[Federal Register Volume 59, Number 170 (Friday, September 2, 1994)]
[Rules and Regulations]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20871]
[[Page Unknown]]
[Federal Register: September 2, 1994]
_______________________________________________________________________
Part II
Department of Labor
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Employment and Training Administration
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20 CFR Part 626, et al.
Job Training Partnership Act; Final Rule
Federal Register / Vol. 59, No. 170 / Friday, September 2, 1994 /
Rules and Regulations
DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Parts 626, 627, 628, 629, 630, 631, and 637
Job Training Partnership Act
RIN 1205-AA95
AGENCY: Employment and Training Administration, Labor.
ACTION: Final rule.
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SUMMARY: The Employment and Training Administration (ETA) of the
Department of Labor (DOL) is amending the Job Training Partnership Act
(JTPA) regulations to implement the Job Training Reform Amendments of
1992 and related statutes. Through these final regulations, the
Department intends to direct the focus of JTPA training and employment
programs on improving the targeting of JTPA services to those facing
serious barriers to employment, enhancing the quality of services
provided and program outcomes, strengthening fiscal and program
accountability and the linkage between the services provided and local
labor market needs, and fostering a comprehensive and coherent system
of human resource services.
EFFECTIVE DATE: June 30, 1995, except that the provisions of
Sec. 627.201 shall be effective October 3, 1994.
FOR FURTHER INFORMATION CONTACT: Mr. James M. Aaron, Office of
Employment and Training Programs. Telephone: (202) 219-6825 (this is
not a toll-free number). Copies of this final rule are available in the
following formats: electronic file on computer disk and audio tape.
They may be obtained at the above office.
SUPPLEMENTARY INFORMATION: On October 13, 1982, the President signed
into law the Job Training Partnership Act, Public Law 97-300. The
stated purposes of the Act were ``to establish programs to prepare
youth and unskilled adults for entry into the labor force, and to
afford job training to those economically disadvantaged individuals and
others facing serious barriers to employment who are in special need of
such training to obtain productive employment.''
Title I of the Act sets forth general requirements for programs, as
well as some requirements for State and local operation of programs.
Title II provides requirements for State and local operation of adult
and youth programs for the economically disadvantaged. Title III of the
Act provides for operation of State and substate programs of employment
and training assistance for dislocated workers. Title IV provides
requirements for special programs for targeted groups, such as Native
Americans, migrant and seasonal farmworkers, and veterans, as well as
for the Job Corps and other specialized programs. Title V provides
incentives to States to reduce welfare dependency and increase self-
sufficiency for absent parents of children receiving aid to families of
dependent children and blind or disabled individuals receiving
supplemental security income under title XVI of the Social Security
Act.
The final rule, among other things, implements statutory
requirements under the Job Training Reform Amendments of 1992 (JTPA
Amendments), Public Law 102-367; the Nontraditional Employment for
Women Act (NEW), Public Law 102-235; the Department of Defense
Authorization Act for Fiscal Year 1993 (Defense Authorization Act),
Public Law 102-484; the Older Americans Act, as amended by Public Law
103-171; the Clean Air Act, Public Law 101-549; the North American Free
Trade Agreement (NAFTA) Worker Security Act, title V of Public Law 103-
182 and the Goals 2000: Educate America Act, Public Law 103-227. While
the programs are modified pursuant to statutory amendments and
requirements, the delivery system for the JTPA programs under the final
rule remains essentially the same as in pre-Amendment regulations. It
does not have the financial or other impact to make it a major rule
and, therefore, the preparation of a regulatory impact analysis is not
necessary. See Executive Order 12866, 58 FR 51735, October 4, 1993.
The Department of Labor (``DOL'' or ``the Department'') has
certified to the Chief Counsel for Advocacy, Small Business
Administration, that pursuant to the Regulatory Flexibility Act at 5
U.S.C. 605(b), the final rule would not have a significant economic
impact on a substantial number of small entities. No significant
economic impact would be imposed on such entities by the final rule.
Paperwork Reduction Act
Pursuant to the Paperwork Reduction Act, information collection
requirements which would be imposed as a result of the final rule are
being submitted separately to the Office of Management and Budget.
Prior Actions
The Department has conducted this rulemaking in an open and public
manner. Since the enactment of the Amendments, Department officials
have responded to numerous invitations to discuss the Amendments with
organizations interested in the Amendments and proposed regulatory
action. Additionally, a group of technical experts has offered
suggestions to the Department on the proposed areas for regulatory
action.
On September 10, 1992, the Department published an Advance Notice
of Proposed Rulemaking in the Federal Register and invited comments
from interested parties regarding proposed or recommended regulatory
actions to be taken by the Department. 57 FR 41447.
On December 29, 1992, the Department published an interim final
rule in the Federal Register, providing the opportunity for comment. 57
FR 62004. Amendments to the rule were published on June 3, 1993. 58 FR
31471.
Over 400 sets of comments were received in response to the interim
final rule. Sources of comments by the close of the comment period were
as follows: Private industry councils (99); service delivery areas
(72); service providers (41); States (39); community-based
organizations (33); public interest groups (31); State JTPA offices
(28); private contractors (14); State education agencies (10); Federal
agencies (8); unions (7); private citizens (7); State job training
coordinating councils (6); members of Congress (2); and other sources
(4).
In addition, on March 24, 1992, the Department published proposed
rules in the Federal Register for the Clean Air Employment Transition
Assistance program under JTPA title III, providing the opportunity to
comment. 57 FR 10232. Thirteen sets of comments were received from
State, substate entities and other organizations.
The Department fully considered these comments and other comments
received in time to consider in the development of this final
regulation and addresses the issues they raised in the following
discussion.
Finally, during the period of May through July, 1994, when this
final rule was in development, the Department initiated a Dialogue with
the employment and training community and others interested in the JTPA
title II program for the disadvantaged. This Dialogue was initiated by
a Federal Register notice published on May 18, 1994, and consisted
principally of a series of fifteen small group and town hall meetings
and a review of research on employment and training programs with a
view to developing an action plan to improve title II programs.
Approach to Rulemaking
These regulations continue to provide substantial responsibility
and discretion to States and local areas in developing policy and in
implementing procedures for JTPA programs. Thus, in many instances in
these final regulations, responsibility for certain decisions is vested
in the State and in the service delivery areas (SDA's) and substate
grantees (SSG's).
The Department has attempted in these final regulations to foster
improved customer services by eliminating or reducing unnecessary
programmatic requirements wherever possible so that decisions on how to
best serve JTPA customers will be made, to the maximum extent possible,
at the level of customer service and based upon customer need. For
example, some of the restrictions on the duration of certain
activities, such as work experience and entry employment experience
where not specifically provided for in the Act, have been eliminated.
Rather than Federal regulation, the needs of the customer as determined
in the assessment process and the intervention's likelihood of success
in enhancing skills and achieving long term employment will dictate how
the program intervention will be designed.
