III, IV, and 
VI of the OAA to increase the likelihood of receipt of unsubsidized 
employment opportunities and supportive services that are available. 
Existing services provided under the authority of section 321(a) of the 
OAA shall be used first by grantee or subgrantee.
    (3) Establishment of cooperative relations with other employment 
and training organizations including the State and local JTPA and the 
Carl D. Perkins Act programs to insure that project enrollees can 
benefit from such cooperative activities as dual eligibility, shared 
assessments, training and referral.
    (4) Establishment of cooperative relations with State employment 
security agencies to insure that enrollees are made aware of services 
available from these agencies.
    (c) Whenever a national organization or other program sponsor 
conducts a project within a planning and service area in a State, such 
an organization or program sponsor shall conduct such a project in 
consultation with the area agency on aging of the planning and service 
area and shall submit to the State agency and the area agency on aging 
a description of such project to be conducted in the State including 
the location of the project, 30 days prior to undertaking the project, 
for review and comment to assure efficient and effective coordination 
of programs under this part.


Sec. 641.304  Recruitment and selection of enrollees.

    Grantees and subgrantees shall use methods of recruitment and 
selection (including notifying the State employment security agency 
when vacancies occur) which will assure that the maximum number of 
eligible individuals will have an opportunity to participate in the 
program. Recruitment efforts shall be designed, to the extent feasible, 
to assure equitable distribution of services to groups described in 
Sec. 641.302(e). [Section 502(b)(1)(H) of the OAA.]


Sec. 641.305  Enrollment eligibility.

    (a) General. Eligibility criteria set forth in this section apply 
to all SCSEP applicants and enrollees, including the following 
individuals:
    (1) Each individual seeking initial enrollment;
    (2) Each individual seeking reenrollment after termination from the 
SCSEP because of loss of unsubsidized employment through no fault of 
their own, including illness; and
    (3) Each enrollee seeking recertification for continued enrollment.
    (b) Eligibility criteria. To be eligible for initial enrollment, 
each individual shall meet the following criteria for age, income, and 
place of residence:
    (1) Age. Each individual shall be no less than 55 years of age. No 
person whose age is 55 years or more shall be determined ineligible 
because of age, and no upper age limit shall be imposed for initial or 
continued enrollment. [Section 502 of the OAA.]
    (2) Income. The income of the family of which the individual is a 
member [[Page 26585]] shall not exceed the low-income standards defined 
in Sec. 641.102 and issued by the Department. In addition, a disabled 
person may be treated as a ``family of one'' for income eligibility 
purposes.
    (3) Residence. Each individual, upon initial enrollment, shall 
reside in the State in which the project is authorized.
    (c) No additional eligibility requirement. Grantees and subgrantees 
shall not impose any additional condition or requirement for enrollment 
eligibility unless required by Federal law.
    (d) Dual Eligibility. Individuals eligible under title V of the OAA 
who are enrolled in a joint program established under a written 
financial or non-financial agreement to jointly operate programs with 
JTPA shall be deemed to satisfy the requirements of JTPA Title II-A.
    (e) Special responsibilities of the grantees and subgrantee(s) 
relating to eligibility.
    (1) Each grantee or subgrantee shall recertify the income of each 
enrollee under its grant or subgrant, respectively, once each project 
year, according to the schedule set forth in the grant agreement and 
shall maintain documentation to support the recertification. Enrollees 
found to be ineligible for continued enrollment because of income shall 
be given, by the grantee or subgrantee, a written notice of termination 
and shall be terminated 30 days after the notice. No enrollee shall 
participate in a community service position for more than 12 months 
without having his or her income recertified.
    (2) If, at any time, the grantee or a subgrantee determines that an 
enrollee was incorrectly declared eligible as a direct result of false 
information given by that individual, the individual shall be given a 
written notice explaining the reason or reasons for the determination 
and shall be terminated immediately.
    (3) If, at any time, the grantee or subgrantee determines that an 
enrollee was incorrectly declared eligible through no fault of the 
enrollee, the grantee or subgrantee shall give the enrollee immediate 
written notice explaining the reason or reasons for termination, and 
the enrollee shall be terminated 30 days after the notice.
    (4) When a grantee or subgrantee makes an unfavorable determination 
on continued eligibility, it shall explain in writing to the enrollee 
the reason(s) for the determination and shall provide notice of the 
right of appeal in accordance with the required procedures set forth in 
Sec. 641.324.
    (5) When a grantee or subgrantee terminates an enrollee for cause, 
it shall inform the enrollee, in writing, of the reason(s) for 
termination and of the right of appeal in accordance with the required 
procedures set forth in Sec. 641.324.
    (6) When a grantee or subgrantee makes an unfavorable determination 
of enrollment eligibility pursuant to paragraph (e) (1) or (3) of this 
section, it should assure that the individual is given a reason for 
non-enrollment and, when feasible, should refer the individual to other 
potential sources of assistance.


Sec. 641.306  Enrollment priorities.

    (a) As set forth in sections 502(b)(1)(M) and 507(1) of the OAA, 
enrollment priorities for filling all positions shall be as follows:
    (1) Eligible individuals with the greatest economic need;
    (2) Eligible individuals who are 60 years old or older; and
    (3) Eligible individuals who seek re-enrollment following 
termination of an unsubsidized job through no fault of their own or due 
to illness, provided that re-enrollment is sought within one year of 
termination.
    (b) Within all enrollment priorities, those persons with poor 
employment prospects shall be given preference.
    (c) Enrollment priorities established in this section shall apply 
to all vacant community service positions, but shall not be interpreted 
to require the termination of any eligible enrollee. The priorities do 
not apply to the experimental private sector projects authorized by 
section 502(e) of the OAA.


