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Employees' Benefits
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2011-04-01
2011-04-01
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INDIAN AND NATIVE AMERICAN EMPLOYMENT AND TRAINING PROGRAMS
632

PART 632
Employees' Benefits
EMPLOYMENT AND TRAINING ADMINISTRATION, DEPARTMENT OF LABOR
Pt. 632

PART 632—INDIAN AND NATIVE AMERICAN EMPLOYMENT AND TRAINING PROGRAMS

Subpart A—Introduction
Sec.
632.1
[Reserved]
632.2
Scope and purpose.
632.3
Format for these regulations.
632.4
Definitions.

Subpart B—Designation Procedures for the Native American Grantees
632.10
Eligibility requirements for designation as a Native American grantee.
632.11
Designation of Native American grantees.
632.12
Alternative arrangements for the provision of services, nondesignation.
632.13
Review of denial of designation as a Native American grantee, or rejection of a Comprehensive Annual Plan.

Subpart C—Program Planning, Application and Modification Procedures
632.17
Planning process.
632.18
Regional and national planning meetings.
632.19
Grant application content.
632.20
Submission of grant application.
632.21
Application disapproval.
632.22
Modification of a Comprehensive Annual Plan (CAP) and/or Master Plan.
632.23
Termination and corrective action of a CAP and/or Master Plan.

Subpart D—Administrative Standards and Procedures
632.31
General.
632.32
Financial management systems.
632.33
Audits.
632.34
Program income.
632.35
Native American grantee contracts and subgrants.
632.36
Procurement standards.
632.37
Allowable costs.
632.38
Classification of costs.
632.39
Administrative cost plan.
632.40
Administrative staff and personnel standards.
632.41
Reporting requirements.
632.42
Grant closeout procedures.
632.43
Reallocation of funds.
632.44
Sanctions for violation of the Act.

Subpart E—Program Design and Management
632.70
Waiver of regulations under parts 632 and 636.
632.75
General responsibilities of Native American grantees.
632.76
Program management systems.
632.77
Participant eligibility determination.
632.78
Training activities.
632.79
Employment activities.
632.80
Other activities.
632.81
Payments to participants.
632.82
Benefits and working conditions for participants.
632.83
FICA.
632.84
Non-Federal status of participants.
632.85
Participant limitations.
632.86
Nondiscrimination and nonsectarian activities.
632.87
Equitable provision of services to the eligible population and significant segments.
632.88
General responsibilities of the Department.
632.89
Performance standards.

Subpart F—Prevention of Fraud and Program Abuse
632.115
General.
632.116
Conflict of interest.
632.117
Kickbacks.
632.118
Nepotism.
632.119
Political patronage.
632.120
Political activities.
632.121
Lobbying activities.
632.122
Unionization and antiunionization activities; work stoppages.
632.123
Maintenance of effort.
632.124
Theft or embezzlement from employment and training funds; improper inducement; obstruction of investigations and other criminal provisions.
632.125
Responsibilities of Native American grantees, subgrantees and contractors for preventing fraud and program abuse and for general program management.
Subpart G [Reserved]

Subpart H—Job Training Partnership Act Programs Under Title IV, Section 401
632.170
Eligibility for funds.
632.171
Allocation of funds.
632.172
Eligibility for participation in title IV, section 401.
632.173
Allowable program activities.
632.174
Administrative costs.

Subpart I—Summer Youth Employment and Training Programs
632.250
General.
632.251
Eligibility for funds.
632.252
Allocation of funds.
632.253
Special operating provisions.
632.254
Program startup.
632.255
Program planning.
632.256
Submission of applications.
632.257
Eligibility for participation.
632.258
Allowable activities.
632.259
Vocational exploration program.
632.260
Worksite standards.
632.261
Reporting requirements.
632.262
Termination date for the summer program.
632.263
Administrative costs.

Authority:
29 U.S.C. 1579(a).

Source:
48 FR 48754, Oct. 20, 1983, unless otherwise noted.

Subpart A—Introduction
§ 632.1
[Reserved]
§ 632.2
Scope and purpose.
It is the purpose of Native American programs to provide job training and employment activities consistent with the intent of title IV, part A, section 401. Such programs shall be administered in such a manner as to maximize the Federal commitment to support growth and development as determined by representatives of the communities and groups served by this section including furtherance of the policy of Indian Self-Determination.
§ 632.3
Format for these regulations.
Regulations promulgated by the Department of Labor to implement the provisions of title IV, section 401 and Indian programs under title II-B of the Act are set forth in 20 CFR part 632. This part in conjunction with part 636 contains all the regulations under the Act applicable to Indian and Native American programs.
§ 632.4
Definitions.
Act—means the Job Training Partnership Act (29 U.S.C. section 1501 et seq.).
Capital improvement—means any modification, addition, restoration or other improvement:
(a) Which increases the usefulness, productivity, or serviceable life of an existing building, structure, or major item of equipment;
(b) Which is classified for accounting purposes as a “fixed asset;” and
(c) The cost of which increases the recorded value of the existing building, structure, or major item of equipment and is subject to depreciation.
Community based organization—means a private nonprofit organization which is representative of the Indian and Native American community or significant segments of the community and which provides employment and training services or activities.
Comprehensive Annual Plan (CAP)—means the annual update to the Master Plan. The CAP will identify the work plan and budget for the annual 401 and title II, part B funding allocations.
Construction—means the erection, installation, assembly or painting of a new structure or a major addition, expansion or extension of an existing structure and the related site preparation, excavation, filling and landscaping or other land improvements.
Contract—means a procurement instrument, other than a grant, by which the Department, a Native American grantee or a subgrantee acquires and pays for property, services, supplies, materials or equipment.
Contractor—means any person, corporation, partnership, public agency, or other entity which enters into a contract with the DOL, a Native American grantee or subgrantee under the Act.
Department—means the United States Department of Labor (DOL) including its agencies and organizational units.
Dependent—means any person for whom, both currently and during the previous 12 months, the participant has assumed 50 percent of the person's support.
DINAP—means the Division of Indian and Native American Programs of the Department of Labor.
DOL—means the U.S. Department of Labor.
Economically disadvantaged—means an individual who
(a) Receives, or is a member of a family which receives, cash welfare payments under a Federal, State, or local welfare program;
(b) Has, or is a member of a family which has, received a total family income for the six-month period prior to application for the program involved (exclusive of unemployment compensation, child support payments, and welfare payments) which, in relation to family size, was not in excess of the higher of
(1) The poverty level determined in accordance with criteria established by the Department of Health and Human Services, or
(2) 70 percent of the lower living standard income level;
(c) Is receiving food stamps pursuant to the Food Stamp Act of 1977;
(d) Is a foster child on behalf of whom State or local government payments are made; or
(e) Is a handicapped individual whose own income meets the requirements of paragraph (a) or (b) of this definition, but who is a member of a family whose income does not meet such requirements.
Entered employment—means the act of securing unsubsidized employment for or by a participant.
Entry level—means the lowest position in any promotional line, as defined locally by collective bargaining agreements, past practice, or applicable personnel rules.
Family—means (a) One or more persons living in a single residence who are related to each other by blood, marriage, or adoption. A step-child or a step-parent is considered to be related by marriage.
(b)(1) For purposes of paragraph (a) of this definition, one or more persons not living in the single residence but who are claimed as a dependent on another person's Federal Income Tax return for the previous year is presumed, unless otherwise demonstrated, to be part of the other person's family.
(2) A handicapped individual may be considered a family of one when applying for programs under the Act.
(3) An individual 18 years of age or older, except as provided in (b) (1) or (2) of this definition, who receives less than 50 percent of support from the family, and who is not the principal earner nor the spouse of the principal earner shall not be considered a member of the family. Such an individual shall be considered a family of one.
Family income—means all income actually received from all sources by all members of the family for the six-month period prior to application. Family size is the maximum number of family members during the six-month period prior to application. When computing family income, income of a spouse and other family members is counted for the portion of the six-month period prior to application that the person was actually a part of the family unit.
(a) For the purposes of determining participant eligibility (and not for grantee allocations), family income includes:
(1) Gross wages, including CSE, Work Experience and OJT paid from JTPA funds, and salaries (before deductions);
(2) Net self-employment income (gross receipts minus operating expenses); and
(3) Other money income received from sources such as interest, net rents, OASI (Old Age and Survivors Insurance) social security benefits, pensions, alimony, and periodic income from insurance policy annuities, and other sources of income.
(b) Family income does not include:
(1) Non-cash income such as food stamps, or compensation received in the form of food or housing;
(2) Imputed value of owner-occupied property, i.e., rental value;
(3) Public assistance payments;
(4) Cash payments received pursuant to a State plan approved under titles I, IV, X or XVI of the Social Security Act, or disability insurance payments received under title II of the Social Security Act;
(5) Federal, State or local unemployment benefits;
(6) Capital gains and losses;
(7) One time unearned income, such as, but not limited to:
(i) Payments received for a limited fixed term under income maintenance programs and supplemental (private) unemployment benefits plans;
(ii) One-time or fixed-term scholarship and fellowship grants;
(iii) Accident, health, and casualty insurance proceeds;
(iv) Disability and death payments, including fixed term (but not lifetime) life insurance annuities and death benefits;
(v) One-time awards and gifts;
(vi) Inheritance, including fixed term annuities;
(vii) Fixed term workers' compensation awards;
(viii) Terminal leave pay;
(ix) Soil bank payments; and
(x) Agriculture crop stabilization payments;
(8) Pay or allowances which were previously received by any veteran while serving on active duty in the Armed Forces;
(9) Educational assistance and compensation payments to veterans and other eligible persons under chapters 11, 13, 31, 34, 35, and 36, of title 38, United States Code;
(10) Payments received under the Trade Act of 1974;
(11) Black Lung payments received under the Benefits Reform Act of 1977, Pub. L. 95-239, 30 U.S.C. 901;
(12) Child support payments; and
(13) Any income directly or indirectly derived from, or arising out of, any property held by the United States in trust for any Indian tribe, band or group or any individual; per capita payments; and services, compensation or funds provided by the United States in accordance with, or generated by, the exercise of any right guaranteed or protected by treaty; and any property distributed or income derived there-from, or any amounts paid to or for any individual member, or distributed to or for the legatees or next of kin of any member, derived from or arising out of the settlement of an Indian claim.
Financial assistance—means any grant, loan, or any other arrangement by which the Department or Native American grantee provides or otherwise makes available assistance in the form of:
(a) Funds;
(b) Services of Federal or Native American grantee personnel; or
(c) Real and personal property or any interest in or use of such property, including:
(1) Transfers or leases of such property for less than fair market value or for reduced consideration and
(2) Proceeds from a subsequent transfer or lease of such property if the Federal or Native American grantee share of its fair market value is not returned to the Federal Government or Native American grantee.
Governing body—means a body consisting of duly elected or designated representatives, a body appointed by duly elected officials, or a body selected in accordance with traditional tribal means which has the authority to provide services to, and to enter into contracts, agreements and grants under this part on behalf of the organization or individuals who elected or designated them, elected the appointing official, or recognize the body selected in accordance with traditional tribal means.
Governor—means the chief executive of any State.
Handicapped individual—means any individual who has a physical or mental disability which for such individual constitutes or results in a substantial handicap to employment.
Hawaiian Native—means any individual, any of whose ancestors were natives, prior to 1778, of the area which now comprises the State of Hawaii (Sec. 3(12)).
JTPA—means the Job Training Partnership Act.
Local Educational Agency (LEA)—means such an agency as defined in section 195(10) of the Vocational Educational Act of 1963. It shall further mean the governing bodies of any Bureau of Indian Affairs, tribal or reservation run agencies or school districts, or any nonprofit agency or tribally chartered entity providing educational services to Indian and Native American persons as determined by the Native American grantee.
Low Income Housing—means: (a) For weatherization or winterization projects, those dwellings occupied by persons whose family income does not exceed 125 percent of the poverty level and which are:
(1) Owned by the occupant;
(2) Publicly owned;
(3) Owned by a private nonprofit organization;
(4) Cooperatively owned; or
(5) For projects funded and approved by the Federal Energy Administration, privately owned rental housing.
(b) For rehabilitation as part of community revitalization or stabilization, housing built or improved with the assistance of Federal, State or tribal programs, and those dwellings occupied by persons whose family income does not exceed 80 percent of the median income for the area, in accordance with section 8(f)(1) of the United States Housing Act of 1937 (42 U.S.C. 1437f) and which are:
(1) Owned by the occupant;
(2) Publicly owned;
(3) Owned by a private nonprofit organization; or
(4) Cooperatively owned.
Lower living standard income level—means that income level (adjusted for regional, metropolitan, urban, and rural differences and family size) determined annually by the Secretary based on the most recent “lower living family budget” issued by the Secretary.
Master plan—means the basic long term agreement between the Department and the Native American grantee. The master plan contains all basic eligibility determination and administrative information.
Native American community benefit—means the outcome of allowable activities undertaken for the advancement of economic and social development in the Indian, Alaskan Native, and Hawaiian Native communities consistent with their goals and life styles as determined by representatives of the community.
Offender—means any adult or juvenile who is or has been subject to any stage of the criminal justice process for whom services under this part may be beneficial or who requires assistance in overcoming artificial barriers to employment resulting from a record of arrest or conviction.
Older worker—means a person who is 55 years of age or older.
Participant—means an individual who has:
(a) Been determined eligible for participation; and
(b) Started receiving employment, training or services (except post-termination services) funded under the Act, within 45 days of such determination.
Poverty level—means the annual income level at or below which families are considered to live in poverty, as annually determined by the Department of Health and Human Services.
Program income—means net income earned from grant or agreement supported activities. Such earnings include but are not limited to: income from service fees, sale of commodities, usage or rental fees, and royalities on patents or copyrights.
Program year—means that 12-month period of time during which job training activities and services and provided to participants.
Public assistance—means Federal, State, tribal, or local government cash payments for which eligibility is determined by a need or income test.
Secretary—means the Secretary of Labor.
Similarly employed—means that status of a person who is working for the same employer as the JTPA participant, is doing the same type of work, and is similarly classified with respect to employment status (e.g., full-time, permanent, or temporary).
State—means the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Northern Marianas Islands, American Samoa, and the Trust Territory of the Pacific Islands.
State Employment Security Agency (SESA)—means the State agency which exercises control over the Unemployment Insurance Service and the Employment Service.
Subgrantee—means any person, corporation, partnership, public agency, or other entity, excluding private for profits concerns, which enters into a grant with the Native American Grantee.
Underemployed persons—means:
(a) Persons who are working part-time but seeking full-time work; or
(b) Persons who are working full-time but whose current annualized wage rate (for a family of one), or whose family's current annualized income, is not in excess of:
(1) The poverty level, or
(2) 70 percent of the lower living standard income level.
Unemployed persons—means individuals who are without jobs and who want and are available for work. The determination of whether individuals are without jobs shall be made in accordance with the criteria used by the Bureau of Labor Statistics of the Department of Labor in defining individuals as unemployed.

