Subject to paragraphs (2) through (4) of this subsection, the Secretary is authorized to enter into contracts or agreements with State and local agencies to pay such State and local agencies for reasonable and necessary expenses of salary and travel incurred by employees of such agencies and an allowance for administrative expenses in accordance with the formula contained in subsection (b) of this section in (A) rendering necessary services in ascertaining the qualifications of educational institutions for furnishing courses of education to eligible persons or veterans under this chapter and chapters 30 through 35 of this title and chapter 106 of title 10, and in the supervision of such educational institutions, and (B) furnishing, at the request of the Secretary, any other services in connection with such chapters. Each such contract or agreement shall be conditioned upon compliance with the standards and provisions of such chapters. The Secretary may also reimburse such agencies for work performed by their subcontractors where such work has a direct relationship to the requirements of such chapters, and has had the prior approval of the Secretary.

(1) Subject to paragraphs (2) through (4) of this subsection, the Secretary is authorized to enter into contracts or agreements with State and local agencies to pay such State and local agencies for reasonable and necessary expenses of salary and travel incurred by employees of such agencies and an allowance for administrative expenses in accordance with the formula contained in subsection (b) of this section in (A) rendering necessary services in ascertaining the qualifications of educational institutions for furnishing courses of education to eligible persons or veterans under this chapter and chapters 30 through 35 of this title and chapter 106 of title 10, and in the supervision of such educational institutions, and (B) furnishing, at the request of the Secretary, any other services in connection with such chapters. Each such contract or agreement shall be conditioned upon compliance with the standards and provisions of such chapters. The Secretary may also reimburse such agencies for work performed by their subcontractors where such work has a direct relationship to the requirements of such chapters, and has had the prior approval of the Secretary.

The Secretary shall make payments to State and local agencies, out of amounts in the Department of Veterans Affairs readjustment benefits account and amounts appropriated to the Secretary, for the reasonable and necessary expenses of salary and travel incurred by employees of such agencies in carrying out contracts or agreements entered into under this section, for expenses approved by the Secretary that are incurred in carrying out activities described in section 3674A(a)(3) of this title (except for administrative overhead expenses allocated to such activities), and for the allowance for administrative expenses described in subsection (b).

(A) The Secretary shall make payments to State and local agencies, out of amounts in the Department of Veterans Affairs readjustment benefits account and amounts appropriated to the Secretary, for the reasonable and necessary expenses of salary and travel incurred by employees of such agencies in carrying out contracts or agreements entered into under this section, for expenses approved by the Secretary that are incurred in carrying out activities described in section 3674A(a)(3) of this title (except for administrative overhead expenses allocated to such activities), and for the allowance for administrative expenses described in subsection (b).

(B) The Secretary shall make such a payment to an agency within a reasonable time after the agency has submitted a report pursuant to paragraph (3) of this subsection.

(C) Subject to paragraph (4) of this subsection, the amount of any such payment made to an agency for any period shall be equal to the amount of the reasonable and necessary expenses of salary and travel certified by such agency for such period in accordance with paragraph (3) of this subsection plus the allowance for administrative expenses described in subsection (b) and the amount of expenses approved by the Secretary that are incurred in carrying out activities described in section 3674A(a)(3) of this title for such period (except for administrative overhead expenses allocated to such activities).

(3) Each State and local agency with which a contract or agreement is entered into under this section shall submit to the Secretary on a monthly or quarterly basis, as determined by the agency, a report containing a certification of the reasonable and necessary expenses incurred for salary and travel by such agency under such contract or agreement for the period covered by the report. The report shall be submitted in the form and manner required by the Secretary.

(4) In addition to amounts made available under paragraph (5), there is authorized to be appropriated to carry out this section $3,000,000 for fiscal year 2019 and each subsequent fiscal year.

The total amount made available under this section for fiscal year 2018 shall be $21,000,000 and for fiscal year 2019 and thereafter shall be $23,000,000.