Sec. 641.307  [Reserved]


Sec. 641.308  Orientation.

    (a) Enrollee. The grantee or subgrantee shall provide orientation 
to eligible individuals who are enrolled as soon as practicable after a 
determination of eligibility. The orientation shall provide, as 
appropriate, information related to: project objectives; community 
service assignments; training; supportive services; responsibilities, 
rights, and duties of the enrollee; permitted and prohibited political 
activities; plans for transition to unsubsidized employment and a 
discussion of safe working conditions at the host agencies.
    (b) Host agency. The grantee or a subgrantee shall provide to those 
individuals who will supervise enrollees at the host agencies, an 
orientation similar to the one described in paragraph (a) of this 
section. This is to assure that enrollees will receive adequate 
supervision and opportunities for transitioning to the host agency 
staff or other unsubsidized employment.
    (c) Supervision. The grantee or subgrantee shall ensure that host 
agencies provide adequate supervision, adequate orientation and 
instruction regarding, among other things, job duties and safe working 
procedures.


Sec. 641.309  Assessment and reassessment of enrollees.

    (a) General. The grantee or subgrantee shall assess each enrollee 
under the grant or subgrant, respectively, to determine the most 
suitable community service assignment and to identify appropriate 
employment, training, and community service objectives for each 
individual. The assessment shall be made in partnership with the new 
enrollee and should consider the individual's preference of 
occupational category, work history, skills, interests, talents, 
physical capabilities, need for supportive services, aptitudes, 
potential for performing proposed community service assignment duties, 
and potential for transition to unsubsidized employment.
    (b) Assessment of physical capabilities. The assessment of each 
enrollee shall take into consideration his or her physical 
capabilities. Assessments of physical ability shall be consistent with 
section 504 of the Rehabilitation Act of 1973, as amended (section 
504), and the Americans with Disabilities Act of 1990 (ADA).
    (c) Assignment. The grantee or subgrantee shall seek a community 
service assignment which will permit the most effective use of each 
enrollee's skills, interests, and aptitudes.
    (d) Individual development plans. The grantee and subgrantee shall 
use the assessment or reassessment as a basis for developing or 
amending an individual development plan (IDP). The IDP shall be 
developed in partnership with the enrollee to reflect the needs of the 
enrollee as indicated by the assessment, as well as the expressed 
interests and desires of the enrollee.
    (e) Review of IDP plan. The grantee and subgrantee shall review the 
IDP at least once in a 12 month period for the following purposes: to 
evaluate the progress of each enrollee in meeting the objectives of the 
IDP; to determine each enrollee's potential for transition to 
unsubsidized employment; to determine the appropriateness of each 
enrollee's current community service assignment; and to review progress 
made toward meeting their training and employment objectives. 
[[Page 26586]] 
    (f) Alternative assignment. The sponsor may develop an alternative 
assignment for an enrollee, when feasible, should there be one of the 
following determinations:
    (1) That a different community service assignment will provide 
greater opportunity for the use of an enrollee's skills and aptitudes;
    (2) That an alternative assignment will provide work experience 
which will enhance the potential for unsubsidized employment; or
    (3) That an alternative assignment will otherwise serve the best 
interests of the enrollee.
    (g) Minimum requirements. The assessments and reassessments 
required by this section shall meet minimum requirements issued by the 
Department on assessment, and subsequent determinations are to be 
recorded in the enrollee's IDP, to become a part of each enrollee's 
permanent record.
    (h) Recent assessments. Assessments of an enrollee, prepared by 
another employment or training program (such as a program under the 
JTPA or the Carl D. Perkins Vocational and Applied Technology Act) may 
be substituted for one prepared by the grantee or subgrantee if the 
training program prepared the assessment within the last year prior to 
applying for SCSEP. [section 502(b)(1)(M) of the OAA.]


Sec. 641.310  Community service assignments.

    (a) Assignment to community service. After the completion of an 
enrollee's orientation and initial training, if any, the grantee or 
subgrantee shall refer the enrollee, as soon as possible, to a useful 
part-time community service assignment, if appropriate, according to 
the IDP.
    (1) Each enrollee shall be placed in a community service assignment 
which contributes to the general welfare of the community and provides 
services related to publicly-owned and operated facilities and 
projects, or projects sponsored by organizations other than political 
parties, exempt from taxation under the provisions of section 501(c)(3) 
of the Internal Revenue Code of 1986. Project sponsors may provide 
enrollees with opportunities to assist in the administration of the 
SCSEP.
    (2) The enrollee shall not be assigned to work involving the 
construction, operation, or maintenance of any facility used or to be 
used as a place for sectarian religious instruction or worship, or to 
work which primarily benefits private, profit-making organizations. 
[Sections 502(b)(1)(A), (C), and (D) and 507(2) of the OAA.]
    (b) Hours of community service assignments.
    (1) Each enrollee's community service assignment shall not exceed 
1,300 hours during a 12-month period specified in the grantee's 
agreement. The 1,300 hours includes paid hours of orientation, 
training, sick leave, and vacation and hours of enrollment provided by 
all grantees and subgrantees. No enrollee shall be paid for more than 
1,300 hours in any 12-month period. [Section 508(a)(2) of the OAA.]
    (2) The grantee or subgrantee shall not require an enrollee to 
participate more than 20 hours during one week; however, hours may be 
extended with the consent of the enrollee.
    (3) The grantee or subgrantee shall not offer an enrollee an 
average of fewer than 20 hours of paid participation per week. Shorter 
periods may be authorized by the grant agreement, in writing by the 
Department, or by written agreement between an enrollee and a grantee 
or subgrantee. [Section 508(a)(2) of the OAA.]
    (4) The grantee or subgrantee shall, to the extent possible, ensure 
that the enrollee works during normal business hours, if the enrollee 
so desires.
    (c) Location. The enrollee shall be employed at work sites in or 
near the community where the enrollee resides. [Section 502(b)(1)(B) of 
the OAA.]
    (d) Working conditions for enrollees. Enrollees shall not be 
permitted to work in a building or surroundings or under conditions 
which are unsanitary, hazardous, or dangerous to the enrollees' health 
or safety. The grantee or subgrantee shall make periodic visits to the 
enrollees' work site(s) to assure that the working conditions and 
treatment of the enrollee are consistent with the OAA and this part. 
[Section 502(b)(1)(J) of the OAA.]


