[Federal Register Volume 59, Number 131 (Monday, July 11, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16698]
[[Page Unknown]]
[Federal Register: July 11, 1994]
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DEPARTMENT OF LABOR
Employment and Training Administration
Job Training Partnership Act; Title II-A, Title II-C, Title III,
and Section 204(d) Performance Standards for Program Years (PY) 1994
and 1995
AGENCY: Employment and Training Administration, Labor.
ACTION: Notice of performance standards for PY 1994-95.
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SUMMARY: The Department of Labor is announcing performance standards
for Job Training Partnership Act (JTPA) Title II-A (Adult Training),
Title II-C (Youth Training), Title III (Dislocated Workers Training),
and section 204 (Older Workers Training) for Program Years (PY) 1994-95
(July 1, 1994-June 30, 1996). The proposed issuance appended to this
notice contains revised performance standards levels and implementation
instructions to conform the Title II performance management system with
the Job Training Reform Amendments of 1992.
EFFECTIVE DATE: July 1, 1994.
FOR FURTHER INFORMATION CONTACT: Steven Aaronson, Chief, Adult and
Youth Standards Unit, Telephone (202) 219-5487, extension 107 (this is
not a toll-free number).
PAPERWORK REDUCTION ACT: Information collection related to this
regulation has been approved previously by the Office of Management and
Budget, No. 1205-0321. No further information collections or other
paperwork requirements of the public are needed.
SUPPLEMENTARY INFORMATION: Under section 106 of the amended Job
Training Partnership Act (JTPA), the Secretary of Labor is required to
set performance standards for programs serving: (1) adults and youth
under Title II-A and Title II-C; (2) dislocated workers under Title
III; and (3) older workers under section 204(d). The Job Training
Reform Amendments of 1992 (Amendments) also introduced significant
changes in the way job training programs are designed and operated at
the local levels. These statutory changes, combined with recent
legislative and administrative initiatives to promote high-quality,
results-driven, customer-oriented services throughout the Federal
Government, are not only reshaping the way JTPA delivers its services,
but also how to measure its effectiveness.
National job training objectives have remained unchanged since 1990
and focus on enhancing the long-term employability and economic self-
sufficiency of those most at risk of becoming or remaining unemployed.
Current measures of the program's progress in achieving these
objectives relate directly to near-term employment and earnings levels
of adult program completers and levels of employment and skill
enhancements of youth program completers. These outcomes do not, by
themselves, measure the quality of the services received or the extent
to which the program is able to improve upon participants' prior
employment, earnings and welfare dependency.
For this reason, the Department will be undertaking a comprehensive
review of its performance standards over the next year to examine
alternative program measures and more cost efficient ways of assessing
the program's long-term effects on its graduates. Ongoing surveys of
JTPA's customers will also provide invaluable feedback on how helpful
JTPA services are to its users, what other services are needed but not
provided by the program, and the extent to which good outcomes are
related to levels of customer satisfaction. Finally, the Employment and
Training Administration will initiate a nationwide JTPA Report Card
that will highlight programs showing the greatest returns on their
human resource investments in terms of obtaining high-quality
employment for those participants most at-risk of failure.
Outcome measures for Title II-A and C will be retained until this
performance standards review is completed. Numerical levels for these
core standards have been updated to reflect the most recent JTPA
program experience.
The Department is also undertaking a comprehensive review of its
Title III programs; therefore, changes in outcome measures will be
deferred until the results of this critical assessment are available.
Governors will continue to be required to set an entered employment
rate standard for their Title III programs and are encouraged to
establish an average wage at placement goal. At the same time, the
Department will be exploring ways to use performance standards to
improve the quality of services provided to dislocated workers, and to
achieve higher levels of customer satisfaction.
Under section 204(d) of JTPA, older worker programs are now subject
to performance standards. However, no incentive awards or sanctions are
associated with these standards. Outcomes for these programs focus on
increasing employment and earnings similar to those programs serving
other disadvantaged adults. Because field evidence suggests that older
workers are much more likely to remain employed once they are placed in
jobs, employment and wages will be measured at program completion
rather than at a later follow-up period. Together, these measures
underscore the employment focus of the program, particularly in jobs
that are higher paying.
To comply with the legislative provisions, the Department
considered adding specific outcome measures for hard-to-serve
participants and separate outcomes for in-school and out-of-school
youth. In the interest of avoiding a proliferation of performance
measures and limiting local flexibility in programming, additional
measures for these three separate groups were not established. Rather,
the requirement to promote services to hard-to-serve individuals will
be addressed from an incentive policy perspective and the issue of in-
school and out-of-school standards will continue to be addressed
through the performance standards adjustment process. When judging
service delivery area (SDA) performance and awarding incentive funds,
States will need to design incentive policies that will promote more
effective services to out-of-school youth and reward placements into
jobs with employer-assisted benefits.
The policy of excluding cost measures from incentive awards will
remain unchanged; however, States are reminded of the integral role of
financial oversight in program management. States are also encouraged
to utilize available administrative data to relate overall costs of job
training to more direct measures of long-term employment, earnings and
reductions in welfare. The Office of the Inspector General will be
collaborating with ETA in developing a mechanism for measuring the
program's return on its investments. The wider JTPA community will also
be invited to participate in this effort.
Discussion of Comments
On March 1, 1994, proposed revisions to the performance standards
for JTPA Title II-A, Title II-C, Title III, and newly instituted
section 204(d) performance standards were published in the Federal
Register at 59 FR 9910. Interested parties were invited to submit
written comments through March 31, 1994.
