[Federal Register Volume 64, Number 151 (Friday, August 6, 1999)]
[Rules and Regulations]
[Pages 42837-42839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20156]
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DEPARTMENT OF EDUCATION
34 CFR Part 611
RIN 1840-AC67
Teacher Quality Enhancement Grants Program
AGENCY: Office of Postsecondary Education, Department of Education
ACTION: Final regulations
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SUMMARY: The Assistant Secretary for Postsecondary Education (Assistant
Secretary) issues regulations that apply the eight percent (8%)
indirect cost limitation for the Department's educational training
grants to all funds that States and local educational agencies receive
under the Teacher Quality Enhancement Grants Program for States and
Partnerships authorized by sections 201-205 of the Higher Education Act
(HEA), as amended by the Higher Education Amendments of 1998. These
regulations would ensure that the limited funding available to support
program activities is concentrated on direct support for improvements
in teacher licensing, certification, preparation, and recruitment,
rather than for recipient ``overhead.''
DATES: These regulations are effective on September 7, 1999.
FOR FURTHER INFORMATION CONTACT: Dr. Louis Venuto, Higher Education
Programs, Office of Postsecondary Education, 400 Maryland Ave. SW.,
Portals Building, Room 6234, Washington, D.C. 20202-5131: Telephone:
(202) 708-8847, or by FAX to: (202) 260-9272. Inquiries also may be
sent by e-mail to: Louis__Venuto@ed.gov. If you use a
telecommunications device for the deaf (TDD), you may call the Federal
Information Relay Service (FIRS) at 1-800-877-8339.
Individuals with disabilities may obtain this document in an
alternate format (e.g., Braille, large print, audiotape, or computer
diskette) on request to the contact person listed in the preceding
paragraph.
SUPPLEMENTARY INFORMATION:
Background
The Nation faces an immediate need for significant improvements in
teacher licensure, certification, preparation, and recruitment.
America's schools will need to hire 2.2 million teachers over the next
decade, more than half of whom will be first-time teachers. As
classrooms grow more challenging and diverse, these teachers will need
to be well prepared to teach all students to the highest standards.
Contemporary classrooms and social conditions confront teachers with a
range of complex challenges previously unknown in the profession. New
education goals and tougher standards, more rigorous assessments, site-
based management, greater interest in parental involvement, the
continuing importance of safety and discipline, and expanded use of
technology increase the knowledge and skills that teaching demands.
On October 8, 1998, the President signed into law the Higher
Education Amendments of 1998 (Pub. L. 105-244). Title II of this law
addresses the Nation's need to ensure that new teachers enter the
classroom prepared to teach all students to high standards by
authorizing, as Title II of the HEA, Teacher Quality Enhancement Grants
for States and Partnerships.
The new Teacher Quality Enhancement Grants Program consists of
three different competitive grant programs: (1) The State Grants
Program, which is designed to help States promote a broad array of
improvements in teacher licensure, certification, preparation and
recruitment, (2) the Partnership Grants for Improving Teacher
Preparation Program, which is designed to have schools of education,
schools of arts and sciences, high-need local educational agencies
(LEAs) and others work together to ensure that new teachers have the
content knowledge and skills their students need of them when they
enter the classroom, and (3) the Teacher Recruitment Program, which is
designed to help schools and school districts with severe teacher
shortages to secure the high-quality teachers that they need. For
Fiscal Year 1999, Congress appropriated $75 million for grants to
States and partnerships to implement activities under these programs.
These three programs are designed to increase student achievement
by implementing comprehensive approaches to improving teacher quality.
They collectively provide an historic opportunity to make positive
change in the recruitment, preparation, licensing, and on-going support
of teachers in America. As such, the success of these programs is
critical to the Nation's ability to succeed in increasing student
achievement for all students. However, to achieve success those awarded
Teacher Quality Enhancement Grants must ensure that they focus their
grant funds on costs that are directly associated with securing needed
improvements in teaching and the teaching profession. For this reason,
on May 19, 1999, the Assistant Secretary published a Notice of Proposed
Rulemaking (NPRM) for this program in the Federal Register (64 FR
27403) that proposed a limit of eight percent (8%) on the indirect cost
rate that States and LEAs receiving Teacher Quality Program funds could
use to pay for their overhead and other expenses that they could charge
as ``indirect costs.'' This eight-percent rate is the same maximum rate
that the Department, under 34 CFR 75.562(a), now permits institutions
of higher education (IHEs) and nonprofit agencies to use in charging
indirect costs to education training grants. As the May 18, 1999 NPRM
explained, by establishing this maximum eight-percent indirect cost for
States and LEAs, these recipients will have the same limitation on
their indirect costs as do those IHEs and nonprofit organizations that
receive funds awarded under the programs' initial competitions. See the
Notice Inviting Applications for New Awards and Final Procedures and
Requirements for FY 1999 Competitions Under the Teacher Quality
Enhancement Grant Programs, 64 FR 6139, 6145-46 (February 8, 1999).