Sec. 641.311  Enrollee wages and fringe benefits.

    (a) Wages. Upon engaging in part-time community service 
assignments, including orientation and training in preparation for 
community service assignments, each enrollee shall receive wages at a 
rate no less than the highest applicable rate:
    (1) The minimum wage which would be applicable to the enrollee 
under the Fair Labor Standards Act of 1938;
    (2) The State or local minimum wage for the most nearly comparable 
covered employment; or
    (3) The prevailing rates of pay for persons employed in similar 
public occupations by the same employer.
    (b) Fringe benefits.
    (1) The grantee or subgrantee shall ensure that enrollees receive 
all fringe benefits required by law.
    (2) Within a project or subproject, fringe benefits shall be 
provided uniformly to all enrollees, unless the Department agrees to 
waive this provision due to a determination that such a waiver is in 
the best interests of applicants, enrollees, and the project 
administration.
    (3) Physical examination.
    (i) Each enrollee shall be offered the opportunity to take a 
physical examination annually. A physical is a fringe benefit, and is 
not an eligibility criterion. The examining physician shall provide, to 
the enrollee only, a written report of the results of the examination. 
The enrollee may, at his or her option, provide the grantee or 
subgrantee a copy of the report. The results of the physical 
examination shall not be taken into consideration in determining 
placement into a community service assignment.
    (ii) An enrollee may refuse the physical examination offered. In 
such a case, the grantee or subgrantee should document this refusal, 
through a signed waiver or other means, within 60 work days after 
commencement of the community service assignment. Thereafter, grantees 
or subgrantees shall document an enrollee's refusal of the annual 
physical examination.
    (c) Retirement. Expenditures of grant funds for contributions into 
a retirement system or plan are prohibited, unless the grantee has 
documentation on hand showing that:
    (1) The costs are allowable under the appropriate cost principles 
indicated at Sec. 641.403(b); and
    (2) Such contributions bear a reasonable relationship to the cost 
of providing such benefits to enrollees because:
    (i) the benefits vest at the time contributions are made on behalf 
of the enrollees; or
    (ii) the charges to SCSEP funds are for contributions on behalf of 
enrollees to a ``defined benefit'' type of plan which do not exceed the 
amounts reasonably necessary to provide the specified benefit to 
enrollees, as determined under a separate actuarial determination.
    (d) Workers' compensation. Where an enrollee is not covered by the 
State workers' compensation law, the grantee or subgrantee shall 
provide the enrollee with workers' compensation benefits equal to that 
provided by law for covered employment. [Section 504(b) of the OAA.]
    (e) Unemployment compensation. The grantee is authorized to pay the 
cost of unemployment insurance for covered [[Page 26587]] enrollees, 
where required by law. [Section 502(b)(1)(O) of the OAA.]


Sec. 641.312  Enrollee supportive services.

    (a) The grantee or subgrantee shall provide supportive services 
designed to assist the enrollee in participating successfully in 
community service assignments and, where appropriate, to prepare and 
assist the enrollee in obtaining unsubsidized employment. To the extent 
feasible, the grantee or subgrantee shall utilize supportive services 
available from other titles of the OAA, particularly those administered 
by area agencies on aging and other funding sources.
    (b) Supportive services may include, but need not be limited to, 
all or some of the following:
    (1) Counseling or instruction designed to assist the enrollee to 
participate successfully in community service assignments or to obtain 
unsubsidized employment.
    (2) Counseling designed to assist the enrollee personally in areas 
such as health, nutrition, social security benefits, Medicare benefits, 
and retirement laws.
    (3) Incidentals, including, but not limited to: work shoes, badges, 
uniforms, safety glasses, eyeglasses, and hand tools, may be provided 
if necessary for successful participation in community service 
assignments and if not available from other sources.
    (4) Periodic meetings on topics of general interest, including 
matters related to health, job seeking skills, safety, and consumer 
affairs.
    (5) Enrollee transportation.
    (i) Enrollee transportation may be paid if transportation from 
other sources at no cost to the project is unavailable and such 
unavailability is documented. When authorized in the grant agreement, 
transportation may be provided for enrollees from home to work, to 
training or to supportive services. [Section 502(b)(1)(L) of the OAA.]
    (ii) Grant funds may not be expended to support the transportation 
costs of host agencies or programs funded by other than title V of the 
OAA, except where provided by Federal law.


Sec. 641.313  Training.