This was also a theme from the title II Dialogue. Some of the
principal themes suggested by the title II Dialogue were the following:
(1) Greater program flexibility with accountability, (2) Greater
support for longer-term training interventions, including approaches
more customized to customer needs and better connections between
training and jobs, (3) Improved coordination at all levels but with
special attention to coordination among federal agencies, (4) Increased
supportive services, (5) More streamlining of eligibility, and (6)
Better access for community-based organizations to JTPA planning and
service delivery. To the extent permitted by the rulemaking process,
the Department considered the major themes from the Dialogue in this
final rule. In several instances, there are changes in this final rule
that are consistent with the themes of the Dialogue. For example, as
noted above, certain prior restrictions have been eliminated; initial
efforts to achieve greater coordination with the Departments of
Education, Health and Human Services and Housing and Urban Development
are reflected in this final rule; the Department has attempted to
streamline the requirements for providing participants with financial
assistance; and these final regulations clarify that, as appropriate,
the new eligibility provisions for youth are applied in the program
under section 123 and title II-B. In addition, the Department will
reexamine the Eligibility Documentation Technical Assistance Guide.
Consistent with Executive Order 12866 (58 FR 51735, October 4,
1993), these regulations are limited to those areas which are
specifically required by statute, identified by the Department or the
public as necessary to provide guidance and clarification, or essential
to further the purposes of the Act. Additionally, the Department fully
intends to provide strong oversight and monitoring of JTPA programs in
conjunction with strengthened State and local oversight and monitoring.
It is through the monitoring of the implementation of the Amendments
and these regulations, rather than through promulgation of prescriptive
regulations, that the Department, working with the States and service
delivery and substate areas, will ensure effective program operations.
Of all the consultations and comments the Department has received,
about half expressed interest in having the Department be more detailed
in the regulations, and the other half indicated that the Department
was being overly prescriptive in the interim final rule and preferred
that the Department provide minimal guidance. The Department reminds
readers of these regulations that the JTPA Amendments create more
restrictive operational and programmatic requirements in order to
address a series of issues that had been identified in connection with
JTPA. The Department has sought to strike a balance in these final
regulations in terms of guidance and prescriptiveness. In some
regulatory areas, such as some of the administrative requirements, the
Department has carefully specified requirements to set a strong
foundation for program integrity so that in other regulatory areas,
such as program design, there can be more flexibility and emphasis on
outcomes. Finally, the Department has sought to make these regulations
sufficiently clear, so that all parties with an interest in JTPA
understand both the requirements and the areas of flexibility in the
program.
This final rule is not a stand-alone document; the companion
document is the JTPA, as amended. In several instances, however,
portions of the Act are repeated to make the final rule user-friendly
and to facilitate its use as a reference tool.
In addition to the 1992 JTPA Amendments, the Clean Air Act, section
4467 of the Defense Authorization Act and the NAFTA Worker Security Act
impacted on title III of JTPA. The final regulations in 20 CFR part 631
provide for limited revisions to existing title III regulations as
required by these statutes.
There were a number of comments on specific areas of performance
standards and related reporting requirements. On July 11, 1994, the
Department published separately in the Federal Register the final
performance standards for PY 1994 and PY 1995. The Department
appreciates the issues raised by commenters on the interim final
regulations in the area of performance standards and has taken these
comments into account in developing the performance standards. In
addition, on June 23, 1994 the Department issued Training and
Employment Information Notice 5-93, Change 1 with the revised reporting
instructions.
The Department also plans to issue separately revisions to the
regulations for title IV, part A, the Employment and Training Programs
for Native Americans and Migrant and Seasonal Farmworkers. When it
does, the contents of the regulations as reflected herein may change.
The Department has issued revised regulations for title IV, part B, the
Job Corps. (58 FR 69098 (December 29, 1993)).
Format of These Final Regulations
The structure, organization, and enumeration of the JTPA
regulations have been revised to accommodate the Amendments. Throughout
this document, unless otherwise stated, ``JTPA'' or ``the Act'' refers
to the Job Training Partnership Act, as amended (29 U.S.C. 1501, et
seq.); ``Department'' or ``DOL'' refers to the U.S. Department of
Labor; and ``Secretary'' refers to the Secretary of the U.S. Department
of Labor or the Secretary's designated representative(s). As used in
these final regulations, the term ``title'' refers to a title of the
Job Training Partnership Act, unless the text specifically refers to
another statute. The terms ``section'', ``part'', and ``subpart'' refer
to a section, part, and subpart, respectively, of these final
regulations, unless the text specifically refers to another document.
As specified at PART 626--Introduction To The Regulations Under The
Job Training Partnership Act, part 627 applies to all programs under
titles I, II, and III of the Act, except where noted, and part 628
generally applies to title II programs. Parts 629 and 630 are reserved
for future use. Part 631 continues to apply to title III programs and
part 637 has been revised for the title V Jobs for Employable Dependent
Individuals (JEDI) program. Therefore, various sections that previously
appeared in parts 627, 628, 629, and 630 have been redesignated to
parts 627 and 628.
Definitions
The interim final rule at Sec. 626.5 added a significant number of
definitions of terms used throughout the JTPA and regulations.
Definitions of the terms ``commercially available off-the-shelf
training package'', ``family'', ``family income'', ``obligations'',
``stand-in costs'', and ``vendor'' received the most comments.
Commercially available off-the-shelf training package.
At the outset, the wording of the term being defined is changed. In
the interim final rule the term was ``commercially available or off-
the-shelf training packages;'' in the final rule, the word ``or'' is
dropped so that the term being defined reads ``commercially available
off-the-shelf training packages''. The reason for this change is that
both the Act and the definition require that a training package be both
commercially available and available at off-the-shelf prices.
Practically, availability at off-the-shelf prices is subsumed within
the broader concept of commercial availability.
Several commenters submitted comments on the definition of
``commercially available off-the-shelf training package'', contained in
Sec. 626.5. The basis of this definition is the definition of a
commercial product found in part 15 of the Federal Acquisition
Regulation (FAR). First of all, the Department acknowledges that there
is a degree of uncertainty regarding which training packages and their
providers fall within the meaning of commercially available off-the-
shelf. The term, as defined within Sec. 626.5, relies generally upon
whether the package is provided in a commercial market in which it is
available to the public. This was the origin of the language ``sold to
the public'' and that related to ``catalogue or market prices''. These
business concepts are indicators of the training package's availability
to the public, e.g., a catalogue available to the public or a public,
advertised price shows that the entity is seeking to engage in
commerce. The Department believes that most parties understand the
basic meaning of whether any package is ``commercially available.''
Some related areas of the definition are discussed further below.
A second area of inquiry pertains to the contents of the package.
The training will consist of classroom and related practical
instruction, which may include hands-on experience. It may consist of
the development of occupational or education-related skills. For
example, a package may provide occupational training to a participant
as a nurse practitioner, as a maintenance mechanic, or in computer
design, in heating, ventilation and air conditioning, or may provide
basic skills in reading and computation. The package may consist of a
necessary assessment of interests, aptitudes, and abilities, as well as
counseling and guidance related to participant progress and employment
prospects. Such a training package will not normally consist of the
kind of assistance typically provided within the meaning of a JTPA
supportive service, but may include fees, books and other materials
needed for participation and completion of the package. In other words,
if an organization offers training to the general public which consists
solely of a practical training course in a particular occupation, it is
that course, without any other placement or assessment services, which
may be purchased as a commercially available training package. On the
other hand, if the organization offers assessment or placement services
to the public as part of its training course, those services will be a
part of the commercially available package. A key indicator, however,
is whether the contents of the package are generally available and
generally the same for all participants, not just JTPA participants.