The Department of Labor (DOL) received 96 written comments on the
proposed performance standards issuance. Eighteen of the letters
explicitly endorsed the overall direction which the Department is
taking in establishing performance standards policy for Program Years
1994 and 1995. In general, the majority of comments requested
clarifications or raised issues about specific aspects of the proposed
requirements. While the concept of imposing a hard-to-serve ``gate''
for incentive awards eligibility received support, its application to
terminees rather than enrollments drew considerable local and State
criticism.
The following summarizes the major issues raised by the commenters
and the Department's respective responses.
Use of Participants Rather Than Terminees as the Basis for Determining
SDA Eligibility for Incentive Awards
The Department specifically sought comments on whether the hard-to-
serve ``gate'' for incentive award eligibility fully addresses the need
to emphasize this population in the performance standards system, and
whether compliance with the gate should be measured against those
enrolled in training or those completing the program. A majority of
those commenting on this issue agreed with the Department's approach of
restricting eligibility for incentive awards to those programs that
enroll in training at least a minimum (65%) hard-to-serve adults as
well as youth.
However, fully three-fourths of States and SDAs submitting comments
specifically recommended that the basis for the gate should be
participants (all individuals served during the year, including those
still enrolled at the end of the program year) rather than terminees.
Basing the 65% hard-to-serve level on program terminees was seen as
pressuring SDAs to ``manipulate'' their terminations. Local programs
can manage the recruitment process to ensure that adequate numbers of
hard-to-serve are enrolled. Ensuring comparable numbers of hard-to-
serve individuals will graduate each year is more problematic because
of the clients' varying training needs. Participants with multiple
barriers typically need to remain in programs longer than those with
fewer barriers.
The Department concurs with the arguments made for changing the
basis of the incentive award ``gate'' from terminations to
participants. Particularly compelling is the rationale that hard-to-
serve participants need longer-term interventions and the adverse
effects that such a gate might create in prompting SDAs to terminate
participants prematurely. Thus, beginning in FY 1994 for SDAs to become
eligible for incentives, at least 65 percent of both the SDAs' Title
II-A and Title II-C (in-school and out-of-school combined) participants
receiving training, and/or other services beyond objective assessment,
must be hard-to-serve. For the purpose of determining compliance with
this requirement, those individuals with SDA-defined barriers that have
been approved by the Governor are to be included as well as
participants in school-wide projects under section 263(g) and
participants in five percent-funded projects.
To further reinforce JTPA's focus on serving hard-to-serve
participants, the Department encourages Governors to design incentive
policies that explicitly promote increased service to that group. For
example, Governors may wish to adjust themselves based on the degree to
which SDAs exceed the incentive eligibility ``gate'' or on a sliding
scale of continuous improvement.
Improved Service to Out-of-School Youth and Employer-Assisted Benefits
Incentive Award Criteria
About 30 percent of all commenters mentioned this issue. Most of
the comments requested additional guidance and clarification on how
these two items could be incorporated into incentive award policies and
asked whether Governors could ignore or ``zero weight'' either one of
them in the awarding of incentives. The Department is sensitive to
concerns about establishing incentive criteria without sufficient
information on the program's prior experience in placing individuals in
jobs with employer-assisted benefits; or in the case of out-of-school
youth, in the absence of effective program models that have a positive
impact on a youth's long-term earnings potential.
In response to the field comments several changes have been made to
the incentive policy guidance as originally proposed. First, Governors
will be encouraged, but not required, to include these criteria in
State incentive policy for PY 1994. States will be required to
incorporate these criteria (i.e., they cannot be zero-weighted)
beginning in PY 1995. In the interim States can use data from the
Standardized Program Information Reports (SPIR) for PYs 1992 and 1993
to establish performance benchmarks for programs serving out-of-school
youth and job placements providing employer-assisted benefits.
Therefore, the Department is giving Governors maximum flexibility in
terms of how these criteria may be applied. Suggested approaches for
rewarding improved service to out-of-school youth and placements in
jobs providing employer-assisted benefits will be included in the
Training and Employment Guidance Letter appended to this Notice.
Several commenters noted that the intent of the incentive
provisions is to encourage service to more out-of-school youth; thus,
SDAs should be rewarded solely on the extent to which they exceed the
statutory minimum service levels. The Department's position is that
rewarding SDAs simply on the basis of increasing the numbers of out-of-
school youth does not go far enough in addressing the disappointing
findings from the National JTPA study. Thus, while SDAs will not be
exempted from the statutory requirement to serve at least 50% out-of-
school youth, ETA is encouraging States to use incentive funds to pilot
innovative youth models and to evaluate and replicate promising
strategies.
20-Hour Requirement
Section 106(k) of JTPA requires for performance standards purposes
that employment be for at least 20 or more hours per week. This
requirement applies to Title II-A (adults), Title II-C (youth), Section
204(d) (older workers), and Title III (dislocated workers) programs.
About 15 percent of the comments questioned the reasonableness of this
requirement for in-school youth, older workers, or disabled
participants, and requested that the Department waive it in these
cases. Since this requirement is explicitly defined in the statute, it
cannot be waived.
Several commenters also requested clarification about the reference
period, i.e., whether a ``week'' means 5 or 7 days and whether follow-
up is needed to verify that an individual actually worked for at least
20 hours. For determining compliance with this provision, a ``week''
means a period of 7 consecutive days, and the 20 or more hours is to be
understood as a condition of employment. (See section 5 of the attached
TEGL.) No formal verification is required, but the Department
encourages States to set up a system that would, at a minimum, provide
for random checking to assess compliance by SDAs.