Subpart B—Designation Procedures for Native American Grantees
§ 632.10
Eligibility requirements for designation as a Native American grantee.
(a) All funds specifically identified in the Act as reserved for the benefit of Indian and Native American participants shall be disbursed by the Department only to Native American grantees designated pursuant to this subpart. Except for FY 1984, designation will be for a period of two years.
(b) To be designated as a Native American grantee, an applicant must have:
(1) A governing body;
(2) For new grantees, an Indian or Native American population within its designated service area of at least 1,000 persons;
(3) The capability to administer an Indian and Native American employment and training program. For purposes of this paragraph, “capability to administer” means that the applicant can demonstrate that it possesses, or can acquire the managerial, technical, or administrative staff with the ability to properly administer government funds, develop employment and training opportunities, evaluate program performance and comply with the provisions of the Act and the regulations. In judging the applicant's request for designation, consideration shall be given to factors such as:
(i) Previous experience in operating an effective employment and training program serving Indians or Native Americans;
(ii) The number and kind of activities of similar magnitude and complexity that the applicant has successfully completed;
(iii) Information from other Federal agencies regarding program performance or financial and management capability.
(c) The Department will not designate an organization in cases where it is established that:
(1) The agency's efforts to recover debts (for which three demand letters have been sent) established by final agency action have been unsuccessful, or
(2) Fraud or criminal activity has been proven to exist within the organization, or
(3) The amount under the funding formulas will not total at least $120,000 in all JTPA funds for the first year of the two-year designation period. In the event that this amount cannot be determined at the time of the Department's decision on the request for designation, the amount shall be estimated in part by reference to the funding levels for Native American programs for the prior fiscal or program year. An applicant for designation shall be designated notwithstanding the limitation in this paragraph of this subsection if it demonstrates that:
(i) It has or expects to receive a combined total of $120,000 in funds or services for the first year of the 2-year designation period from JTPA and other human resource development programs, including but not limited to those providing for employment, education, vocational education, health, social or similar services; or
(ii) It is recognized and directly funded by Federal agencies, such as the Indian-serving agencies within the Departments of the Interior, Health and Human Services or Education as the primary service delivery organization for the provision of human resource development services to Indians or Native Americans within the organization's customary service area. This provision shall be interpreted consistent with the Federal policy established in Pub. L. 96-638, the Indian Self-Determination Act; or
(iii) It has demonstrated successful operation of an employment and training program at a level below $120,000 within the previous two years. For this purpose, success is the ability to adequately meet planned goals and stay within the grant's cost limits.
(4) For a consortium to be designated, it must submit the consortium agreement which meets the requirements of this subpart.
(d) Types of eligible Native American grantees:
(1) Indian tribe, band or group. The Department shall designate as a Native American grantee an Indian tribe, band or group which meets the requirements in paragraphs (b) and (c) of this section.
(2) Alaskan Native entity. The Department shall designate as a Native American grantee an Alaskan Native entity as defined in the Alaskan Native Claims Settlement Act which meets the requirements in paragraphs (b) and (c) of this section.
(3) Hawaiian Native grantee. The Department may designate as a Native American grantee any private nonprofit organization or public agency representative of the Native Hawaiian community which meets the requirements in paragraphs (b) and (c) of this section and which the Department determines will best meet the needs of Native Hawaiians.
(4) Public or private agencies. The Department may designate as a section 401 grantee a private nonprofit organization or public agency which meets the requirements in paragraphs (b) and (c) of this section to serve areas where there are significant numbers of Indians or Native Americans, but where there are no Indian tribes, bands or groups, Alaskan Native entities or Hawaiian sponsors or consortia of such sponsors eligible for designation.
(5) Consortium grantees. The Department may designate as a Native American grantee a consortium of any of the types of grantees described in paragraphs (c), (1), (2), (3), and (4) of this section which may or may not be independently eligible. All such consortia shall meet the following requirements, in addition to the requirements in paragraphs (b) and (c) of this section:
(i) All the members shall be in geographic proximity to one another. A consortium may operate in more than one State.
(ii) An administrative unit shall be designated for operating the program, which may be a member of the consortium or an agency formed by the members. The administrative unit shall be delegated all powers necessary to administer the program effectively, including the power to enter into contracts and subgrants and other necessary agreements, to receive and expend funds, to employ personnel, to organize and train staff, to develop procedures for program planning, to monitor financial and program performance, and to modify the grant agreement through agreement with the Secretary. The right of reallocating funds within the consortium area shall be reserved to the consortium's members.
(iii) The consortium shall be the Native American grantee. The consortium agreement shall be signed by an official or officials of each member of the consortium authorized to enter into a binding consortium and shall specify that each member shall be liable jointly or separately for claims established against the grantee. Additional standardized requirements for consortium agreements will be communicated to grantees under separate order.
(e) In the situation where the Department does not designate Indian tribes, bands or groups or Alaska Native groups to serve such groups, the Department shall, to the maximum extent feasible, enter into arrangements for the provision of services to such groups with other types of section 401 grantees which meet with the approval of the Indian tribes, bands, groups or Alaska Native groups to be served (section 401(d)). In such cases, the Department shall consult with the governing body of such Indian tribes, bands, groups or Alaska Native groups prior to the designation of a Native American grantee.
(f) In designating Native American grantees to serve groups other than those in paragraph (e) of this section, such as nonreservation Indians and Native Hawaiians, the Department shall, whenever feasible, designate grantees which are directly controlled by Indian or Native American people. Where it is not feasible to designate such types of grantees, DINAP shall consult with Indian or Native American-controlled organizations in the area with respect to the designation of a Native American grantee. Where a private nonprofit organization is designated, DINAP shall require any such grantees not directly controlled by Indian or Native American people to establish a Native American Employment and Training Planning Council and to implement an Indian preference policy with respect to hiring of staff and contracting for services with regard to all funds provided pursuant to this part (sec. 7(b) of the Indian Self-Determination and Education Assistance Act).
§ 632.11
Designation of Native American grantees.
(a) When designations are required and the potential grantee is not under a Master Plan agreement, an applicant for designation as a Native American grantee shall submit a notice of intent to apply for funds. Such notices of intent shall be postmarked by January 1 and be submitted to the Division of Indian and Native American Programs (DINAP), Employment and Training Administration, U.S. Department of Labor, 601 D Street NW., Washington, DC. 20213. Notices of intent may also be delivered to that office in person not later than the close of business on January 2 or the first business day of the designation year. Such notices of intent to apply shall be submitted on Standard Form 424 as a preapplication for Federal assistance. For applicants not under an active Master Plan agreement or the Master Plan agreement is due to expire during the year of designation, the following information shall be included in the notice of intent:
(1) Evidence that the applicant meets the requirements for a Native American grantee contained in § 632.10.
(2) A description of the geographic area or areas which the applicant proposes to serve, together with the Indian and Native American population in such areas, to the extent known. The description must include a list of States (if more than one), in alphabetical order, and under each State, a list of counties in alphabetical order, followed by a list of tribes, bands or groups (if any) in alphabetical order. If the applicant was a Native American grantee for the period prior to the one which is being applied for, the applicant must also list any counties and tribes, bands or groups which are being added to, or deleted from, the previous fiscal year's service area;
(3) A description of the applicant's organization, including the legal status of the applicant, the process of selection of the governing body, the duties and responsibilities of the governing body, and in the case of private nonprofit organizations, a copy of the articles of incorporation;
(4) Evidence of the applicant's capability to operate an Indian or Native American employment and training program, including a statement of the applicant's past successes in operating programs for Indians or other Native Americans and a statement of the applicant's experience in managing the types of programs and activities allowable under the Act;
(5) A description of the planning process including employer involvement which the applicant proposes to undertake in developing a plan for the use of funds;
(6) Information related to a grantee's administrative responsibility. The DOL will conduct an independent review to determine whether each applicant is currently delinquent in repaying any DOL claims or has any outstanding administrative problems. Applicants are, therefore, encouraged to submit any documents related to these factors including documents and correspondence previously submitted to DOL. Submittal of such materials will enable DOL to move rapidly to complete the Notice of Intent and grantee designation review process.
(7) If the applicant is applying as a consortium, evidence that the consortium meets the requirements for a consortium in this part and a consortium agreement as specified in § 632.10(d)(5)(iii).
(b) If more than one organization submits a Notice of Intent for a geographic area, the Department will notify the organizations involved and conduct a special review for the area in question. The notice to the organizations will indicate any additional information needed and the review process to be followed.
(c) If the applicant for designation is a current grantee, under a master plan agreement, and there is no change in the service area requested, only the Standard Form 424 and a statement(s) indicating that to the best of the applicant's knowledge, it meets the requirements of § 632.10(c)(4) will be necessary and shall be submitted within the timeframe established in § 632.11(a).
(d) Responsibility Review. Prior to finally designating, conditionally designating or nondesignating the Department will conduct a review of the available records to determine whether or not the organization has failed any responsibility test. This review is intended to establish overall responsibility to administer Federal funds. With the exception of § 632.11 (c)(1) and (c)(3), the failure to meet any one of the following responsibility test factors would not establish that the organization is irresponsible unless the failure is substantial or persistent. The responsibility tests are as follows:
(1) The agency's efforts to recover debts (for which three demand letters have been sent) established by final agency action have been unsuccessful, or failure to comply with an approved repayment plan.
(2) Serious administrative deficiencies have been identified in final findings and determination—such as failure to maintain a financial management system as required by Federal regulations.
(3) Established fraud or criminal activity exists within the organization.
(4) Wilfull obstruction of the audit process.
(5) Substantial failure to provide services to applicants as agreed to in a current or recent grant or to meet performance standards requirements as provided for and developed pursuant to § 632.89.
(6) Failure to correct deficiencies brought to the grantee's attention in writing as a result of monitoring activities, reviews, assessments, etc.
(7) Failure to return a grant closeout package on outstanding advances within 90 days of expiration date or receipt of closeout package, whichever is later, unless an extension has been requested and granted; final billings reflecting serious cost category or total budget cost overrun.
(8) Failure to submit required reports.
(9) Failure to properly report and dispose of government property as instructed by DOL.
(10) Failure to have maintained cost controls resulting in excess cash on hand.
(11) Failure to procure or arrange for audit coverage for any two year period when required by DOL.
(12) Failure to audit subrecipient within the required period when applicable.
(13) Final disallowed costs in excess of five percent of the grant or contract award.
(14) Failure to establish a mechanism to resolve subrecipient's audit within established time frames.
(e) On March 1 of each designation year, the Department shall designate or conditionally designate Native American grantees for the coming two program years. Each applicant shall be notified in writing of the determination. Those applicants that are not designated in whole or in part as Native American grantees may appeal under the complaint procedures available for this part. Conditional designations will include the nature of the conditions and the actions required to be finally designated.
(Approved by the Office of Management and Budget and assigned OMB control number 1205-0213)
§ 632.12
Alternative arrangements for the provision of services, nondesignation.
(a) If no application for Native American grantee designation for an area is filed, or if the Department has denied such application for that area, the Department may designate and fund an entity to serve that area, pending the final resolution of any Petitions for Reconsideration or other actions taken pursuant to § 632.13. An organization not designated in whole or in part may also appeal to an ALJ under the provisions of part 636. This further appeal will not in any way interfere with the Department's designation and funding of another organization to serve the area in question. The available remedy under such an appeal will be the right to be designated in the future rather than a retroactive or immediately effective designation status. Therefore, in the event the ALJ rules that the organization should have been designated and the organization continues to meet the requirements at §§ 632.10 and 632.11, the Department will designate the successful appellant organization and fund within 90 days of the ALJ decision unless the end of the 90 day period is within six months of the end of the two year designation period. Any organization designated or funded for the area in question would be affected by this remedial action and undesignated. All parties must agree to this arrangement prior to funding. The alternate organization which loses its designation as a result of the application of this remedy may not appeal the undesignation.
(b) If the grant officer finally disapproves a CAP pursuant to § 632.21 he/she may withdraw the Native American grantee's designation and immediately designate another entity to serve the area, pending the final resolution of any Petitions for Reconsideration or other actions taken pursuant to part 636.
(c) If a Native American grantee's CAP is terminated or suspended in whole or in part, the Department (after an opportunity for a hearing except in emergency situations as described in section 164(f) of the Act) may designate another entity to serve the area.
(d) If it is not feasible for the Department to designate another entity to serve the area under the conditions described in paragraphs (a), (b), and (c) of this section, the funds involved may be distributed at the Secretary's discretion to Native American grantees serving other areas.
§ 632.13
Review of denial of designation as a Native American grantee, or rejection of a Comprehensive Annual Plan.
(a) An applicant for designation as a Native American grantee which is refused such designation in whole or in part may file a Petition for Reconsideration with the Grant Officer within 14 days of receipt of a letter from the Department indicating its failure to be designated as a Native American grantee.
(1) A Petition for Reconsideration shall be in writing, shall be signed by a responsible official of the applicant entity, and shall enumerate the factors which the applicant entity asserts should be reviewed by the Grant Officer in reconsidering the denial of its application.
(2) Upon receipt of the Petition for Reconsideration, the Grant Officer shall, within 30 days, make one of the following determinations:
(i) That based on the available information from the original request for designation and information supplied in the Petition for Reconsideration, the applicant entity should be designated as a Native American grantee;
(ii) That the original determination made was correct; or
(iii) That an informal conference between representatives of the applicant entity and the Grant Officer shall be held at a specified time and place to discuss the Petition for Reconsideration.
(3) If an informal conference is held, the applicant entity shall have the opportunity to present any pertinent information which may further substantiate its petition. The Grant Officer shall notify the applicant entity of its final decision within 14 days after the informal conference is held.
(4) All final determinations of the Grant Officer, which deny a Petition for Reconsideration, shall be in writing, shall state the reasons for the denial, shall be sent to the applicant by certified mail, return receipt requested, and shall notify the applicant entity that, within 21 days of its receipt of the notice, it may request a hearing pursuant to part 636.
(b) A designated Native American grantee whose CAP has been rejected may file a Petition for Reconsideration pursuant to paragraph (a) of this section. Such petitions shall be handled under the procedures described in paragraph (a) of this section.