Finally, commenters raised questions about the type of entity that
might provide the commercially available package. A variety of entities
may be the source of a commercially available package; however, the
characteristics of the package, that is, whether they meet the tests of
commercial availability at off-the-shelf prices, are more of an
indicator than the entity that provides it. Such entities may include
those that provide computer-based instruction in a variety of
occupational and educational topical areas, or they may be public and
private schools, academies or other entities that offer training that
is commercially available, as discussed above.
A few commenters requested that the phrase ``performance criteria''
be defined, and the definition now includes language that addresses the
reference to ``performance criteria''. ``Performance criteria'' may
generally fall into two or more areas that reflect the necessary
components and features of the package that is to be delivered, such as
(1) grade requirements, knowledge, skills, and competencies which may
be expected to be attained by students, and (2) where appropriate,
participant attainment as manifested by job placement. This latter
component is contingent upon whether the service is regularly offered
and may be reasonably included in the package.
A few commenters were concerned with the requirement that the
packages be unmodified. They indicated that, in many instances, a
commercially available training package may be modified to some degree
to reflect the special needs of the JTPA population, without changing
its basic content. A strict reading of the regulation would prohibit
contracting for commercially available packages which are modified in
any way, regardless of whether the package remains substantially the
same. In addition, this strict reading would prohibit the JTPA program
from taking advantage of a discounted price that might be offered in
connection with multiple purchases of the package. The Department does
not intend that a local program be prohibited from purchasing a
commercially available package at a discounted price.
In order to respond to this comment, the Department further
conforms the definition to the concepts in the FAR, and the word
``unmodified'' is removed. This change recognizes that some
modifications may be made to a package to meet special JTPA
requirements, just as a commercial entity would offer to other
customers, while the package remains substantially similar to that
regularly offered. A test for whether the package remains substantially
the same as that regularly offered is whether the modification does not
involve an increase in the catalogue price. An increase in catalogue
price would indicate that the package is not substantially the same.
However, a price decrease due to such things as volume discounts or
good negotiating is not, in itself, indicative of a modified package.
Another test is whether the same training components continue to be
offered in the package. A difference in the training components would
indicate that the package may not be substantially the same. All of
these tests should be considered in determining whether a training
package meets the definition. Further, JTPA funds should not be used to
make any modification to a training package. Should training packages
be modified in order to conform to JTPA requirements, they may be
considered commercially available off-the-shelf only if they comply
with the remaining requirements listed in the definition. Thus, while
some modification is possible, the definition is not intended to
include ``customized training,'' training designed solely to meet the
special needs of an individual or group of JTPA participants.
A few commenters asked for a definition of ``substantial'' in
regard to the quantities sold. In response, the phrase ``in substantial
quantities'' is removed from the definition because the Department
believes that the concept is embodied in the idea of ``being sold to
the general public'' which follows in the definition. For further
guidance, the FAR indicates, with respect to being sold in
``substantial quantities'', that ``[N]ominal quantities, such as
models, samples, prototypes, or experimental units, do not meet this
requirement.'' Further, there were suggestions that an amount such as
25 to 30 percent non JTPA sales may be useful to States and SDA's when
setting policy in this area. The definition that is provided conforms
to the FAR definition; therefore, it is not being changed.
A few commenters wondered if community-based organizations (CBO's)
and non-profit organizations were included within this definition. Such
organizations may be among the types of organizations that provide a
``commercially available off-the-shelf'' training package if the
training packages they provide meet the definition.
Several comments reflected confusion about the relationship of
``commercially available off-the-shelf training packages'' to
``vendors'' and ``subrecipients''. It is important to recognize that
the definitions of ``vendor'' and ``subrecipient'' and the definition
of ``commercially available off-the-shelf training package'' exist for
different purposes and should not be viewed as related. An agreement to
acquire a commercially available off-the-shelf training package may
create either a vendor or a subrecipient relationship, depending on the
content of the package. If the package contains elements that meet some
of the distinguishing characteristics of a subrecipient (see
definition), then a subrecipient relationship is created.
Regardless of whether a vendor or subrecipient relationship is
created, the costs of the commercially available off-the-shelf training
package may be charged entirely to the direct training category.
However, other JTPA requirements such as record retention, audit, etc.
do apply to a subrecipient.
The intent of the definition of ``commercially available off-the-
shelf training packages'' is to provide states and SDA's broad
flexibility to utilize generally available training services and to be
able to charge those services entirely to the training cost category.
It will, for example, permit states and SDA's to purchase training from
a variety of educational institutions at off-the-shelf or catalogue
prices. It must be recognized, however, that there are limits to the
flexibility that the definition affords. One important limitation is
that the definition only applies to the provision of actual training
services to eligible JTPA participants. It does not apply to
intermediate administrative entities or entities that pass funds
through to training providers. Another limitation is that the services
must actually be available to and provided to significant numbers of
persons or to entities that procure training for such persons under
other state or federal programs outside the JTPA system. It will not be
sufficient for a training provider merely to claim that its services
are available to the general public or to other training programs (like
the JOBS program). The state or SDA must be able to show that the
services actually are available to the public or to other programs and
that the services are utilized by them. If a training provider has a
history of providing training only to the JTPA program or to JTPA
participants, it will not be considered a provider of ``commercially
available off-the-shelf training packages''.
Although not a part of the definition, section 141(d)(3)(A) of the
Act also requires that ``commercially available off the shelf training
packages'' be purchased competitively. The requirements for competitive
procurement are covered in the procurement provisions of the
regulations at Sec. 627.420.
Family
Several comments were received on the definition of the term
``family'' at Sec. 626.5 of the interim final regulations. In general,
the nature of these comments was that: (1) The definition is too
restrictive and limits the Governor's flexibility in defining the term;
(2) the definition does not recognize alternative living arrangements
that do not fit neatly into the ``traditional'' concept of a family;
and (3) the regulations do not address how to handle other family
members, including dependent adults, living in the same residence. A
few of the commenters noted that an apparent conflict exists in how
``family'' is defined in the interim final regulations and how it is
treated in the Standardized Program Information Report (SPIR)
instructions.
The term ``family'' was statutorily defined in the 1992 Amendments
for the purposes of income eligibility determination for receipt of
JTPA services. The interim final regulations provide the Governor with
flexibility to interpret the term ``family'' concerning how ``dependent
children'' are defined for JTPA programs. The interim final rule also
defines the phrase ``living in a single residence''. The statute
established a standard definition to apply consistently for JTPA
programs, which, within the three categories, covers the vast majority
of family configurations and living relationships in the country. The
definition is not intended to address every possible permutation of
alternative living arrangements.
