[Federal Register Volume 59, Number 80 (Tuesday, April 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9923]


[[Page Unknown]]

[Federal Register: April 26, 1994]


_______________________________________________________________________

Part X





Department of Labor





_______________________________________________________________________



Employment and Training Administration



20 CFR Part 641



_______________________________________________________________________



Office of the Secretary



29 CFR Part 89



_______________________________________________________________________




Senior Community Service Employment Program; Proposed Rule
DEPARTMENT OF LABOR

Employment and Training Administration

20 CFR Part 641

Office of the Secretary

29 CFR Part 89

[RIN 1205-AA29]

 
Senior Community Service Employment Program

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

ACTION: Proposed rule.

-----------------------------------------------------------------------

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

DATES: Written comments on the proposed rule are invited from 
interested parties. To be assured of consideration, comments must be 
received on or before May 26, 1994.

ADDRESSES: Written comments should be addressed to the Assistant 
Secretary of Labor for Employment and Training, Department of Labor, 
200 Constitution Avenue, NW., room N4641, Washington, DC 20210. 
Attention: Paul A. Mayrand, Director, Office of Special Targeted 
Programs.
    Commenters wishing acknowledgement of receipt of their comments 
shall submit them by certified mail, return receipt requested. Comments 
received will be available for public inspection during normal business 
hours at the Division of Older Worker Programs, Office of Special 
Targeted Programs. Telephone: (202) 219-4778.
    Persons who need assistance to review the proposed regulation will 
be provided with appropriate aids. To schedule an appointment, call 
(202) 219-4778 (VOICE) or (TDD). Copies of the notice of proposed 
rulemaking are available in the following formats: electronic file on 
computer disk, audiotape, and large-type print. They may be obtained at 
the above address.

FOR FURTHER INFORMATION CONTACT: Charles L. Atkinson, Chief, Division 
of Older Worker Programs, Office of Special Targeted Programs 
Telephone: (202) 219-4778 (this is not a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Introduction

    As authorized by title V of the Older Americans Act (OAA or Act), 
as amended (42 U.S.C. 3056, et seq.), the Senior Community Service 
Employment Program (SCSEP) fosters and promotes useful part-time 
opportunities in community service activities for persons with low 
incomes who are fifty-five years old or older. The Employment and 
Training Administration (ETA) of the Department of Labor (DOL or 
Department) administers the program by means of grant agreements with 
eligible organizations such as governmental entities and certain public 
and private non-profit agencies and organizations. Pursuant to the Act, 
the Department in 1973 established SCSEP.
    The SCSEP regulations were last revised in 1976: 29 CFR part 89, 41 
FR 9006 (March 2, 1976). The SCSEP legislation has been amended by the 
following laws since the last revision of the regulation: Public Law 
95-478, section 105 (October 18, 1978); Public Law 97-115, section 12 
(December 29, 1981); Pub. L. 98-459, sections 501-05 (October 9, 1984); 
Public Law 100-175, sections 161-66 (December 7, 1987); and Public Law 
102-375, sections 502-11 (September 30, 1992) and Public Law 103-171 
(December 2, 1993). On July 19, 1985, the Department published a notice 
of proposed rulemaking governing the SCSEP in the Federal Register (50 
FR 29606) for the purpose of soliciting public comment. The proposed 
rule would have implemented only the amendments established by Pub. L. 
98-459 (October 9, 1984). The comments made in response to the July 19, 
1985, Federal Register proposed rule have been considered in drafting 
this proposed rule. Also implemented are the 1987 and 1992 amendments 
contained in Public Law 100-175 (December 7, 1987), and Pub. L. 102-375 
(September 30, 1992). The Department has made other minor changes to 
accommodate revisions in other federal regulations which impact upon 
the operations of SCSEP. For that reason, the Department is providing 
an opportunity for public comment on the entire regulation. Since 1985, 
pursuant to grant agreements, recipients and subrecipients have used 
the July 19, 1985, proposed rule to administer and operate their 
projects. During that period, no substantive problems with the July 19, 
1985, proposed rule have been identified. Therefore, major changes have 
not been made.
    This document proposes to revise the proposed SCSEP regulation to 
conform to the OAA and to make technical changes based on the 
Department's experience in administering the SCSEP.

II. The Older Americans Act Amendments of 1992, Pub. L. 102-375 
(September 30, 1992). Summary of Proposed Changes

    There are provisions contained in Pub. L. 102-375 (1992 Act) which 
impact on SCSEP. The category and provisions are as follows:

 Financial

    Equitable Distribution of Resources. Section 504(b)(2) of the 1992 
Act added section 506(c)(3) to the OAA to expand the criteria for 
equitable apportionment of OAA project monies to include the ``relative 
distribution'' within each State of those eligible individuals with the 
greatest economic need, the greatest social need, and those who are 
minorities. Currently, each State considers the proportion of eligible 
individuals residing within each county.

 Eligibility/Assessment

    Poor Employment Prospects. Section 502(a) of the OAA, as amended by 
section 501(1) of the 1992 Act, reaffirms statutorily that the SCSEP 
program is to serve unemployed low-income eligible individuals, 55 or 
older, who have ``poor employment prospects''.
    Greatest Economic Need. Section 502(b)(1)(M) of the OAA, as amended 
by section 501(2)(A) of the 1992 Act, requires that SCSEP recipients 
and subrecipients serve individuals with low income at or below the 
poverty line.
    Dual Eligibility. Section 510 of the OAA, as added by section 506 
of the 1992 Act, makes SCSEP enrollees eligible for programs under 
section 203 of the Job Training Partnership Act (JTPA) where projects 
are jointly carried out under the two programs.
    Assessment. Section 502(b)(1)(N) of the OAA, as added by section 
501(2) (B) and (C) of the 1992 Act, requires an analysis of an 
enrollee's skills, talents, need for supportive service(s) and physical 
capabilities. It also provides for employment counseling based on 
strategies that identify appropriate employment objectives and progress 
in meeting such objectives or an equivalent assessment under another 
employment or training program.

 Consultation/Coordination

    Consultation with Area Agencies on Aging. Section 502(d)(1) of the 
OAA, as amended by section 501(4) of the 1992 Act, requires SCSEP 
recipients and subrecipients to consult with the local area agency on 
aging in the planning and service areas in localities where a SCSEP 
project is to be located. This is in addition to the existing 
requirement that SCSEP recipients and subrecipients submit a 
description of the project to the State agency 30 days prior to 
undertaking the project.
    Coordination with Administration on Aging. Section 503(a)(2) and 
(b)(1) of the OAA, as amended by section 502(a)(3) and (b) of the 1992 
Act, requires the Department of Labor to coordinate the administration 
of the SCSEP program with the other titles of the Older Americans Act 
in the areas of support and nutrition service, training, research and 
demonstrations, and grants to Native Americans. Such coordination is 
required in order to increase the likelihood that SCSEP enrollees 
receive services authorized by the Older Americans Act and to increase 
job opportunities for them.
    Coordination with Job Training Programs. Sections 502(e)(2)(C) and 
505(d) (1) and (2) of the OAA, as added by sections 501(5)(D) and 
503(2) of the 1992 Act, require the Department of Labor to promote and 
coordinate SCSEP projects with other programs, projects, or activities 
under other Acts that provide training and employment opportunities to 
eligible individuals.

