Subpart C--Financing of State Vocational Rehabilitation Programs
'361.60 Matching requirements.
(a) Federal share.
(1) General. Except as provided in paragraph (a)(2) of this section, the Federal share for expenditures made by the State under the State plan, including expenditures for the provision of vocational rehabilitation services and the administration of the State plan, is 78.7 percent.
(2) Construction projects. The Federal share for expenditures made for the construction of a facility for community rehabilitation program purposes may not be more than 50 percent of the total cost of the project.
(b) Non-Federal share.
(1) General. Except as provided in paragraph (b)(2) and (3) of this section, expenditures made under the State plan to meet the non-Federal share under this section must be consistent with the provisions of 34 CFR 80.24.
(2) Third party in-kind contributions. Third party in-kind contributions specified in 34 CFR 80.24(a)(2) may not be used to meet the non-Federal share under this section.
(3) Contributions by private entities. Expenditures made from contributions by private organizations, agencies, or individuals that are deposited in the account of the State agency or sole local agency in accordance with State law and that are earmarked, under a condition imposed by the contributor, may be used as part of the non-Federal share under this section if the funds are earmarked for--
(i) Meeting in whole or in part the State’s share for establishing a community rehabilitation program or constructing a particular facility for community rehabilitation program purposes;
(ii) Particular geographic areas within the State for any purpose under the State plan, other than those described in paragraph (b)(3)(i) of this section, in accordance with the following criteria:
(A) Before funds that are earmarked for a particular geographic area may be used as part of the non-Federal share, the State must notify the Secretary that the State cannot provide the full non-Federal share without using these funds.
(B) Funds that are earmarked for a particular geographic area may be used as part of the non-Federal share without requesting a waiver of statewideness under '361.26.
(C) Except as provided in paragraph (b)(3)(i) of this section, all Federal funds must be used on a statewide basis consistent with '361.25, unless a waiver of statewideness is obtained under '361.26; and
(iii) Any other purpose under the State plan, provided the expenditures do not benefit in any way the donor, an individual to whom the donor is related by blood or marriage or with whom the donor has a close personal relationship, or an individual, entity, or organization with whom the donor shares a financial interest. The Secretary does not consider a donor’s receipt from the State unit of a grant, subgrant, or contract with funds allotted under this part to be a benefit for the purposes of this paragraph if the grant, subgrant, or contract is awarded under the State’s regular competitive procedures.
(Authority: Sections 7(14), 101(a)(3), 101(a)(4) and 104 of the Act; 29 U.S.C. 706(14), 721(a)(3), 721(a)(4) and 724))
EXAMPLE for paragraph (b)(3): Contributions may be earmarked in accordance with '361.60(b)(3)(iii) for providing particular services (e.g., rehabilitation technology services); serving individuals with certain types of disabilities (e.g., individuals who are blind), consistent with the State’s order of selection, if applicable; providing services to special groups that State or Federal law permits to be targeted for services (e.g., students with disabilities who are receiving special education services), consistent w`ith the State’s order of selection, if applicable; or carrying out particular types of administrative activities permissible under State law. Contributions also may be restricted to particular geographic areas to increase services or expand the scope of services that are available statewide under the State plan in accordance with the requirements in '361.60(b)(3)(ii).
'361.61 Limitation on use of funds for construction expenditures.
No more than 10 percent of a State’s allotment for any fiscal year under section 110 of the Act may be spent on the construction of facilities for community rehabilitation program purposes.
(Authority: Section 101(a)(17)(A) of the Act; 29 U.S.C. 721(a)(17)(A))
'361.62 Maintenance of effort requirements.
(a) General requirements.
(1) The Secretary reduces the amount otherwise payable to a State for a fiscal year by the amount by which the total expenditures from non-Federal sources under the State plan for the previous fiscal year were less than the total of those expenditures for the fiscal year 2 years prior to the previous fiscal year. EXAMPLE: For fiscal year 2001, a State’s maintenance of effort level is based on the amount of its expenditures from non-Federal sources for fiscal year 1999. Thus, if the State’s non-Federal expenditures in 2001 are less than they were in 1999, the State has a maintenance of effort deficit, and the Secretary reduces the State’s allotment in 2002 by the amount of that deficit.