Definition of ``Failure to Meet Standards''
Section 106(j)(i)(A) of JTPA requires the Secretary to establish
uniform criteria of determining whether a service delivery area fails
to meet performance standards. To comply with this provision, the
Department specified the number of failed standards which constitute
overall failure. Commenters generally agreed with the concept of a
uniform definition of performance failure; however, there was minor
opposition to defining overall failure as missing a combination of any
three standards or simply missing both youth standards. The Department
was criticized for placing too much weight on the youth standards.
Given Congressional interest in improving the quality of service to
youth, as reflected in various provisions in the amended JTPA, and
given the need to respond to the programmatic issues raised by the
National JTPA Study, the Department believes its emphasis on youth
program performance is appropriate.
Several commenters requested clarification on whether SDAs had to
fail the same standards two consecutive years to trigger a
reorganization. The sanction policy does not apply to the same
standards over the two-year period. Thus, for the purpose of
identifying whether an SDA has failed to meet performance standards for
two consecutive years, overall failure means failing any three core
standards or both youth standards for two consecutive years.
Definitions for meeting and failing individual standards will be
established by Governors.
Performance Standards for Older Worker Programs Under Section 204(d)
The other major area of comment involved the performance standards
for older worker programs under Section 204(d). A total of 27 letters
was received from advocates/service providers and State agencies on
aging. These letters questioned the methodology and data used for
setting the performance standards levels. Many indicated that the
proposed levels were too high, particularly the level of the average
wage at placement standard.
Since March 1, 1994, when the notice appeared in the Federal
Register, additional data became available from the PY 1992 SPIR.
Reported information on the Section 204(d) Older Worker program was
analyzed and used to establish revised levels for the standards that
are more closely related to actual experience for that program. This
has resulted in a lower entered employment rate standard, but the
average wage at placement standard remains unchanged. It should be
remembered, however, that the Secretary's standards are merely
departure points which will be adjusted to account for local economic
conditions and the characteristics of the terminees. The Department
will be providing States with a methodology for making these
adjustments.
Performance Standards Levels
A total of 9 comments was received about the overall performance
levels for Titles II-A and II-C standards. Comments were mixed with
hard-to-serve advocates supporting both higher and lower levels. The
majority of comments advocating lower levels were from youth advocates
who felt that the standard for youth employment was too high given the
recent decline in the rate of placing youth in jobs.
The numerical values of the standards are generally set so that if
local programs continue to perform unchanged from the prior program
year, 75 percent of the system are expected to exceed their standards.
The proposed numerical standards for five of the six core measures (all
but the YEER) and the Title III Entered Employment Rate measure are set
in this manner, using PY 1992 performance. Further adjustments were
made to reflect the new 20 hour per week minimum requirement for
employment. To arbitrarily raise the level of all standards, as
suggested by certain advocate groups, appeared counterproductive when
the Department was imposing new targeting requirements and employment
caveats.
One exception is the numerical standard for the YEER which if
similarly set, would lead to reduced standards for SDAs. The recently
published 30-month results from the National JTPA Study suggest that
employment and earnings experienced by out-of-school youth in JTPA fall
short of acceptable levels. Therefore, to foster improved services to
out-of-school youth, the numerical standard for the YEER will remain at
its current level of 41 percent.
The Secretary's standards for the new older worker performance
measures were derived from an analysis of available PY 1992 Section
204(d) data from the SPIR. The same general rules that were used for
setting the levels for the Titles II-A, II-C, and III programs,
including the adjustment for 20-hour employment, were used for the
Section 204(d) program. Again, it must be emphasized that these
national standards are merely departure points and States must make
adjustments to account for local conditions.
Certifications
This issuance is procedural in character and gives directions to
States and local service deliverers on the implementation of
performance standards under Title II-A, Title II-C, Section 204(d), and
Title III of JTPA. Therefore, it is not classified as ``major'' under
Executive Order 12291 and no impact analysis is required. This issuance
has been assessed according to the Federalist policymaking criteria
outlined in Executive Order 12612. The Department believes that this
issuance will not materially limit the policymaking discretion of the
States. This issuance both addresses Departmental policy objectives and
permits States discretionary authority in the application of
performance standards. The procedural framework included in this
issuance enables States to better assist localities in more effective
and efficient program design and management.
Signed at Washington, DC, this 5th day of July, 1994.
Doug Ross,
Assistant Secretary of Labor.
Appendix--Revisions to the Performance Management System, and
Performance Standards for Program Years (PY's) 1994 and 1995
Training and Employment Guidance Letter________
Training and Employment Guidance Letter No. ________
From: Barbara Ann Farmer, Administrator for Regional Management
Subject: Job Training Partnership Act (JTPA) Title II and Title III
Performance Standards for PY's 1994-1995
1. Purpose. To transmit guidance on the Secretary's required
performance measures and the Secretary's implementing instructions for
performance standards for Program Years (PY's) 1994 and 1995 (July 1,
1994-June 30, 1995; July 1, 1995-June 30, 1996).
2. Background. Sec. 106 of JTPA, as amended, directs the Secretary
to establish performance standards for adult, youth, and dislocated
worker programs. These standards may be updated every two years based
on the most recent JTPA program experience, as well as program emphases
and goals established by the Department of Labor. The Secretary also
issues instructions for implementing standards and parameter criteria
for States to follow in adjusting the Secretary's standards for service
delivery areas (SDAs) and substate areas (SSAs).
The Job Training Reform Amendments (JTRA) of 1992 mandated
significant changes in the design and operation of local job training
programs, as well as the criteria used to assess their performance.