III. Proposed Regulatory Changes by Section

    The regulations for the SCSEP are currently at 29 CFR part 89. As 
part of the process of consolidating all of the ETA program regulations 
into 20 CFR chapter V, the Department is redesignating the regulations 
at 29 CFR part 89 as 20 CFR part 641 and revising the regulations as 
discussed below. See the redesignation table at the end of this 
summary. The section number references are to the redesignated 
sections.

A. Recent Statutory Amendments

    The following is a discussion of changes made in response to the 
amendments contained in Pub. L. 102-375.
Part 641
    1. Section 641.102 includes new definitions for area agency on 
aging, disability (consistent with section 504 of the Rehabilitation 
Act of 1973 and 29 CFR parts 32 and 34), dual eligibility, greatest 
economic need, greatest social need, individual development plan, JTPA, 
poor employment prospects, reallotment, and subrecipient. These new 
definitions are intended to provide clarifications consistent with the 
1992 Act's amendments to the Older Americans Act and administrative 
requirements.
    2. Section 641.201 is amended to add hearings to assist in 
understanding the allotment process; it also adds provisions for 
within-State apportionment factors, including greatest economic need 
and greatest social need.
    3. Section 641.205 is amended to reformat and streamline the 
regulation.
    4. Section 641.302 is amended by: adding ``greatest economic need'' 
as a factor to be considered by the recipient and subrecipient under 
their grants for serving specific needs; adding language to acknowledge 
the need for the recipient and subrecipient to monitor the projects and 
subprojects; adding language to acknowledge the need for documentation 
to support enrollment and continuing eligibility determinations based 
on concerns raised by the Department of Labor's Office of the Inspector 
General; and reinforcing the need to provide equitable services.
    5. Section 641.303 is amended by: substituting ``recipient or 
subrecipient'' for ``project sponsor''; revising paragraph (b)(2) to 
incorporate the need for establishing cooperative relationships to 
obtain supportive services under other titles of the Older Americans 
Act as the first approach used; adding paragraph (b)(3) to address the 
need to develop cooperative relationships with other employment and 
training organizations, including JTPA and Carl D. Perkins Act 
programs; adding paragraph (b)(4) to emphasize the need for cooperative 
relations with the employment security agency; and adding paragraph 
(b)(5) to ensure consultations and sharing of project descriptions 
among the recipients, subrecipients and the affected area agency on 
aging.
    6. Section 641.305, at paragraphs (a) and (b), is amended to 
clearly state the three regulatory issues when eligibility criteria 
must be employed; a new paragraph (d) is added, consistent with 20 CFR 
628.605(e)(3) of the JTPA Interim Final Regulations issued December 29, 
1992, 57 FR 62004, to incorporate the dual eligibility provisions of 
section 510 of the OAA, as added by section 506 of the 1992 Act; and 
paragraph (e) is added to clearly address varying situations dealing 
with termination of enrollees.
    7. Section 641.306 is amended by adding ``eligible individuals with 
the greatest economic need'' as the first enrollment priority; 
Sec. 641.306(b) establishes a preference for persons with poor 
employment prospects within the priorities; and Sec. 641.306(c) is 
added to clarify that priorities only apply to vacant positions. 
Provisions regarding additional priorities have been dropped and 
provisions regarding conversions to permanent enrollment status are 
found in Sec. 641.318 Over-enrollment.
    8. Section 641.308 is amended to include a discussion of safe 
working conditions and is restructured to provide for host agency 
orientation.
    9. Section 641.309 is restructured and provisions for assessment 
and reassessment of enrollees are added consistent with section 
502(b)(1)(N) of the OAA, as added by section 501(2)(C) of the 1992 Act.
    10. Section 641.310 is amended to incorporate the information on 
community assignments under a single heading and transfers former (e) 
which is now addressed under Sec. 641.308(c).
    11. Section 641.311(b)(3) is added to establish a limitation on the 
use of an enrollee's physical examination by recipients and 
subrecipients and to establish that physical examinations are to be an 
enrollee's fringe benefit and their use will be limited to the 
assessment process.
    12. Section 641.312(a) is amended to require, to the extent 
feasible, use of supportive services from other Titles of the 1992 Act; 
paragraph (b)(4) is added to address the need for periodic meetings; 
and paragraph (b)(5) is revised to clarify when SCSEP funds can be used 
for enrollee transportation.
    13. Section 641.313 is revised to create a single section of the 
regulation for training activities. Specifically: Sec. 641.313(b) 
increases the number of allowable hours for training from 260 to 480 
while ensuring that SCSEP is used solely for job search and job 
referral services; Sec. 641.313(d) is added to clarify that recipients 
and subrecipients are encouraged to arrange for or directly provide 
skill training opportunities; Sec. 641.313(e) is added to require that 
the continuing focus on community service be a basis for training; 
Sec. 641.313(f) is added to acknowledge that an enrollee can be 
reimbursed for related costs; Sec. 641.313(g) is added to require that 
a recipient or a subrecipient must seek to obtain skill training at no 
cost before paying for the training from SCSEP funds; and 
Sec. 641.313(h) is added to clarify that self-development training 
should not be prevented or limited as a result of this section.
    14. Section 641.314 is revised for clarity; in addition, 
Sec. 641.314(b) is amended to require an action plan when the goal for 
unsubsidized placement has not been achieved.
    15. Section 641.315 is revised to permit restricted limits on the 
duration of enrollment.
    16. Section 641.316 is added to permit recipients and subrecipients 
to terminate enrollees who refuse to accept reasonable referrals or job 
offers, e.g., three or more, which are consistent with their individual 
development plan and there are no extenuating circumstances, e.g., 
unavailability of transportation. This provision does not institute an 
untried procedure. Instead, it sanctions a practice which individual 
sponsors had previously implemented unilaterally to encourage enrollees 
to accept unsubsidized employment so other eligible applicants would 
have an opportunity to participate in the program.
    17. Section 641.318 is amended to clarify the concept of ``over-
enrollment'' of individuals in SCSEP which replaces the phrase 
``temporary positions''.
    18. Section 641.323 is amended to recognize the unique status of 
Indian reservation work sites by permitting a waiver of nepotism 
restrictions.
    19. Section 641.324 is revised to cite the procedures to be 
followed for recipients of JTPA funds.
    20. Section 641.326 is amended to consolidate rules regarding 
projects established pursuant to section 502(e) of the OAA.
    21. Subpart D, sections 641.401-.406, is revised to include all of 
the Administrative Standards and Procedures for Recipients and 
Limitations on Federal Funds covering both governmental agencies and 
non-profit organizations.
    22. Section 641.402 is amended to cite the Departmental regulations 
and administrative requirements that must be followed and excludes 
subpart E, interstate Agreements, from coverage.
    23. Section 641.403(b) is added to cite the Office of Management 
and Budget circulars that must be followed; Sec. 641.403(c) relocates 
the section on lobbying which was formerly covered by Sec. 674.321(c); 
Sec. 641.403(d) relocates the former Sec. 674.402(e) which deals with 
building repairs and acquisition costs; and Sec. 641.403(e) establishes 
certain allowable fringe benefits costs.
    24. Section 641.404 relocates the classification of cost material 
previously covered by Sec. 674.402(c)(1-2); and Sec. 641.404(c) 
clarifies the list of other enrollee costs; and Sec. 641.404(d) is 
added to cover cost reductions.
    25. Section 641.405 is renumbered from former Sec. 674.402 and 
eliminates dates that are no longer applicable to limitations on 
federal funds.
    26. Section 641.406 replaces former Sec. 674.406 which dealt with 
administrative cost waivers and clearly lists the criteria to be used.
    27. Section 641.407(e) is added to address the Indian reservation 
matching requirement situation.
    28. Section 641.408 is added to list budget changes which will not 
be permitted without prior approval.
    29. Section 641.409 is restructured to clearly identify the 
requirements for submittal of the program quarterly progress report, 
the financial status report, and adds the requirement for a cash 
management report and an equitable distribution report.
    30. Section 641.410 establishes that subgrant agreements are to 
clearly identify all matters dealing with such agreements, including 
the recipient's responsibility for performance and are not to provide 
for expenditures beyond the end date of the grant, and these agreements 
are exempted from procurement requirements.
    31. Section 641.411 is added to cite the accounting methods to be 
used for program income.
    32. Section 641.412 is added to identify the proper requirement is 
to follow for equipment purchased prior to July 1, 1989.
    33. Section 641.413 is added to emphasize the need for using the 
appropriate OMB circular for audits.
    34. Section 641.414 relocates the former Sec. 674.409 and provides 
the correct citations for grant closeout procedures.
    35. Section 641.415 is amended to correct and update the former 
Sec. 674.408 by providing the proper citations to be used in appeals to 
the Department of Labor.
    36. Section 641.601 is amended to outline the responsibilities of 
the Department to assess, evaluate and monitor the program and 
recipients.