Subpart C—Program Planning, Application and Modification Procedures
§ 632.17
Planning process.
(a) Each Native American grantee shall establish a planning process for the development of its Master Plan and Comprehensive Annual Plan. This planning process shall involve consideration of the need for job training and employment services, appropriate means of providing needed services and methods of monitoring and assessing the services provided. Recognizing the importance of employer involvement in designing and implementing programs, each Native American grantee shall involve employers in program planning.
(b) (1) Each Native American grantee's planning process shall involve consultation with major employers or organizations representing employers inside the grantee's designated service or surrounding labor market area. Such consultation shall include consideration of the opportunities for placement of program participants and the design of training activities and related services.
(2) A description of the procedures used for this consultation shall be included in the grantee's Master Plan. The results of the consultation shall be described in the grantee's Comprehensive Annual Plan.
(3) Native American grantees are encouraged to establish or to use existing formal advisory councils, such as Private Industry Councils, as vehicles for such consultation. Grantees are also encouraged to use all appropriate mechanisms, including Tribal Employment Rights Offices (TEROs), to insure maximum opportunity for the placement of participants in unsubsidized employment.
(4) A Native American grantee will not be held responsible for the refusal of any employer or organization representing employers to engage in the consultation process described in this section.
(c) In addition to the requirement in paragraph (b) of this section, the planning process shall provide the opportunity for the involvement of the client community, service providers (such as appropriate community-based organizations) and educational agencies, tribal agencies or other Indian and Native American organizations whose programs are relevant to the provision of job training services within the grantee's service area.
§ 632.18
Regional and national planning meetings.
Grant funds may be used for holding regional and national planning meetings, subject to restrictions of allowable costs.
§ 632.19
Grant application content.
The basic document will be a four year Master Plan which will be supplemented each fiscal year by submission and approval of a Comprehensive Annual Plan (CAP). The Master Plan and CAP system will be implemented for 1985 or the first designation period following the FY 1984 designations. Each designated grantee will be informed of and provided the necessary documents and requirements in sufficient time to complete grant actions without interrupting services to participants.
§ 632.20
Submission of grant application.
(a) Beginning with 1985 or the first designation period after 1984, a Master Plan must be submitted by a date and pursuant to instructions issued by the Department. The approved Master Plan will remain in effect for four years unless terminated. During the fourth year of the Master Plan a new Master Plan must be submitted by a date and pursuant to instructions issued by the Department.
(b) Each year a completed CAP is to be submitted for approval by registered mail to the Chief, DINAP by a date and pursuant to instructions announced by the Department. The CAP will be approved by DINAP if it is consistent with the basic provisions or the Master Plan and applicable regulations and formal directives.
§ 632.21
Application disapproval.
(a) A CAP shall be disapproved by the Grant Officer if it fails to meet the requirements of the Act or the regulations.
(b) No CAP shall be finally disapproved until the designated Native American grantee is provided with a description by the Chief, DINAP in writing of the CAP's defects and has been provided with at least 30 days to remedy such defect(s), but has failed to do so.
(c) When a CAP is finally disapproved a notice of disapproval shall be transmitted by certified mail, return receipt requested, to the applicant, accompanied by a statement of the grounds of the disapproval and a statement that the applicant may file a Petition for Reconsideration with respect to the disapproval.
§ 632.22
Modification of a Comprehensive Annual Plan (CAP) and/or Master Plan.
(a) The requirements for modifying a Master Plan and/or CAP will be included in administrative instructions issued by the Grant Officer upon final implementation of the Master Plan/CAP system.
(b) Prior to implementing the Master Plan/CAP system, a formal modification will be required when:
(1) There is a change of at least 25 percent or $25,000 (whichever is greater) in any cost category; or
(2) There is a change of at least 25 percent or 25 individuals (whichever is greater) in the number of individuals to be served in any category of program activity.
(c) The documentation to be submitted to the DINAP Federal Representative requesting such a modification shall consist of a letter explaining the need for the change and four copies of the proposed modification.
(d) The Grant Officer should notify the Native American grantee of tentative approval or disapproval within 10 calendar days of receipt of the proposed modifications. The Grant Officer should notify the Native American grantee in writing of final approval or disapproval within 30 calendar days of the receipt of the proposed modification.
(e) A Native American grantee may make any change in its Program Planning Summary and Budget Information Summary without prior approval, except as provided in this section.
(f) Native American grantees shall notify DINAP by submitting a modification whenever there is a change in a name, address, or other similar information.
(g) The Department will unilaterally modify a grant when a simple funding or performance period increase is required and it is consistent with the approved plan.
(Approved by the Office of Management and Budget and assigned OMB control number 1205-0213)
§ 632.23
Termination and corrective action of a CAP and/or Master Plan.
(a) Emergency Termination. The Department may terminate or suspend a CAP designation or Master Plan under emergency termination procedures in accordance with section 164(f) of the Act. The provisions in part 636 shall not apply in instances of emergency termination.
(1) Instances under which emergency termination can occur include but are not limited to: Audit reports identifying numerous adverse findings in the area of financial control and management; information gathered through onsite monitoring which substantiates serious management, fiscal and/or performance problems, information from the Inspector General or gained through incident reports of poor performance, serious administrative problems and/or inability to protect and account for Federal funds.
(2) Within 30 days of written termination notification to a grantee, the Department will secure applicable documents onsite, seize bank accounts relating to the program, arrange for the payment of legitimate bills and debts and arrange, to the degree feasible, for the continued provision of services to program enrollees.
(b) Termination for Cause. Termination for cause can occur whenever there is a substantial or persistent violation of the governing rules and regulations or failure to comply with the grant terms and conditions. The following factors will be considered for termination:
(1) Poor performance and inability to meet Federal standards related to such debt collection requirements as:
(i) Failure to respond to demand letters from DOL for repayment of debts within the stated timeframe;
(ii) Failure to comply with an approved repayment agreement revealed through monitoring or subsequent audit;
(iii) Failure to take necessary corrective action to improve underperformance and to plan for more effective subsequent operations.
(2) Nonperformance related to such requirements as:
(i) Failure to submit required quarterly financial reports for two successive periods within 45 days after they are due;
(ii) Failure to submit required quarterly performance reports for two successive periods within 45 days after they are due;
(iii) Failure to develop a plan of action to correct deficiencies identified in an audit report or by an onsite monitoring review.
(3) Nonperformance related to such requirements as:
(i) Failure to comply with formal corrective action after due notice;
(ii) Failure to comply with the requirements of the Act related to a grievance procedure and other requirements;
(iii) Failure to submit a required modification within 10 days to adjust the grant award due to reduction in available funds, reductions due to debt collection action, etc.
(c) In addition, the Department, by written notice, may terminate a grant in whole or in part in the event of a reduction in the funds available or a change in provisions for JTPA title IV, section 401 programs by reason of congressional action.