Revised Section 106 requires that performance standards for Title II-A,
Title II-C, Section 204(d) and Title III programs measure the number of
job placements that provide a minimum of 20 hours of work per week, and
that programs be rewarded based on high performance, increased service
to the ``hard-to-serve,'' and quality job placements that are both
high-paying and offer employer-assisted benefits. Incentive and
sanction policies are to be structured around more explicit criteria,
and performance standards failure is now federally defined to ensure
greater uniformity in assessing underperformance nationwide. As a
result of the JTPA amendments, section 204(d) now mandates performance
measures for the older worker program.
To assist the Department in responding to the substantive changes
required in the section 106 amendments, a Technical Workgroup was
convened in Washington, DC, in mid-July 1993. The workgroup had
representatives from State and local JTPA programs; public interest
groups, including the Partnership for Training and Employment Careers;
the U.S. Conference of Mayors; the National Association of Counties;
the National Governors' Association; and the National Council on the
Aging; and staff from the Department of Labor (DOL) Office of the
Inspector General. This Guidance Letter incorporates, to a large
extent, the workgroup's findings.
3. Performance Management Goals for PY's 1994-1995. Departmental
goals, initially established for PY 1990 in anticipation of the
amendments, remain unchanged and are as follows:
--Targeting services to a more at-risk population;
--Improving the quality and intensity of services that lead to
skills acquisition, long-term employability and increased earnings;
--Placing greater emphasis on basic skills acquisition to qualify
for employment or advanced education or training; and
--Promoting comprehensive, coordinated human resource programs to
address the multiple needs of at-risk populations.
In addition, with the passage of the 1992 JTPA Amendments, the
performance management system has been tasked, through its performance
incentive policies, to improve service to out-of-school youth and also
to foster employment in better quality jobs which offer high wages and
employer-assisted benefits.
These goals are reflected in the Secretary's six Title II-A and
Title II-C (core) measures, national numerical standards for these
measures, new incentive award criteria, and associated reporting
requirements. Governors still retain authority to establish additional
standards which reflect State policy and to develop the specific
approach to determining incentive awards.
This issuance specifies the national standards for PY's 1994-1995
and introduces the new criteria which must be a part of State incentive
grant policies. Data to support additional non-cost measures will
continue to be reported and Governors may use these measures, or others
in making State incentive award determinations. Data on costs together
with program performance will provide critical information for State
monitoring, fiscal oversight, and assist States in measuring returns on
their human resource investments.
The Department has identified two additional goals for PY 1994-
1995. These are:
--Establishing a strong customer focus and orientation toward
improving the program's responsiveness in meeting the individual needs
of participants; and
--Seeking and using customer feedback to monitor the
appropriateness of JTPA services and to promote continuous program
improvements.
States and SDAs are encouraged to survey customers on a regular
basis as an integral part of their program oversight to identify
program weaknesses and to improve program services. Technical
assistance will be made available on cost-effective ways to gather and
utilize such information.
4. Secretary's National Standards for PY's 1994-1995. The
Secretary's performance measures and national standards for Title II-A,
Title II-C, section 204(d), and Title III (all of section 302(c)(1)
State activities, and sections 302(c)(2) and 302(d) substate area
activities) are as follows:
PY 1994-1995 Performance Standards
Title II-A
Adult Follow-up Employment Rate
59%
Adult Weekly Earnings at
Follow-up
$245
Welfare Follow-up Employment
Rate
47%
Welfare Weekly Earnings at
Follow-up
$223
Title II-C
Youth Entered Employment Rate
41%
Youth Employability Enhancement Rate
40%
Section 204(d) Older Worker Programs
Entered Employment Rate
52%
Average Hourly Wage at Placement
$5.45
Title III
Entered Employment Rate
67%
Average Wage at Placement
State Determined
The Title II-A adult and welfare follow-up measures will continue
to be based on individuals who terminate during the first three
quarters of the program year and the last quarter of the previous
program year.
5. Explanation of Performance Standards Levels. The Title II-A and
II-C numerical standards were derived from PY 1992 aggregate
performance data reported on the JTPA Annual Status Report (JASR) and
are generally set at a minimally-acceptable level that approximately
75% of the SDA's can be expected to exceed.
Revising the numerical standard for the Youth Entered Employment
Rate (YEER) in the same way would lead to reduced standards for SDAs.
However, recent National JTPA Study results suggest that employment and
earnings experienced by out-of-school youth in JTPA fall short of
acceptable levels. Therefore, to encourage improved services to out-of-
school youth, the numerical standard for the YEER will remain at its
current level of 41 percent.
Earnings standards have been adjusted to account for expected
future inflation. Finally, an additional special adjustment has been
made to employment-related standards to account for the requirement in
section 106(k) that permits credit, for performance standards purposes,
only for employment that is scheduled for 20 or more hours per week.
Similar to the Title II-A and Title II-C standards, the Title III
standard was derived from PY 1992 performance data reported on the
Worker Adjustment Program Annual Program Report (WAPR). This standard
is set at a level that, approximately, 75 percent of the substate areas
can be expected to exceed. As with the employment measures for Titles
II-A and II-C, an adjustment has been made to take into account the 20-
hour per week employment requirement.
Since discrete aggregate data were not available for PY 1992
Section 204(d) Older Worker program performance, available SPIR data
were used to assist in setting performance standards levels for that
program. As with the employment measures for Titles II-A, II-C, and
III, an adjustment has been made to take into account the 20-hour per
week employment requirement.
Note: Programs operated under section 204(d) are State programs
even though they may be managed by various local entities.
Therefore, performance standards will be applied to the total older
worker programs State-wide. Unlike the adult and youth programs
under Title II-A/C, however, no incentive awards or sanctions are
associated with these standards.