B. Prior Amendments and Proposed Changes

    The following is a discussion of proposed changes made as a result 
of public comments on the July 19, 1985, proposed regulation, which was 
never finalized; changes made to the OAA by the 1987 amendments (Pub. 
L. 199-175); and other editorial, clarification and technical purposes.
    1. Section 641.101 is revised to read: ``Part 641 contains the 
regulations of the Department of Labor for the Senior Community Service 
Employment Program (SCSEP) under title V of the Older Americans Act of 
1965, which maintains a dual objective of providing community service 
assignments while promoting transition to unsubsidized employment. This 
part, and other pertinent regulations expressly incorporated by 
reference, set forth all regulations applicable to the SCSEP.''
    2. Section 641.102 removes or amends a number of definitions of 
terms to reflect DOL's uniform administrative requirements for grants 
in 29 CFR part 97, which apply to activities under this part. Among the 
terms omitted are ``local government'', ``State'', and ``grant 
agreement.''
    3. Section 641.102 is amended to expand its coverage consistent 
with the 1987 amendments (Pub. L. 100-175), to include ``literacy 
tutoring'' among the examples of community services.
    4. Section 641.302(a) conforms to the revision of OAA section 
502(b)(1)(M), made by section 162(a) of Pub. L. 100-175. The program 
assurance in that section now must take into account the rates of 
poverty and unemployment of the eligible individual groups.
    5. Section 641.303 is amended by removing the words ``Objective 
of'' from the beginning of paragraph (b) and adding in lieu thereof the 
word ``The''.
    6. Section 641.305(b)(3) is amended by removing ``place of'' from 
the phrase ``place of residence'' in the heading and substituting the 
word ``reside'' for the phrase ``have a place of residence''.
    7. Section 641.309 is amended to add the word ``interest'' after 
the word ``skills'' in paragraph (b).
    8. Section 641.312 is amended to add a new paragraph (b)(4). The 
former paragraph (b)(4) is redesignated as paragraph (b)(5) and a new 
sentence is added to newly designated paragraph (b)(5), immediately 
preceding the final sentence, to read: ``When authorized in the grant 
agreement, transportation may be provided for enrollees from home to 
work, to training or to supportive services.''
    9. Section 641.315 is revised to read: ``A maximum duration of 
enrollment may be established by the recipient in the grant agreement 
when authorized by the Department.''
    10. Section 641.324 is amended by revising the heading of the 
section to read: ``Enrollee and applicant complaint resolution.'' In 
paragraph (b), the word ``federal'' is added before the word ``law'' in 
the first sentence. Paragraph (c) is revised to read: ``Recipients that 
do not receive any funds under the JTPA shall process complaints of 
discrimination in accordance with Title 29 CFR parts 31 and 32. 
Recipients that receive any funds under JTPA shall process complaints 
of discrimination in accordance with Title 29 CFR part 34.''
    11. Section 641.402(b)(2) is redesignated as Sec. 641.405(b)(2) and 
is revised to read: ``The amount of Federal funds budgeted for enrollee 
wages and fringe benefits shall be no less than 75 percent of the 
grant.'' The remainder of that sentence is removed.
    12. Section 641.405(b)(1) is revised to conform to the revisions of 
section 502(c)(3) of the OAA, made by section 161 of Pub. L. 100-175. 
The maximum percentage of federal funds which may be used for 
administrative costs is now limited to 13.5 percent, unless the 
Department increases the amount available to not more than 15 percent 
of the grant's federal cost. The Department shall administer such 
required increases in accordance with section 502(c)(3) of the OAA.
    13. Section 641.406 is expanded to include administrative cost 
waiver criteria.
    14. Section 641.415 is amended to revise the rules for 
administrative hearings and for appeals from final disallowances.

                           Redesignation Table                          
------------------------------------------------------------------------
                                                          New section of
                  Old section of 29 CFR                       20 CFR    
------------------------------------------------------------------------
89.1....................................................         641.101
89.2....................................................         641.201
89.3....................................................         641.102
89.6....................................................         641.203
89.7....................................................         641.204
                                                             and 641.205
89.8....................................................         641.204
89.9....................................................         641.206
89.10...................................................         641.208
89.11...................................................         641.207
89.12...................................................         641.209
89.15...................................................         641.301
89.16...................................................         641.302
89.17...................................................         641.303
89.18...................................................         641.304
89.19...................................................         641.305
89.20...................................................         641.306
89.21...................................................         641.311
89.22...................................................         641.308
89.23...................................................         641.309
89.24...................................................         641.313
89.25...................................................         641.310
89.26...................................................         641.313
89.27...................................................         641.312
89.28...................................................         641.312
89.29...................................................         641.314
89.30...................................................         641.315
89.31...................................................         641.316
                                                                 and 324
89.32...................................................         641.311
89.33...................................................         641.311
89.34...................................................         641.318
89.35...................................................         641.310
89.36...................................................         641.317
89.37...................................................         641.324
89.38...................................................         641.320
                                                                 and 321
89.39...................................................         641.323
89.40...................................................         641.325
89.41...................................................         641.407
89.42...................................................         641.405
                                                                 and 406
89.43...................................................         641.410
89.51...................................................         641.402
89.52...................................................         641.402
89.53...................................................         641.402
89.54...................................................         641.402
89.55...................................................         641.402
89.56...................................................         641.411
89.57...................................................         641.407
89.58...................................................         641.402
89.59...................................................         641.409
89.60...................................................         641.302
                                                                 and 409
89.61...................................................         641.402
89.62...................................................         641.408
89.63...................................................         641.419
89.64...................................................         641.412
89.65...................................................         641.402
89.71...................................................         641.402
89.72...................................................         641.402
89.73...................................................         641.402
89.74...................................................         641.402
89.75...................................................         641.411
89.76...................................................         641.407
89.77...................................................         641.402
89.78...................................................         641.409
89.79...................................................         641.302
                                                                 and 409
89.80...................................................         641.402
89.81...................................................         641.408
89.82...................................................         641.414
89.83...................................................         641.402
89.84...................................................         641.412
89.85...................................................         641.402
89.91...................................................         641.501
89.96...................................................         641.601
89.97...................................................         641.601
89.98...................................................         641.602
89.99...................................................         641.303
------------------------------------------------------------------------

Regulatory Impact

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

Paperwork Reduction Act

    Pursuant to the Paperwork Reduction Act, information collection 
requirements which must be imposed as a result of this regulation have 
been approved by the Office of Management and Budget as a proposed 
rule.
    Public reporting burden for the collection of information is 
estimated to average 55 hours per response, including the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. The required reports described at 
Sec. 641.409 are as follows: the Quarterly Progress Report, the 
Quarterly Financial Status Report, the Quarterly Report of Federal Cash 
Transaction, and the Annual Equitable Distribution report.
    Send comments regarding this burden estimate or any other aspect of 
this collection of information, including suggestions for reducing this 
burden, to the Office of Management and Budget, Paperwork Reduction 
Project (1205-0040), Washington, DC 20503: Attention: Desk Officer for 
Employment and Training Administration.

