Title 9 Regulations

§ 7333. Grants.

  1. Establishment Grants.

    1. The Department may award Establishment Grants to public or private non-profit rehabilitation facilities. Such facilities include sheltered workshops, work activity centers, facilities serving primarily blind and/or deaf, independent living centers, rehabilitation centers, and other community resources for the handicapped available within the state. Such facilities shall provide vocational rehabilitation services or transitional or extended employment for handicapped individuals. The purpose of such grants is to:

      1. Expand, remodel, or alter existing buildings and/or

      2. Acquire initial and additional fixed or movable equipment of existing buildings.

      3. Provide initial or additional staffing assistance which will be available only for personnel who are engaged in new or expanded program activities of the rehabilitation facility.

    2. The initial establishment grant shall be for 12 to 15 months. Establishment grants shall be reviewed annually. If the project continues to show effectiveness in achieving its goals and is incorporated into the basic program at the end of the project, the grant may be continued and/or renewed for additional periods, however, the grant period shall not exceed a total of 51 months.

    3. The facility shall provide a minimum of twenty percent of the amount of the grant during the first year. The Department may provide up to eighty percent of the amount of the grant from federal funds. The grantee shall assume an increased share of the funding each project year as an indication of ability and intent to continue the project at the end of the project period.

  2. Innovation and Expansion Grants.

    1. The Department may award Innovation and Expansion Grants to public or private non-profit organizations and agencies. Only referrals, applicants or clients of the Department of Rehabilitation shall be served in these projects.

    2. The purpose of such Grants is to plan, prepare for, and initiate special programs that:

      1. Increase the capability of the Department to serve and rehabilitate severely handicapped individuals and other designated groups who have unusual or difficult problems in connection with their rehabilitation.

      2. Introduce new devices and techniques in the provision of vocational rehabilitation services.

      3. Develop and provide vocational rehabilitation services.

      4. Enrich existing services.

      5. Broaden the scope of existing services.

    3. The initial Innovation and Expansion grant shall be for 12 months. All Innovation and Expansion grants shall be reviewed annually. If the project is effective, the grant may be extended for additional periods, however, the total grant period shall not exceed 36 months.

    4. The facility shall provide a minimum of ten percent of the amount of the grant. The department may provide up to ninety percent of the amount of the grant from federal funds during the first year. The grantee shall assume an increased share of the funding each project year as an indication of ability and intent to continue the project at the end of the project period. These sharing ratios shall not be allowed to vary or deviate unless approved by the Department.

  3. Grant Awards to Independent Living Centers.

    1. Independent Living Centers (hereinafter "ILC's") shall receive state grant funds to serve a specific geographic area designated by the Department. New ILC's shall be funded only for those areas of the state in which independent living services are not available. The Department shall determine when funds are sufficient to add new ILC's or extend the geographic service area for an existing funded ILC. The ILC shall not be restricted from providing services outside the geographic service area so long as these services are not supported by state ILC grant funds.

    2. To the extent that funds are allocated and appropriated, monies shall be allocated to ILC's according to the following formula:

      1. Each ILC shall receive a $150,000 base grant.

      2. Any appropriated money available after payment of the base grants shall be divided among the ILC's based on the ratio of the total of the general population in an ILC's geographic service area as compared to the total of the general population in all ILC's geographic service areas statewide.

      3. No ILC shall receive a combined allocation of base and population funds less than that received in Fiscal Year 1987-88.

Note: Authority cited: Sections 19006 and 19016, Welfare and Institutions Code. Reference: Sections 19800-19806, Welfare and Institutions Code; and 34 CFR 361.51, 361.73, 361.75 and 366.


  1. New subsection (c) filed 12-1-83 as an emergency; effective upon filing (Register 83, No. 51).

  2. Order of Repeal of 12-1-83 emergency order filed 12-12-83 by OAL pursuant to Government Code Section 11349.6 (Register 83, No. 51).

  3. New subsection (c) filed 6-29-84; designated effective 7-1-84 pursuant to Government Code Section 11346.2(d) (Register 84, No. 26).

  4. Amendment of subsection (c) filed 5-31-88; operative 6-30-88 (Register 88, No. 23).


§ 7334. Grant Management.

  1. The Department, in conjunction with the U.S. Department of Education, shall establish priorities for the use of allotted funds each year. The list of priorities shall be made available on request to potential applicants for funds.

  2. The Department shall establish and maintain a format to evaluate, prioritize, and award applications for grants on the basis of the following U.S. Department of Education priorities:

    1. The degree to which the applicant has responded to the annual departmental mission and objectives.

    2. Consumer involvement, affirmative action, and accessibility.

    3. Ability to meet district client needs.

    4. Adequacy of grant planning.

    5. Ability to administer grant funds.

    6. Adequacy of the current program base.

  3. Applicants shall be notified in writing of the action of the Department on their application for grants status.

  4. Applicant Appeals.

    1. Any applicant for a grant who is dissatisfied with the decision of the Department relative to an application for or discontinuation of grant funding may request a review by the Department. The request shall be in writing the specific reason(s) for the request and the action desired. The request shall be submitted to the Department within 30 days of the date of the notification of action.