Subpart D—Administrative Standards and Procedures
§ 632.31
General.
(a) This subpart describes requirements relating to the administration of grants by Native American grantees. Administrative requirements found in this subpart apply to all programs under the Act unless stated to the contrary for any specific program.
(b) As referenced in this subpart, the requirements set forth in 41 CFR parts 29-70, “Administrative requirements governing all grants and agreements by which Department of Labor agencies award funds to State and local governments, Indian and Native American entities, public and private institutions of higher education and hospitals, and other quasi-public and private nonprofit organizations,” shall apply to grants under JTPA. Whenever the provisions of 41 CFR part 29-70 conflict with the provisions of part 632, the provisions of part 632 shall prevail.
(1) The requirements in 41 CFR 29-70.1 set forth the policies which apply to all basic grants and agreements.
(2) The requirements in 41 CFR 29-70.2 implement OMB Circular Nos. A-102 and A-110, and apply to all JTPA grants and agreements unless otherwise indicated in these regulations.
§ 632.32
Financial management systems.
(a) Each Native American grantee, subgrantee and contractor shall maintain a financial management system which will provide accurate, current and complete disclosure of the financial transactions under each grant, subgrant or contract activity, and will enable each Native American grantee, subgrantee or contractor to evaluate the effectiveness of program activities and meet the reporting requirements of this subpart.
(b) Each Native American grantee, subgrantee and contractor shall maintain its financial accounts so that the reports required by the Department may be prepared therefrom.
(c) To be acceptable for audit under this subpart, a Financial Status Report shall be:
(1) Current as of the cut-off date of the audit;
(2) Taken directly from or linked by worksheet to the Native American grantee's books of original entry; and
(3) Traceable to source documentation of the unit transaction.
§ 632.33
Audits.
(a) General. The audit provisions of 41 CFR part 29-70 shall apply to Native American grantees. Until unified or single audit procedures are promulgated and implemented for nonprofit entities, the Office of the Inspector General shall be responsible for arranging and conducting audits of Native American grantees that are not Indian tribal governments.
(b) Audit reports. Upon receipt of a final audit report the Inspector General will promptly transmit the audit report to the grantee for a comment period not to exceed 30 days.
(c) Initial Determination. After the conclusion of the comment period for audits provided the grantee, the Grant Officer shall make an initial determination of the allowability of questioned costs or activities. Such determination should be based on the Act, regulations grants or other agreements under the Act.
(d) Informal resolution. Except as provided in section 164(f) of the Act, the Grant Officer shall not revoke a grant, in whole or in part, nor institute corrective action or sanctions against a grantee without first providing the grantee with an opportunity to informally resolve those matters contained in the Grant Officer's initial determination. If the matters are informally resolved the Grant Officer shall notify the parties in writing of the nature of the resolution, which shall constitute the final determination, and may close the file.
(e) Final determination. The Grant Officer shall, not later than 180 days from the time the Inspector General issues the final approved audit report, issue a final determination that:
(1) Indicates that efforts to informally resolve matters contained in the initial determination pursuant to paragraph (a) of the section have been unsuccessful.
(2) Lists those matters upon which the parties continue to disagree.
(3) Lists any modifications to the factual findings and conclusions set forth in the initial determination.
(4) Lists any sanctions, and required corrective actions, including any other alteration or modification of the plan, grant, agreement or program intended by the Grant Officer.
(5) Sets forth any appeal rights.
§ 632.34
Program income.
(a) General. The provisions of 41 CFR 29-70.205, program income and interest earned, shall apply to Native American grantee programs.
(b) Income generated under any program may be retained by the recipient to continue to carry out the program, notwithstanding the expiration of DOL financial assistance for that program.
(c) Special provisions. Income earned as a result of activities of JTPA participants by an income generating enterprise, which is owned by an Indian tribe, band or group or an Alaskan native entity, and the profits of which are used exclusively for governmental, charitable, educational, civic, social or other similar purposes, may be retained by such enterprise and used in the same manner as other income of such enterprise.
§ 632.35
Native American grantee contracts and subgrants.
(a) Contracts may be entered into between the Native American grantee and any party, public or private, for purposes set forth in the JTPA.
(b) Subgrants may be entered into between the Native American grantee and units of State and local general government, Indian tribal government, public agencies or nonprofit organizations.
(c) The Native American grantee is responsible for the development, approval and operation of all contracts and subgrants and shall require that its contractors and subgrantees adhere to the requirements of the Act, the regulations under the Act, and other applicable law. It shall also require contractors and subgrantees to maintain effective control and accountability over all funds, property and other assets covered by the contract or subgrant.
(d) Each Native American grantee shall take action against its contractors and subgrantees to prevent or eliminate violations of the regulations, and to prevent misuse of JTPA funds.
(e) Subgrantees are entitled to funding for administrative costs. The amount of such funding will be determined during the development of subgrants subject to the overall administrative costs of the grant.
(f) If a contract or subgrant is cancelled in whole or in part, the Native American grantee shall develop procedures for ensuring continuity of service to affected participants to the extent feasible.
(g) The Native American grantee may enter into contracts or subgrants which extend past the expiration date of the CAP but such extension shall not exceed 6 months. In such cases, the grantee shall continue to be responsible for the administration of such contracts and subgrants.
(h) To the extent feasible, Native American Indian grantees shall give preference in the award of contracts and subgrants to Indian organizations and to Indian-owned economic enterprises as defined in section 3 of the Indian Financing Act of 1974 (25 U.S.C. 1452). Any contract or subgrant made by a Native American grantee shall require that, to the greatest extent feasible, preference and opportunities for training and employment in connection with such contract or subgrant shall be given to qualified Indians regardless of age, religion or sex and that the contractor or subgrantee shall comply with any Indian preference requirements established by the Native American grantee. All grantees, subgrantees and contractors shall include the requirements of this paragraph in all subcontracts and subgrants made by them (sec. 7(b) of the Indian Self-Determination and Education Assistance Act, Public Law 93-638 (25 U.S.C. 450 et seq.)).
(i) The Native American grantee shall ensure that contractors and subgrantees maintain and make available for review by the grantee and the Department of Labor all records pertaining to the operations of programs under such contracts and subgrants consistent with the maintenance and retention of record requirements in 41 CFR parts 29-70.
§ 632.36
Procurement standards.
(a) Native American grantees shall comply with the procurement systems and procedures found in 41 CFR 29-70.216, Procurement standards.
(b) Subject to the Indian preference provisions of § 632.35(h), small and minority-owned businesses, including small businesses owned by women, within the service area of the Native American grantee, shall be provided maximum reasonable opportunity to compete for contracts for supplies and services. One means to provide for this is the use of set-asides.
(c) No funds shall be paid by the Native American grantee to any organization for the conduct of programs under the Act unless:
(1) It has submitted an acceptable proposal;
(2) Selection is performed on a merit basis;
(3) It has not been seriously deficient in its conduct of, or participation in, any Department of Labor program in the past, or is not a successor organization to one that was seriously deficient in the past, unless the organization statisfactorily demonstrates that the deficiency has been or will be corrected and performance substantially improved; and
(4) It has the administrative capability to perform effectively.
§ 632.37
Allowable costs.
(a) General. To be allowable, a cost must be necessary and reasonable for proper and efficient administration of the grantee's program, be allocable thereto under these principles, and, except as provided herein, not be a general expense required to carry out the overall responsibilities of the grantee. Costs charged to the program shall be consistent with those normally allowed in like circumstances and, with applicable State and local law, rules or regulations as determined by the Native American grantee.
(b) Unless otherwise indicated below, direct and indirect costs shall be charged in accordance with 41 CFR 29-70 and 41 CFR 1-15.7.
(c) Costs associated with repairs, maintenance, and capital improvements of existing facilities used primarily for programs under the Act are allowable. Additionally, the costs of home repair, weatherization and rehabilitation are allowable when the work is performed on low income housing as defined in § 632.4.
(d) Section 401 funds may be used to pay the cost of incorporating a PIC, other planning body or consortium administrative entity for the purpose of carrying out programs under the Act. These costs are chargeable to administration.
(e) Costs which are billed as a single unit charge do not have to be allocated or prorated among the several cost categories but may be charged entirely to training when the agreement:
(1) Is for classroom training;
(2) Is fixed unit price; and
(3) Stipulates that full payment for the full unit price will be made only upon completion of training by a participant and placement of the participant into unsubsidized employment in the occupation trained for and at not less than the wage specified in the agreement.
§ 632.38
Classification of costs.
Allowable costs shall be charged against the following four cost categories: Administration; training, employment and other (including supportive services).
(a) Costs are allocable to a particular cost category to the extent that benefits are received by such category.
(b) The Native American grantee is required to plan, control and charge expenditures against the aforementioned cost categories.
(c) The Native American grantee is responsible for ensuring that, at a minimum, subgrant or subcontract recipients plan, control, and charge expenditures against the aforementioned cost categories.
(d) Administrative costs consist of all direct and indirect costs associated with the management of the grantee's program. These costs include but are not limited to: the salaries and fringe benefits of personnel engaged in executive, fiscal, data collection, personnel, legal, audit, procurement, data processing, communications, maintenance, and similar functions; and related materials, supplies, equipment, office space costs, and staff training. Also included are salaries and fringe benefits of direct program administrative positions such as supervisors, program analysts, labor market analysts, and project directors. Additionally, all costs of clerical personnel, materials, supplies, equipment, space, utilities, and travel which are identifiable with these program administration positions are charged to administration.
(e) Training costs consist of goods and services which directly affect program participants in a training activity. Training costs include, but are not limited to, the following: the costs associated with on-the-job training, salaries, fringe benefits, equipment and supplies of personnel engaged in providing training; books and other teaching aids; equipment and materials used in providing training to participants; classroom space and utility costs; employability assessment; job related counseling for participants; job search assistance and labor market orientation; participant allowances, and tuition and entrance fees which represent instructional costs which have a direct and immediate impact on participants. In addition, 250 hours of youth try-out employment is considered an allowable training cost. Youth try-out employment is that which meets the requirements of § 632.78.
(f) The compensation of individuals who both instruct participants and supervise other instructors must be prorated among the training and administration cost categories on the basis of time records or other equitable means. Similarly, tuition fees, and the costs of supplies used in the course of both participant instruction and other activities should be prorated among the benefitting uses.
(g) Employment costs consist of those costs associated with community service employment and work experience as described in § 632.79.
(h) Other costs include supportive services, services which are necessary to enable an individual to participate in training and assistance under this part, and those described in § 632.80.
(i) Costs which are not readily assignable to the training or employment cost category should be charged to either the administration or other category as appropriate.
(j) Unemployment compensation costs are allowable for administrative staff hired in accordance with the administrative provisions of this part, and for CSE participants. Unemployment compensation costs are allowed for work experience only where required by State law.
(k) Travel costs. (1) The cost of participant travel and staff travel necessary for the administration of programs under the Act are allowable costs, chargeable to the proper cost category, and must follow standard Federal travel requirements.
(2) Travel costs of Native American grantee officials, including staff, board members, and advisory council members are allowable if the travel and costs specifically relate to programs under the Act. These costs will be charged to administration. Travel costs for officials of tribes or organizations belonging to a consortium require advance written approval from the Chief, DINAP, unless they are also officials of the Native American grantee organization.
(3) Travel costs for participants using their personal vehicles in the performance of their jobs are allowable if the employing agency normally reimburses its other employees in this way. These costs shall be charged to supportive services.
(4) Travel costs to enable participants to obtain employment or to participate in programs under the Act are allowable as supportive services.
(l) Allocation of fixed unit charge. (1) When contractors or subgrantees bill the Native American grantee with a single unit charge containing costs which are chargeable to more than one cost category, the Native American grantee shall charge these costs to the cost categories in § 632.38. For unit charges such as tuition fees for which the necessary detail cannot be provided, a reasonable estimate of the breakdown of the single unit charge among cost categories in § 632.38 will be sufficient, including for audit purposes. When such unit charges are normally billed as a single charge and the cumulative amount of such charges to a service provider does not exceed $25,000 within the grant year, proration will not be required. These costs may be charged to the category receiving the most benefit.
(2) The provisions of this section shall not apply to vendors selling or leasing equipment and attendant service at a commercially established rate to Native American grantees or subgrantees.
(3) In the case of multiuse equipment there must be a proration of costs or, if there is a predominant usage relating to one cost category, a charge shall be made to that category.
(4) Any single cost, such as staff salaries or fringe benefits, which is properly chargeable to more than one cost category shall be prorated among the affected categories.
§ 632.39
Administrative cost plan.
(a) All administrative funds for all programs operated under separate sections of the Act by a Native American grantee may be accounted for separately and be allocated by title and program activity or may be pooled into one fund. Planned expenditures from the fund shall be described in a separate section of the CAP.
(b) The administrative cost plan may be modified during the program year.
§ 632.40
Administrative staff and personnel standards.
(a) Staffing. Members of the population to be served shall be provided maximum employment opportunities at all levels of the JTPA grantee administration. Native American grantees shall establish systems to enhance the recruitment and hiring of qualified Indian and Native Americans and to provide opportunities for their further occupational training and career advancement.
(b) Compensation. Compensation for administrative staff shall be at levels consistent with generally accepted business practices in the area. Such administrative wages, salaries, and fringe benefits are allowable administrative costs under JTPA.
(c) Basic personnel standards. All grantee employees, including participants, engaged in the administration of programs under the Act shall be subject to the policies and methods of personnel administration as formally established by the Native American grantee.
(d) Bonding. Native American grantees shall comply with the bonding requirements at 41 CFR 29-70.202b.
§ 632.41
Reporting requirements.
Within 45 days of the end of each quarter, a Native American grantee shall submit to the Chief, DINAP by registered mail, financial and program reports. Accuracy of all reports must be verified by the chief executive officer or financial officer. When estimates are used the verification statement will so state. The exact reports to be submitted and reporting instructions as approved by the Office of Management and Budget will be announced to Native American grantees under separate order.
§ 632.42
Grant closeout procedures.
Grant closeout will conform to the requirements at 41 CFR part 29-70. As necessary, the Secretary shall issue supplementary closeout requirements.
§ 632.43
Reallocation of funds.
When the DINAP determines that reallocation is appropriate, it shall give the Native American grantee 30-day notice of proposed action to remove funds from the grant. Such notice shall include specific reasons for the action being taken, and shall give the Native American grantee the opportunity to submit comments on the proposed reallocation of funds. These comments shall be submitted to DINAP within 30 days from the date of the notice. DINAP shall notify affected Native American grantees on any decision to reallocate funds. The Grant Officer shall finally reallocate by modifying the CAP.
§ 632.44
Sanctions for violation of the Act.
(a) Pursuant to sections 164 (d), (e), (f), (g), and (h) of the Act, the Secretary may impose appropriate sanctions and corrective actions for violations of the Act, Regulations, or grant terms and conditions. Additionally, sanctions may include the following:
(1) Offsetting debts, arising from misexpenditure of grant funds, against amounts to which the grantee is or may be entitled under the Act, except as provided in section 164(e)(1) of the Act. The debt shall be fully satisfied when the Secretary reduces amounts allotted to the grantee by the amount of the misexpenditure; and
(2) Determining the amount of Federal cash maintained by the grantee or its subgrantee or contract or in excess of reasonable grant needs, establishing a debt for the amount of such excessive cash, and charging interest on that debt.
(b) Except for actions under section 164(f) and 167 of the Act, to establish a debt or violation subject to sanction and/or corrective action, the Secretary shall utilize initial and final determination procedures outlined in part 636.
(c) To impose a sanction or corrective action regarding a violation of section 167 of the Act, the Secretary shall utilize the procedures of 29 CFR part 31.
(d) (1) The Secretary shall hold the grantee responsible for all funds under the grant. The grantee shall hold its subgrantees and contractors responsible for JTPA funds received through the grant.
(2) The Secretary shall determine the liability of the grantee for misexpenditures of grant funds in accordance with section 164(e) of the Act, including the requirement that the grantee shall have taken prompt and appropriate corrective actions for misexpenditures by a subgrantee or contractor.
(3) Prompt, appropriate, and aggressive debt collection action to recover any funds misspent by subgrantees or contractors ordinarily shall be considered a part of the corrective action required by section 164(e)(2)(D) of the Act.
(4) In making the determination required by section 164(e)(2) of the Act, the Secretary may determine, based on a request from the grantee, that the grantee may forego certain collection actions against a subgrantee or contractor where that subgrantee or contractor was not at fault with respect to the liability criteria set forth in section 164(e)(2)(A) through section 164(e)(2)(D) of the Act. The Secretary shall consider such requests in assessing whether the grantee's corrective action was appropriate in light of section 164(e)(2)(D) of the Act.
(5) The grantee shall not be released from liability for misspent funds under the determination required by section 164(e) of the Act until the Secretary determines that further collection action, either by the grantee or subgrantee or contractor, would be inappropriate or would prove futile.
(e) Nothing in this section shall preclude the Secretary from imposing a sanction directly against a subgrantee or contractor as authorized in section 164(e)(3) of the Act. In such a case, the Secretary shall inform the grantee of the Secretary's action.