Therefore, this regulation will have all
[[Page 42838]]
recipients of program funds subject to the same maximum indirect cost
rate.
The NPRM recognized that, absent a limitation of this kind,
Secs. 75.560-75.564 and 80.22 of the Education Department's General
Administrative Regulations (EDGAR), which incorporate Federal cost
principles developed by the Office of Management and Budget (OMB),
permit grantees to claim these costs. However, it also explained that
the best data available to the Department indicate that over 20 States
have indirect cost rates of over 15 percent; two States have an
indirect cost rates of 34 percent. Absent the establishment, through
program regulations, of a limitation on recipient indirect cost rates,
States with these indirect cost rates that are awarded State or Teacher
Recruitment Program grants could devote 15 percent or more of their
grant awards to support their overall overhead expenses and other
indirect costs rather than the direct costs of improving teacher
quality.
The Secretary continues to believe that allowing States, LEAs, and
other Teacher Quality Enhancement grant recipients to use program funds
to compensate themselves for these very high general overhead and
related expenses is inconsistent with the vital purpose of the programs
and the expectations that Congress and the Nation have for their
success. Accordingly, for reasons explained more fully in the NPRM,
given (1) the pivotal significance of the Teacher Quality Enhancement
Grant programs, (2) the national need that these programs have a
maximum impact on the quality and quantity of highly-qualified new
teachers, and (3) the fact that these programs are competitive, the
Secretary issues 34 CFR 611.41 (renumbered from proposed Sec. 611.30 in
the NPRM). Section 611.41 establishes a maximum indirect cost rate that
a State or LEA receiving funds under any of the Teacher Quality
Enhancement Grant Programs may use in charging program funds as
indirect costs. Under this regulation, a State or LEA may charge
Teacher Quality Enhancement Grants Program funds for indirect costs at
a rate that is limited to eight percent or its negotiated rate,
whichever is less.
Section 611.41 will apply to any funding that States and LEAs
receive under the three Teacher Quality Enhancement Grant programs,
both under the initial and any subsequent program. As explained above,
the Department previously established this limitation for IHEs and
nonprofit organizations that receive program funds awarded in the
initial 1999 grant competitions. In proposed regulations that the
Secretary will develop to govern future competitions under the three
Teacher Quality Enhancement Grant programs, the Secretary intends to
propose that this eight-percent limitation for IHEs and nonprofit
organizations apply to future competitions as well. This proposal, if
finalized, would make the eight-percent maximum indirect cost rate
applicable to all grant funds awarded under all grant competitions held
under these programs, regardless of the recipient.
Analysis of Comments and Changes
In response to the Secretary's invitation in the NPRM, one party
submitted comments on the proposed regulation. An analysis of the
comment and of the changes in the regulations since publication of the
NPRM follows.
Comment: The commenter noted that the cost principles in OMB
Circular A-87, which govern Federal grants to State and local
governments, authorize grantees to recover indirect costs that are
otherwise allowable. The commenter, a State official, acknowledged that
the proposed rule for the Teacher Quality programs would itself have
minimal impact on his state. However, the commenter expressed concern
about what appeared to be a trend on the part of Federal programs to
cap administrative costs, and thus create an ``unfunded mandate.''
Discussion: The three new Teacher Quality Enhancement Grant
programs offer an opportunity to improve teacher quality in America by
effectively addressing the immediate need for significant improvements
in teacher licensure, certification, preparation, and recruitment.
However, success will depend upon how well we use the resources that
Congress provides to make sustained and meaningful improvements in
teacher licensure, certification, preparation, and recruitment. For
fiscal year 1999, Congress appropriated $75 million for these three
component programs. If these funds, and funds that Congress will
appropriate for use in future years, are to achieve their purposes, we
need to ensure that they are used as effectively as possible. To do so,
it is necessary to place a reasonable limitation on the amount of
program funds that Title II grant recipients may use to reimburse
themselves for the ``indirect costs'' of program activities.
Doing so does not create, as the commenter suggests, an unfunded
mandate. Rather, Sec. 611.41 strikes a reasonable balance between the
need to focus as much funding for the Teacher Quality Enhancement Grant
programs as possible on direct services to improve teacher licensure,
certification, preparation, and recruitment, and the reality that, to
do so, recipients will encounter some indirect costs. In this regard,
the Secretary continues to believe that States and LEAs receiving
Teacher Quality Enhancement Grant funds do not need to apply high
general indirect cost rates in order to fairly compensate themselves
for the overhead and other indirect costs associated with activities
they will conduct.
Moreover, because these programs are competitive, States and LEAs
(as well as IHEs and nonprofit agencies) that believe that they need
additional indirect costs to implement these needed grant activities
simply need not apply or accept grant awards. Therefore, this
regulation does not impose any non-reimbursed indirect costs on
unwilling recipients, and so does not establish an unfunded mandate.