    (a) The grantee or subgrantee shall provide or arrange for training 
specific to an enrollee's community service assignment. Training may be 
provided through lectures, seminars, classroom instruction, individual 
instruction or other arrangements including, but not limited to, 
arrangements with employment and training programs. The grantee or the 
subgrantee is encouraged to obtain such services through locally 
available resources, including employment and training programs, as 
defined in Sec. 641.103, and through host agencies, at no cost or 
reduced cost to the project. [Section 502(b)(1)(I) of the OAA.]
    (b) Training shall consist of up to 500 hours per grant year and 
shall be consistent with the enrollee's IDP. Such training may cover 
all aspects of training; e.g., skill, job search, etc. Enrollees shall 
not be enrolled solely for the purpose of receiving job search and job 
referral services. Waivers for additional hours of training will be 
considered on an exception basis.
    (c) In addition to training in preparation for community service 
assignments, as described in this section, a grantee or subgrantee is 
encouraged to arrange for, or directly provide, skills-training 
opportunities beyond the SCSEP community service training activities 
which will permit the enrollee to acquire or improve skills, including 
literacy training, applicable in community service assignment or for 
unsubsidized employment.
    (d) A grantee or subgrantee, to the extent feasible, shall arrange 
skill-training for the enrollee which is realistic and consistent with 
his or her IDP. A grantee or subgrantee shall place major emphasis on 
the training available through on-the-job experience at SCSEP work 
sites, thereby retaining the community service focus of the SCSEP.
    (e) An enrollee engaging in skills-related training, as described 
in paragraphs (c) and (d) of this section, may be reimbursed for the 
documented travel costs and room and board necessary to engage in such 
training. [Section 502(b)(1)(I) of the OAA.]
    (f) Whenever possible a grantee or subgrantee shall seek to obtain 
all training for enrollees reduced or no cost to title V from such 
sources as the JTPA and the Carl D. Perkins Vocational and Applied 
Technology Education Act. Where training is not available from other 
sources, title V funds may be used for training.
    (g) Nothing in this section shall be interpreted to prevent or 
limit an enrollee from engaging in self-development training available 
from sources other than title V of the OAA during hours other than 
hours of community service assignment.
    (h) Joint programming, including co-enrollment when appropriate, 
between title V programs and programs authorized by the Job Training 
Partnership Act, the Community Services Block Grant Act, or the Carl D. 
Perkins Act is strongly encouraged.


Sec. 641.314  Placement into unsubsidized employment.

    (a) In order to ensure that the maximum number of eligible 
individuals have an opportunity to participate in community service 
assignments, the grantee or subgrantee shall employ reasonable means to 
place each enrollee into unsubsidized employment.
    (b) To encourage the placement of the enrollee into an unsubsidized 
job, the Department has established a goal of placing into unsubsidized 
employment the number of enrollees which equals at least 20 percent of 
the project's annual authorized positions. Whenever this goal is not 
achieved, the grantee shall develop and submit a plan of action for 
addressing this shortfall.
    (c) The grantee or subgrantee may contact private and public 
employers directly or through the State employment security agencies to 
develop or identify suitable unsubsidized employment opportunities; and 
should encourage host agencies to employ enrollees in their regular 
work forces.
    (d) The grantee or subgrantee shall follow-up on each enrollee who 
is placed into unsubsidized employment and shall document such follow-
up at least once within 3 months of unsubsidized placement.


Sec. 641.315  Maximum duration of enrollment.

    A maximum duration of enrollment may be established by the grantee 
in the grant agreement, when authorized by the Department. Time limits 
on enrollment shall be reasonable and IDPs shall provide for transition 
to unsubsidized employment or other assistance before the maximum 
enrollment duration has expired.


Sec. 641.316  Individual development plan-related terminations.
    When an enrollee refuses to accept a reasonable number of referrals 
or job offers to unsubsidized employment consistent with his or her IDP 
and there are no extenuating circumstances, the enrollee may be 
terminated from the SCSEP. Such a termination shall be consistent with 
administrative guidelines issued by the Department and the termination 
shall be subject to the applicable appeal rights and procedures 
described in Sec. 641.324.


Sec. 641.317  Status of enrollees.

    Enrollees who are employed in any project funded under the OAA are 
not deemed to be Federal employees as a result of such employment. 
[Section 504(a) of the OAA.] [[Page 26588]] 


Sec. 641.318  Over-enrollment.

    Should attrition or funding adjustments prevent a portion of 
project funds from being fully utilized, the grantee may use those 
funds during the period of the agreement to over-enroll additional 
eligible individuals. The number over-enrolled may not exceed 20 
percent of the total number of authorized positions established under 
the grant agreement without the written approval of the Department. 
Payments to or on behalf of enrollees in such positions shall not 
exceed the amount of the unused funds available. Each individual 
enrolled in such a position shall be informed in writing that the 
assignment is temporary in nature and may be terminated. The grantee 
shall first seek to maintain full enrollment in authorized positions 
and shall seek to schedule all enrollments and terminations to avoid 
excessive terminations at the end of the grant period.


Sec. 6541.319  [Reserved]


Sec. 641.320  Political patronage.

    (a) No grantee may select, reject, promote, or terminate an 
individual based on that individual's political affiliations or 
beliefs. The selection or advancement of enrollees as a reward for 
political services, or as a form of political patronage, is prohibited.
    (b) There shall be no selection of subgrantees or host agencies 
based on political affiliation.


Sec. 641.321  Political activities.

