(a) State-operated and State-supported schools and facilities approved to provide educational services to deaf infants under Education Law, section 4204-a, shall submit annually, at times designated by the commissioner, budget forms containing justification for all proposed expenditures for which State aid is required. Such budgets shall indicate by line item all positions and items of proposed expenditure. All budgets in connection with other than department-funded programs shall be reported on a supplemental sheet similar to the format for State-aided programs.

(b) All annual expenditures shall be justified to the satisfaction of the commissioner in accordance with the instructions accompanying the annual year-end report forms submitted by the State-operated and State-supported schools.

(c) All new positions requested in the annual budget shall be justified in a narrative statement attached to the budget request.

(d) Review of all budgets submitted by the State-supported schools will be guided by the expenditures at the State-operated schools for the deaf and blind. The portion of the salary of each employee which exceeds the salary of an employee having similar duties at the State-operated schools for the deaf and blind shall not be an aidable operating expense of such State-supported private schools, except that a location pay differential, in the amount provided for in any contract or contracts between the State of New York and the certified or recognized employee organization or organizations representing State employees at the State-operated schools for the deaf and blind, will be included as an aidable operating expense of schools located in the geographical areas to which such location pay differential applies.

(e) Budgets approved by the commissioner for a particular school year represent the maximum support for that year. State-supported schools shall limit items of expenditure and positions to those approved by the commissioner. Any transfer between line items of expenditure exceeding 10 percent or $1,000, whichever is greater, of the approved budget authorization for the school year shall have prior approval of the commissioner.

(f) Capital construction for new buildings, including related service facilities such as heating, sanitary and lighting facilities, and improvement of grounds, and additions to accommodate growth of activity not a part of the State program, will not be approved as State-aidable operating expenses. Such equipment or furnishings as are necessary to accommodate or maintain the educational program for State-appointed students are aidable expenditures, with the prior approval of the commissioner. All necessary repairs, including replacement of roofs, boilers, plumbing systems, installations of safety devices in existing buildings, such as proper exits, fire safety systems and renovation, considered necessary for maintaining generally accepted standards of instruction, living arrangements outside of the classrooms, protection of the health and safety of State-appointed students and the preservation of the physical plant, may be approved, provided that application to the commissioner is made in advance of the incurring of any obligation. Emergency repairs not exceeding $2,500 may be made without prior approval, but the nature and extent of such repairs shall be promptly reported to the commissioner.

(g) Research activities, programs for nonstate-appointed students and all other activities with accompanying income and expenditures determined not to be a part of the educational program offered to State-appointed students will not be considered in determining State support.

(h) The governing board, by resolution adopted during the fiscal year it received a gift or bequest, may restrict such funds for capital use or other programs which are not State-supported. The board may, by similar resolution, restrict such funds to provide merit supplements to the salaries of staff approved by the commissioner for State-appointed students. Such supplements shall be excluded from any overhead charges. Copies of the resolutions restricting the use of funds from private sources and annual income derived from such funds, and a designation of funds from private sources that have been restricted by the donor, shall be filed with the commissioner as part of the report of expenditures submitted for final payment.

(i) The submission of the claim for final payment shall be accompanied by a report of income and expenditures. Income shall include all funds from governmental agencies and private sources, including income derived from capital assets. Expenditures shall include the cost of services and programs for State-appointed students as well as the cost of other services and programs administered by the school.

(j) State-operated and State-supported schools shall maintain adequate accounting records clearly setting forth the expenses allocable to approved programs and to those additional programs which are not subject to reimbursement.

(k) The accounting records of State-operated and State-supported schools shall be subject to audit and review at times designated by the commissioner and the Department of Audit and Control.

(l) All payments made to the State-operated and State-supported schools and to approved facilities will be in accordance with actual expenditures incurred during the school year for which State payment is sought. Final expenditures are subject to audit by the Department of Audit and Control.

(m) All facilities educating deaf infants pursuant to Education Law section 4204-a shall, in addition, submit quarterly reports of each deaf infant's attendance in accordance with Education Law, section 4204-a(2) and semiannual reports of each deaf infant's progress.

(n) All facilities educating deaf infants pursuant to Education Law section 4204-a which are eligible to receive financial assistance through the Department of Health for Medicaid patients or for infants approved under the medical rehabilitation program shall seek such assistance for each infant. Infants who are eligible for reimbursement under private insurance or other public health agencies shall not be eligible for tuition assistance. Where educational programming for the deaf infant includes parent orientation sessions which are not eligible for support by the Department of Health or other State or local agencies, the facility may claim that support from the Education Department providing that the facility is approved pursuant to section 200.7 of this Part.