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Federal Register / Vol. 62, No. 28 / Tuesday, February 11, 1997 / Rules and Regulations6341(2) In the administration of the Stateplan, there has been a failure to complysubstantially with any provision of thatplan or a program improvement planestablished in accordance with section106 of the Act.(b) Informal resolution. Prior towithholding or limiting payments inaccordance with this section, theSecretary attempts to resolve disputedissues informally with State officials.(c) Notice. If, after reasonable efforthas been made to resolve the dispute, noresolution has been reached, theSecretary provides notice to the Stateagency of the intention to withhold orlimit payments and of the opportunityfor a hearing.(d) Withholding hearing. If the Stateagency requests a hearing, the Secretarydesignates one or more individuals,either from the Department orelsewhere, not responsible for orconnected with the administration ofthis program, to conduct a hearing inaccordance with the provisions of 34CFR part 81, Subpart A.(e) Initial decision. The hearing officerissues an initial decision in accordancewith 34 CFR 81.41.(f) Petition for review of an initialdecision. The State agency may seek theSecretary’s review of the initial decisionin accordance with 34 CFR 81.42.(g) Review by the Secretary. TheSecretary reviews the initial decision inaccordance with 34 CFR 81.43.(h) Final decision of the Department.The final decision of the Department ismade in accordance with 34 CFR 81.44(i) Judicial review. A State may appealthe Secretary’s decision to withhold orlimit payments by filing a petition forreview with the U.S. Court of Appealsfor the circuit in which the State islocated, in accordance with section107(d) of the Act.(Authority: Secs. 101(b), 107(c), and 107(d) ofthe Act; 29 U.S.C. 721(b), 727(c)(1) and (2),and 727(d))State Plan Content: Administration§ 361.12 Methods of administration.The State plan must assure that theState agency, and the designated Stateunit if applicable, employs methods ofadministration found necessary by theSecretary for the proper and efficientadministration of the plan and forcarrying out all functions for which theState is responsible under the plan andthis part. These methods must includeprocedures to ensure accurate datacollection and financial accountability.(Authority: Sec. 101(a)(6) of the Act; 29U.S.C. 721(a)(6))§ 361.13 State agency for administration.(a) Designation of State agency. TheState plan must designate a State agencyas the sole State agency to administerthe State plan, or to supervise itsadministration in a political subdivisionof the State by a sole local agency, inaccordance with the followingrequirements:(1) General. Except as provided inparagraphs (a) (2) and (3) of this section,the State plan must provide that thedesignated State agency is one of thefollowing types of agencies:(i) A State agency that is anindependent State commission, board,or other agency that has as its majorfunction vocational rehabilitation orvocational and other rehabilitation ofindividuals with disabilities.(ii) The State agency administering orsupervising the administration ofeducation or vocational education in theState, provided that it includes avocational rehabilitation unit asprovided in paragraph (b) of thissection.(iii) A State agency that includes avocational rehabilitation unit, asprovided in paragraph (b) of thissection, and at least two other majororganizational units, each of whichadministers one or more of the State’smajor programs of public education,public health, public welfare, or labor.(2) American Samoa. In the case ofAmerican Samoa, the State plan mustdesignate the Governor.(3) Designated State agency forindividuals who are blind. If a Statecommission or other agency thatprovides assistance or services toindividuals who are blind is authorizedunder State law to provide vocationalrehabilitation services to individualswho are blind, and this commission oragency is primarily concerned withvocational rehabilitation or includes avocational rehabilitation unit asprovided in paragraph (b) of thissection, the State plan may designatethat agency as the sole State agency toadminister the part of the plan underwhich vocational rehabilitation servicesare provided for individuals who areblind or to supervise its administrationin a political subdivision of the State bya sole local agency.(b) Designation of State unit. (1) If thedesignated State agency is of the typespecified in paragraph (a)(1)(ii) or(a)(1)(iii) of this section, or if thedesignated State agency specified inparagraph (a)(3) of this section does nothave as its major function vocationalrehabilitation or vocational and otherrehabilitation of individuals withdisabilities, the State plan must assurethat the agency (or each agency if twoagencies are designated) includes avocational rehabilitation bureau,division, or unit that—(i) Is primarily concerned withvocational rehabilitation or vocationaland other rehabilitation of individualswith disabilities and is responsible forthe administration of the State agency’svocational rehabilitation program underthe State plan, including thoseresponsibilities specified in paragraph(c) of this section;(ii) Has a full-time director;(iii) Has a staff, at least 90 percent ofwhom are employed full time on therehabilitation work of the organizationalunit; and(iv) Is located at an organizationallevel and has an organizational statuswithin the State agency comparable tothat of other major organizational unitsof the agency or, in the case of anagency described in paragraph (a)(1)(ii)of this section, is so located and has thatstatus or has a director who is theexecutive officer of the State agency.(2) In the case of a State that has notdesignated a separate State agency forindividuals who are blind, as providedfor in paragraph (a)(3) of this section,the State may assign responsibility forthe part of the plan under whichvocational rehabilitation services areprovided to individuals who are blindto one organizational unit of thedesignated State agency and may assignresponsibility for the rest of the plan toanother organizational unit of thedesignated State agency, with theprovisions of paragraph (b)(1) of thissection applying separately to each ofthese units.(c) Responsibility for administration.(1) The State plan must assure that, ata minimum, the following activities arethe responsibility of the designatedState unit or the sole local agency underthe supervision of the State unit:(i) All decisions affecting eligibilityfor vocational rehabilitation services,the nature and scope of availableservices, and the provision of theseservices.(ii) The determination that anindividual has achieved an employmentoutcome under § 361.56.(iii) Policy formulation andimplementation.(iv) The allocation and expenditure ofvocational rehabilitation funds.(2) This responsibility may not bedelegated to any other agency orindividual.(Approved by the Office of Management andBudget under control number 1820–0500.)(Authority: Sec. 101(a)(1) and 101(a)(2) of theAct; 29 U.S.C. 721(a)(1) and 721(a)(2))