6. Implementing Provisions. The following implementing requirements
must be followed:
A. Required Standards. For Titles II-A and II-C, Governors are
required to set, for each SDA, a numerical performance standard for
each of the six Secretary's measures; for the Older Worker program,
Governors are required to set numerical Entered Employment Rate and
Average Wage at Placement standards for programs operated under section
204(d); for Title III, Governors are required to set for each substate
area a numerical performance standard for the Entered Employment Rate
and are encouraged to establish an Average Wage at Placement goal
B. Setting the Standards. Consistent with new legislative
provisions, Governors are now required to adjust the Secretary's
performance standards to reflect local area circumstances (section
106(d)). Such adjustments apply to Title II-A, Title II-C, section
204(d) and Title III programs, and must conform to the Secretary's
parameters described below:
1. Procedures must be:
--Responsive to the intent of the Act,
--Consistently applied among the SDA's/SSA's,
--Objective and equitable throughout the State,
--In conformance with widely accepted statistical criteria;
2. Source data must be:
--Of public use quality,
--Available upon request;
3. Results must be:
--Documented,
--Reproducible; and
4. Adjustment factors must be limited to:
--Economic factors,
--Labor market conditions,
--Geographic factors,
--Characteristics of the population to be served,
--Demonstrated difficulties in serving the population (this
adjustment factor is new), and
--Type of services to be provided.
The Department offers Governors an adjustment methodology that
conforms both to these parameters and to the requirement in section
106(d). This methodology covers Title II-A, Title II-C Section 204(d),
and Title III programs and will be provided to States in a soon-to-be
issued Training and Employment Information Notice. Should the Governor
choose to use an alternate methodology, or make adjustments not
addressed by the Departmental model, it must conform to the parameter
criteria and be documented in the Governor's Coordination and Special
Services Plan (GCSSP) prior to the program year to which it applies.
The State Job Training Coordinating Council and, where appropriate, the
State Human Resources Investment Council must have an opportunity to
consider adjustments to the Secretary's standards and to recommend
variations. To determine whether an SDA has met or exceeded a
performance standard, Governors must use actual end-of-year program
data to recalculate the performance standards.
C. Performance Standards Definitions. Governors must calculate the
performance of their SDA's, SSA's, and section 204(d) programs
according to the definitions included in the Attachments.
D. Titles II-A and II-C Incentive and Sanction Policies.
Performance standards are to be established for programs funded under
Titles II and III of the Act. In applying the Secretary's standards for
Titles II-A and II-C, Governors must use the six core measures and also
consider criteria relating to programs successfully serving out-of-
school youth and placement in jobs providing employer-assisted
benefits. Governors are encouraged to begin using these criteria in PY
1994 incentive policies; these criteria are required (i.e., they cannot
be zero-weighted) to be incorporated into State incentive policies
beginning in PY 1995. Governors may select additional non-cost
measures, such as increased service to hard-to-serve participants, to
form the basis of incentive policies as long as the following criteria
are met:
1. As the basis for making incentive awards, the Governors must use
all (i.e., cannot ``zero weight'' any) of the six Secretary's core
measures. Beginning in PY 1995, Governors will also be required to
reward innovative out-of-school youth program models either identified
by the Department of Labor or recognized by the State as having a
demonstrated record of success, and placements in jobs providing
employer-assisted benefits. Although successful programs for out-of-
school youth remain the cornerstone of out-of-school incentives, SDA's
will still be expected to exceed the 50 percent minimum service level
to be rewarded under that criterion. Governors have considerable
flexibility in implementing the new incentive criteria. Suggested
approaches to addressing these criteria are included as Attachments 3
and 4 to this TEGL. Decisions regarding the relative weight or emphasis
of each core measure (e.g., the Youth Entered Employment Rate) and
incentive criterion (e.g., placement in jobs with employer-assisted
benefits) in a State's incentive award formula rest with the Governor.
The core measures will be the basis for identifying SDA's that are
candidates for technical assistance and for imposing sanctions. At
least 75 percent of the funds set aside for performance incentives must
be related to these measures and the out-of-school youth and employer-
assisted benefits criteria, in accordance with section 106(b)(7)(E).
2. Cost standards cannot be used for incentive award purposes.
However, States are reminded of the integral role of financial reviews
in program management. States are encouraged to explore ways of
relating overall costs of job training to more direct measures of long-
term employment, earnings and reductions in welfare.
3. Incentive policies may include adjustments to incentive award
amounts based upon factors such as grant size, additional services to
the hard-to-serve, intensity of service, and expenditure level.
4. A Secretary's standard for service to the hard-to-serve, as
required by section 106(b)(7)(B) of JTPA, has been established in the
form of a stand-alone eligibility criterion (``gate'') for incentive
awards. In order for an SDA to be eligible to receive any incentive
award, at least 65 percent of both the SDA's (a) Title II-A and (b)
Title II-C (in-school and out-of-school youth combined) participants
receiving training and/or other service beyond objective assessment
must be hard-to-serve. The definitions of hard-to-serve are to be
consistent with the definitions in sections 203(b), 263(b), and 263(d)
of the Act. For the purpose of determining compliance with this
requirement, Governors are to include any SDA-defined barriers that
have been approved by the Governor, as well as the characteristics of
participants in school-wide projects under section 263(g) and
participants in five percent-funded projects.
5. For those SDA's that successfully ``pass through'' the gate,
three criteria (in addition to any funds set aside for Governors'
standards) will determine the amount of the incentive award: (1)
exceeding the Secretary's performance standards, (2) providing quality
service to out-of-school youth, and (3) placing participants in
employment that provides employer-assisted benefits.