Subpart E—Program Design and Management
§ 632.70
Waiver of regulations under Parts 632 and 636.
(a) A Native American section 401 grantee may request, and the Assistant Secretary of Labor for Employment and Training may grant, a waiver of specific provisions of 20 CFR Parts 632 and 636, or of any applicable administrative issuance, to the extent that such request is consistent with the provision of the Act.
(b)(1) In requesting a waiver under this section, the Native American section 401 grantee shall demonstrate how it will enhance the provision of services or outcomes to participants, which may include, but are not limited to, the following purposes: improving the targeting of services to the hard-to-serve; increasing the level of basic and occupational skills training provided by the JTPA program; contributing to the provisions of academic enrichment services to youth; promoting coordination of JTPA programs with other human resources programs; or substantially improving the job placement outcomes of the JTPA program.
(2) The request shall describe the regulatory requirements to be waived and demonstrate how such requirements impede the enhancement of the services and outcomes described in paragraph (b)(1) of this section.
(3) The waiver request shall indicate how the grantee will modify its planning documents as a result of the waiver.
(c) A waiver shall not be granted for:
(1) Any statutory requirement;
(2) The formula for allocation of funds;
(3) Eligibility requirements for services as provided in this part;
(4) Requirements for public health or safety, labor standards, civil rights, occupational safety or health, or environmental protection; or
(5) Prohibitions or restrictions relating to construction of buildings or facilities.
(d) Waivers granted shall be effective for no more than four years from the date the waiver is granted.
[60 FR 58229, Nov. 27, 1995]
§ 632.75
General responsibilities of Native American grantees.
This subpart sets out program operation requirements for Native American grantees including program management, linkages, coordination and consultation, allowable activities, participant benefits and duration of participation provisions. It also sets forth the responsibilities of Native American grantees with respect to nondiscrimination and equitable provision of services.
§ 632.76
Program management systems.
(a) All Native American grantees shall establish management information systems to control and assess all programs. Native American grantees must institute and maintain effective systems for the overall management of all programs including:
(1) Eligibility verification systems as described in § 632.77;
(2) Complaint and hearing procedures as described in part 636; and
(3) Mechanisms for taking immediate corrective action where problems have been identified and for restitution of JTPA funds for improper expenditures.
(b) All Native American grantees shall establish and maintain financial management and participant tracking systems in accordance with § 632.32 and § 632.77. The principal objectives of such systems shall be to provide the Native American grantee with systems necessary to effectively manage its program and to provide information necessary to design program activities and delivery mechanisms and complete Federal required reports.
(c) Each Native American grantee shall establish and use procedures for the continuous, systematic assessment of program performance in relation to the performance standards and goals contained in its CAP.
(d) Native American grantees shall establish and use procedures whereby the information collected and assessments conducted shall be considered in subsequent program planning and in the selection of service deliverers.
§ 632.77
Participant eligibility determination.
(a) Each Native American grantee, and any subgrantees or contractors assigned responsibility for the determination of participant eligibility, shall be responsible for developing and maintaining a system which reasonably ensures an accurate determination and subsequent verification of eligibility based on the information presented at the time of application.
(b) The ultimate responsibility for the selection of participants and the maintenance of participant records rests with the Native American grantee. However, the Native American grantee may assign the administration of this responsibility to subgrantees of contractors. The selected agency must provide adequate documentation of each participant's eligibility and retain in the participant's folder the information on which this determination is based.
(c) The eligibility determination shall be based upon a signed, completed, application form which records all information necessary to determine eligibility, which attests that the information on the application is true to the best of the applicant's knowledge and acknowledging that such information is subject to verification and that falsification of the application shall be grounds for the participant's termination and may subject the applicant to prosecution under law. In the case of an applicant who is a minor (except minors who are emancipated or heads of households), the signature of the parent, responsibile adult or guardian is also required.
(d) Native American grantees shall maintain documentation to ensure the credibility of the eligibility determination, which shall at a minimum:
(1) Include a completed application for participation;
(2) Include records of all actions taken to correct deficiencies in the eligibility determination procedures; and
(3) Show compliance with section 504 of the Act.
(e) A participant determined to be ineligible shall immediately be terminated.
(f) A Native American grantee may enter into an agreement with a State employment security agency (SESA) or other independent agency or organization as may be approved by the Department, for the verification of applicant eligibility within 45 days of enrollment. The Native American grantee shall monitor such verification procedures to ensure that erroneous verifications are not made deliberately or with insufficient care.
(g) Participants may be transferred from one JTPA program to another, from one Native American grantee to another, from a Native American grantee to a SDA grant recipient, from a SDA grant recipient to a Native American grantee, or concurrently enrolled in programs sponsored by Native American grantees or SDA grant recipients, provided, except for age requirements, they were eligible for the subsequent or concurrent program when they were first enrolled.
(h) Eligibility determinations for each program shall be made at the time of application. Applicants determined eligible may be enrolled as participants within 45 days of the date of the application without an update of the information on the application provided they did not obtain full-time permanent unsubsidized employment in the interim. This provision does not appy to the title II-B program.
(i) Aliens described in section 167(a)(5) of the Act and who otherwise meet the eligibility requirements for programs under this part, may participate in a program if this is permitted by Indian law or the Native American grantee.
§ 632.78
Training activities.
Native American grantees shall design and operate programs funded under the Act which support growth and development as determined by representatives of the Indian and Native American communities and groups served (sec. 401(a)). Training shall be only for occupations for which there is a demand in the area served or in another area to which the participant is willing to relocate, and consideration in the selection of training programs may be given to training in occupations determined to be in sectors of the economy which have a potential for sustained demand or growth. The CAP will provide evidence based on local labor market information that occupational demand exists for planned training. The basic types of training activities available to Native American grantees, subgrantees and contractors include, but are not limited, to the following:
(a) Classroom training. This program activity is any training of the type normally conducted in an institutional setting, including vocational education, and designed to provide individuals with the technical skills and information required to perform a specific job or group of jobs. It may be coupled with other employment and training activities and may also include training designed to enhance the employability of individuals by upgrading basic skills, through the provision of courses such as remedial education, GED, training in the primary language of persons with limited English-speaking proficiency, or English-as-a-second-language training.
(b) On-the-job training. (1) On-the-job training (OJT) is training in the private or public sector given to a participant, who has been hired first by the employer, and which occurs while the participant is engaged in productive work which provides knowledge or skills essential to the full and adequate performance of the job. This does not preclude a participant who has been hired by and received OJT from one employer from being ultimately placed with another employer. Innovative approaches to financing, particularly involving the sharing of training costs by the private sector are to be encouraged.
(2) OJT may be coupled with other JTPA employment and training activities. As needed, OJT participants may receive any of the employment and training services or supportive services through the system, through community resources, or through employer resources.
(3) Reimbursement. Payments to employers for OJT which shall not, during the period of such training, average more than 50 percent of the wages excluding fringe benefits paid by the employer to such participants, and payments in such amount shall be deemed to be in compensation for the extraordinary costs associated with the training costs and lower productivity of such participants. No direct wage payments will be made to OJT participants by the Native American Grantee.
(4) OJT agreements. Employers will be held responsible with respect to JTPA costs only in accordance with the provisions of their OJT agreements. At a minimum, the OJT agreement shall contain the elements listed below. Native American grantees may place additional provisions in the OJT agreement only after a careful assessment is made of the additional burdens imposed on participating employers. Agreements may be entered into only with employers which have not been seriously deficient in their conduct of or participation in any DOL program. Each OJT agreement shall contain:
(i) A brief training outline, including the length of training and the nature of the training;
(ii) The method and maximum amount of reimbursement for OJT training costs;
(iii) The number of participants to be trained;
(iv) Job descriptions and specification of participant wage rates;
(v) Reporting requirements;
(vi) An assurance that payroll records, time and attendance records, job duties and documentation of classroom training, employment and training services, or supportive services, costs for which the employer is being reimbursed will be subject to review;
(vii) A termination clause for nonperformance; and
(viii) An assurance that the employer will comply with the Act and regulations.
(c) Tryout employment. Tryout employment in private-for-profit worksites may be conducted in accordance with section 205(d)(3)(B) of the Act (sec. 141(K)).
(d) Training assistance. Such assistance includes:
(1) Orientation to the world of work;
(2) Counseling. This includes employment and training related counseling and testing;
(3) Job development;
(4) Job search assistance. This includes transition services, such as job seeking skills instruction, individualized job search plan, labor market information, and other special activities for transition to unsubsidized employment;
(5) Job referral and placement; and
(6) Vocational Exploration Program (VEP). A Native American grantee may conduct a VEP program to expose participants to jobs available in the private sector through observation of such jobs, instruction, and, if appropriate, limited practical experience.
(e) Combined activities. (1) A participant may be simultaneously or sequentially enrolled in two or more activities.
(2)(i) Reimbursement may be up to 100 percent to employers, including private-for-profit employers, for expenditures for the costs of classroom training, employment and training assistance or supportive services for participants in combined activities including the costs of participants' wages paid by the employer for time spent in these activities during working hours.
(ii) Reimbursement may be made on a cost reimbursement or fixed cost basis and shall be supported by business receipts, payroll, or other records normally kept by the employer.
(iii) Nothing in this paragraph (b)(1) shall allow reimbursement to private-for-profit employers for the costs of OJT to exceed the amounts allowable in § 632.78.
§ 632.79
Employment activities.
(a) Community service employment (CSE). Community Service Employment is the type of work normally provided by government and includes, but is not limited to, work (including part-time work) in such fields as environmental quality, child care, health care, education, crime prevention and control, prisoner rehabilitation, transportation, recreation, maintenance of parks, streets and other public facilities, solid waste removal, pollution control, housing and neighborhood improvement, rural development, conservation, beautification, veterans outreach, development of alternative energy technologies, and other fields of human betterment and community improvement. It includes work performed by tribally sponsored or owned income generating enterprises owned by Indian tribes, bands, or groups, or Native Alaskan entities, provided the profits from such enterprises are used exclusively for functions normally performed by the governing body of such entities.
(b) Work experience. (1) Work experience is a short-term or part-time work assignment with an employing agency or an organization authorized to employ CSE participants. It is otherwise prohibited in the private-for-profit sector.
(2) Participation in work experience shall be for a reasonable length of time, based on the needs of the participant, and subject to the restrictions set forth in § 632.85.
§ 632.80
Other activities.
(a) General. Native American grantees may conduct employment and training activities not described in this subpart. The CAP shall describe the basic design of activities undertaken as “other activities” and their objectives. These activities may include, but are not limited to:
(1) Removal of artificial barriers to employment;
(2) Job restructuring;
(3) Revision or establishment of merit systems;
(4) Development and implementation of affirmative action plans, including Indian preference plans and Tribal Employment Rights Office (TERO) programs.
(5) Post termination services in § 632.80 for up to 30 days following termination; and
(6) Employment generating services.
(b) Supportive services. Supportive services are those which are necessary to enable an individual eligible under this part, but who cannot afford to pay for such services, participate in the program. Such supportive services may include but are not limited to transportation, health care, special services and materials for the handicapped, child care, meals, temporary shelter, financial counseling, and other reasonable expenses required for participation in the training program and may be provided in-kind or through cash assistance.
§ 632.81
Payments to participants.
(a) General. Each participant paid wages for employment activities, allowances for classroom training or reimbursed for OJT or tryout employment will be provided such benefits pursuant to section 142 of the Act.
(b) Maximum wage rates for CSE. (1) The wages (including those received from overtime work and leave taken during the period of employment) paid to any CSE participant from funds under the Act shall be limited to a full-time rate of $10,000 per year (or the hourly, weekly, or monthly rate which, if full-time and annualized, would equal a rate of $10,000 per year). Approved rates above $10,000 are fixed at the CETA approved rate as of September 30, 1982, unless adjusted by the Secretary.
(2) Fringe benefits payable from funds under the Act to any CSE participant may not exceed those regularly afforded to similarly employed non-JTPA workers.
(3) Davis-Bacon wages. All laborers and mechanics employed by contractors or subcontractors in any construction, alteration, or repair, including painting and decorating, of projects, buildings, and works which are federally assisted under this Act, shall be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary in accordnace with the Act of March 3, 1931, popularly known as the Davis-Bacon Act, and the implementing regulations in 29 CFR parts 1, 3, 5, and 7.
(c) Payment of allowances. (1) A basic hourly allowance for regularly enrolled classroom training or services participants shall not exceed the higher of the State or Federal minimum hourly wage.
(2) Native American grantees are encouraged to submit allowance payment designs which are less than in paragraph (c) (1) of this section. Through innovative reimbursement systems the number of participants should be maximized. The allowance payment system will be described in the Master Plan and as an option may include dependent allowances.
(3) Repayments. Native American grantees shall require participants to repay the amount of any overpayment of allowances under this part, except if the overpayment was made in the absence of fault on the part of the participant. Where the Native American grantee requires repayment, any overpayment not repaid may be set off against any future allowance or other payments under the Act to which the participant may become entitled.
(d) Combined activities. A primary activity is one in which a participant is enrolled for more than 50 percent of scheduled time. Participants enrolled in a primary activity for which wages are payable and simultaneously in an activity for which allowances are payable may, at the Native American grantee's option, be paid wages for all hours of participation. A participant enrolled in a primary activity for which allowances are payable may, at the Native American grantee's option, be paid allowances for all hours of participation, except when OJT is the non-primary component. However, in the latter case, before placing an individual in such an activity, the Native American grantee shall request a determination from the Internal Revenue Service as to whether income from the non-primary component is taxable.
§ 632.82
Benefits and working conditions for participants.
The provisions of sections 142 and 143 of the Act shall apply to benefits and working conditions.
§ 632.83
FICA.
Expenditures may be made from JTPA funds for taxes under the Federal Insurance Contribution Act (FICA), 26 U.S.C. 3101, et seq.
§ 632.84
Non-Federal status of participants.
Participants shall not be deemed Federal employees and shall not be subject to the provisions of law relating to Federal employment.
§ 632.85
Participant limitations.
(a) Except as provided in paragraph (c) of this section and for participants in programs that have other statutory limits, participation in work experience shall be limited to a maximum of 1,000 hours during any one year beginning with the day of enrollment in either CETA or JTPA.
(b) No participant may receive wages for CSE for more than 78 weeks during a 2-year period from the participant's initial enrollment in either JTPA or in a program supported by the Comprehensive Employment and Training Act.
(c) The limitation on work experience participation in JTPA set forth in paragraph (a) of this section:
(1) Shall not apply to time spent by in-school youth or title II-B participants enrolled in a work experience program under the Act, nor shall such time be included in determining if an individual has reached such limitations; and
(2) May be waived by the Chief, DINAP and the waiver justification described in the Master Plan or CAP.
§ 632.86
Nondiscrimination and nonsectarian activities.
Pursuant to section 167(a) of the Act:
(a) Subject to the restriction that services under section 401 of JTPA are legally available only to Indian and Native American persons, nondiscrimination and equal opportunity requirements and procedures, including complaint processing compliance reviews, will be governed by the provisions of 29 CFR parts 31 and 32 and will be administered by the Office of Civil Rights.
(b) The employment or training of participants in sectarian activities is prohibited.
§ 632.87
Equitable provision of services to the eligible population and significant segments.
Native American grantees shall ensure and provide evidence in the Master Plan that a system is in place to afford all members of the eligible population within the service area for which the grantee was designated are afforded an equitable opportunity for employment and training activities and services.
§ 632.88
General responsibilities of the Department.
The Department of Labor shall be responsible for:
(a) Providing prompt notification to all Native American grantees of allocations of funds, proposed and final rules and program directives and procedures.
(b) The development, after consultation with Native American grantees, of regulations, performance standards and program policies governing Native American programs. Such regulations and program policies shall take into account the special circumstances under which Native American programs operate (sec. 401 (h)(1)).
(c) Providing Native American grantees with technical assistance, as the Secretary deems necessary, related to the administration and operation of JTPA programs (sec. 401(i)).
(d) Taking appropriate action to establish administrative procedures and machinery within the Department, including the retention of personnel having particular competence in the field of Indian and Native American employment and training programs, for the selection, administration, monitoring and evaluation of such programs (sec. 401(e)).
§ 632.89
Performance standards.
The Department of Labor shall establish performance standards for all Native American grantees (section 401(h)(1)). Performance results, as judged against these standards, will not be used for grantee designation purposes for the Program Years 1985-1986. Performance results will be a factor in grantee designations for Program Years 1987-1988, and beyond.