    (a) General. No project under title V of the OAA or this part may 
involve political activities.
    (1) No enrollee or staff person may be permitted to engage in 
partisan or nonpartisan political activities during hours for which 
they are paid with SCSEP funds.
    (2) No enrollee or staff person, at any time, may be permitted to 
engage in partisan political activities in which such enrollee or staff 
person represents himself or herself as a spokesperson of the SCSEP 
program.
    (3) No enrollee may be employed or out-stationed in the office of a 
Member of Congress, a State or local legislator, or on any staff of a 
legislative committee.
    (4) No enrollee may be employed or out-stationed in the immediate 
office of any elected chief executive officer(s) of a State or unit of 
general government, except that:
    (i) Units of local government may serve as host-agencies for 
enrollees in such positions, provided that such assignments are 
nonpolitical; and
    (ii) Where assignments are technically in such offices, such 
assignments actually are program activities not in any way involved in 
political functions.
    (5) No enrollee may be assigned to perform political activities in 
the offices of other elected officials. However, placement of enrollees 
in such nonpolitical assignments within the offices of such elected 
officials is permissible, provided that grantees develop safeguards to 
ensure that enrollees placed in these assignments are not involved in 
political activities. These safeguards shall be described in the grant 
agreement and shall be subject to review and monitoring by the grantee 
and the Department.
    (b) Hatch Act.
    (1) State and local employees governed by 5 U.S.C. chapter 15 shall 
comply with the Hatch Act provisions as interpreted and applied by the 
Office of the Special Counsel.
    (2) Each project subject to 5 U.S.C. chapter 15 shall display a 
notice and shall make available to each person associated with such 
project a written explanation, clarifying the law with respect to 
allowable and unallowable political activities under 5 U.S.C. chapter 
15 which are applicable to the project and each category of individuals 
associated with such project. This notice, which shall have the 
approval of the Department, shall contain the telephone number and 
address of the DOL Inspector General. [Section 502(b)(1)(P) of the 
OAA.] Enforcement of the Hatch Act shall be as provided at 5 U.S.C. 
chapter 15.


Sec. 641.322  Unionization.

    No funds provided under title V of the OAA or this part may be used 
in any way to assist, promote, or deter union organizing.


Sec. 641.323  Nepotism.

    (a) No grantee or subgrantee may hire, and no host agency may be a 
work site for a person who works in an administrative capacity, staff 
position, or community service position funded under title V of the OAA 
or this part if a member of that person's immediate family is engaged 
in a decision-making capacity (whether compensated or not) for that 
project, subproject, grantee, subgrantee or host agency. This provision 
may be waived by the Department at work sites on Native American 
reservations and rural areas provided that adequate justification can 
be documented, such as that no other persons are eligible for 
participation.
    (b) To the extent that an applicable State or local legal 
requirement regarding nepotism is more restrictive than this provision, 
that requirement shall be followed.
    (c) For purposes of this section:
    (1) Immediate family means wife, husband, son, daughter, mother, 
father, brother, sister, son-in-law, daughter-in-law, mother-in-law, 
father-in-law, brother-in-law, sister-in-law, aunt, uncle, niece, 
nephew, stepparent, stepchild, grandparent, and grandchild.
    (2) Engaged in an administrative capacity includes those persons 
who, in the administration of projects, or host agencies, have 
responsibility for, or authority over those with responsibility for, 
the selection of enrollees from among eligible applicants.


Sec. 641.324  Enrollee and applicant complaint resolution.

    (a) Each grantee shall establish and describe in the grant 
agreement procedures for resolving complaints, other than those 
described by paragraph (c) of this section, arising between the grantee 
and an enrollee.
    (b) Allegations of violations of federal law, other than those 
described in paragraph (c) of this section, which cannot be resolved 
within 60 days as a result of the grantee's procedures, may be filed 
with the Chief, Division of Older Worker Programs, Employment and 
Training Administration, U.S. Department of Labor, Washington, DC 
20210.
    (c) Grantees that do not receive any funds under the JTPA shall 
process complaints of discrimination in accordance with 29 CFR parts 31 
and 32. Grantees that receive any funds under JTPA shall process 
complaints of discrimination in accordance with 29 CFR part 34.
    (d) Except for complaints described in paragraphs (b) and (c) of 
this section, the Department shall limit its review to determining 
whether the grantee's appeal procedures were followed.


Sec. 641.325  Maintenance of effort.

    (a) Employment of an enrollee funded under title V of the OAA or 
this part shall be only in addition to budgeted employment which would 
otherwise be funded by the grantee, subgrantee and the host agency(ies) 
without assistance under the OAA. [Section 502(b)(1)(F) of the OAA.]
    (b) Each project funded under title V of the OAA or this part:
    (1) Should result in an increase in employment opportunities in 
addition to those which would otherwise be available;
    (2) Shall not result in the displacement of currently employed 
workers, including partial displacement such as a reduction in hours of 
non- [[Page 26589]] overtime work, wages, or employment benefits;
    (3) Shall not impair existing contracts for service or result in 
the substitution of Federal funds for other funds in connection with 
work that would otherwise be performed;
    (4) Shall not substitute project jobs for existing federally-
assisted jobs; and
    (5) Shall not employ or continue to employ any enrollee to perform 
work which is the same or substantially the same as that performed by 
any other person who is on layoff. [Section 502(b)(1)(G) of the OAA.]


Sec. 641.326  Experimental private sector training projects.

    (a) The Department may authorize a grantee to develop an 
experimental job training project(s) designed to provide second career 
training and the placement of eligible individuals in employment 
opportunities with private business concerns. [Section 502(e) of the 
OAA.]
    (b) Experimental project agreements for training may be with 
States, public agencies, non-profit private organizations, and private 
business concerns.
    (c) The geographic location of these projects shall be determined 
by the Department to insure an equitable distribution of such projects.
    (d) To the extent feasible, experimental projects shall emphasize 
second-career training, and innovative work modes, including those with 
reduced physical exertion, and placement into growth industries and 
jobs reflecting new technologies.
    (e) The Department shall establish by administrative guidelines the 
application schedule, content, format, allocation levels and reporting 
requirements for experimental projects.
    (f) Current title V eligibility standards shall be used for 
experimental projects unless the Department permits, in writing, the 
use of another approved income index.
    (g) Projects funded under section 502(e) of the OAA shall seek to 
be coordinated with projects carried out under title II-A of the JTPA 
to the extent feasible.
    (h) National grantees shall distribute funds for experimental 
projects in accordance with the State allocation in their title V 
grant.
    (i) A grantee may exclude a project, permitted under section 502(e) 
of the OAA, from meeting the non-federal share requirement set forth in 
Sec. 641.407; however, this exclusion does not relieve the grantee from 
the matching requirement, under Sec. 641.407, which applies to the 
entire grant.