(2) If, at the time the Secretary makes a determination that a State has failed to meet its maintenance of effort requirements, it is too late for the Secretary to make a reduction in accordance with paragraph (a)(1) of this section, then the Secretary recovers the amount of the maintenance of effort deficit through audit disallowance.
(b) Specific requirements for construction of facilities. If the State provides for the construction of a facility for community rehabilitation program purposes, the amount of the State’s share of expenditures for vocational rehabilitation services under the plan, other than for the construction of a facility for community rehabilitation program purposes or the establishment of a facility for community rehabilitation purposes, must be at least equal to the expenditures for those services for the second prior fiscal year. If a State fails to meet the requirements of this paragraph, the Secretary recovers the amount of the maintenance of effort deficit through audit disallowance.
(c)
(1) Satisfaction of the maintenance of effort requirements under paragraphs (a) and (b) of this section are determined based on the total amount of a State’s non-Federal expenditures under both parts of the State plan; and
(2) If a State fails to meet any maintenance of effort requirement, the Secretary reduces the amount otherwise payable to the State for that fiscal year under each part of the plan in direct relation to the amount by which expenditures from non-Federal sources under each part of the plan in the previous fiscal year were less than they were for that part of the plan for the fiscal year 2 years prior to the previous fiscal year.
(d) Waiver or modification.
(1) The Secretary may waive or modify the maintenance of effort requirement in paragraph (a)(1) of this section if the Secretary determines that a waiver or modification is necessary to permit the State to respond to exceptional or uncontrollable circumstances, such as a major natural disaster or a serious economic downturn, that‑‑
(i) Cause significant unanticipated expenditures or reductions in revenue that result in a general reduction of programs within the State; or
(ii) Require the State to make substantial expenditures in the vocational rehabilitation program for long‑term purposes due to the one‑time costs associated with the construction of a facility for community rehabilitation program purposes, the establishment of a facility for community rehabilitation program purposes, or the acquisition of equipment.
(2) The Secretary may waive or modify the maintenance of effort requirement in paragraph (b) of this section or the 10 percent allotment limitation in '361.61 if the Secretary determines that a waiver or modification is necessary to permit the State to respond to exceptional or uncontrollable circumstances, such as a major natural disaster, that result in significant destruction of existing facilities and require the State to make substantial expenditures for the construction of a facility for community rehabilitation program purposes or the establishment of a facility for community rehabilitation program purposes in order to provide vocational rehabilitation services.
(3) A written request for waiver or modification, including supporting justification, must be submitted to the Secretary as soon as the State determines that an exceptional or uncontrollable circumstance will prevent it from making its required expenditures from non‑Federal sources.
(Authority: Sections 101(a)(17) and 111(a)(2) of the Act; 29 U.S.C. 721(a)(17) and 731(a)(2))
'361.63 Program income.
(a) Definition. For purposes of this section, program income means gross income received by the State that is directly generated by an activity supported under this part.
(b) Sources. Sources of program income include, but are not limited to, payments from the Social Security Administration for assisting Social Security beneficiaries and recipients to achieve employment outcomes, payments received from workers' compensation funds, fees for services to defray part or all of the costs of services provided to particular individuals, and income generated by a State-operated community rehabilitation program.
(c) Use of program income.
(1) Except as provided in paragraph (c)(2) of this section, program income, whenever earned, must be used for the provision of vocational rehabilitation services and the administration of the State plan. Program income is considered earned when it is received.
(2) Payments provided to a State from the Social Security Administration for assisting Social Security beneficiaries and recipients to achieve employment outcomes may also be used to carry out programs under part B of Title I of the Act (client assistance), part B of Title VI of the Act (supported employment), and Title VII of the Act (independent living).
(3) The State is authorized to treat program income as--
(i) An addition to the grant funds to be used for additional allowable program expenditures, in accordance with 34 CFR 80.25(g)(2); or
(ii) A deduction from total allowable costs, in accordance with 34 CFR 80.25(g)(1).
(4) Program income cannot be used to meet the non-Federal share requirement under '361.60.
(Authority: Section 108 of the Act; 29 U.S.C. 728; 34 CFR 80.25)
'361.64 Obligation of Federal funds and program income.