Although the Department believes that the regulations provide the
Governor with some latitude in defining the term ``family'', the
comments raised an issue regarding the adverse effect of excluding
``dependent adults'' from the definition, which warrants further
consideration. While the Department recognizes that excluding dependent
adults may impact on the eligibility of some family members, the
Department does not believe that this circumstance is included in the
statutory definition. The Department does not believe that it has the
authority to expand upon the definition of ``family'' beyond the
categories specifically found at section 4 of the Act. No change is
made in the final regulations. Other individuals living in the same
residence, who are not dependent children, would be viewed as
individuals in applying for and being determined eligible to receive
JTPA services.
A few of the commenters accurately noted the difference between the
definition of ``family'' in the interim final regulations and the SPIR
instructions regarding the treatment of an individual with a disability
for the purposes of eligibility determinations. The SPIR reflects the
definition of ``family'' in the regulations in effect prior to the
publication of the December 29, 1992, interim final rule. The
definition contained in the interim final regulations indicate that an
individual with a disability ``may'', for the purpose of income
eligibility, be considered to be an unrelated individual who is a
family unit of one. This change was an administrative error and should
not have been included in the interim final rule. Accordingly, the
definition of ``family'' is amended to revise the word ``may'' to
``shall'' in the final regulations. This amendment is consistent with
the provisions at section 4(8) of the Act defining the term
``economically disadvantaged''.
Family Income
A few comments were received on the change in the definition of
``family income'' and the method for calculating such income for the
purposes of determining eligibility for JTPA services. In general, the
nature of the comments were that: (1) The use of the Department of
Health and Human Services' (HHS) poverty guidelines appears to conflict
with the definition of ``economically disadvantaged'' at section 4(8)
of the Act; (2) the definition does not include certain payments that
have previously been excluded from family income; and (3) the old
definition of ``family income'' should be retained, with the Governor
defining the term for the purposes of income eligibility
determinations, as has been the case since the inception of JTPA.
A few commenters accurately noted that certain payments that have
always been considered to be ``public assistance'' were omitted from
the interim final rule. This was an inadvertent oversight in developing
the regulations. The definition of ``family income'' is amended in the
final rule to reflect that ``public assistance'' still includes Aid to
Families with Dependent Children (AFDC), Supplemental Security Income,
Emergency Assistance money payments, and non-Federal funded General
Assistance or General Relief money payments, which are exclusions from
income for the purposes of income eligibility determinations. In
addition, certain other Federal statutes exclude additional types of
payments from JTPA income eligibility determinations. For example, Pell
grants are specifically excluded by title IV of the Higher Education
Act, as is income earned while on active military duty and certain
other veterans' benefits, identified at 38 U.S.C. 4213. These
exclusions are incorporated into the final rule. There also has been
concern expressed regarding the inclusion of Social Security benefit
payments as income in determining eligibility for older individuals. It
has been noted that many older individuals fall just above the income
threshold for JTPA because of the inclusion of Social Security benefits
and, therefore, are being denied needed JTPA services. The Department
recognizes that older individuals have special needs which warrant
consideration for their participation and inclusion in programs under
JTPA. In the interest of responding to such needs, the Department is
amending the regulations in the final rule to permit the Governor to
exclude 25 percent of regular Social Security benefits from family
income. The Department believes that this change will address the
concerns of the commenters.
A few commenters raised the issue that the HHS guidelines include
scholarships as income. They expressed concern that individuals who may
receive scholarship assistance based on need, but who are otherwise
economically disadvantaged, would not be eligible for services if such
assistance is counted as family income. In addition, they pointed out
that the inclusion of such needs-based assistance would also impact the
eligibility of another family member who would otherwise be eligible
for services, regardless of whether the individual receiving such
assistance applies for JTPA services. The Department finds merit in the
comments and is amending the definition of ``family income'' to add
``needs-based scholarship assistance'' to the exclusions from family
income. To the extent that existing guidance has been interpreted to
require the inclusion of needs-based scholarship assistance as family
income, these regulations supersede any such guidance.
A few of the commenters noted that the interim final rule appeared
to indicate that only use of the poverty level applied in determining
eligibility. This conflicts with section 4(8) of the Act, which
indicates the use of the higher of the poverty level or 70 percent of
the Lower Living Standard Income Level in determining economically
disadvantaged status. The Department acknowledges that the preamble
language could be misinterpreted. The reference to the use of the HHS
poverty guidelines as the standard for determining economic
disadvantage pertained to the use of the HHS guidelines to define
family income, and not to indicate requirements different from those
found at section 4(8) of the Act. The HHS guidelines, with the
exceptions noted in the definition of family income, would be used to
determine income, and that income figure would apply for the purposes
of income eligibility determinations under section 4(8) of the Act.
Of the several comments received on the term ``obligations'', most
commenters were satisfied with the definition and asked that it not be
changed. A few commenters wanted it changed as they believed that, as
defined, very little, if any, funds would be reallotted or reallocated.
No change is made to the definition, but the issue of reallotment is
further treated in the discussion of Sec. 627.410.
One commenter pointed out that the term ``service provider'' was
defined by statute in section 301(b)(3) of the Act. The definition in
these regulations is amended to conform to the statutory definition.
The definition of ``stand-in costs'' is revised, along with the
regulation at Sec. 627.480(f) (which had been paragraph (g) in the
interim final regulation), so that both provide the same criteria as to
the time when such costs were incurred and the cost category to which
they are chargeable.
Several other comments were received on the definition of
``vendor'', most of which generally fell into two groups. One group
encouraged referencing the definition of this term contained in the
Office of Management and Budget (OMB) Circulars A-128 and A-133. The
other group requested more clarification or examples. A few commenters
raised questions of whether vendor goods or services could be
customized, or the extent to which they could be altered, and still
meet the vendor definition.
The Department is applying the standard Federal Government-wide
description of the term ``vendor'', as it already exists in the audit
requirements and related literature of OMB Circulars A-128 and A-133.
However, A-128 does not contain a definition of the term ``vendor'' and
the A-133 definition appears to limit the term to providers of
administrative goods and services. For those reasons, and, as explained
in the preamble to the interim final rule, the Department draws upon
the Questions and Answers developed by the President's Council on
Integrity and Efficiency (PCIE) and OMB for its definition. The PCIE
document carries the vendor definition beyond administrative goods and
services and provides examples.
With regard to the question on whether vendor goods or services
could be customized or modified, the Department believes that the
package may be modified to meet JTPA requirements if the vendor
modifies its goods or services for other customers and if it remains
substantially the same as those goods or services regularly offered. An
indication of whether vendor goods or services are substantially the
same as those regularly offered is whether the price does not increase
when it is modified. No change is made to the definition in the final
rule.
The Major Changes in Part 627--General Provisions Governing Programs
Under Titles I, II, and III of the Act are as follows
Subpart B--Program Requirements
Governor/Secretary Agreement
Section 627.200 was amended in the interim final rule to require
that guidelines, interpretations, and definitions adopted by the
Governor be published. A few commenters raised the question of what
constituted ``published''.
The word ``published'' is removed in the final rule and the word
``issued'' is substituted. Also, language is added to indicate that
such guidelines, interpretations, and definitions adopted by the
Governor are to be those that actually have been imposed or utilized,
consistent with section 124 of the Act. The word ``issued'' is used to
better reflect the purpose of the requirement that the guidelines,
interpretations and definitions on which the Governor relies are to be
made public prior to their effective date and to assure that they are
actually being used in the administration of the JTPA programs. How the
Governor chooses to inform the public may vary and may depend upon the
nature of the action. It may include means such as issuance of written
directives or letters, inclusion in an electronic network or bulletin
board, publishing in a newspaper, or other public announcement in which
the effective date is indicated.