Subpart D--Administrative Standards and Procedures for Grantees and 
Limitations on Federal Funds


Sec. 641.401  General.

    This subpart establishes limitations on title V funds to be used 
for community service activities and describes, or incorporates by 
reference, requirements for the administration of grants by the SCSEP 
grantee.


Sec. 641.402  Administrative requirements.

    (a) Except as otherwise provided in this part, title V funds shall 
be administered in accordance with, and subject to, the Department's 
regulations at 29 CFR parts 31, 32, 34, 93, 96, and 98. In addition, 
projects and activities administered by State, local or Indian tribal 
governments are also subject to the Department's administrative 
requirements regulations at 29 CFR part 97; projects and activities 
administered by institutions of higher education, hospitals, or other 
non-profit organizations are subject to the Department's administrative 
requirements regulations at 29 CFR part 95. Grantees of title V funds 
shall be subject to any revisions of any implementing regulations cited 
in this paragraph (a) on the effective date of such revisions.
    (b) The administration of interagency agreements set forth in 
subpart E of this part is not subject to paragraph (a) of this section.


Sec. 641.403  Allowable costs.

    (a) General. The allowability of costs shall be determined in 
accordance with the cost principles indicated in paragraph (b) of this 
section, except as otherwise provided in this part.
    (b) Applicable Cost Principles.
    (1) The cost principles set forth in paragraphs (b)(1) through (4) 
of this section apply to the organization incurring the costs:
    (i) OMB Circular A-87--State, local or Indian tribal government;
    (ii) OMB Circular A-122--Private, non-profit organization other 
than:
    (A) Institutions of higher education;
    (B) Hospitals; or
    (C) Other organizations named in OMB Circular A-122 (see sections 
4.a. (Definitions) and 5 (Exclusions) of OMB Circular A-122);
    (iii) OMB Circular A-21--Educational institution; or
    (iv) 48 CFR part 31, subpart 31.2--Commercial organization (for-
profit organization, other than a hospital or other organizations named 
in OMB Circular A-122).
    (2) The OMB Circulars are available by writing to the Office of 
Management and Budget, Office of Administration, Publications Unit, 
Room G-236, New Executive Office Building, Washington, DC 20503, or by 
calling 202-395-7332.
    (c) Lobbying costs. In addition to the prohibition contained in 29 
CFR part 93 and in accordance with limitations on the use of 
appropriated funds in Department of Labor Appropriation Acts, title V 
funds shall not be used to pay any salaries or expenses related to any 
activity designed to influence legislation or appropriations pending 
before the Congress of the United States.
    (d) Building repairs and acquisition costs. No federal grant funds 
provided to a grantee or subgrantee under title V of the OAA or this 
part may be expended directly or indirectly for the purchase, erection, 
or repair of any building except for the labor involved in:
    (1) Minor remodeling of a public building necessary to make it 
suitable for use by project administrators;
    (2) Minor repair and rehabilitation of publicly used facilities for 
the general benefit of the community; and
    (3) Minor repair and rehabilitation by enrollees of housing 
occupied by persons with low incomes who are declared eligible for such 
services by authorized local agencies.
    (4) Accessibility and Reasonable Accommodation. Funds may be used 
to meet a grantee or subgrantee's obligations to provide physical and 
programmatic accessibility and reasonable accommodation as required by 
section 504 of the Rehabilitation Act of 1973, as amended, and the 
Americans with Disabilities Act of 1990.
    (e) Allowable fringe benefit costs. The cost of the following 
fringe benefits are allowable: initial and annual physical assessments, 
annual leave, sick leave, holidays, health insurance, social security, 
worker's compensation and any other fringe benefits approved in the 
grant agreement and permitted by the appropriate Federal cost 
principles found in OMB Circulars A-87 and A-122, except as limited for 
retirement costs by Sec. 641.311(c).


Sec. 641.404  Classification of costs.

    All costs must be charged to one of the following three cost 
categories:
    (a) Administration. The cost category of Administration shall 
include, but need not be limited to, the direct and indirect costs of 
providing:
    (1) Administration, management, and direction of a program or 
project;
    (2) Reports on evaluation, management, community benefits, and 
other aspects of project activity;
    (3) Assistance of an advisory council, if any; [[Page 26590]] 
    (4) Accounting and management information systems;
    (5) Training and technical assistance for grantee or subgrantee 
staff;
    (6) Bonding; and
    (7) Audits.
    (b) Enrollee wages and fringe benefits. The cost category of 
Enrollee Wages and Fringe Benefits shall include wages paid to 
enrollees for hours of community service assignments, as described in 
Sec. 641.311, including hours of training related to a community 
service assignment, and the costs of fringe benefits provided in 
accordance with Sec. 641.311.
    (c) Other enrollee costs. The cost category of Other enrollee costs 
shall include all costs of functions, services, and benefits not 
categorized as administration or enrollee wages and fringe benefits. 
Other enrollee costs shall include, but shall not be limited to, the 
direct and indirect costs of providing:
    (1) Recruitment and selection of eligible enrollees as provided in 
Secs. 641.304 and 641.305;
    (2) Orientation of enrollees and host agencies as provided in 
Sec. 641.308;
    (3) Assessment of enrollees for participation in community service 
assignments and evaluation of enrollees for continued participation or 
transition to unsubsidized employment as provided in Sec. 641.309;
    (4) Development of appropriate community service assignments as 
provided in Sec. 641.310;
    (5) Supportive services for enrollees, including transportation, as 
provided in Sec. 641.312;
    (6) Training for enrollees, including tuition; and
    (7) Development of unsubsidized employment opportunities for 
enrollees as provided in Sec. 641.314.
    (d) Cost reductions. Grantees may lower administration costs or 
other enrollee costs by assigning enrollees to activities which 
normally would be charged to either of these cost categories. In such 
instances, the costs of enrollees' wages and fringe benefits shall be 
charged to the cost category of enrollee wages and fringe benefits. 
[Section 502(b)(1)(A) of the OAA.]