(a) Except as provided in paragraph (b) of this section, any Federal funds, including reallotted funds, that are appropriated for a fiscal year to carry out a program under this part that are not obligated by the State by the beginning of the succeeding fiscal year and any program income received during a fiscal year that is not obligated by the State by the beginning of the succeeding fiscal year remain available for obligation by the State during that succeeding fiscal year.
(b) Federal funds appropriated for a fiscal year remain available for obligation in the succeeding fiscal year only to the extent that the State met the matching requirement for those Federal funds by obligating, in accordance with 34 CFR 76.707, the non-Federal share in the fiscal year for which the funds were appropriated.
(Authority: Section 19 of the Act; 29 U.S.C. 716)
'361.65 Allotment and payment of Federal funds for vocational rehabilitation services.
(a) Allotment.
(1) The allotment of Federal funds for vocational rehabilitation services for each State is computed in accordance with the requirements of section 110 of the Act, and payments are made to the State on a quarterly basis, unless some other period is established by the Secretary.
(2) If the State plan designates one State agency to administer, or supervise the administration of, the part of the plan under which vocational rehabilitation services are provided for individuals who are blind and another State agency to administer the rest of the plan, the division of the State’s allotment is a matter for State determination.
(b) Reallotment.
(1) The Secretary determines not later than 45 days before the end of a fiscal year which States, if any, will not use their full allotment.
(2) As soon as possible, but not later than the end of the fiscal year, the Secretary reallots these funds to other States that can use those additional funds during the current or subsequent fiscal year, provided the State can meet the matching requirement by obligating the non-Federal share of any reallotted funds in the fiscal year for which the funds were appropriated.
(3) Funds reallotted to another State are considered to be an increase in the recipient State’s allotment for the fiscal year for which the funds were appropriated.
(Authority: Sections 110 and 111 of the Act; 29 U.S.C. 730 and 731)
Subpart D--[Reserved]
Subpart E--Evaluation Standards and Performance Indicators
'361.80 Purpose.
The purpose of this subpart is to establish evaluation standards and performance indicators for the Program.
(Authority: 29 U.S.C. 726(a))
'361.81 Applicable definitions.
In addition to those definitions in '361.5(b), the following definitions apply to this subpart:
Average hourly earnings means the average per hour earnings in the week prior to exiting the vocational rehabilitation (VR) program of an eligible individual who has achieved a competitive employment outcome.
Business Enterprise Program (BEP) means an employment outcome in which an individual with a significant disability operates a vending facility or other small business under the management and supervision of a designated State unit (DSU). This term includes home industry, farming, and other enterprises.
Exit the VR program means that a DSU has closed the individual=s record of VR services in one of the following categories:
(1) Ineligible for VR services.
(2) Received services under an individualized plan for employment (IPE) and achieved an employment outcome.
(3) Received services under an IPE but did not achieve an employment outcome.
(4) Eligible for VR services but did not receive services under an IPE.
General or combined DSU means a DSU that does not serve exclusively individuals with visual impairments or blindness.
Individuals from a minority background means individuals who report their race and ethnicity in any of the following categories: American Indian or Alaska Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander, or Hispanic or Latino.
Minimum wage means the higher of the rate specified in section 6(a)(1) of the Fair Labor Standards Act of 1938, 29 U.S.C. 206(a)(1), (i.e., the Federal minimum wage) or applicable State minimum wage law.
Non-minority individuals means individuals who report themselves exclusively as White, non-Hispanic.
Performance period is the reporting period during which a DSU=s performance is measured. For Evaluation Standards 1 and 2, performance data must be aggregated and reported for each fiscal year beginning with fiscal year 1999. However, DSUs that exclusively serve individuals with visual impairments or blindness must report each year the aggregated data for the 2 previous years for Performance Indicators 1.1 through 1.6; the second year must coincide with the performance period for general or combined DSUs.
Primary indicators means Performance Indicators 1.3, 1.4, and 1.5, which are specifically designed to measure--
(1) The achievement of competitive, self-, or BEP employment with earnings equivalent to the minimum wage or higher, particularly by individuals with significant disabilities; and
(2) The ratio between the average hourly earnings of individuals who exit the VR program in competitive, self-, or BEP employment with earnings equivalent to the minimum wage or higher and the State=s average hourly earnings for all employed individuals.