Catalogue of Federal Domestic Assistance Number

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

List of Subjects

20 CFR Part 641

    Administrative requirements, Aged, Employment, Government 
contracts, Grant programs--labor, Reporting and recordkeeping 
requirements.

29 CFR Part 89

    Aged, Employment, Government contracts, Grant programs--labor, 
Reporting and recordkeeping requirements.

Proposed Rule

    Accordingly, 29 CFR part 89 is proposed to be redesignated as 20 
CFR part 641 and the redesignated 20 CFR part 641 is proposed to be 
revised to read as follows:

PART 641--SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM

Subpart A--Introductory Provisions

Sec.
641.101  Scope and purpose.
641.102  Definitions.

Subpart B--Grant Planning and Application Procedures

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

Subpart C--Grant Operations

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

Subpart E--Interagency Agreements

641.501  Administration.

Subpart F--Assessment and Evaluation

641.601  General.
641.602  Limitation.

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

Subpart A--Introductory Provisions


Sec. 641.101  Scope and purpose.

    Part 641 contains the regulations of the Department of Labor for 
the Senior Community Service Employment Program (SCSEP) under title V 
of the Older Americans Act of 1965, which maintains a dual objective of 
providing community service assignments while promoting transition to 
unsubsidized employment. This part, and other pertinent regulations 
expressly incorporated by reference, set forth all regulations 
applicable to the SCSEP.


Sec. 641.102  Definitions.

    The following definitions apply to this part:
    Act and OAA mean the Older Americans Act of 1965, as amended (42 
U.S.C. 3001, et seq.).
    Area agency on aging means an area agency on aging designated under 
section 305(a)(2)(A) of the Act or a State agency performing the 
functions of an area agency on aging under section 305(b)(5) of the 
Act.
    Authorized position means an enrollment opportunity during a 
program year. The number of authorized positions is derived by dividing 
the total amount of funds appropriated during a program year by the 
national average unit cost per enrollee for that program year as 
determined by the Department. The national average unit cost includes 
all administration costs, other enrollee costs, and enrollee wage and 
fringe benefit costs. An allotment of the total dollars for the 
recipient is divided by the national unit cost to determine the total 
number of authorized positions for each grant agreement.
    Community service means social, health, welfare, and educational 
services (particularly literacy tutoring); legal assistance, and other 
counseling services, including tax counseling and assistance and 
financial counseling; library, recreational, day care and other similar 
services; conservation, maintenance, or restoration of natural 
resources; community betterment or beautification; pollution control 
and environmental quality efforts; weatherization activities; and 
includes inter-generational projects; but is not limited to the above. 
It excludes building and highway construction (except that which 
normally is performed by the project sponsor) and work which primarily 
benefits private, profit-making organizations. [Section 507(2).]
    Department and DOL mean the United States Department of Labor, 
including its agencies and organizational units.
    Disability means a physical or mental impairment of an individual 
that substantially limits one or more major life activities; a record 
of such impairment; or being regarded as having such an impairment. [29 
CFR parts 32 and 34.]
    Dual eligibility means the status of those eligible individuals who 
satisfy the eligibility requirements of section 203 of the JTPA and/or 
title V of the OAA. In programs carried out jointly with JTPA, Title V 
eligible individuals shall be deemed to satisfy the requirements of 
section 203 of the JTPA. To be recognized as a program for which dual 
eligibility may be established, the JTPA service delivery area and the 
title V recipient or subrecipient must establish a written financial or 
non-financial agreement to carry out joint programs.
    Eligible individual means a person who is 55 years of age, or 
older, and who has a low income as defined in this section. [Section 
507(1).]
    Eligible organization means an organization which is legally 
capable of receiving and using Federal funds under the Act and entering 
into a grant or other agreement with the Department to carry out 
provisions of title V. [Section 502(b)(1).]
    Employment and training program(s) means publicly funded efforts 
designed to offer employment, training and/or placement services which 
enhance an individual's employability. The term is used in this part to 
include, but not be limited to, the JTPA or similar legislation and 
State or local programs of a similar nature.
    Enrollee means an individual who is eligible, receives services, 
and is paid wages for engaging in community service employment 
assignments under a project.
    Greatest economic need means the need resulting from an income 
level at or below the poverty line based on guidelines provided by the 
Department.
    Greatest social need, as defined at section 102(a)(30) of the Act, 
means the need caused by noneconomic factors which include:
    (1) Physical and mental disabilities;
    (2) Language barriers; and
    (3) Cultural, social, or geographical isolation, including 
isolation caused by racial or ethnic status.
    Host agency means a public agency or a private non-profit 
organization, other than a political party or any facility used or to 
be used as a place for sectarian religious instruction or worship, 
exempt from taxation under the provisions of section 501(c)(3) of the 
Internal Revenue Code of 1986, which provides a work site and 
supervision for an enrollee.
    Individual development plan means a plan for an enrollee which 
shall include an employment goal, achievement objectives, and 
appropriate sequence of services for the enrollee based on an 
assessment conducted by the recipient or subrecipient and jointly 
agreed upon by the enrollee.
    JTPA means the Job Training Partnership Act (29 U.S.C. 1501, et 
seq.).
    Low income means an income which, during the preceding 6 months on 
an annualized basis or the actual income during the preceding 12 
months, whichever is more beneficial to the applicant, is not more than 
125 percent of the poverty levels established and periodically updated 
by the U.S. Department of Health and Human Services. In addition, an 
individual who receives, or is a member of a family which receives, 
regular cash welfare payments shall be deemed to have a low income for 
purposes of this part.
    Poor employment prospects means the unlikelihood of an otherwise 
eligible individual obtaining employment without the assistance of this 
or other employment and training programs. Persons with poor employment 
prospects include, but are not limited to, those without a substantial 
employment history, basic skills, English-language proficiency, or are 
displaced homemakers, school dropouts, disabled veterans, or homeless.
    Program year means the one-year period covered by a grant agreement 
beginning July 1 and ending on June 30.
    Project means an undertaking by a recipient or subrecipient, 
pursuant to a grant agreement between the Department and a recipient, 
which provides for community service employment opportunities for 
eligible individuals and the delivery of associated services.
    Reallocation means a redistribution of funds by a recipient.
    Reallotment means the redistribution of allotted title V funds by 
the Department from one State to another State(s) or from one recipient 
to another recipient.
    Recipient means an eligible organization which has entered into a 
grant agreement with the Department under this part.
    Residence means an individual's declared permanent dwelling place. 
No requirement pertaining to length of residency prior to enrollment 
shall be imposed.
    SCSEP means the Senior Community Service Employment Program as 
authorized under title V of the Act.
    State agency on aging means that sole State agency designated by 
the State, in accordance with regulations of the Assistant Secretary on 
Aging, pursuant to section 305(a)(1) of the Act.
    Subrecipient means the legal entity to which a subgrant is awarded 
by a recipient and which is accountable to the recipient (or higher 
tier subrecipient) for the use of the funds provided.
    Title V means title V of the Act, 42 U.S.C. 3056 et seq.