--The definition of ``employer-assisted benefits'' is to be
consistent with the SPIR definition (see Attachment 4). For the
purposes of reporting and performance standards, fringe benefits count
so long as they are an acknowledged component of employment conditions,
whether actually received at the time of placement or not. Thus, State
incentive policies will be structured to include benefit information
for those participants who entered employment at termination, and
Governors will have considerable latitude in implementing this
incentive policy requirement.
6. Consistent with present DOL policy, SDA's that pass through the
``gate'' and exceed all six of the Secretary's Titles II-A and II-C
standards must receive an incentive award.
7. Determination of an SDA's failure to meet these standards and
the consequent imposition of technical assistance and reorganization
requirements under section 106(j) will be based only on the Secretary's
Title II-A and Title II-C core measures.
--``Meeting Performance Standards'' overall is defined as meeting
at least four of the six core standards, one of which must be a youth
standard. Conversely, overall ``Failure'' is defined as failing any
three (3) or more of the core standards or failing both youth
standards. Definitions for meeting and failing individual standards
will be established by Governors.
--Failure for the first year precludes an SDA from receiving any
incentive awards and requires Governors to provide technical assistance
to the underperforming SDA.
--Failure in the second consecutive year precludes an SDA from
receiving any incentive award and requires Governors to impose a
reorganization plan.
8. Section 106(j)(3) requires each State to report to the
Secretary, not later than 90 days after the end of each program year,
the actual performance and performance standards for each SDA within
that State. Within the same timeframe, technical assistance plans
developed by the State are required for each SDA ``failing'' for the
first year. A 90-day timeframe also applies to the imposition of a
reorganization plan, which is mandatory when an SDA ``fails'' for a
second consecutive year. Specific procedures for the formal performance
standards report and required State action will be provided under
separate cover. However, in addition to the formal annual process,
there should be ongoing oversight of SDA performance and continuous
technical assistance and capacity-building aimed at addressing areas
where program performance can be improved. In addition, the Employment
and Training Administration will initiate a national JTPA Report Card
that will highlight programs showing the greatest returns on their
human resource investments in terms of high-quality employment (type of
job, wages and fringe benefits) for those participants most at-risk of
failure. Further information on the content and procedures for
preparing the ``report card'' will be provided separately.
9. Governors must specify in the GCSSP their incentive award policy
under section 202(c)(1)(B) and 202(c)(3)(A) and imposition of sanctions
policy under section 106(j). It is recognized that the timing of this
issuance may preclude some States from submitting complete incentive
policies with their PY 1994-95 GCSSPs. States are to provide as much
information as possible in compliance with required due dates and
submit a GCSSP amendment containing complete information no later than
August 31, 1994.
10. In PY 1994 and 1995, Governors will continue to have the
authority to exclude pilot projects serving ``hard-to-serve''
individuals funded from the 5 percent incentive fund set-aside in
computing their standards and actual performance. States and SDA's are
encouraged to use such funds to develop or replicate model programs
serving out-of-school youth, particularly those based on contextual
learning models.
Note: For those SDA's in which ``incentive projects'' are
indistinguishable from those that provide general training, these
programs would not be considered exempt from performance standards.
7. State Action. States are to distribute this Guidance Letter to
all officials within the State who need such information to implement
the new performance standards policies and requirements for PY 1994-95.
It is especially critical that States, State Councils, Private Industry
Councils and SDA operational staff become thoroughly familiar with the
new provisions concerning incentive and sanctions policies.
A copy of this Guidance Letter is also being sent to your State
JTPA Liaison, the State Wagner-Peyser Administering Agency, and the
State Worker Adjustment Liaison.
8. Inquiries. Questions concerning this issuance may be directed to
Steven Aaronson at (202) 219-5487, ext. 107.
9. Attachments.
1. Definitions for Performance Standards;
2. Youth Employability Enhancement Definitions;
3. Rewarding Model Programs for Out-of-School Youth;
4. Rewarding Placements in Jobs Providing Employer-Assisted
Benefits.
Attachment 1--Definitions for Performance Standards
Those terminees who receive only objective assessment and/or
supportive services (or only objective assessment and/or supportive
services and entered employment) are to be excluded from the
calculation of performance outcomes for Title II-A, Title II-C, and
section 204(d) older worker programs. Participants in special 5-
percent-funded projects may, at the discretion of the Governor, also be
excluded from the calculation of performance outcomes for Title II-A
and Title II-C.
The following defines the Title II-A performance standards:
1. Adult Follow-Up Employment Rate--Total number of adult
respondents who were employed (for at least 20 hours per week) during
the 13th full calendar week after termination, divided by the total
number of adult respondents (i.e., terminees who completed follow-up
interviews).
2. Adult Follow-Up Weekly Earnings--Total weekly earnings for all
adult respondents who were employed (for at least 20 hours per week)
during the 13th full calendar week after termination, divided by the
total number of adult respondents employed (for at least 20 hours per
week) at the time of follow-up.
Welfare
3. Welfare Follow-Up Employment Rate--Total number of adult welfare
respondents who were employed (for at least 20 hours per week) during
the 13th full calendar week after termination, divided by the total
number of adult welfare respondents (i.e., terminees who completed
follow-up interviews).
4. Welfare Follow-Up Weekly Earnings--Total weekly earnings for all
adult welfare respondents employed (for at least 20 hours per week)
during the 13th full calendar week after termination, divided by the
total number of adult welfare respondents employed (for at least 20
hours per week) at the time of follow-up.