Waivers
In the interim final rule, the Department requested comments on the
feasibility of authorizing waivers to the JTPA regulatory requirements.
Recently, it has been suggested that some of the administrative burden
or unintended effect of regulatory requirements may be reduced through
the granting of waivers--specifically waivers of regulatory
requirements. This was recommended in the recent report of the National
Performance Review, ``Creating a Government That Works Better and Costs
Less.'' The Department believes that there is merit in this concept and
incorporates a waiver provision in these regulations. Therefore, a new
Sec. 627.201 is added which permits the Governor to request, and the
Secretary to approve, waivers of the regulations for up to four years.
The request from the Governor must be consistent with the provisions of
the Act and demonstrate how the waiver will meet one of the criteria
listed in the regulation.
Absent specific statutory authorization, the Secretary has no
authority to waive statutory requirements. The Secretary may, however,
waive provisions of the regulations which expand upon, interpret or
explicate statutory requirements. The new regulation is intended to
permit waivers of any regulatory provision as long as the waiver does
not affect the basic statutory requirements and if it is shown that the
waiver will improve services, increase skill or educational attainment,
promote coordination or substantially improve the job placement
outcomes of the JTPA program. For example, a State may seek a waiver of
the 25% disregard for social security income for older workers since
that rule is not mandated by the Act. To obtain such a waiver, a state
would have to demonstrate that it would not reduce services to those
most in need. On the other hand, a state could not obtain a waiver of
the regulatory prohibition on using JTPA funds to support employment
generating activities since that regulation simply repeats a clear
statutory requirement. In a more complicated situation, a state could
request a waiver of some of the detailed requirements of the
procurement regulation (Sec. 617.420) if those requirements conflicted
with its own procurement system. In order to obtain such a waiver,
however, the state would have to show that its system adequately
addresses all of the minimum requirements listed in section 164(a)(3)
of the Act and that it would promote coordination with other programs
or would result in either better quality services or better employment
outcomes if the same procurement system were used by those programs.
The Department assumes that the States and SDA's/SSG's are more
aware than is DOL of what waivers they may need. Thus, the Department
does not intend to provide immediate general guidance on what waivers
may or may not be requested. As the Department determines which waiver
requests it will grant and which waivers lead to greater coordination
or better program results, guidance will be issued to enable the JTPA
system to better understand the waiver process and to learn about what
practices work.
Public Service Employment Prohibition
No comments were received on this section. Section 627.205 remains
unchanged, except for extending the public service employment
prohibition to include title II-C funds.
Nondiscrimination and Equal Opportunity
The JTPA Amendments amended section 167 of the Act to require that
the Secretary issue final regulations which would clarify the
application of the nondiscrimination and equal opportunity provisions
of the JTPA and provide uniform procedures for implementing these
provisions. On January 15, 1993, the Directorate of Civil Rights (the
DOL agency responsible for enforcing the various Federal
nondiscrimination and equal opportunity statutes applicable to
federally assisted programs) promulgated a final rule to implement the
nondiscrimination and equal opportunity requirements of the JTPA (29
CFR part 34; 58 FR 4742). Throughout these final regulations, all of
the Department's nondiscrimination and equal opportunity regulations
(29 CFR parts 31, 32, and 34) are cited since they are all applicable
to JTPA federally assisted programs. In order to eliminate the burden
of complying with overlapping regulatory requirements, 29 CFR part 34
provides that compliance by JTPA recipients with part 34 constitutes
compliance with the Department's Civil Rights Act of 1964, title VI
regulations (29 CFR part 31) and with specified portions of the
Department's Rehabilitation Act section 504 federally assisted program
regulations. 29 CFR part 32, subparts A, C, and E.
A few commenters, in connection with Sec. 627.210(a)(3), questioned
the cost category to which expenses for ``accessibility'' and
``reasonable accommodation'' should be charged. This matter is treated
in the discussion of Sec. 627.440, Cost classification. In addition, a
commenter noted that this provision of the regulations should not be
construed to otherwise relieve a recipient or subrecipient from their
responsibility under the law to provide for ``accessibility and
``reasonable accommodation''. The Department agrees and the final rule
is modified to indicate that the provision applies only with regard to
needs for the JTPA program.
Relocation
Section 141(c) of the Act was revised substantially to prohibit the
use, or proposal for use, of JTPA funds to induce or to encourage the
relocation of a company when such relocation results in the loss of
employment of any employee of the company at the original site. That
section also prohibits certain assistance to any relocating company for
the first 120 days after the company commences operations at the new or
expanded location, if the relocation results in an employee's job loss
at the original site. If the Secretary finds that the State, SDA, or
substate grantee (SSG) has violated either provision, fines are levied
equal to twice the amount of funds expended. If the State, SDA, or SSG
demonstrates that it neither knew nor reasonably could have known
(after an inquiry undertaken with due diligence) that the funds it
provided were expended in violation of these provisions, then only the
amount expended is repaid.
Some commenters questioned whether these provisions prevent SDA's/
SSG's from placing participants in certain job openings for a set
period of time. The Department believes that they do under
circumstances in which there are job losses in other geographic areas
or in which workers are laid off or experience periods of unemployment.
By clarifying and standardizing terms, as well as setting the
prohibition on assistance at 120 days, the Act systematizes the
administration of this prohibition on relocation. Most of the comments
on the interim final rule pertaining to these provisions focused on the
need for clarification of terms such as ``labor market area'', ``loss
of employment'', ``commercial operations'', ``pre-award review'',
``induce'' or ``encourage'', and on the extent of an SDA's due
diligence and local liability.
Section 627.215(c) defines a ``relocating establishment'' as a
business entity moving operations ``from a facility in one labor market
area within the United States and its territories to a new or expanding
facility in another labor market area.'' Commenters pointed out that
some rural labor market areas may encompass vast areas and several
counties. Section 4(13) of the Act provides a definition of ``labor
market area'' as ``an economically integrated geographic area within
which individuals can reside and find employment within a reasonable
distance or can readily change employment without changing their place
of residence. Such areas shall be identified in accordance with
criteria used by the Bureau of Labor Statistics of the Department of
Labor in defining such areas or similar criteria established by a
Governor.'' The key to the Act's definition is that the labor market
area be ``an economically integrated geographic area'' where an
individual can change his or her employment without changing his or her
place of residence. Thus, for purposes of this relocation provision, a
large rural SDA could contain more than one labor market area.
Several commenters asked for a clarification of ``loss of
employment''. One stated that when employees at the original location
do not accept relocation job offers and then are laid off, ``loss of
employment'' has not occurred. The Department believes that, in such a
situation, loss of employment is presumed when a person no longer has a
job with the company at the original location or with any other entity
because of the relocation and the loss of employment at that location
would not otherwise have occurred. This does not include those who
would have retired or quit regardless of the relocation, or those who
were fired for cause.