Subpart B--Grant Planning and Application Procedures


Sec. 641.201  Allotment and allocation of title V funds.

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


Sec. 641.202  Eligibility for title V funds.

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


Sec. 641.203  Soliciting applications for title V funds.

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


Sec. 641.204  Grant application requirements.

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


Sec. 641.205  Responsibility review.

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


Sec. 641.206  Grant application review.

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


Sec. 641.207  Negotiation.

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


Sec. 641.208  Rejection of grant application or project components.

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


Sec. 641.209  Award of funds.

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

Subpart C--Grant Operations


Sec. 641.301  General.

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


Sec. 641.302  Recipient responsibilities.

    The recipient shall provide to eligible individuals: wages, skill 
acquisition or skill enhancement opportunities, periodic physical 
examinations, personal and employment-related counseling, assistance in 
transition to unsubsidized employment where feasible, and other 
benefits as approved by the Department.
    (a) Recipients are responsible for:
    (1) Following and enforcing the requirements set forth in the Act 
and this part;
    (2) Implementing and carrying out projects in accordance with the 
provisions of the grant agreement; and
    (3) Assuring, to the extent feasible, that such projects will serve 
the needs of minority, eligible individuals who have the greatest 
economic need, at least in proportion to their numbers in the State, 
and take into consideration their rates of poverty and unemployment 
based on best available information, limited English-speaking, and 
Indian eligible individuals. [Section 502(b)(1)(M).]
    (b) The recipient periodically shall monitor the performance of 
grant-supported activities to assure that project goals are being 
achieved and that the requirements of the Act and this part are being 
met.
    (c) The recipient or subrecipient shall obtain and record the 
personal information necessary for a proper determination of 
eligibility for each individual and maintain documentation supporting 
the enrollment of eligible persons.
    (d) Each recipient or subrecipient shall make efforts to provide 
equitable services among substantial segments of the population 
eligible for participation in SCSEP. Such efforts shall include, but 
not be limited to: outreach efforts to broaden the composition of the 
pool of those considered for participation, to include members of both 
sexes, various race/ethnic groups and individuals with disabilities.


Sec. 641.303  Cooperative relationships.

    (a) Each recipient or subrecipient shall, to the maximum extent 
feasible, cooperate with other agencies, including activities conducted 
under the JTPA to provide services to elderly persons and to persons 
with low incomes, and with agencies providing employment and training 
services.
    (b) The cooperation described in paragraph (a) of this section 
shall include, but not be limited to:
    (1) Selection of community service employment occupational 
categories, work assignments, and host agencies to provide a variety of 
community service opportunities for enrollees and to produce a variety 
of federally funded services which respond to the community's total 
needs and initiatives.
    (2) Establishment of cooperative relations with the State agency on 
aging designated under section 305(a)(1) of the Act and with area 
agencies on aging designated under section 305(a)(2) of the Act for the 
purpose of obtaining services as authorized under titles III, IV, and 
VI of the Act to increase the likelihood of receipt of employment 
opportunities and supportive services that are available. Existing 
services provided under the authority of section 321(a) of the Act 
shall be used first by recipients or subrecipients.
    (3) Cooperative relations shall be established with other 
employment and training organizations including the State and local 
JTPA and the Carl D. Perkins Act programs to insure that project 
enrollees can benefit from such cooperative activities as dual 
eligibility, shared assessments, training and referral.
    (4) Establishment of cooperative relations with State employment 
security agencies to insure that enrollees are made aware of services 
available from these agencies.
    (5) In order to insure efficient and effective coordination of 
programs under this part, recipients or subrecipients shall consult and 
submit project descriptions among themselves as well as with affected 
area agencies on aging. [Section 502(d)(1).]


Sec. 641.304  Recruitment and selection of enrollees.

    Recipients and subrecipients shall use methods of recruitment and 
selection (including listing of vacancies with the State employment 
security agency) which will assure that the maximum number of eligible 
individuals will have an opportunity to participate in the program. 
Recruitment efforts shall be designed, to the extent feasible, to 
assure equitable distribution of services to groups described in 
Sec. 641.302(e). [Section 402(b)(1)(H).]


Sec. 641.305  Enrollment eligibility.

    (a) General. Eligibility criteria set forth in this section apply 
to all SCSEP applicants and enrollees, including the following 
individuals:
    (1) Each individual seeking initial enrollment;
    (2) Each individual seeking reenrollment after termination from the 
SCSEP; and
    (3) Each enrollee seeking recertification for continued enrollment.
    (b) Eligibility criteria. To be eligible for initial enrollment, 
each individual shall meet the following criteria for age, income, and 
place of residence:
    (1) Age. Each individual shall be no less than 55 years of age. No 
person whose age is 55 years or more shall be determined ineligible 
because of age, and no upper age limit shall be imposed for initial or 
continued enrollment. [Section 502.]
    (2) Income. The income of an individual, or of the family of which 
the individual is a member, shall not exceed the low-income standards 
defined in Sec. 641.103 and issued by the Department.
    (3) Residence. Each individual, upon initial enrollment, shall 
reside in the State in which the project is authorized.
    (c) No additional eligibility requirement. Recipients and 
subrecipients shall not impose any additional condition or requirement 
for enrollment eligibility.
    (d) Dual eligibility. Individuals eligible under title V shall be 
deemed to satisfy the requirements of title II-A of the JTPA, when a 
written financial or non-financial agreement to jointly operate 
programs for older workers is established with a JTPA service delivery 
area.
    (e) Special responsibilities of the recipients and subrecipient(s) 
relating to eligiblity. (1) Each recipient or subrecipient shall 
recertify the income of each enrollee under its grant or subgrant, 
respectively, once each project year, according to the schedule set 
forth in the grant agreement and shall maintain documentation to 
support the recertification. Enrollees found to be ineligible for 
continued enrollment because of income shall be given, by the recipient 
or subrecipient, a written notice of termination and shall be 
terminated 30 days after the notice. No enrollee shall participate in a 
community service position for more than 12 months without having his 
or her income recertified.
    (2) If, at any time, the recipient or a subrecipient determines 
that an enrollee was incorrectly declared eligible as a direct result 
of false information given by the individual, the individual shall be 
given a written notice explaining the reason or reasons for the 
determination and shall be terminated immediately.
    (3) If, at any time, the recipient or subrecipient determines that 
an enrollee was incorrectly declared eligible through no fault of the 
enrollee, the recipient or subrecipient shall give the enrollee 
immediate written notice explaining the reason or reasons for 
termination, and the enrollee shall be terminated 30 days after the 
notice.
    (4) When a recipient or subrecipient makes an unfavorable 
determination on continued eligibility, it shall explain in writing to 
the enrollee the reason(s) for the determination and shall provide 
notice of the right of appeal in accordance with the required 
procedures set forth in Sec. 641.324.
    (5) When a recipient or subrecipient terminates an enrollee for 
cause, it shall inform the enrollee in writing, of the reason(s) for 
termination and of the right of appeal in accordance with the required 
procedures set forth in Sec. 641.324.
    (6) When a recipient or subrecipient makes an unfavorable 
determination of enrollment eligibility pursuant to paragraph (e)(1) or 
(3) of this section, it should assure that the individual is given a 
reason for non-enrollment and referred to other potential sources of 
assistance.