(A) The total amount made available under this section for fiscal year 2018 shall be $21,000,000 and for fiscal year 2019 and thereafter shall be $23,000,000.

(B) Beginning in fiscal year 2019, whenever there is an increase in benefit amounts payable under title II of the Social Security Act (42 U.S.C. 401 et seq.) as a result of a determination made under section 215(i) of such Act (42 U.S.C. 415(i)), the Secretary shall, effective on the date of such increase in benefit amounts, increase the amount in effect under subparagraph (A), as in effect immediately prior to the date of such increase in benefit amounts payable under title II of the Social Security Act, by the same percentage as the percentage by which such benefit amounts are increased.

The allowance for administrative expenses incurred pursuant to subsection (a) of this section shall be paid in accordance with the following formula: Total salary cost reimbursable under this section Allowable for administrative expense $5,000 or less $693. Over $5,000 but not exceeding $10,000 $1,247. Over $10,000 but not exceeding $35,000 $1,247 for the first $10,000, plus $1,155 for each additional $5,000 or fraction thereof. Over $35,000 but not exceeding $40,000 $7,548. Over $40,000 but not exceeding $75,000 $7,548 for the first $40,000, plus $999 for each additional $5,000 or fraction thereof. Over $75,000 but not exceeding $80,000 $14,969. Over $80,000 $14,969 for the first $80,000, plus $872 for each additional $5,000 or fraction thereof.

Each State and local agency with which the Secretary contracts or enters into an agreement under subsection (a) of this section shall report to the Secretary periodically, but not less often than annually, as determined by the Secretary, on the activities in the preceding twelve months (or the period which has elapsed since the last report under this subsection was submitted) carried out under such contract or agreement. Each such report shall describe, in such detail as the Secretary shall prescribe, services performed and determinations made in connection with ascertaining the qualifications of educational institutions in connection with this chapter and chapters 32, 34, and 35 of this title and in supervising such institutions.

(Added Pub. L. 88–126, § 1, Sept. 23, 1963, 77 Stat. 159, § 1774; amended Pub. L. 89–358, § 3(a)(7), (8), (11), Mar. 3, 1966, 80 Stat. 20, 21; Pub. L. 90–631, § 4, Oct. 23, 1968, 82 Stat. 1334; Pub. L. 92–540, title IV, § 403(7), 411, Oct. 24, 1972, 86 Stat. 1090, 1092; Pub. L. 93–508, title II, § 210(1), Dec. 3, 1974, 88 Stat. 1584; Pub. L. 94–502, title V, § 503, Oct. 15, 1976, 90 Stat. 2399; Pub. L. 95–202, title III, § 303, Nov. 23, 1977, 91 Stat. 1441; Pub. L. 96–466, title II, §§ 203(1), 213(1), Oct. 17, 1980, 94 Stat. 2188, 2190; Pub. L. 97–295, § 4(51), Oct. 12, 1982, 96 Stat. 1308; Pub. L. 100–323, § 13(a)(1), (b)(5), May 20, 1988, 102 Stat. 571, 573; Pub. L. 101–237, title IV, §§ 414, 423(b)(1)(A), Dec. 18, 1989, 103 Stat. 2085, 2092; Pub. L. 102–16, § 10(a)(7), Mar. 22, 1991, 105 Stat. 56; renumbered § 3674 and amended Pub. L. 102–83, § 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406; Pub. L. 103–446, title VI, § 606(a)(1), (b), Nov. 2, 1994, 108 Stat. 4672; Pub. L. 106–419, title I, § 123, Nov. 1, 2000, 114 Stat. 1837; Pub. L. 107–14, § 8(a)(7), June 5, 2001, 115 Stat. 34; Pub. L. 107–330, title III, § 301, Dec. 6, 2002, 116 Stat. 2824; Pub. L. 110–252, title V, § 5005, June 30, 2008, 122 Stat. 2379; Pub. L. 115–48, title III, § 301(a), Aug. 16, 2017, 131 Stat. 989.)