Several commenters requested further guidance on commencement (or
expansion) of commercial operations. The Department added the term
``commercial'' to the regulations to be consistent with the statutory
intent that a viable prohibition on JTPA assistance in the day-to-day
production of goods and services be observed. The term ``commercial''
operations is intended to further distinguish between the construction
and operation stage of a business, as well as to demarcate the stage
when products are being produced for commercial distribution.
Similarly, a number of commenters asked whether ongoing JTPA
contracts with a company must be stopped or interrupted when the
company relocates work from another facility. The Department believes
any such contracts with the business within the SDA to which the
company has relocated must be ended for the duration of the time work
is being relocated, since ongoing JTPA assistance was not meant to
accommodate business needs which are the result of work relocation from
another facility.
Additional clarification was also requested on the treatment of
relocation scenarios where large retail store chains close down some
sites sequentially and then open others in widely dispersed locations.
The Department believes that the Act only applies to such cases where a
company closes a retail store in one location in order to move that
retail store's business to another location.
Section 627.215(d) requires a pre-award review to be completed to
document compliance with section 141(c) of the Act. Several commenters
asked for clarification, and one recommended that the States be
responsible for developing the standardized pre-award format. Others
voiced concern about whether SDA's should be held liable if relocation
occurred despite pre-award assurances to the contrary; several stated
that a properly completed pre-award review should prove due diligence
on the part of the SDA and that sanctions otherwise are unduly harsh.
The Department believes that these reviews are for the protection of
the State and the SDA/SSG. Section 627.215(d) is revised to provide
additional guidance for States and SDA's in developing standardized
pre-award review procedures and to indicate items which should be
included in a review. Information should include the names under which
the facility does business, including successors-in-interest, the name,
title, and address of the employer supplying the information; the name
and address of the facility in the other geographic area which is being
closed or from which business is being transferred; the nature of the
products or business being transferred to the new location; the date
the facility will commence or expand operations; and a statement from
the employer about job losses at the old location. The SDA also should
check with the former location to verify the employer's statements
about job loss. The Department believes that a review based upon the
suggestions in the regulations is evidence of due diligence, but does
not hold the SDA harmless when it is subsequently shown that the
statute was violated because the Act provides that the Secretary shall
require repayment.
It is important to note that assistance to relocating businesses is
not an entitlement. Once the State complies with the minimum
requirements set out in these regulations, it may be more restrictive
in its assessment of the company's situation or its determination of
policy regarding relocating employers.
One commenter stressed the importance of monitoring to ensure the
use of consistent pre-award reviews and also recommended that the SDA/
SSG consult with all affected parties, including union representatives
at the original and relocated site if relocation is indicated and JTPA
assistance is sought. Although not required by the regulations, the
State should consider incorporating such procedures in its guidelines
for the pre-award review. Before engaging in negotiations with any
company interested in moving to the area which seeks future JTPA
assistance, the SDA/SSG should initiate a pre-award review.
Finally, a few commenters asked what constituted ``inducement'' or
``encouragement'' to a company to relocate. The Act provides that
``[N]o funds provided under this Act shall be used or proposed for use
to encourage or induce the relocation, of an establishment or a part
thereof, that results in a loss of employment for any employee of such
establishment at the original location.'' Thus, JTPA funds cannot be
used in any manner for this purpose. Similarly, JTPA funds cannot be
used under the prohibitions concerning employment generating activities
(Section 141(q)). One commenter asked whether written material
containing a general description of JTPA programs could be distributed
to the local Chamber of Commerce. The Department does not believe that
providing material to a Chamber of Commerce which provides a general
description of JTPA programs would fall within the prohibition of the
Act unless the purpose of the material were to induce or encourage
relocation. This regulation is not intended to affect what the Chamber
of Commerce does, as long as JTPA funds are not used.
Guidance on the Issue of Duplicate and Overlapping Payments Among
Federal, State, and Local Programs, Including Pell Grants
Section 627.220 clarifies the interpretation of sections 107(b) and
141(b) of the Act. This section also highlights the importance of
coordination with programs under title IV of the Higher Education Act
of 1965, as amended (HEA), in view of the new coordination provisions
at sections 205 and 265 of the Act, which require SDA's to enhance the
provision of services through coordination with other programs.
The purpose of coordination requirements is to preclude duplicate
or overlapping payments among Federal, State, and local programs to
participants and training institutions and to ensure that the best mix
of programs and funds is available to the JTPA participant.
Accordingly, Sec. 627.220 assigns responsibility to the SDA's to
coordinate the sharing of information that affects JTPA-funded programs
with the school's financial aid officer, provides for contractual
safeguards to prevent duplication or overlap of services and funding
among programs, and emphasizes the requirement for assessing the JTPA
participant's financial needs and available resources as part of the
individual service strategy (ISS). These matters will also be addressed
through technical assistance and guidance jointly developed between DOL
and U.S. Department of Education officials in order to guide both
systems in the development of constructive working relationships.
Comments were submitted on a number of issues addressed in this
section. The issue of whether JTPA funds should pay for tuition or
supportive services in coordination with other payment programs was
raised by some who recommended that clearer instructions be provided.
The exact mix of funds should be determined according to the
availability of each funding source for either training costs or
supportive services, with the goal of making the program affordable and
enabling the participant to successfully complete it.
In addition, commenters were concerned about the complexity of
procedures needed to ensure compliance with sections 107(b) and 141(b)
of the Act. The Department agrees with the need to streamline
procedures. Accordingly, Sec. 627.220 is revised to reflect the
following changes: Sec. 627.220(b)(2) is deleted, and
Sec. 627.220(b)(1) now directs the SDA to assist the participant early
in the objective assessment, as appropriate, to establish eligibility
for HEA, title IV financial assistance programs. In addition,
Sec. 627.220(b)(4) now emphasizes that participants may, but are not
required to, apply for or access student loans or incur personal debt
as a condition of JTPA participation. While the use of student loans to
finance training or education is not prohibited and may be explored in
the assessment process, loans should only be used if the participant
agrees and is made fully aware of the responsibilities that the loan
entails. Participation in a JTPA program may not be conditioned on
applying for or using a loan. Finally, Sec. 627.220(b)(4) clarifies the
need for information sharing which must take place for any financial
aid awarded after the participant enrolls in an agreed-upon program.
The discussion of HEA student assistance programs in this provision
raised a concern that title II participants may be required to access
loans. The Department wishes to stress that this is not the case.
Section 627.220(b)(4) emphasizes the importance of matching the
participant with an affordable program. As a general consideration,
individuals should not be required to incur debts as a condition of
participating in JTPA programs. Indeed, better identification and
coordination of funding sources and improved evaluation of the
participant's ability to complete a program successfully as part of the
ISS should address the need for personal indebtedness to finance JTPA
participation. Thus, Sec. 627.220(a) should not be construed to mean
that loans must be considered resources for the purposes of this
regulation.
The reason for including HEA, title IV student loans in the
information-sharing requirements is that in the past, some JTPA
participants have been required or encouraged to take out loans to pay
for their training without the knowledge of the SDA's. However, the new
requirements for objective assessments and developing ISS's for
participants mean that SDA's must take responsibility for evaluating
and documenting the participant's financial needs and coordinated
ability to pay for an agreed-upon training program before he/she
enrolls in the program.