Sec. 641.306  Enrollment priorities.

    (a) As set forth in sections 502(b)(1)(M) and 507(1) of the Act, 
enrollment priorities for filling vacant authorized positions shall be 
as follows:
    (1) Eligible individuals with the greatest economic need;
    (2) Eligible individuals who are 60 years old and older; and
    (3) Eligible individuals who seeks re-enrollment following 
termination of a job because of illness or engaging in unsubsidized 
employment, provided that re-enrollment is sought within one year of 
termination.
    (b) Within all enrollment priorities, those persons with poor 
employment prospects shall be given preference.
    (c) Enrollment priorities established in this section shall apply 
to vacant positions and shall not be interpreted to require the 
termination of any eligible enrollee.


Sec. 641.307  [Reserved]


Sec. 641.308  Orientation.

    (a) Enrollee. After an individual enrolls in a community service 
employment assignment, the recipient or subrecipient shall, as soon as 
practicable, provide orientation to the enrollee. The orientation shall 
provide, as appropriate, information related to: project objectives; 
community service employment assignments; training; supportive 
services; responsibilities, rights, and duties of the enrollee; 
permitted and prohibited political activities; plans to transition to 
unsubsidized employment and a discussion of safe working conditions at 
the host agencies.
    (b) Host agency. The recipient or a subrecipient shall provide to 
those individuals who will supervise enrollees at the host agencies, 
the orientation described in paragraph (a) of this section. This is to 
assure that enrollees will receive adequate supervision and 
opportunities for transitioning to the host agency staff or other 
unsubsidized employment.
    (c) Supevision. The recipient or subrecipient shall ensure that 
host agencies provide adequate orientation, instruction, and 
supervision for enrollees job responsibilities regarding 
responsibilities and safety.


Sec. 641.309   Assessment and reassessment of enrollees.

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


Sec. 641.310   Community service employment assignments.

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


Sec. 641.311  Enrollee wages and fringe benefits.

    (a) Wages. Upon engaging in part-time community service employment 
assignments, including orientation and training in preparation for 
community service employment assignments, each enrollee shall receive 
wages at a rate no less than the highest applicable rate:
    (1) The minimum wage which would be applicable to the enrollee 
under the Fair Labor Standards Act of 1938;
    (2) The State or local minimum wage for the most nearly comparable 
covered employment; or
    (3) The prevailing rates of pay for persons employed in similar 
public occupations by the same employer.
    (b) Fringe benefits. (1) The recipient or subrecipient shall ensure 
that enrollees receive all fringe benefits required by law.
    (2) Within a project or subproject, fringe benefits shall be 
provided uniformly to all enrollees, unless the Department agrees to 
waiver this provision due to a determination that such a waive is in 
the best interests of applicants, enrollees, and the project 
administration.
    (3) Physical assessment. A physical examination shall be regarded 
as a fringe benefit and its use will be limited to determining the need 
for supportive services. A copy of the physical examination shall be 
provided to the enrollee. A physical examination is a program benefit 
and shall not be interpreted as an eligibility criterion.
    (i) Each individual selected for enrollment shall have a physical 
assessment within the 2-month period immediately before the first day 
of compensated participation which shall be used as part of the 
assessment process following eligibility determination. [Section 
502(b)(1)(N).] Exceptions are provided in paragraph (b)(3)(iv) of this 
section.
    (ii) Enrollees should be provided a physical examination every 
twelve months, but no enrollee may participate in community service 
employment for more than 15 months without a physical examination or a 
waiver, as provided by paragraph (b)(3)(iv) of this section.
    (iii) An enrollee who is terminated may be reenrolled without an 
additional physical assessment, provided that the time elapsed since 
the last physical assessment does not exceed 15 months, and provided 
that a schedule of one examination within each 15-month period shall be 
resumed, based on the date of the last examination.
    (iv) Notwithstanding paragraphs (b)(3) (i), (ii), and (iii) of this 
section, when an individual objects to a physical examination, the 
recipient or subrecipient shall obtain a signed waiver prior to the 
first day of compensated participation. Thereafter, an additional 
signed waiver shall be obtained from each enrollee before providing any 
compensated participation more than 15 months after the date of the 
enrollee's latest waiver. Failure to receive such waiver within the 15-
month timeframe will result in the enrollee's preclusion from further 
participation in an assignment.
    (c) Retirement. Expenditures of grant funds for contributions into 
a retirement system or plan are prohibited, unless the recipient has 
documentation on hand showing that:
    (1) The costs are allowable under the appropriate cost principles 
indicated at Sec. 641.403(b); and
    (2) Such contributions bear a reasonable relationship to the cost 
of providing such benefits to enrollees because:
    (i) the benefits vest at the time contributions are made on behalf 
of the enrollees; or
    (ii) the charges to SCSEP funds are for contributions on behalf of 
enrollees to a ``defined benefit'' type of plan which do not exceed the 
amounts reasonably necessary to provide the specified benefit to 
enrollees, as determined under a separate actuarial determination.
    (d) Workers' compensation. Where an enrollee is not covered by the 
State workers' compensation law, the recipient or subrecipient shall 
provide the enrollee with workers' compensation benefits equal to that 
provided by law for covered employment. [Section 504(b).]
    (e) Unemployment compensation. The recipient is authorized to pay 
the cost of unemployment insurance for covered enrollees, where 
required by law. [Section 502(b)(1)(O).]


Sec. 641.312  Enrollee supportive services.

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


Sec. 641.313  Training.

    (a) The recipient or subrecipient shall provide a new enrollee with 
training related to community service employment assignments prior to, 
and as preparation for, actual community service employment. Training 
may be provided through lectures, seminars, classroom instruction, 
individual instruction or other arrangements, including but not limited 
to arrangements with employment and training programs. The recipient or 
the subrecipient is encouraged to obtain such services through locally 
available resources, including employment and training programs, as 
defined in Sec. 641.103, and through host agencies, at no cost or 
reduced cost to the project. [Section 502(b)(1)(I).]
    (b) Training shall consist of up to 480 hours and shall be 
consistent with the enrollee's IDP. Such training shall cover all 
aspects of training, e.g., orientation, skill, job search, etc. 
Enrollees shall not be enrolled solely for the purpose of receiving job 
search and job referral services. Waivers for additional hours of 
training will be considered on an exception basis.
    (c) The recipient or subrecipient shall enroll each individual in 
the project prior to training in preparation for community service 
employment assignments and shall pay each enrollee as provided in 
Sec. 641.310(b).
    (d) In addition to training in preparation for community service 
employment assignments, as described in this section, a recipient or 
subrecipient is encouraged to arrange for, or directly provide, skills-
training opportunities beyond the SCSEP community service training 
activities which will permit the enrollee to acquire or improve skills, 
including literacy training, applicable in community service employment 
or for unsubsidized employment.
    (e) A recipient or subrecipient, to the extent feasible, shall 
arrange skill-training for the enrollee which is realistic and 
consistent with his or her IDP. A recipient or subrecipient shall place 
major emphasis on the training available through on-the-job experience 
at SCSEP work sites, thereby retaining the community service focus of 
the SCSEP.
    (f) An enrollee engaging in skills-related training as described in 
paragraphs (d) and (e) of this section, may be reimbursed for the 
documented travel cost and room and board necessary to engage in such 
training. [Section 502(b)(1)(I).]
    (g) A recipient or subrecipient shall seek to obtain all training 
for enrollees from such sources as the JTPA and the Carl D. Perkins 
Vocational and Applied Technology Education Act at no cost to the 
project. Where training is not available from other sources, title V 
funds may be used for training.
    (h) Nothing in this section shall be interpreted to prevent or 
limit an enrollee from engaging in self-developmental training 
available from sources other than title V during hours other than hours 
of community service employment.
    (i) Nothing in this section shall preclude joint programs between 
title V programs and programs authorized by the Job Training 
Partnership Act, the Community Services Block Grant Act or the Carl D. 
Perkins Act.