Note: The Title II-A adult and welfare follow-up employment
measures will continue to be based on individuals who terminate
during the first three quarters of the program year and the last
quarter of the previous program year. If the response rates for
those employed at termination and those not employed at termination
in an SDA differ by more than 5 percentage points in either the
adult or welfare samples, then the calculations of the follow-up
outcomes for that group must be modified to adjust for non-response
bias. The following defines the Title II-C performance standards:
5. Youth Entered Employment Rate (YEER)--Total number of youth who
entered employment at termination (for at least 20 hours per week),
divided by the total number of youth who terminated, excluding those
potential dropouts who are reported (on the Standardized Program
Information Report [SPIR]) as remained-in-school and dropouts who are
reported (on the SPIR) as returned-to-school.
Note: As in past practice, youth terminees who remain-in-school
or return-to-school and who also enter employment will not be
excluded from the termination pool reflected in the denominator of
the Youth Entered Employment Rate. However, only employment of at
least 20 hours per week satisfies the requirement for
``employment.''
6. Youth Employability Enhancement Rate (YEEN)--Total number of
youth who attained one of the employability enhancements at
termination, whether or not they also obtained a job, divided by the
total number of youth who terminated.
Youth Employability Enhancements include:
a. Attained (two or more) PIC-recognized Youth Employment
Competencies.
b. Completed major level of education following participation of at
least 90 calendar days or 200 hours in JTPA activity.
c. Entered and retained for at least 90 calendar days or 200 hours
in non-Title II training or received a certification of occupational
skill attainment.
Note: It is expected that the ultimate result of this outcome
will be the attainment of a job-specific skill competency on the
part of the terminee.
d. Returned to and retained in full-time school (dropouts only) for
one semester or at least 120 calendar days, attained a basic or job-
specific skill competency, and made satisfactory progress.
Note: For the purposes of this outcome, and the remained in
school outcome described below, ``school'' includes alternative
schools, defined as a specialized, structured curriculum offered
inside or outside of the public school system which may provide
work/study and/or General Educational Development (GED) test
preparation.
e. Remained in school for one semester or at least 120 calendar
days (for youth at risk of dropping out of school), attained a basic or
job-specific skill competency, and made satisfactory progress.
Note: For youth aged 14 and 15, the acceptable competencies will
be basic skills or pre-employment/work maturity.
The following defines Section 204(d) Older Worker program
performance standards:
1. Entered Employment Rate--Total number of individuals who entered
employment of at least 20 hours per week at termination, divided by the
number of total terminations.
2. Average Wage at Placement--Total hourly wage rate of all
terminees who entered employment of at least 20 hours per week at
termination, divided by the number of terminees who entered employment
of at least 20 hours per week at termination.
The following defines the Title III performance standard:
1. Entered Employment Rate--Total number of individuals who entered
employment of at least 20 hours per week at termination, excluding
those who were recalled or retained by the original employer after
receipt of a layoff notice, divided by the total terminations,
excluding those who were recalled or retained by the original employer
after receipt of a layoff notice.
Note: As indicated in the definitions listed above, for
performance standards purposes, the term ``employment'' means
employment for 20 or more hours per week. For determining compliance
with this provision, a ``week'' means a period of 7 consecutive
days, and the 20 or more hours is to be understood as a condition of
the employment. No formal verification is required, but the
Department encourages States to set up a system that would, at a
minimum, provide for random checking to assess compliance by SDA's.
Attachment 2--Youth Employability Enhancement Definitions
``Youth Employability Enhancement'' means an outcome for youth,
other than entered unsubsidized employment, which is recognized as
enhancing long-term employability and contributing to the potential for
a long-term increase in earnings and employment. Outcomes which meet
this requirement shall be restricted to the following:
(1) Attained PIC-Recognized Youth Employment Competencies (two or
more reported from SPIR items 36a, 36d, and 36e);
(2) Returned to Full-Time School;
(3) Remained in School;
(4) Completed Major Level of Education; or
(5) Entered Non-Title II Training.
1. Attained PIC-Recognized Youth Employment Competencies--The total
number of youth who demonstrated proficiency, as defined by the PIC in
two or more of the following three skill areas in which the terminee
was deficient at enrollment: (1) pre-employment/work maturity (SPIR
item 36a); (2) basic education (SPIR item 36d); or (3) job-specific
skills (SPIR item 36e). Competency gains must be achieved through
program participation and be tracked through sufficiently developed
systems that must include: quantifiable learning objectives, related
curricula/training modules, pre and post-assessment, employability
planning, documentation, and certification.
The completely detailed definition for Youth Employment Competency
systems is located in the Standardized Program Information Reporting
System (SPIR) instructions.
2. Returned to Full-Time School--The total number of youth who: (1)
had returned to full-time secondary school (e.g., junior high school,
middle school and high school) including an alternative school if, at
the time of intake, the participant was not attending school (exclusive
of summer school) and had not obtained a high school diploma or
equivalent; and (2) prior to termination, had been retained in school
for one semester or at least 120 calendar days.
Alternative School--A specialized, structured curriculum offered
inside or outside of the public school system which may provide work/
study and/or GED preparation.
Note: To obtain credit for Returned to Full-Time School and
Remained in School (described below), SDA's must be prepared to
demonstrate that retention results from continuing, active
participation in JTPA activities and the youth must: (1) be making
satisfactory progress in school; and (2) (for youth aged 16-21)
attain a PIC-approved Youth Employment Competency in Basic Skills or
Job-Specific Skills; or (3) (for youth aged 14-15) attain a PIC-
approved Youth Employment Competency in Pre-employment/Work Maturity
or Basic Skills.