Subpart F—Prevention of Fraud and Program Abuse
§ 632.115
General.
(a) To ensure the integrity of the JTPA programs special efforts by grantees are necessary to prevent fraud and other program abuses. While any violation of the Act or regulations may constitute fraud or program abuse, this subpart F identifies and addresses those specific program problems of most concern to the Department.
(b) This subpart sets forth specific responsibilities of Native American grantees, subgrantees and contractors and of the Secretary to prevent fraud and program abuse in JTPA programs.
§ 632.116
Conflict of interest.
(a) No member of any advisory, planning, private industry council or governing body under the Act shall cast a vote on any matter which has a direct bearing on services to be provided by that member or any organization which such member directly represents or on any matter which would financially benefit such member or any organization such member represents.
(b) Each Native American grantee, subgrantee or contractor shall avoid personal and organizational conflict of interest in awarding financial assistance and in the conduct of procurement activities involving funds under the Act in accordance with the code of conduct requirements set forth in 41 CFR 29-70.216-4.
(c) Neither the Secretary nor any Native American grantee, subgrantee or contractor shall pay funds under the Act to any nongovernmental individual, institution or organization to conduct an evaluation of any program under the Act if such individual, institution or organization is associated with that program as a consultant or technical advisor.
§ 632.117
Kickbacks.
No officer, employee or agent of any Native American grantee, subgrantee of contractor shall solicit or accept gratuities, favors or anything of monetary value from any actual or potential subgrantee, contractor or supplier.
§ 632.118
Nepotism.
(a) No Native American grantee, subgrantee, contractor or employing agency shall permit the hiring of any person in a staff position or as a participant if that person or a member of that person's immediate family is employed in an administrative capacity by the Native American grantee, subgrantee or contractor. The Native American grantee may waive this requirement if adequate justification is documented. The following are examples where the nepotism provision may be waived:
(1) If there are no other persons eligible and available for participation or employment by the Native American grantee;
(2) Where the Native American grantee's total service population is 2,000 or less, or where the geographical situation of an Indian or Native American community is rural and isolated from other communities within the designated service area; or
(3) Where the potential participant has a history of unemployment or dependence on public assistance.
(b) A Native American grantee may develop its own nepotism policy in lieu of the policy in paragraph (a) of this section. The Chief, DINAP, shall review any such policy before its implementation and shall approve or disapprove it. Any such policy shall be described in the Master Plan and have adequate safeguards to prevent persons employed in an administrative capacity for the Native American grantee, its subgrantees or contractors from using such position to secure JTPA services or other benefits for a member of his or her immediate family. A satisfactory policy shall include the following minimum criteria:
(1) All formal personnel procedures shall be followed;
(2) There shall be full written disclosure to the governing body describing all advantages, conflicts and/or disadvantages which may result from the specific personnel action; and
(3) No member of the immediate family of the applicant shall participate in the applicant's selection.
(c) For purposes of this section, the term “immediate family” means wife, husband, son, daughter, mother, father, brother, and sister. The term “staff position” includes all JTPA staff positions funded under the Act such as instructors, counselors, and other staff involved in administrative, training or service activities. The term “employed in an administrative capacity” includes those persons who have overall administrative responsibility for a program including: All elected and appointed officials who have any responsibility for the obtaining of or approval of any grant funded under this part as well as other officials who have any influence or control over the administration of the program, such as the project director, deputy director and unit chiefs; and persons who have selection, hiring, placement or supervisory responsibilities for participants in a Native American employment and training program. The term excludes officials of entities belonging to a consortium who are not at the same time officials of the consortium. Persons serving on a Native American grantee's advisory councils or PIC shall not be considered to be in an administrative capacity.
§ 632.119
Political patronage.
(a) No Native American grantee, subgrantee or contractor may select, reject, or promote a participant based on that individual's political affiliation or beliefs. The selection or advance of employees as a reward for political services or as a form of political patronage, whether or not the political service or patronage is partisan in nature, is prohibited.
(b) There shall be no selection of subgrantees or contractors based on political affiliation.
§ 632.120
Political activities.
(a) No program under the Act may involve political activities.
(b) No participant may engage in partisan or nonpartisan political activities during hours for which the participant is paid with JTPA funds.
(c) No participant may, at any time, engage in partisan or nonpartisan political activities in which such participant represents himself or herself as a spokesperson for the JTPA program.
§ 632.121
Lobbying activities.
No funds provided under the Act may be used in any way:
(a) To attempt to influence in any manner a member of Congress to favor or oppose any legislative or appropriation by Congress; or
(b) To attempt to influence in any manner State or local legislators to favor or oppose any legislation or appropriation by such legislators.
§ 632.122
Unionization and antiunionization activities; work stoppages.
(a) No funds under the Act shall be used in any way to either promote or oppose unionization (sec. 143(c)(1)).
(b) No participant in work experience or community service employment may be placed into, or remain working in, any position which is affected by labor disputes involving a work stoppage. If such a work stoppage occurs during the grant period, participants in affected positions must:
(1) Be relocated to positions not affected by the dispute; or
(2) Be suspended through administrative leave or other means; or
(3) Where participants belong to the labor union involved in the work stoppage, they shall be treated in the same manner as other members of the union except that they may not remain in the affected positions. The grantee shall make every effort to relocate participants who wish to remain working into suitable positions unaffected by the work stoppage.
(c) No person shall be referred to or placed in an on-the-job training position affected by a labor dispute involving a work stoppage and no payments may be made to employers for the training and employment of participants in on-the-job training during the periods of work stoppage.
§ 632.123
Maintenance of effort.
(a) Funds provided under this Act shall only be used for activities which are in addition to those which would otherwise be available in the area in the absence of such funds.
(b) Funds provided under this Act shall not be used to duplicate facilities or services available in the area (with or without reimbursement) from Federal, State, or local sources, unless the plan establishes that alternative services or facilities would be more effective or more likely to achieve performance goals.
§ 632.124
Theft or embezzlement from employment and training funds; improper inducement; obstruction of investigations and other criminal provisions.
The criminal provision of 18 U.S.C. 665 states:
(a) Whoever, being an officer, director, agent or employee of, or connected in any capacity with, any agency receiving financial assistance under the JTPA knowingly hires an ineligible individual or individuals; embezzles, willfully misapplies, steals, or obtains by fraud any of the money, funds, assets, or property which are the subject of a grant or contract of assistance pursuant to such Act shall be fined not more than $10,000 or imprisoned for not more than 2 years, or both; but if the amount so embezzled, misapplied, stolen, or obtained by fraud does not exceed $100, such person shall be fined not more than $1,000 or imprisoned not more than 1 year, or both.
(b) Any person whoever willfully obstructs or impedes, or endeavors to obstruct or impede, an investigation or inquiry under the JTPA or the regulations thereunder, shall be punished by a fine of not more than $5,000 or by imprisonment for not more than 1 year, or by both such fine and imprisonment.
(c) In addition to the criminal provisions set forth in paragraphs (a) and (b) of this section, individuals may be held criminally liable under other Federal laws. For example, 18 U.S.C. sections 600 and 601 hold them liable if they:
(1) Directly or indirectly promise any employment position, compensation, contract, appointment, or other benefit, provided for or made possible in whole or in part by funds under the Act, or any special consideration in obtaining any such benefit, to any person as consideration, favor, or regard for any political activity or for the support of, or opposition to, any candidate or any political party in connection with any general or special election to any political office, or in connection with any primary election or political convention or caucus held to select candidates for any political office (18 U.S.C. 600); or
(2) Directly or indirectly knowingly cause or attempt to cause any person to make a contribution of a thing of value (including services) for the benefit of any candidate or any political party, by means of the denial or deprivation, or the threat of the denial or deprivation, of any employment or benefits funded under the Act (18 U.S.C. 601).
§ 632.125
Responsibilities of Native American grantees, subgrantees and contractors for preventing fraud and program abuse and for general program management.
(a) Each Native American grantee shall establish and use internal program management procedures sufficient to prevent fraud and program abuse, including subgrantee and contractor fraud and abuse. The procedures to be used shall be identified in the Native American grantee's Master Plan.
(b) Each Native American grantee, subgrantee and contractor shall ensure that sufficient, auditable, and otherwise adequate records are maintained which support the expenditure of all funds under the Act. Such records shall be sufficient to allow the Secretary to audit and monitor the Native American grantees', subgrantees', and contractors' programs and shall include the maintenance of a management information system in accordance with the requirements of § 632.32.
(c) Any person having knowledge of fraud, criminal activity or other abuse shall report such information directly and immediately to the Secretary. Similarly, all complaints involving such matters should also be reported to the Secretary directly and immediately.
Subpart G [Reserved]