Sec. 641.314  Placement into unsubsidized employment.

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


Sec. 641.315  Maximum duration of enrollment.

    A maximum duration of enrollment may be established by the 
recipient in the grant agreement, when authorized by the Department.


Sec. 641.316  Individual development plan-related terminations.

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


Sec. 641.317  Status of enrollees.

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


Sec. 641.318  Over-enrollment.

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


Sec. 641.319  [Reserved]


Sec. 641.320  Political patronage.

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


Sec. 641.321  Political activities.

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


Sec. 641.322  Unionization.

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


Sec. 641.323  Nepotism.

    (a) No recipient or subrecipient may hire, and no host agency may 
be a work site for a person, in an administrative capacity, staff 
position, or community service employment position funded under title V 
or this part if a member of that person's immediate family is engaged 
in a decision-making capacity (whether compensated or not) for that 
project, subproject, recipient, subrecipient or host agency. This 
provision may be waived by the Department at work sites on Native 
American reservations provided that adequate justification can be 
documented, such as that no other persons are eligible for 
participation, the total service population is 2,000 or less and is 
isolated, or where there is a history of dependence on public 
assistance.
    (b) To the extent that an applicable State or local legal 
requirement regarding nepotism is more restrictive than this provision, 
that requirement shall be followed.
    (c) For purposes of this section:
    (1) Immediate family  means wife, husband, son, daughter, mother, 
father, brother, sister, son-in-law, daughter-in-law, mother-in-law, 
father-in-law, brother-in-law, sister-in-law, aunt, uncle, niece, 
nephew, stepparent, stepchild, grandparent, and grandchild.
    (2) Engaged in an administrative capacity includes those persons 
who, in the administration of projects, or host agencies, have 
responsibility for, or authority over, those with responsibility for 
the selection of enrollees from among eligible applicants.


Sec. 641.324  Enrollee and applicant complaint resolution.

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


Sec. 641.325  Maintenance of effort.

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


Sec. 641.326  Experimental private sector training projects.

    (a) The Department may authorize a recipient to develop an 
experimental job training project(s) designed to provide second career 
training and the placement of eligible individuals in employment 
opportunities with private business concerns. [Section 502(e).]
    (b) Experimental project agreements for training may be with 
States, public agencies, non-profit private organizations, and private 
business concerns.
    (c) The geographic location of these projects shall be determined 
by the Department to insure an equitable distribution of such projects.
    (d) To the extent feasible, experimental projects shall emphasize 
second-career training, innovative work modes, including those with 
reduced physical exertion, and placement into growth industries and 
jobs reflecting new technologies.
    (e) The Department shall establish by administrative guidelines, 
the application schedule, content, format, allocation levels and 
reporting requirements for experimental projects.
    (f) Current title V eligibility standards shall be used for 
experimental projects, unless the Department permits, in writing, the 
use of another approved income index.
    (g) Projects funded under section 502(e) of the Act shall seek to 
be coordinated with projects carried out under section 204(d) of the 
JTPA to the extent feasible.
    (h) Recipients shall distribute funds for experimental projects in 
accordance with the State allocation formulas in their title V grant.

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


Sec. 641.401  General.

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


Sec. 641.402  Administrative requirements.

    (a) Except as otherwise provided in this part, title V funds shall 
be administered in accordance with, and subject to, the Department's 
regulations at 29 CFR parts 31, 32, 34, 93, 96, and 98. In addition, 
projects and activities administered by State, local or Indian tribal 
governments are also subject to the Department's administrative 
requirements regulations at 29 CFR part 97; projects and activities 
administered by institutions of higher education, hospitals, or other 
non-profit organizations are subject to the Department's administrative 
requirements regulations at 41 CFR part 29-70 (1984). Recipients of 
title V funds shall be subject to any revisions of any implementing 
regulations cited in this paragraph (a) on the effective date of such 
revisions.
    (b) The administration of interagency agreements set forth in 
subpart E of this part is not subject to paragraph (a) of this section.


Sec. 641.403  Allowable costs.

    (a) General. Costs shall be determined in accordance with the cost 
principles indicated in paragraph (b) of this section, except as 
otherwise provided in this part.
    (b) Applicable Cost Principles. The cost principles set forth in 
paragraphs (b) (1) through (4) of this section apply to the 
organization incurring the costs:
    (1) OMB Circular A-87--State, local or Indian tribal government;
    (2) OMB Circular A-122--Private, non-profit organization other 
than:
    (i) Institution of higher education;
    (ii) Hospital; or
    (iii) Other organization named in OMB Circular A-122 as not subject 
to OMB Circular A-122;
    (3) OMB Circular A-21--Educational institution; or
    (4) 48 CFR Part 31.2--Commercial organization (for-profit 
organization, other than a hospital or other organization name in OMB 
Circular A-122 as not subject to OMB Circular A-122).
    (c) Lobbying costs. In addition to the prohibition contained in 29 
CFR part 93 and in accordance with limitations on the use of 
appropriated funds in Department of Labor Appropriation Acts, title V 
funds shall not be used to pay any salaries or expenses related to any 
activity designed to influence legislation or appropriations pending 
before the Congress of the United States.
    (d) Building repairs and acquisition costs. No Federal grant funds 
provided to a recipient or subrecipient under title V or this part may 
be expended directly or indirectly for the purchase, erection, or 
repair of any building except for the labor involved in:
    (1) Minor remodeling of a public building necessary to make it 
suitable for use by project administrators;
    (2) Minor repair and rehabilitation of publicly used facilities for 
the general benefit of the community; and
    (3) Minor repair and rehabilitation by enrollees of housing 
occupied by persons with low incomes who are declared eligible for such 
services by authorized local agencies.
    (3) Allowable fringe benefit costs. The cost of the following 
fringe benefits are allowable: initial and annual physical assessments, 
annual leave, sick leave, holidays, health insurance, social security, 
workman's compensation and any other fringe benefits approved in the 
grant agreement and permitted by the appropriate Federal cost 
principles found in OMB Circular A-87 and A-122, except as limited by 
Sec. 641.311(c).


Sec. 641.404  Classification of costs.

