[Code of Federal Regulations]
[Title 34, Volume 1]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 34CFR222.53]

[Page 529-530]
 
                           TITLE 34--EDUCATION
 
              SECONDARY EDUCATION, DEPARTMENT OF EDUCATION
 
PART 222_IMPACT AID PROGRAMS--Table of Contents
 
     Subpart D_Payments Under Section 8003(d) of the Act for Local 
       Educational Agencies That Serve Children With Disabilities
 
Sec. 222.53  What restrictions and requirements apply to the use of funds provided under section 8003(d)?

    (a) An LEA shall use funds provided under section 8003(d) in 
accordance with the provisions of section 8003(d)(2) and 34 CFR part 
300.
    (b) Obligations and expenditures of section 8003(d) funds may be 
incurred in either of the two following ways:
    (1) An LEA may obligate or expend section 8003(d) funds for the 
fiscal year for which the funds were appropriated.
    (2) An LEA may reimburse itself for obligations or expenditures of 
local and general State aid funds for the fiscal year for which the 
section 8003(d) funds were appropriated.
    (c) An LEA shall use its section 8003(d) funds for the following 
types of expenditures:
    (1) Expenditures that are reasonably related to the conduct of 
programs or projects for the free appropriate public education of 
federally connected children with disabilities. These expenditures may 
include program planning and evaluation but may not include construction 
of school facilities.
    (2) Acquisition cost (net invoice price) of equipment required for 
the free appropriate public education of federally connected children 
with disabilities.
    (i) If section 8003(d) funds are used for the acquisition of any 
equipment described in this paragraph (c)(2) of this section, the fair 
market value of any financial advantage realized through rebates, 
discounts, bonuses, free pieces of equipment used in a program or 
project for the free appropriate public education of federally connected 
children with disabilities, or other circumstances, is not an allowable 
expenditure and may not be credited as an expenditure of those funds.
    (ii) Funds awarded under the provisions of section 8003(d) may be 
used to acquire equipment for the free appropriate public education of 
the federally connected children with disabilities

[[Page 530]]

only if title to the equipment would be in the applicant agency.
    (d) An LEA shall account for the use of section 8003(d) funds as 
follows:
    (1) By recording, for each fiscal year, the receipt (or credit) of 
section 8003(d) funds separately from other funds received under the 
Act, i.e., on a line item basis in the general fund account or in a 
separate account; and
    (2) By demonstrating that, for each fiscal year, the amount of 
expenditures for special education and related services provided to the 
federally connected children with disabilities is at least equal to the 
amount of section 8003(d) funds received or credited for that fiscal 
year. This is done as follows:
    (i) For each fiscal year determine the amount of an LEA's 
expenditures for special education and related services provided to all 
children with disabilities.
    (ii) The amount determined in paragraph (d)(2)(i) of this section is 
divided by the average daily attendance (ADA) of the total number of 
children with disabilities the LEA served during that fiscal year.
    (iii) The amount determined in paragraph (d)(2)(ii) of this section 
is then multiplied by the total ADA of the LEA's federally connected 
children with disabilities claimed by the LEA for that fiscal year.
    (3) If the amount of section 8003(d) funds the LEA received (or was 
credited) for the fiscal year exceeds the amount obtained in paragraph 
(d)(2)(iii) of this section, an overpayment equal to the excess section 
8003(d) funds is established. This overpayment may be reduced or 
eliminated to the extent that the LEA can demonstrate that the average 
per pupil expenditure for special education and related services 
provided to federally connected children with disabilities exceeded its 
average per pupil expenditure for serving non-federally connected 
children with disabilities.

(Approved by the Office of Management and Budget under control number 
1810-0036)

(Authority: 20 U.S.C. 7703(d))