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<br /> page 4 of 6 pages <br /> D. For projects whose monthly participation falls below 500, the State <br /> has the option to compute the sliding scale allowable at a 500 <br /> participant level with the stipulation that the nutrition education <br /> funding requirement is met as outlined in Section II, paragraph C. <br /> E. All administrative obligations and expenditures must be incurred and <br /> documented in accordance with the Uniform Federal Assistance <br /> Regulations 7 CFR part 3015, Current Federal Regulations, and <br /> published State Policies. Add i tionally, all categories of costs <br /> billed to the State and allocations of such costs must be in <br /> accordance with the State approved "Plan to Allocate Direct Costs", <br /> (P AOC). A listing of the categories contained in the negotiated PAOC <br /> are as shown in Attachment I of this Agreement. <br /> F. State reserves the right to exclude and/or recover any expenditures <br /> that have been claimed and/or paid that are not authorized by the <br /> regulations and/or directives pertaining to the program. <br /> G. The caseload quantity shall be assigned by State by giving written <br /> notice to Project and may be subject to change from time to time upon <br /> written notice to Project from State. Project assumes liability for <br /> all food costs resulting from Project exceeding assigned caseload <br /> maXlffiUITI. <br /> H. State reserves the right to withhold a proportionate amount of earned <br /> administrative funds when evidence exists that nutrition education is <br /> not being provided by Project, or that Project is not complying with the <br /> provisions of USDA and/or State directives. <br /> 1. State reserves the right to grant exceptions to the above funding <br /> formula as described in Section II, paragraphs Band C above. <br /> J. Performance of Section II of this Agreement shall be contingent upon <br /> funds being made available by USDA. <br /> K. All program income shall be retained by the project and: <br /> 1. Used by the project for any purposes which further the <br /> objectives of legislation under which the grant was made, and <br /> be deducted from total project costs, or <br /> 2. Be deducted from total project costs, according to the <br /> Departmental (State) policy interpreting Uniform Grant and <br /> Contract Management Standards Manual (UGCMS), a copy of which is <br /> included in the UGCMS Manual. <br /> III <br /> For and in consideration of the mutual benefits accruing to both parties of <br /> this Agreement, it is further agreed and understood that: <br />