RSA-911 means the Case Service Report that is submitted annually by a DSU as approved by the Office of Management and Budget (OMB).
Self-employment means an employment outcome in which the individual works for profit or fee in his or her own business, farm, shop, or office, including sharecroppers.
Service rate means the result obtained by dividing the number of individuals who exit the VR program after receiving one or more services under an IPE during any reporting period by the total number of individuals who exit the VR program (as defined in this section) during that reporting period.
State=s average hourly earnings means the average hourly earnings of all persons in the State in which the DSU is located.
(Authority: 29 U.S.C. 726(a))
'361.82 Evaluation standards.
(a) The Secretary establishes two evaluation standards to evaluate the performance of each DSU that receives funds under this part. The evaluation standards assist the Secretary and each DSU to evaluate a DSU=s performance in serving individuals with disabilities under the VR program.
(b) A DSU must achieve successful performance on both evaluation standards during each performance period.
(c) The evaluation standards for the VR program are--
(1) Evaluation Standard 1--Employment outcomes.
A DSU must assist any eligible individual, including an individual with a significant disability, to obtain, maintain, or regain high-quality employment.
(2) Evaluation Standard 2--Equal access to services.
A DSU must ensure that individuals from minority backgrounds have equal access to VR services.
(Approved by the Office of Management and Budget under control number 1820-0508.)
(Authority: 29 U.S.C. 726(a))
'361.84 Performance indicators.
(a) The performance indicators establish what constitutes minimum compliance with the evaluation standards.
(b) The performance indicators require a DSU to provide information on a variety of factors to enable the Secretary to measure compliance with the evaluation standards.
(c) The performance indicators are as follows:
(1) Employment outcomes.
(i) Performance Indicator 1.1. The number of individuals exiting the VR program who achieved an employment outcome during the current performance period compared to the number of individuals who exit the VR program after achieving an employment outcome during the previous performance period.
(ii) Performance Indicator 1.2. Of all individuals who exit the VR program after receiving services, the percentage who are determined to have achieved an employment outcome.
(iii) Performance Indicator 1.3. Of all individuals determined to have achieved an employment outcome, the percentage who exit the VR program in competitive, self-, or BEP employment with earnings equivalent to at least the minimum wage.
(iv) Performance Indicator 1.4. Of all individuals who exit the VR program in competitive, self-, or BEP employment with earnings equivalent to at least the minimum wage, the percentage who are individuals with significant disabilities.
(v) Performance Indicator 1.5. The average hourly earnings of all individuals who exit the VR program in competitive, self-, or BEP employment with earnings levels equivalent to at least the minimum wage as a ratio to the State=s average hourly earnings for all individuals in the State who are employed (as derived from the Bureau of Labor Statistics report "State Average Annual Pay" for the most recent available year).
(vi) Performance Indicator 1.6. Of all individuals who exit the VR program in competitive, self-, or BEP employment with earnings equivalent to at least the minimum wage, the difference between the percentage who report their own income as the largest single source of economic support at the time they exit the VR program and the percentage who report their own income as the largest single source of support at the time they apply for VR services.
(2) Equal access to services.
(i) Performance Indicator 2.1. The service rate for all individuals with disabilities from minority backgrounds as a ratio to the service rate for all non-minority individuals with disabilities.
(Approved by the Office of Management and Budget under control number 1820-0508.)
(Authority: 29 U.S.C. 726(a))
'361.86 Performance levels.
(a) General.
(1) Paragraph (b) of this section establishes performance levels for--
(i) General or combined DSUs; and
(ii) DSUs serving exclusively individuals who are visually impaired or blind.
(2) The Secretary may establish, by regulations, new performance levels.
(b) Performance levels for each performance indicator.
(1)(i) The performance levels for Performance Indicators 1.1 through 1.6 are--
Performance Indicator Performance Level by Type of
DSU
General/Combined Blind
1.1 Equal or exceed previous Same
performance period.
1.2 55.8% 68.9%
1.3 72.6% 35.4%
1.4 62.4% 89.0%
1.5 .52 (Ratio) .59
1.6 53.0 (Math. Difference) 30.4
(ii) To achieve successful performance on Evaluation Standard 1 (Employment outcomes), a DSU must meet or exceed the performance levels established for four of the six performance indicators in the evaluation standard, including meeting or exceeding the performance levels for two of the three primary indicators (Performance Indicators 1.3, 1.4, and 1.5).