Subpart H—Job Training Partnership Act Programs Under Title IV, Section 401
§ 632.170
Eligibility for funds.
The Department shall provide funds under section 401 of the Act only to Native American grantees designated in accordance with § 632.10.
§ 632.171
Allocation of funds.
(a) One hundred percent, except as provided in § 632.171(c), of the amount available for section 401 will be distributed by formula as follows:
(1) Twenty-five percent of the available funds shall be allocated on the basis of the relative number of unemployed Indians and other Native Americans within the Native American grantee's geographic service area compared to the total number of unemployed Indians and other Native Americans in the United States.
(2) Seventy-five percent of the available funds shall be allocated on the basis of the relative number of members of Indian and other Native Americans households, whose income is at or below the poverty level, within the Native American grantee's geographic service area compared to the total number of members of Indians and Native American households in poverty in the United States.
(b) Commencing with Program Year 1985 and after consultation with Indian groups, the Department may reserve up to one percent of section 401 funds. These funds may be used for technical assistance to improve the program's overall performance.
(c) In situations when the Department determines that the formula allocation will result in severe disruption from one year to the next, a hold harmless or other factor to minimize such disruptions may be used.
§ 632.172
Eligibility for participation in title IV, section 401.
(a) An Indian, Native Alaskan, or Native Hawaiian, as determined by the Native American Grantee, who is economically disadvantaged, or unemployed or underemployed is eligible to participate in a program under this subpart. For income eligibility purposes, the NAG may use either 6-months annualized or 12-months actual income.
(b) Indians and other persons of Native American descent who meet the requirements of subsection (a) of this section and who are identified by the Federal or State government as “landless” or “terminated” or “non-federally recognized” are included among those eligible to participate. These terms shall be broadly construed for the specific purpose of including, among others, terminated, State-recognized, or other groups or individuals previously determined to be eligible for Indian services under the Comprehensive Employment and Training Act.
(c) A Native American grantee may enroll Indian and Native American participants in upgrading and retraining programs who are not unemployed, underemployed or economically disadvantaged where such participants meet the following eligibility requirements:
(1) For upgrading, a person must be operating at less than full skill potential, and working for at least the prior 6 months with the same employer in either an entry level, unskilled or semiskilled position or a paid position with little or no advancement opportunity in a normal promotional line. Priority consideration shall be given to the workers who have been in entry level positions for the longest time.
(2) For retraining a person must have received a bona fide notice of impending layoff and have been determined by the grantee as having little opportunity to be reemployed in the same or equivalent occupation or skill level within the labor market area.
§ 632.173
Allowable program activities.
(a) Native American grantees may undertake programs and activities consistent with the purposes of the Act including, but not limited to, programs and activities described in §§ 632.78 through 632.81.
(b) Native American grantees are encouraged to develop innovative means of addressing the needs of unemployed, underemployed and economically disadvantaged members of their communities and of contributing to the permanent economic self-sufficiency of such communities.
(c) Training and placement in the private sector will be emphasized. CSE and work experience are permitted when consistent over the long term with increasing earnings in unsubsidized employment. Expenditures for CSE are limited to 10 percent or the unemployment rate, based on data collected by an appropriate Federal or State agency including BIA, of a NAG's total section 401 allocation. For nonreservation grantees, the official BLS unemployment rate or State job service rate for the area will be used.
(d) Wages and allowances are to be kept to a minimum to maximize funds to be used for training.
(e) Innovative approaches to the private sector are encouraged.
(f) Other activities described in § 632.80 should use no more than 25 percent of the funds. This limitation may be increased to accommodate the extraordinary costs associated with special training projects where it is clear the benefits support the additional cost. An increase to this limitation shall be approved in instances such as, but not limited to, rural participants needing relocation for training, when the costs of housing, transportation, etc., for training participants cannot be met within a 25 percent limitation, and for TERO activities.
§ 632.174
Administrative costs.
Administrative costs for this subpart are limited to and shall not exceed 20 percent of the funds available.