Sec. 641.405  Limitations on federal funds.

    (a) The limitations on federal funds set forth in this section 
shall apply to SCSEP funds allotted to grantees for community service 
activities. Cost categories, limitations, and periods during which 
different limitations shall apply are set forth in paragraph (b) of 
this section.
    (b) The cost categories and the limitations which apply to them 
shall be:
    (1) Administration. The amount of federal funds expended for the 
cost of administration during the program year shall be no more than 
13.5 percent of the grant. The Department may increase the amount 
available for the cost of administration to no more than 15 percent of 
the project in accordance with section 502(c)(3) of the OAA.
    (2) Enrollee wages and fringe benefits. The amount of federal funds 
budgeted for enrollee wages and fringe benefits shall be no less than 
75 percent of the grant.


Sec. 641.406  Administrative cost waiver.

    (a) Based upon information submitted by a public or private 
nonprofit agency or organization with which the Department has or 
proposes to have an agreement, as set forth under section 502(b) of the 
OAA, the Department may waive Sec. 641.405(b)(1) and increase the 
amount available for paying the costs of administration to an amount 
not to exceed 15 percent of the proposed federal costs of the grant. 
Each waiver shall be in writing. The Department shall administer this 
section in accordance with section 502(c)(3) (A) and (B) of the OAA.
    (b) The waiver may be provided to grantees that demonstrate and 
document reasonable and necessary:
    (1) Major administrative cost increases;
    (2) Operational requirements imposed by the Department;
    (3) Increased costs associated with unsubsidized placement;
    (4) Increased costs of providing specialized services to minority 
groups; and
    (5) The minimum amount necessary to administer the grant relative 
to the available funds.


Sec. 641.407  Non-federal share of project costs.

    The non-federal share of costs may be in cash or in-kind, or a 
combination of the two, and shall be calculated in accordance with 29 
CFR 97.24 or 29 CFR 95.23, as appropriate. The Department shall pay not 
more than 90 percent of the cost of any project which is the subject of 
an agreement entered into under the OAA, except that the Department is 
authorized to pay all of the costs of any such project which is:
    (a) An emergency or disaster project;
    (b) A project located in an economically depressed area as 
determined by the Secretary of Labor in consultation with the Secretary 
of Commerce and the Director of the Office of Community Services of the 
Department of Health and Human Services;
    (c) A project which is exempted by law; or
    (d) A project serving an Indian reservation that can demonstrate it 
cannot provide adequate non-federal resources. [Sections 502(c) and 
502(e) of the OAA.]


Sec. 641.408  Budget changes.
    As an exception to 29 CFR 97.30(c)(1), Budget changes, 29 CFR 
95.25, Revision of budget and program plans, the movement of Enrollee 
wages and fringe benefits to any other budget category shall not be 
permitted without prior written approval of the awarding agency. The 
Department shall not approve any budget change which would result in 
non-compliance with Sec. 641.405(b)(2).


Sec. 641.409  Grantee fiscal and performance reporting requirements.

    (a) In accordance with 29 CFR 97.40 or 29 CFR 95.51, as 
appropriate, each grantee shall submit a Senior Community Service 
Employment Program Quarterly Progress Report (QPR). This report shall 
be prepared to coincide with the ending dates for Federal fiscal year 
quarters and shall be submitted to the Department no later than 30 days 
after the end of the quarterly reporting period unless a waiver is 
provided. If the grant period ends on a date other than the last day of 
a federal fiscal year quarter, the last quarterly report covering the 
entire grant period shall be submitted no later than 30 days after the 
ending date unless a waiver is provided. The Department shall provide 
instructions for the preparation of this report.
    (b) In accordance with 29 CFR 97.41 or 29 CFR 95.52, as 
appropriate, the following financial reporting requirements apply to 
title V grants:
    (1) An SF-269, Financial Status Report (FSR), shall be submitted to 
the Department within 30 days after the ending of each quarter of the 
program year unless a waiver is provided. A final FSR shall be 
submitted within 90 days after the end of the grant unless a waiver is 
provided.
    (2) All FSR's shall be prepared on an accrual basis.
    (c) In accordance with Departmental instructions, an equitable 
distribution report of SCSEP positions by all grantees in each State 
shall be submitted annually by the State agency receiving title V funds 
or another project sponsor designated by the Department. (Approved 
under the Office of Management and Budget Control No. 1205-0040) 
[[Page 26591]] 


Sec. 641.410  Subgrant agreements.

    (a) The grantee is responsible for the performance of all 
activities implemented under subgrant agreements and for compliance by 
the subgrantee with the OAA and this part.
    (b) No subgrant or other subagreement may provide for any 
expenditure of funds beyond the ending date of the grant agreement.
    (c) For purposes of this part, procurement, as described in 29 CFR 
part 97 and 29 CFR 95.40 through 95.48, does not include the award or 
administration of subgrant agreements.


Sec. 641.411  Program income accountability.

    Any of the methods described at 29 CFR 97.25 or 29 CFR 95.24, as 
appropriate, may be used to account for program income.