Satisfactory Progress in School--An SDA, in cooperation with the
local school system, must develop a written policy that defines an
individual standard of progress for each participant that he or she is
required to meet. Such a standard should, at a minimum, include both a
qualitative element of a participant's progress (e.g., performance on a
criterion-referenced test or a grade point average) and a quantitative
element (e.g., a time limit for completion of the program or course of
study). This policy may provide for exceptional situations in which
students who do not meet the standard of progress are nonetheless
making satisfactory progress during a probationary period because of
mitigating circumstances.
3. Remained in School--The total number of youth who, prior to
termination, had been retained in full-time secondary school, including
alternative school, for one semester or at least 120 calendar days. A
youth may be reported as Remained-in-School only if he/she was
attending school at the time of intake, had not received a high school
diploma or its equivalent, and was considered ``at risk of dropping out
of school,'' as defined by the Governor in consultation with the State
Education Agency.
4. Completed Major Level of Education--The total number of adults/
youth who, prior to termination, had completed, during enrollment in
the program, a level of educational achievement which had not been
reached at entry. Levels of educational achievement are secondary and
post-secondary. Completion standards shall be governed by State
standards and shall include a high school diploma, GED Certificate or
equivalent at the secondary level, and shall require a diploma or other
written certification of completion at the post-secondary level.
Note: To obtain credit, completion of a major level of education
must result primarily from active JTPA program participation of at
least 90 calendar days or 200 hours, usually prior to the completion
of the major level of education.
5. Entered Non-Title II Training--The total number of adults/youth
who, prior to termination, had entered an occupational skills
employment/training program not funded under Title II of the JTPA, that
builds upon and does not duplicate training received under Title II.
Note: To obtain credit, the participant must have been retained
in that program for at least 90 calendar days OR 200 hours or must
have received a certification of occupational skill attainment.
During the period the participant is in non-Title II training, he/
she may or may not have received JTPA services. It is expected that
the ultimate result of this outcome will be the attainment of a job-
specific skill competency on the part of the terminee.
Attachment 3--Rewarding Model Programs for Out-of-School Youth
One of the Department of Labor's high priorities is to improve the
effectiveness of JTPA programs for out-of-school youth. Results from
the National JTPA Study show that outcomes achieved by out-of-school
youth 30 months after entering the program are disappointing. To
implement section 107(b)(7)(C) of the amended JTPA, the Department
encourages in PY 1994, and will require in PY 1995, that Governors
reward out-of-school youth programs that are identified by the
Department or recognized by the State as having a demonstrated record
of success. States need to develop ways to identify such programs.
Possible approaches include:
--Using outcomes achieved to identify successful programs. Outcomes
could include both the two youth performance measures and measures such
as learning gains and earnings/retention in full-time employment.
--Alternatively, States could offer SDA's ``seed money'' from
incentive funds to plan/operate programs that provide innovative or
high-quality training to out-of-school youth based on criteria
established by the Governor. Examples of such criteria include training
that integrates occupational and basic skills training, and training
that emphasizes acquiring job skills in demand in the emerging
workplace.
Note: Whatever method is used to reward successful out-of-school
youth programs, access to such incentives must be limited to those
SDA's that serve in excess of 50 percent out-of-school youth in
their overall Title II-C program.
Attachment 4--Rewarding Placements in Jobs Providing Employer-
Assisted Benefits
PY 1994 is the first year Governors are asked to reward SDA's for
placements in jobs with employer-assisted benefits, including health
benefits. (Governors will be required to do so beginning in PY 1995.)
Rewarding such placements is intended to increase the focus on overall
job quality. To include placements in jobs with employer-assisted
benefits in their incentive policies, States will need to:
1. Specify how the criterion will be measured. The definition must
be consistent with that for SPIR Item 35c (i.e., consisting of, at a
minimum, health insurance benefits and coverage under Social Security
or an equivalent pension plan). Note that it is not necessary for an
individual to actually receive benefits when employment begins as long
as they are an acknowledged component of employment conditions. For
example, health benefits available after a waiting-period and benefits
that are refused because of availability from another source both count
as employer-assisted benefits. Examples of measures of jobs with
benefits, using data from SPIR Item 35c are:
--among terminees who enter employment, the percent who are in jobs
providing employer-assisted benefits; and
--among all terminees, the percent who enter employment and are in
jobs providing employer-assisted benefits.
2. Determine how to reward placement in jobs with employer-assisted
benefits. One possible approach would require the State to determine a
departure point or benchmark to use in setting rewards levels for
benefits. This departure point would serve the same function served by
the numerical national standards for the Secretary's core measures. It
would be the level that, before any adjustment for local factors,
identifies rewardable performance. Under this approach, a State would
also decide whether and how the departure point should be adjusted for
local clientele and economic conditions when setting reward levels for
each SDA.
Rather than setting reward levels for employer-assisted benefits
using a process akin to setting standards for the Secretary's core
measures, States may choose a simpler approach. Because there are no
sanctions based on this criterion, it is not absolutely necessary to
set a minimally acceptable performance level. It is possible to reward
SDA's at all levels of performance on employer-assisted benefits. One
way to do this would be to set aside a portion of incentive funds to
reward such placements. This reward pool could be divided among SDA's
based on their proportionate share of all placements in jobs with
employer-assisted benefits. This procedure is equivalent to giving a
fixed amount for each placement (i.e., the amount is the value of the
pool divided by the total number of placements into jobs with benefits
in the State.
Because this approach may be viewed as favoring SDA's in areas
where benefits are widely prevalent, it should be viewed as interim
until better data on employer-assisted benefits are available.
[FR Doc. 94-16698 Filed 7-8-94; 8:45 am]
BILLING CODE 4510-30-M