In fact, several commenters stressed the importance of evaluating
all potential HEA funding sources as part of the development of the ISS
and that these funding sources be identified and applied for while the
ISS is being developed. See Sec. 627.220(b)(2).
Since federal Pell Grant eligibility can be established before a
student enrolls and a Pell Grant can be used at any participating
institution that an eligible student attends, SDA's and SSG's should
expedite the application process by providing application forms to
individuals and providing assistance, as necessary, in filling out and
submitting these forms. Although a few commenters were concerned that
undue delays in the provision of services might result, it is important
to note that Pell Grant eligibility guidelines are readily available,
as is the application form for establishing eligibility, and the
financial information required to complete the application is already
required to ascertain eligibility for JTPA programs. Furthermore, the
Department of Education makes funds available to participating schools
before the start of the school year to pay eligible students. These
funds can be accessed as soon as eligibility is documented, the cost of
attendance (COA) is calculated, and enrollment occurs. Although a few
commenters suggested that establishing Pell Grant eligibility might
represent an administrative burden, the sequence described herein in
fact streamlines the funding decision process for the JTPA delivery
system and permits coordination of funding sources in the context of
the ISS.
A number of comments questioned a perceived inconsistency between
Department of Education and Department of Labor guidance on whether HEA
title IV or JTPA funds must be used first. The Department does not
think there is any conflict with Department of Education regulations
with regard to coordinating with JTPA funding decisions for tuition
payments because of the flexibility in the use of the Pell Grant for
tuition or other education related expenses. These JTPA regulations
only require that, when a Pell Grant is awarded to a JTPA participant,
JTPA funds cannot be expended on costs that already have been paid by
federal Pell Grant funds.
One commenter questioned the need for including the participant's
agreement to the disposition of the Pell Grant in the contract with the
school, since it is understood that the participant will sign off on
the ISS, which includes information to be shared. Another commenter
raised the issue of the Privacy Act as a reason why schools may not
share information regarding JTPA participants with SDA's. To clarify
the issue of participant agreement, the final rule includes the
participant's agreement to the information-sharing process in
Sec. 627.220(c).
Strengthening monitoring provisions was the concern of a few
commenters, who stated that requiring the school's financial aid
officer to share financial information on JTPA participants with the
SDA is key to following up on the participant's ISS and to coordinating
JTPA funds with other sources of funding. The Department carefully
considered comments which called for reduced coordination requirements
but believes that information sharing agreements are necessary to
ensure compliance with this section; however, the separate sharing of
students' names may not be necessary since JTPA agreements with
training institutions will include the names of participants for whom
payments to the school are being made. Therefore, this requirement is
removed from the final rule.
Several commenters reported that schools are holding JTPA
participants personally liable for payments withheld in accordance with
the terms of performance-based contracts. Performance-based contracts
(or any other agreements with service providers) must prohibit schools
from holding the student liable for outstanding charges. Otherwise, the
performance-based contract would be undercut because the incentive for
the school to perform would be removed. This practice is prohibited by
the U.S. Department of Education as described in the Federal Student
Financial Aid Handbook, Pell Grant Section. Therefore, JTPA program
operators should be aware that the use of certain contracting methods,
particularly contracts for classroom-sized projects and fixed unit
price, performance-based contracts, affects how educational
institutions are permitted to calculate the COA, which determines the
amount of the participant's Pell Grant. An institution can include a
tuition and fee charge for calculating the federal Pell Grant COA only
when contracts or agreements specify the tuition and fees (i.e.,
individual referrals), when there is a charge recorded to the student
(when JTPA or another source pays the tuition and fee charge and the
student would be required to pay these charges if they were not paid by
JTPA or another source). Two types of JTPA agreements do not allow
schools to include tuition and fees in the Pell COA or to make a charge
to the student for these costs: (1) Blanket agreements that do not
specify an individual amount to be paid by the SDA for tuition and fees
but may include a number of students to be trained and an amount of
compensation to be paid to the school; and (2) performance-based
contracts (to the extent they are still used).
Employment Generating, Economic Development, and Other Activities
Section 141(q) of the Act prohibits employment generating
activities (EGA) with JTPA funds. Included in the prohibition are
economic development activities, revolving loan funds, capitalization
of businesses, contract bidding resource centers, and similar
activities.
Section 627.225(b) encourages SDA staff to work with economic
development agencies and to participate on economic development boards
and commissions to provide information about JTPA. Such participation
may assist SDA staff in making informed decisions about community job
training needs and the future direction of local JTPA training. In
addition, the prohibition of EGA should not be taken to prohibit
ordinary employer outreach and job development activities.
Section 141(q) of the Act also includes a prohibition on foreign
travel. A number of comments were received requesting that the
prohibition in the interim final regulations on using title I, II, or
III funds for foreign travel be narrowed. While the Department agrees
that allowing foreign travel would be beneficial with the
implementation of NAFTA, it was clearly the intent of the Act to
restrict the use of funds for economic development and related
activities. However, other foreign travel necessary to the conduct of
JTPA program may be allowable; therefore, Sec. 627.225(a) is revised to
clarify that the prohibition on foreign travel applies to economic
development and related activities prohibited by the Act.
A commenter was concerned that a prohibition on foreign travel
would prohibit staff from Territorial or Freely Associated States
recipients, such as American Samoa and Micronesia, from traveling to a
State. While the narrower interpretation of prohibited foreign travel
described above should resolve this, the Department wants to clarify
that, under section 4(22), such recipients are considered States for
JTPA purposes and as such, inter-recipient travel would not be
considered foreign travel.
Several commenters requested clarification about what cost
categories the remaining allowable EGA should be charged. To clarify,
there are no allowable employment generating activities available under
JTPA. The allowable activities discussed in this section are otherwise
authorized activities and should be charged to the category of benefit
determined with guidance provided by the Governor.
Displacement
The provisions in the regulations have not been substantially
changed from the prior Sec. 629.4 and closely reflect the provisions of
section 143(b) of the Act. No comments were made on this section and no
changes are made.
General Program Requirements
Section 627.235 of the interim final rule sets forth some general
program requirements for the JTPA program, including specific reference
to the provisions of sections 141, 142, and 143 of the Act, reference
to the selective service requirements of the Act, continuation of the
requirement for timely enrollment, and the new requirements of section
124 of the Act regarding the imposition of State and SDA requirements.
A few commenters suggested setting forth extensive procedures
regarding the appropriate consultation and concurrence of organized
labor. The Department believes that the provisions of the Act, though
somewhat revised, are clear and that in most instances SDA's and others
have developed procedures for ensuring that labor is consulted, as
appropriate, in the development of training programs, and that the
affected labor organization concurs in writing with training agreements
when there is a collective bargaining agreement, even if it is not
impaired. In the years since the inception of JTPA, this has not
systematically emerged as an issue. Accordingly, the final rule is not
changed.
One commenter suggested that the only aliens who should be eligible
for JTPA participation are permanent resident aliens. The commenter's
reasoning is that to serve other aliens in the United States on a
temporary basis would waste scarce JTPA resources. The
nondiscrimination provisions of section 167 of the Act set forth the
requirements for the participation of individuals who may not be
citizens of the United States, including those who are not permanent
resident aliens. The final rule is not changed.