    2. The Department's Grant Review Committee reviews all such requests. The Committee consists of the Chief Deputy Director and the four Deputy Directors. The Committee shall review the request and shall notify the appellant in writing of the decision within 30 days of the date of the request.

    3. The decision of the Grant Review Committee is final.

  5. Grants shall be managed by the Department in accordance with:

    1. The Office of Management and Budget Circulars for Administration of Grants.

    2. The Department's Grants Management Handbook.

    3. The terms of the grant between the Department and the facility.

Note: Authority cited: Sections 19006 and 19016, Welfare and Institutions Code. Reference: 45 CFR 1361.49 and 1361.73 and 45 CFR 74.80 and 74.81.


§ 7335. Auditing Requirements.

  1. Establishment Grants, Innovation and Expansion Grants, and other grants and contracts shall be audited to evaluate the financial transactions and determine compliance with the terms of the grant or contract.

  2. Grant and contract recipients shall arrange for independent audits that meet the standards and needs set forth by the Department. The audit shall be conducted in accordance with the Department's basic audit standards for grants and contracts and any additional audit standards required by the Department.

  3. Contracts for independent auditors shall provide that their audits meet the Department's needs and requirements. Copies of independent audit reports shall also be furnished to the Department. Audit working papers shall be made available to the Department and other governmental audit staff.

  4. The Department may also utilize independent audits made by Certified Public Accounting or Public Auditing firms, by an audit agency of the Federal or State Government, or Department auditors to accomplish the purpose of this article.

  5. External or internal audits shall be made in accordance with:

    1. Generally accepted auditing standards including the standards of the U.S. Accounting Office's publication "Standards for the Audit of Governmental Organizations Programs, Activities, and Functions".

    2. Federal Regulations 34 CFR, Part 74.

    3. OMB Circular No. A-110, Federal Management Circular FMC 74-7.

    4. Department of Rehabilitation's "Grant Management Handbook".

    5. The terms of the contract.

    6. Grant management guidelines.

  6. Audits shall be conducted at regular intervals, usually once a year, but at least once every two years. Audits may be conducted at other times at the discretion of the Department. The frequency shall depend on the nature, size and complexity of the recipient's grant or sub-grant supported activities.

  7. A copy of each audit report and a description of its resolution shall be furnished to the facility and the appropriate regional office of the U.S. Department of Education Audit Agency.

  8. A copy of the audit report shall be transmitted to the facility within 45 calendar days after the completion of the audit.

  9. The audit report is considered final 30 days after mailing unless the facility appeals the findings and recommendations in accordance with this section.

  10. If the facility disputes any audit finding or recommendation, the facility may, within 30 days of the mailing of the written notice of the audit, appeal the finding or recommendation. The appeal shall be in writing, clearly identify all issues in dispute, contain a full statement of the facility's position with respect to each issue, and contain pertinent facts and reasons in support of the facility's position. The appeal shall be addressed to the Audit Review Committee, Department of Rehabilitation. The Department may require the facility to submit additional documentation relevant to the disputed findings.

  11. The Audit Review Committee, consisting of the Chief Deputy Director and the Departmental Deputy Directors, shall receive appeals of audit findings, conduct hearings or otherwise review the appeal to decide the merit of the dispute. The decision of the committee shall be based on the Federal and State laws and regulations and the Federal audit guidelines.

  12. The Departmental Audit Review Committee shall consider the appeal and the pertinent documentation and arrive at a decision within 45 days from receipt of the appeal. Representatives of the facility may present information to the Audit Review Committee orally or in writing.

  13. The decision of the Audit Review Committee is final and shall be in writing and shall contain findings of fact, a determination of the issues presented, a decision and an order to recover overpayments, if appropriate. Copies of the decision shall be mailed to the facility.

  14. Any overpayment determined by audit to be due and payable shall be liquidated in the following manner:

    1. By lump-sum payment.

    2. By off-set against current payments due to the provider.

    3. In accordance with a repayment agreement executed by the facility and the Department.

    4. By any other method of recovery available by law.

  15. The Department may charge interest on any overpayment from the time of the final decision of the audit review committee.

Note: Authority cited: Sections 19006 and 19016, Welfare and Institutions Code. Reference: 34 CFR, Part 74, 361.90 and 361.91, and Sections 11180 and 12419, Government Code.


  1. Amendment filed 3-2-82; effective thirtieth day thereafter (Register 82, No. 10).