Subpart I—Summer Youth Employment and Training Programs
§ 632.250
General.
This subpart contains the policies, rules, and regulations of the Department in implementing and administering a Summer Youth Employment and Training Program for Indians and other Native Americans authorized by title II, part B of the Act.
§ 632.251
Eligibility for funds.
Only Native American grantees described in section 401(c)(1) of the Act are eligible for summer youth program funds.
§ 632.252
Allocation of funds.
(a) For this program the Secretary shall reserve the same percentage of JTPA 3(b) funds as were available in the CETA, IV-C Fiscal Year 1983 program.
(b) Allocations shall be made to eligible Native American grantees on the basis of a formula using the best available data as determined by the Department in consultation with Native American groups and shall be published by the Secretary.
§ 632.253
Special operating provisions.
Native American grantees shall:
(a) Provide services to youths most in need;
(b) Develop outreach and recruitment techniques aimed at all segments of the economically disadvantage youth population, especially school dropouts, youth not likely to return to school without assistance from the summer program, and youth who remain in school but are likely to be confronted with significant employment barriers relating to work attitude, aptitude, social adjustment, and other such factors;
(c) Provide labor market orientation to participants. This orientation may include, as appropriate: vocational exposure, counseling, testing, resume preparation, job interview preparation, providing labor market information, providing information about other training programs available in the area, including apprenticeship programs, and similar activities. It may be provided on a group or individual basis. In providing labor market orientation, skill training and remedial education, each grantee shall make maximum efforts to develop cooperative relationships with other community resources so that these activities are provided in the summer program at no cost, or at minimum cost, to the summer program;
(d) Assure that adequate supervision from skilled supervisors is provided to participants at each worksite;
(e) Make appropriate efforts to encourage educational agencies and post-secondary institutions to award academic credit for the competencies participants gain from their participation in the summer program;
(f) Ensure that appropriate efforts are made to closely monitor the performance of the summer program and measure program results against established goals;
(g) Ensure that enrollee applications are widely available and that jobs are awarded among individuals most severely disadvantaged in an equitable fashion. Enrollment applications shall require the signature of the applicant or (in the case of minors) the parent or guardian attesting to the accuracy of the information, including income data, provided on the application; and
(h) Provide participants with an orientation to the program which shall include, but not be limited to: purposes of the program and the conditions and standards (including such items as hours of work, pay provisions and complaint procedures) for such activities in the program.
§ 632.254
Program startup.
During the planning and design phase of the program and prior to the close of the school year, only those activities outlined in § 632.255(b) are permissible. These activities shall be charged as administrative costs. Individuals may not begin participation in the program before the close of school.
§ 632.255
Program planning.
(a)(1) In developing the summer program, the Native American grantee shall coordinate the summer plan with its title IV program.
(2) Native American grantees shall use the planning process described in § 632.17.
(b) The following planning and design activities shall be allowable beginning October 1 of each year;
(1) Hiring of staff (planners, worksite developers, intake specialists, etc.), provided, prior to the close of school all staff salaries and benefits shall be charged as administrative expenses, except that 45 days prior to the beginning of the summer program and 45 days after the summer program, all staff costs and other program development costs may be charged pursuant to § 632.38;
(2) Development of the summer plan;
(3) Worksite development;
(4) Recruitment, intake and selection of participants;
(5) Arrangements for supportive services;
(6) Dissemination of program information;
(7) Development of coordination between schools and other services;
(8) Staff training; and
(9) Other activities that may be characterized as planning and design but not program operation.
(c) Expenses incurred in such planning and design activities may, pursuant to § 632.38, be paid from administrative funds received under other titles of the Act.
§ 632.256
Submission of applications.
To the extent possible, Native American grantees will be notified of their summer youth allocation at the same time section 401 allocations are announced. The summer plan will be a separate part of the CAP and follow the same format as the CAP.
§ 632.257
Eligibility for participation.
(a) An individual shall be eligible for participation if, at time of application, he or she is an Indian or Native American youth who is:
(1) At the time of application, economically disadvantaged;
(2) At the time of enrollment, age 14 through 21 inclusive; and
(3) For income eligibility purposes, the NAG may use either six months annualized or 12 months actual income.
(b) The nepotism provisions of this part shall not apply to this program,
§ 632.258
Allowable activities.
Allowable activities are those listed in § 632.78-80 except that community service employment is not permitted.
§ 632.259
Vocational exploration program.
A Native American grantee may conduct a vocational exploration program for the purpose of exposing youth to the operation and types of jobs and instruction including, where appropriate, limited and short term practical experience.
§ 632.260
Worksite standards.
(a)(1) Each Native American grantee shall develop a written agreement with worksite employers which complies with sections 142 and 143 of the Act and which assures:
(i) Adequate supervision of each participant;
(ii) Adequate accountability for participant time and attendance; and
(iii) Adherence to the rules and regulations governig the summer program.
(2) Such written agreements may be memoranda of understanding, simple work statements or other documents which indicate an estimate of the number of participants at the worksite and any operational conditions governing the program at the worksite.
(b) Each Native American grantee shall establish procedures for the monitoring and evaluation of each worksite to insure compliance with the worksite agreements and the terms and conditions of subgrants and contracts.
(c) No participant shall be required to work, or be compensated for work with JTPA funds, for more than 40 hours of work per week.
§ 632.261
Reporting requirements.
(a) Each Native American grantee shall submit an end of summer report which will include both financial and characteristics information. The report format will be issued to grantees under separate instructions.
(b) The report in this section is to be submitted to Chief, DINAP by registered mail no later than 45 days after the end of the summer program.
§ 632.262
Termination date for the summer program.
Participants may not be enrolled in the summer program beyond September 30, or beyond the date they resume school full-time, whichever occurs earlier. Allowable activities after September 30 include report and record preparation and submittal, completion of evaluations and assessments of worksite employers and the overall program or other elements of the summer program.
§ 632.263
Administrative costs.
Administrative costs for this subpart are limited to and shall not exceed 20 percent of the funds available.