(2)(i) The performance level for Performance Indicator 2.1 is--
Performance Indicator Performance Levels
2.1 .80 (Ratio)
(ii) To achieve successful performance on Evaluation Standard 2 (Equal access), DSUs must meet or exceed the performance level established for Performance Indicator 2.1 or meet the performance requirement in paragraph (2)(iii) of this section.
(iii) If a DSU=s performance does not meet or exceed the performance level required for Performance Indicator 2.1, or if fewer than 100 individuals from a minority population have exited the VR program during the reporting period, the DSU must describe the policies it has adopted or will adopt and the steps it has taken or will take to ensure that individuals with disabilities from minority backgrounds have equal access to VR services.
(Authority: 29 U.S.C. 726(a))
'361.88 Reporting requirements.
(a) The Secretary requires that each DSU report within 60 days after the end of each fiscal year the extent to which the State is in compliance with the evaluation standards and performance indicators and include in this report the following RSA-911 data:
(1) The number of individuals who exited the VR program in each closure category as specified in the definition of "Exit the VR program" under '361.81.
(2) The number of individuals who exited the VR program in competitive, self-, or BEP employment with earnings at or above the minimum wage.
(3) The number of individuals with significant disabilities who exited the VR program in competitive,
self-, or BEP employment with earnings at or above the minimum wage.
(4) The weekly earnings and hours worked of individuals who exited the VR program in competitive, self-, or BEP employment with earnings at or above the minimum wage.
(5) The number of individuals who exited the VR program in competitive, self-, or BEP employment with earnings at or above the minimum wage whose primary source of support at the time they applied for VR services was "personal income."
(6) The number of individuals who exited the VR program in competitive, self-, or BEP employment with earnings at or above the minimum wage whose primary source of support at closure was "personal income."
(7) The number of individuals exiting the VR program who are individuals from a minority background.
(8) The number of non-minority individuals exiting the VR program.
(9) The number of individuals from a minority background exiting the VR program after receiving services under an IPE.
(10) The number of non-minority individuals exiting the VR program after receiving services under an IPE.
(b) In lieu of the report required in paragraph (a) of this section, a DSU may submit its RSA-911 data on tape, diskette, or any alternative electronic format that is compatible with RSA=s capability to process such an alternative, as long as the tape, diskette, or alternative electronic format includes the data that--
(1) Are required by paragraph (a)(1) through (10) of this section; and
(2) Meet the requirements of paragraph (c) of this section.
(c) Data reported by a DSU must be valid, accurate, and in a consistent format. If a DSU fails to submit data that are valid, accurate, and in a consistent format within the 60-day period, the DSU must develop a program improvement plan pursuant to '361.89(a).
(Approved by the Office of Management and Budget under control number 1820-0508.)
(Authority: 29 U.S.C. 726(b))
'361.89 Enforcement procedures.
(a) If a DSU fails to meet the established performance levels on both evaluation standards as required by '361.82(b), the Secretary and the DSU must jointly develop a program improvement plan that outlines the specific actions to be taken by the DSU to improve program performance.
(b) In developing the program improvement plan, the Secretary considers all available data and information related to the DSU=s performance.
(c) When a program improvement plan is in effect, review of the plan is conducted on a biannual basis. If necessary, the Secretary may request that a DSU make further revisions to the plan to improve performance. If the Secretary establishes new performance levels under '361.86(a)(2), the Secretary and the DSU must jointly modify the program improvement plan based on the new performance levels. The Secretary continues reviews and requests revisions until the DSU sustains satisfactory performance based on the current performance levels over a period of more than 1 year.
(d) If the Secretary determines that a DSU with less than satisfactory performance has failed to enter into a program improvement plan or comply substantially with the terms and conditions of the program improvement plan, the Secretary, consistent with the procedures specified in '361.11, reduces or makes no further payments to the DSU under this program until the DSU has met one of these two requirements or raised its subsequent performance to meet the current overall minimum satisfactory level on the compliance indicators.
(Approved by the Office of Management and Budget under control number 1820-0508.)
(Authority: 29 U.S.C. 726(b) and (c))