(a) State-administered programs--(1) Services for older individuals.
Of the funds allocated for any program year for section 202(c)(1)(D) of
the Act to carry out activities pursuant to section 204(d) of the Act--
(i) Not less than 50 percent shall be expended for the cost of
direct training services; and
(ii) Not more than 20 percent shall be expended for the cost of
administration.
(2) State education services. Of the funds allocated for any program
year for sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry out
activities pursuant to section 123(d)(2)(B) of the Act--
(i) Not less than 50 percent shall be expended for the cost of
direct training services; and
(ii) Not more than 20 percent shall be expended for the cost of
administration.
(3) The limitations specified in paragraph (a)(2) of this section
shall apply to the combined total of funds allocated for sections
202(c)(1)(C) and 262(c)(1)(C) of the Act.
(b) SDA allocations. (1) In applying the title II-A and II-C cost
limitations specified in section 108(b)(4) of the Act, the funds
allocated to a service delivery area shall be net of any:
(i) Transfers made in accordance with sections 206, 256, and 266 of
the Act; and
(ii) Reallocations made by the Governor in accordance with section
109(a) of the Act.
(2) The limitations specified in paragraph (b)(1) of this section
shall apply separately to the funds allocated for title II-A and title
II-C programs.
(3) The title II-B administrative cost limitation of 15 percent
shall be 15 percent of the funds allocated for any program year to a
service delivery area, excluding any funds transferred to title II-C in
accordance with section 256 of the Act (section 253(a)(3)).
(c)(1) The State shall establish a system to regularly assess
compliance with the cost limitations including periodic review and
corrective action, as necessary.
(2) States and service delivery areas shall have the 3-year period
of fund availability to comply with the cost limitations in section 108
of the Act and paragraphs (a) and (b) of this section (section 161(b)).
(d) Administrative costs incurred by a community-based organization
or non-profit service provider shall not be included in the limitation
described in section 108(b)(4)(A) of the Act if:
(1) Such costs are incurred under an agreement that meets the
requirements of section 141(d)(3)(C) (i) and (ii) of the Act;
(2) The total administrative expenditures of the service delivery
area, including the administrative expenditures of such community-based
organizations or non-profit service providers, do not exceed 25 percent
of the funds allocated to the service delivery area for the program year
of allocation; and
(3) The total direct training expenditures of the service delivery
area, including the direct training expenditures of such community-based
organizations or non-profit service providers, is equal to or exceeds 50
percent of the funds allocated to the service delivery area for the
program year less one-half of the percentage by which the total
administrative expenditures of the service delivery area exceeds 20
percent. For example, if the total administrative expenditures of the
service delivery area is 24 percent, then the total direct training
expenditures of the service delivery area must be at least 48 percent.
(e) The provisions of this section do not apply to any title III
programs.
(f) The provisions of this section do not apply to any designated
SDA which served as a concentrated employment program grantee for a
rural area under
the Comprehensive Employment and Training Act (section 108(d)).