The Department has no plans to apply this limitation on State and
LEA indirect cost rates to other grant programs. However, any decision
to propose doing so would come only after the Department weighs State
and LEA interests in charging indirect costs authorized in both EDGAR
regulations and OMB cost principles against the Nation's need to
maximize the amount of grant funds supporting direct program services.
In weighing these relative interests, one consideration must be whether
a proposal to limit indirect cost rates can be expected to discourage
submission of high-quality applications. In this regard, we note that
the Department announced in the application packages used for the
initial Teacher Quality Enhancement grant competitions its intent to
propose the eight-percent limitation on State and LEA indirect cost
rates. Nonetheless, 40 States applied for the State Program grants, and
large numbers of LEAs are included as partners in the 220 partnerships
that applied for the Partnership Program grants. Also relevant here is
the fact that no State applicant for 1999 grant competitions requested
an indirect cost reimbursement in excess of eight percent.
State and Teacher Recruitment grant awards have yet to be
announced. However, the Secretary is pleased with the number of high-
quality applications, and believes that this outpouring of interest in
the new Teacher Quality Enhancement Grants Program demonstrates that
the limitation on indirect costs has not discouraged high-quality
applications for these important awards.
Change: None.
[[Page 42839]]
Goals 2000: Educate America Act
The Goals 2000: Educate America Act (Goals 2000) focuses the
Nation's education reform efforts on the eight National Education Goals
and provides a framework for meeting them. Goals 2000 promotes new
partnerships to strengthen schools and expands the Department's
capacities for helping communities to exchange ideas and obtain
information needed to achieve the goals.
These regulations address the National Education Goal that the
Nation's teaching force will have the content knowledge and teaching
skills needed to instruct all American students for the next century.
Paperwork Reduction Act of 1995
These regulations do not contain any information collection
requirements.
Intergovernmental Review
This program is subject to Executive Order 12372 and the
regulations in 34 CFR part 79. One of the objectives of the Executive
Order is to foster an intergovernmental partnership and a strengthened
federalism. The Executive order relies on processes developed by State
and local governments for coordination and review of proposed Federal
financial assistance.
This document is intended to provide early notification of our
specific plans and actions for this program.
Assessment of Educational Impact
In the NPRM we requested comments on whether the proposed
regulations would require transmission of information that any other
agency or authority of the United States gathers or makes available.
Based on the response to the NPRM and our review, we have
determined that these final regulations do not require transmission of
information that any other agency or authority of the United States
gathers or makes available.
Electronic Access to This Document
You may review this document, as well as all other Department of
Education documents published in the Federal Register, in text or
portable document format (PDF) on the World Wide Web at either of the
following sites:
http://ocfo.ed.gov/fedreg.htm
http://www.ed.gov/news.html
To use the PDF you must have the Adobe Acrobat Reader Program with
Search, which is available free at either of the previous sites. If you
have questions about using the PDF, call the U.S. Government Printing
Office (GPO), toll free, at 1-888-293-6498; or in the Washington, DC
area at (202) 512-1530.
Note: The official version of the document is the document
published in the Federal Register. Free Internet access to the
official edition of the Federal Register and the Code of Federal
Regulations is available on GPO Access at: http://
www.access.gpo.gov/nara/index.html
(Catalog of Federal Domestic Assistance Number 84.336: Teacher
Quality Enhancement Grants Program)
List of Subjects in 34 CFR Part 611
Colleges and universities, Elementary and secondary education,
Grant programs--education.
Program Authority: 20 U.S.C. 1021 et seq.
Dated: August 2, 1999.
Claudio F. Prieto,
Acting Assistant Secretary for Postsecondary Education.
For the reasons discussed in the preamble, the Secretary amends
Chapter VI of title 34 of the Code of Federal Regulations by adding a
new part 611 to read as follows:
PART 611--TEACHER QUALITY ENHANCEMENT GRANTS PROGRAM
Sec.
Subpart A-D
Subpart E--Other Grant Conditions
611.41 What is the maximum indirect cost rate for States and local
educational agencies?
Authority: 20 U.S.C. 1021 et seq., unless otherwise noted.
Subpart A-D--[Reserved]
Subpart E--Other Grant Conditions
Sec. 611.41 What is the maximum indirect cost rate for States and
local educational agencies?
Notwithstanding 34 CFR 75.560-75.562 and 34 CFR 80.22, the maximum
indirect cost rate that a State or local educational agency receiving
funding under the Teacher Quality Enhancement Grants Program may use to
charge indirect costs to these funds is the lesser of--
(a) The rate established by the negotiated indirect cost agreement;
or
(b) Eight percent.
(Authority: 20 U.S.C. 1021 et seq.)
[FR Doc. 99-20156 Filed 8-5-99; 8:45 am]
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