    All costs must be charged to one of the following three cost 
categories:
    (a) Administration. The cost category of Administration shall 
include, but need not be limited to, the direct and indirect costs of 
providing:
    (1) Administration, management, and direction of a program or 
project;
    (2) Reports on evaluation, management, community benefits, and 
other aspects of project activity;
    (3) Assistance of an advisory council, if any;
    (4) Accounting and management information systems;
    (5) Training and technical assistance for recipient or subrecipient 
staff;
    (6) Bonding; and
    (7) Audits.
    (b) Enrollee wages and fringe benefits. The cost category of 
Enrollee Wages and Fringe Benefits shall include wages paid to 
enrollees for hours of community service assignments as described in 
Sec. 641.311 or training as described in Sec. 641.313, and the costs of 
fringe benefits provided in accordance with Sec. 641.311.
    (c) Other enrollee costs. The cost category of Other Enrollee Costs 
shall include all costs of functions, services, and benefits not 
categorized as administration or enrollee wages and fringe benefits. 
Other enrollee costs shall include, but shall not be limited to, the 
direct and indirect costs of providing:
    (1) Recruitment and selection of eligible enrollees as provided in 
Sec. 641.304;
    (2) Orientation of enrollees and host agencies as provided in 
Sec. 641.307;
    (3) Assessment of enrollees for participation in community service 
assignments and evaluation of enrollees for continued participation or 
transition to unsubsidized employment as provided in Sec. 641.309;
    (4) Development of appropriate community service assignments as 
provided in Sec. 641.310;
    (5) Supportive services for enrollees, including transportation, as 
provided in Sec. 641.312;
    (6) Training for enrollees as provided in Sec. 641.313; and
    (7) Development of unsubsidized employment opportunities for 
enrollees as provided in Sec. 641.315.
    (d) Cost reductions. Recipients may lower administration costs or 
other enrollee costs by assigning enrollees to activities which 
normally would be charged to either of these cost categories. In such 
instances, the costs of enrollees' wages and fringe benefits shall be 
charged to the cost category of enrollee wages and fringe benefits. 
[Section 502(b)(1)(A).]


Sec. 641.405  Limitations on federal funds.

    (a) Limitations on federal funds set forth in this section shall 
apply to SCSEP funds allotted to recipients for community service 
activities. Cost categories, limitations, and periods during which 
different limitations shall apply are set forth in paragraph (6) of 
this section.
    (b) Cost categories, limitations, and periods during which 
limitations apply shall be:
    (1) Administration. The amount of federal funds expended for the 
cost of administration during the program year shall be no more than 
13.5 percent of the grant. The Department may increase the amount 
available for the cost of administration to no more than 15 percent of 
the grant in accordance with section 502(c)(3) of the Act.
    (2) Enrollee wages and fringe benefits. The amount of federal funds 
budgeted for enrollee wages and fringe benefits shall be no less than 
75 percent of the grant.


Sec. 641.406  Administrative cost waiver.

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


Sec. 641.407  Non-federal share of project costs.

    (a) The Department shall pay not more than 90 percent of the cost 
of any project which is the subject of an agreement entered into under 
the Act, except that the Department is authorized to pay all of the 
costs of any such project which is:
    (1) An emergency or disaster project;
    (2) A project located in an economically depressed area as 
determined by the Secretary of Labor in consultation with the Secretary 
of Commerce and the Director of the Office of Community Services of the 
Department of Health and Human Services;
    (3) A project permitted under section 502(e) of the Act;
    (4) A project which is exempted by law; or
    (5) A project serving an Indian reservation that can demonstrate it 
cannot provide adequate non-federal resources.
    (b) The non-federal share of costs may be in cash or in-kind, or a 
combination of the two, and shall be calculated in accordance with 29 
CFR 97.24 or 41 CFR 29-70.206 (1984), as appropriate. [Sections 502(c) 
and 502(e).]


Sec. 641.408  Budget changes.

    As an exception to 29 CFR 97.30(c)(1), Budget Changes, or 41 CFR 
29-70.211 (1984), Modifications and Budget Revision Procedure, the 
movement of Enrollee Wages and Fringe Benefits to any other budget 
category shall not be permitted without prior written approval of the 
awarding agency. The Department shall not approve any budget change 
which would result in non-compliance with Sec. 641.405(b)(2).


Sec. 641.409  Recipient fiscal and performance reporting requirements.

    (a) In accordance with 29 CFR 97.40 or 41 CFR 29-70.209-3 (1984), 
as appropriate, as approved under OMB Control No. 1205-0040, each 
recipient shall submit a Senior Community Employment Program Quarterly 
Progress Report (QPR). This report shall be prepared to coincide with 
the ending dates for Federal fiscal year quarters and shall be 
submitted to the Department no later than 30 days after the end of the 
quarterly reporting period. If the grant period ends on a date other 
than the last day of a Federal fiscal year quarter, the last quarterly 
report covering the entire grant period shall be submitted no later 
than 30 days after the ending date. The Department shall provide 
instructions for the preparation of this report.
    (b) In accordance with 29 CFR 97.41 or 41 CFR 29-70.207-2(a) (1984) 
and 41 CFR 29-70.208 (1984), as appropriate, the following financial 
reporting requirements apply to title V grants:
    (1) An SF-269, Financial Status Report (FSR), shall be submitted to 
the Department within 30 days after the ending of each quarter of the 
program year. A final FSR shall be submitted within 90 days after the 
end of the grant.
    (2) All FSR's shall be prepared on an accrual basis.
    (3) Each recipient shall submit an SF-272, Report of Federal Cash 
Transactions, within 30 days after the ending dates of each of the 
quarters of the program year.
    (c) In accordance with Departmental instructions, an equitable 
distribution report of SCSEP positions by all recipients in each State 
shall be submitted annually by the State agency receiving title V 
funds.


Sec. 641.410  Subgrant agreements.

    (a) The recipient is responsible for the performance of all 
activities implemented under subgrant agreements and for compliance by 
the subrecipient with the Act and this part.
    (b) No subgrant or other subagreement may provide for any 
expenditure of funds beyond the ending date of the grant agreement.
    (c) For purposes of this part, procurement, as described in 29 CFR 
part 97 and 41 CFR 29-70.216 (1984), does not include the award or 
administration of subgrant agreements.


Sec. 641.411  Program income accountability.

    Any of the methods described at 29 CFR 97.25 or 41 CFR 29-70.205 
(1984), as appropriate, may be used to account for program income.


Sec. 641.412  Equipment.

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


Sec. 641.413  Audits.

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


Sec. 641.414  Grant closeout procedures.

    Grant closeout procedures for title V grants to State, local, or 
Indian tribal governments shall conform to the requirements at 29 CFR 
97.50. As necessary, the Department shall issue supplementary closeout 
instructions for all title V recipients, including recipients not 
subject to 29 CFR part 97.


Sec. 641.415  Department of Labor appeals procedures for recipients.

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

Subpart E--Interagency Agreements


Sec. 641.501  Administration.

    (a) Federal establishments other than the Department of Labor which 
receive and use funds under title V or this part shall submit to DOL 
project fiscal and progress reports as described in Sec. 641.406.
    (b) Non-DOL federal establishments which receive and use funds 
under title V shall maintain the standard records on individual 
enrollees and enrollee activities, in accordance with this part.
    (c) The Department may provide title V funds to another federal 
agency by a non-expenditure transfer authorization or by payments on an 
advance or reimbursement basis.
    (d) In aspects of project administration other than those described 
in paragraphs (a) and (b) of this section, federal establishments which 
receive and use funds under title V may use their normal administrative 
procedures.

Subpart F--Assessment and Evaluation


Sec. 641.601  General.

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


Sec. 641.602  Limitation.

    In arranging for the assessment of a recipient, or the evaluation 
of a subrecipient, or the evaluation of the overall program under title 
V or this part, the Department shall not use any individual, 
institution, or organization associated with any project under title V.

    Signed at Washington, DC, this 19th day of April, 1994.
Robert B. Reich,
Secretary of Labor.
[FR Doc. 94-9923 Filed 4-25-94; 8:45 am]
BILLING CODE 4510-30-M