Sec. 641.412  Equipment.

    Equipment purchased by a State grantee with title V funds prior to 
July 1, 1989, shall be subject to 29 CFR 97.32.


Sec. 641.413  Audits.

    Each grantee is responsible for complying with the Single Audit Act 
of 1984 (31 U.S.C. 7501 et seq.) and 29 CFR part 96, the Department of 
Labor regulation which implements Office of Management and Budget 
Circular A-128, ``Audits of State and Local Governments''; or OMB 
Circular 133, ``Audits of Institutions of Higher Education and Other 
Nonprofit Institutions'', as appropriate.


Sec. 641.414  Grant closeout procedures.

    Grantees shall follow the grant closeout procedures at 29 CFR 97.50 
or 29 CFR 95.71, as appropriate. As necessary, the Department shall 
issue supplementary closeout instructions for all title V grantees.


Sec. 641.415  Department of Labor appeals procedures for grantees.

    (a) This section sets forth the procedures by which the grantee may 
appeal a SCSEP final determination by the Department relating to costs, 
payments, notices of suspension, and notices of termination other than 
those resulting from an audit. Appeals of suspensions and terminations 
for discrimination shall be processed under 29 CFR part 31, 32, or 34, 
as appropriate.
    (b) Appeals from a final disallowance of cost as a result of an 
audit shall be made pursuant to 29 CFR part 96, subpart 96.6.
    (c) Upon a grantee's receipt of the Department's final 
determination relating to costs (except final disallowance of cost as a 
result of an audit), payments, suspension or termination, the grantee 
may appeal the final determination to the Department's Office of 
Administrative Law Judges, as follows:
    (1) Within 21 days of receipt of the Department's final 
determination, the grantee may transmit by certified mail, return 
receipt requested, a request for a hearing to the Chief Administrative 
Law Judge, United States Department of Labor, 800 K Street, NW., room 
400 N, Washington, DC 20001 with a copy to the Department official who 
signed the final determination. The Chief Administrative Law Judge 
shall designate an administrative law judge to hear the appeal.
    (2) The request for hearing shall be accompanied by a copy of the 
final determination, if issued, and shall state specifically those 
issues of the determination upon which review is requested. Those 
provisions of the determination not specified for review, or the entire 
determination when no hearing has been requested, shall be considered 
resolved and not subject to further review.
    (3) The Rules of Practice and Procedures for Administrative 
Hearings Before the Office of Administrative Law Judges, set forth at 
29 CFR part 18, shall govern the conduct of hearings under this 
section, except that:
    (i) The appeal shall not be considered a complaint; and
    (ii) Technical rules of evidence, such as the Federal Rules of 
Evidence and subpart B of 29 CFR part 18, shall not apply to any 
hearing conducted pursuant to this section. However, rules designed to 
assure production of the most credible evidence available and to 
subject testimony to test by cross-examination shall be applied where 
reasonably necessary by the administrative law judge conducting the 
hearing. The certified copy of the administrative file transmitted to 
the administrative law judge by the official issuing the final 
determination shall be part of the evidentiary record of the case and 
need not be moved into evidence.
    (4) The administrative law judge should render a written decision 
no later than 90 days after the closing of the record.
    (5) The decision of the administrative law judge shall constitute 
final action by the Secretary of Labor unless, within 21 days after 
receipt of the decision of the administrative law judge, a party 
dissatisfied with the decision, or any part thereof, has filed 
exceptions with the Secretary of Labor specifically identifying the 
procedures, fact, law, or policy to which exception is taken. Any 
exception not specifically urged shall be deemed to have been waived. 
Thereafter, the decision of the administrative law judge shall become 
the decision of the Secretary unless the Secretary of Labor, within 30 
days of such filing, has notified the parties that the case has been 
accepted for review.
    (6) Any case accepted for review by the Secretary of Labor shall be 
decided within 180 days of such acceptance. If not so decided, the 
decision of the administrative law judge shall become the final 
decision of the Secretary of Labor.
Subpart E--Interagency Agreements


Sec. 641.501  Administration.

    (a) Federal establishments other than the Department of Labor which 
receive and use funds under title V of the OAA or this part shall 
submit to DOL project fiscal and progress reports as described in 
Sec. 641.409.
    (b) Non-DOL federal establishments which receive and use funds 
under title V shall maintain the standard records on individual 
enrollees and enrollee activities, in accordance with this part.
    (c) The Department may provide title V funds to another federal 
agency by a non-expenditure transfer authorization or by payments on an 
advance or reimbursement basis.
    (d) In aspects of project administration other than those described 
in paragraphs (a) and (b) of this section, federal establishments which 
receive and use funds under title V of the OAA may use their normal 
administrative procedures.

Subpart F--Assessment and Evaluation


Sec. 641.601  General.

    The Department shall assess each grantee and subgrantee to 
determine whether it is carrying out the purposes and provisions of 
title V of the OAA and this part in accordance with the OAA, this part 
and the grant or other agreements. The Department also shall evaluate 
the overall program conducted under title V of the OAA or this part to 
aid in the administration of the SCSEP. The Department and individuals 
designated by the Department may make site visits and conduct such 
other monitoring activities as determined by SCSEP needs.


Sec. 641.602  Limitation.

    In arranging for the assessment of a grantee, or the evaluation of 
a subgrantee, or the evaluation of the overall program under title V of 
the OAA or this part, the Department shall not use any individual, 
institution, or [[Page 26592]] organization associated with any project 
under title V of the OAA.

    Signed at Washington, DC, this 5th day of May, 1995.
Robert B. Reich,
Secretary of Labor.
[FR Doc. 95-11949 Filed 5-16-95; 8:45 am]
BILLING CODE 4510-30-P