(a) Consistent with the policy adopted pursuant to § 10-202e, the Department of Education shall establish a student dropout prevention grant program, in each fiscal year in which funds are appropriated, to assist local and regional school districts with the greatest need in decreasing the number of students dropping out of school and increasing the state-wide graduation rate. Local and regional school districts shall use the grants to conduct needs assessments, implement or expand innovative programs, evaluate existing efforts or implement other activities specified in a project plan developed pursuant to subsection (d) of this section.

(b) The Commissioner of Education shall identify the eligibility criteria for participation in the program annually, on or before January fifteenth, except that in the fiscal year ending June 30, 1988, the identification shall be made on or before August fifteenth. Eligibility criteria shall include, but not be limited to, graduation rates and educational need.

(c) The Department of Education shall identify each local or regional school district eligible to participate in the program. Such identification shall be done annually, on or before March fifteenth, except that in the fiscal year ending June 30, 1988, the identification shall be made on or before September fifteenth. Grant recipients shall be selected from those school districts so identified. Such identification shall not constitute a grant entitlement.

(d) School districts which have been identified pursuant to subsection (c) of this section may annually submit grant proposals to the Commissioner of Education at such time and in such manner as the commissioner prescribes. Each proposal shall be based on a three-year project plan, shall include, but not be limited to, project goals, objectives, evaluation strategies, staff assignments and a budget which shall identify local funding and other available resources for the three-year period and may include programs or services which are provided through written agreements with nonprofit organizations or private employers or programs or services which are provided to children of school age who are not attending school in order to promote their return to school.

(e) Within the availability of funds, the commissioner shall determine whether to authorize a grant award to a local or regional board of education upon receipt of a grant proposal pursuant to subsection (d) of this section and shall determine the amount of any such grant. Such authorization shall be made on or before September fifteenth of each fiscal year in which payment is to be made, except that in the fiscal year ending June 30, 1988, the authorization shall be made on or before November fifteenth. The amount of the award shall be based upon criteria including, but not limited to, district enrollment, relative wealth and the proposal submitted pursuant to subsection (d) of this section. Of the total amount appropriated in each fiscal year for the purposes of this section, the Department of Education (1) may set aside not more than five per cent to provide administrative assistance relating to the implementation of this section, and (2) shall set aside five per cent for competitive grants for local and regional boards of education not eligible to participate in the program pursuant to subsection (c) of this section. The timelines for identifying the eligibility criteria for such competitive grants, for identifying school districts eligible for such grants, for submitting proposals and for authorizing grant awards shall conform to the respective timelines described in this subsection and subsections (b) to (d), inclusive, of this section.

(f) Each local or regional board of education participating in the grant program shall prepare a financial statement of expenditures and an annual project report. The report shall describe the project activities and the degree to which the project met its goals and objectives. Such financial statements and reports shall be submitted to the department on or before September first of the fiscal year immediately following each fiscal year in which the school district participates in the grant program. On or before December thirty-first of the fiscal year following the fiscal year in which payment is received, each local or regional board of education which receives a grant pursuant to this section shall file with the commissioner a financial audit in such form as the commissioner prescribes. If the commissioner finds that any such grant is being used for purposes which are not in conformity with the purposes of this section, the commissioner may require repayment of the grant to the state. Not later than February 15, 1990, the State Board of Education shall report to the committees of the General Assembly having cognizance of matters relating to education and appropriations and the budgets of state agencies concerning the operation and effectiveness of the program funded under this section.