A commenter suggested that this section be revised to indicate that
JTPA is not an entitlement program. The Department believes that the
provisions of sections 204(c)(5), 264(d)(6) of the Act and Sec. 628.525
of the interim final rule adequately address this subject by making it
clear that neither eligibility nor participation in a JTPA program
creates an entitlement to services. The final rule is not changed.
Several commenters requested clarification of when the ``45-day
clock'' in paragraph (c) begins for purposes of enrollment into JTPA,
particularly in light of the new program requirements for targeting and
assessment. The Department agrees that such guidance would be helpful
and the final rule is changed to indicate that the clock begins with
the date of eligibility determination.
In connection with the requirements of paragraph (e), some
commenters questioned the method for determining whether a requirement
which is a rule, regulation, policy, or performance standard is imposed
by a State or an SDA. This question is raised particularly when the Act
or these regulations may require the Governor or SDA to develop such a
requirement. In general, any requirement that is issued beyond the
actual text of the Act or these regulations should be identified to the
source (State or SDA) that issues it. This guidance applies only to
requirements that are not specifically called for (i.e., ``the Governor
shall'' or ``the SDA shall'') by the Act or these regulations. Note
that, for these purposes, the term SDA as used here includes any entity
empowered to act for the SDA including the grant recipient,
administrative entity or the private industry council. See also the
discussion of Sec. 627.200 above. The final rule is changed to indicate
that it applies to State and SDA requirements that are in addition to
those of the Act and regulations.
On-the-Job Training (OJT)
Section 627.240 of the interim final regulations sets out
requirements pertaining to the on-the-job training (OJT) activity
authorized at sections 204(b), 253(a), 314(d) and in title IV of the
Act. The interim final regulations dealt with a few broad areas related
to OJT, such as the duration of OJT, OJT payments, contracts for OJT,
employer and participant eligibility, as well as a definition of OJT.
Many of the commenters observed that the requirements for OJT have
become so burdensome as to make OJT no longer a viable JTPA training
option. The 1992 Amendments made a number of changes in the
requirements for OJT programs which are implemented in these
regulations. These changes were aimed at eliminating perceived abuses
in OJT programs. While it is true that these new requirements do limit
some flexibility in operating OJT programs, the Department does not
agree that the new requirements in any way make OJT a less desirable or
feasible training option. Indeed, the Department believes that OJT is
an important training vehicle for the JTPA program. As demonstrated by
The National JTPA Study (December 1994) , OJT provided ``the most
consistent positive program impacts on the earnings of adults * * *.
Both women and men in this subgroup enjoyed large positive earnings
gains that were statistically significant and sustained throughout the
30-month follow-up period.'' The Department believes that entities
which deliver OJT will find that these final regulations set forth only
those requirements which are necessary to preserve the integrity of the
OJT activity and to ensure that it remains an effective training tool.
With regard to the definition of OJT in paragraph (a), it is
essential to recognize that by using OJT, the JTPA system is purchasing
occupational training needed by a participant--often training not
elsewhere available, which is provided through employment that will
usually continue with the employer after the training is completed.
(Note the provisions of paragraph (a)(2) of the final rule regarding
placement of OJT participants with other employers). The objective of
OJT is not, as suggested by some commenters, to subsidize wages or to
reduce an employer's wage costs, but to purchase training and to
provide an opportunity for JTPA participants that they might not
otherwise have. The contents of paragraph (a) are reorganized into
three subordinate paragraphs for better clarity. Language is added in a
new paragraph (a)(1) to clarify the definition of OJT by: (1) Making
reference to the ISS as part of the process for determining whether an
individual should be offered OJT, (2) making specific reference to the
OJT agreement, and (3) making specific reference to the principle that
the purpose of the OJT arrangement is to purchase training in exchange
for reimbursement of the employer's extraordinary costs.
By far the most prevalent comment on the interim final rule was
that the Department needed to clarify the provisions relating to the
limitations on the duration of OJT which were contained in paragraph
(b) of the interim final rule. The final rule clarifies the durational
rules for OJT. The basic rule is that OJT is to be for the length of
time normally needed for training to acquire the skills needed to
perform the occupation up to a 6-month length of training. OJT may not
exceed that 6 month maximum training period except in cases in which
the training is less than full time and the training period will exceed
6 calendar months. In that case, OJT may not exceed 500 hours. To more
clearly convey these rules, paragraph (b)(1) is broken into four
subordinate paragraphs. Paragraph (b) is also reordered for greater
clarity. Six months of training is defined as the amount of time an
employee would work on a regular or full-time basis in the occupation
for which the OJT contract is written in a 6 month period. If the
training period is shorter, the training time is still considered to be
the amount of time an employee would work on a regular or full-time
basis for that period.
Commenters observed that OJT contracts were usually written in
terms of hours and wondered how this related to the 6-month limitation.
The Department wishes to promote local discretion in developing OJT
contracts; therefore, the regulations do not prescribe a particular
time category by which SDA's designate the 6-month period, so long as
the designation is consistent with the purpose of the statutory
limitation. For example, the 6-month training period may be expressed
in the number of hours (usually not more than 1,040 working hours),
days (180 days), or weeks (26 weeks in 6 months) that an individual
would work full-time in a 6-month period. Contracts for OJT which are
expressed in any of these ways will be acceptable. In simplest terms,
an OJT employee who enters employment on May 1 and works continuously
on a full-time basis on the OJT occupation would complete 6 months of
training on October 31. Whatever time category the SDA chooses to use
to designate the duration of the OJT contract, it should treat any
adjustments (such as those provided for in the discussion below) in the
same terms, so if there is an adjustment for illness to a contract
written in working hours, the adjustment will be made in working hours,
not weeks or days.
If the OJT period is interrupted for a full day or more by events
beyond the OJT trainee's or the employer's control, such as holidays,
illness, plant downtime, or strike, such time may be added to the
original period. Thus, using the time period of the above example, if
an OJT participant is in OJT to learn a machine operation but is ill
for 10 working days (approximately 80 working hours, two working weeks,
or one-half of a working month) the OJT period may end approximately
November 11 through November 15 (instead of October 31) depending on
how duration is designated in the contract. (The employer would not be
reimbursed for the period in which the participant is not in the OJT
occupation.) The objective of this rule is to assure that the
participant receives the full period of training (up to 6 months) in
the occupation for which the OJT contract is written. This rule, of
course, applies only to time that a participant was scheduled to spend
in the actual OJT activity. It does not apply to any of the
participant's other activities, either in training or outside of their
OJT employment.
Several commenters expressed the concern that the regulations were
too prescriptive in requiring OJT in higher skilled occupations. The
language of Sec. 627.240(b)(2) of the interim final rule was merely
intended to encourage the use of OJT in higher skilled occupations.
Language is added to the redesignated Sec. 627.240(b)(5) to make this
clear. Other commenters were concerned that the 6-month limitation was
inconsistent with providing training in very high skilled occupations.
The Department agrees that there are some higher skilled occupations
for which OJT training may not be available because of the 6-month
limitation. Nevertheless, that limitation is statutory and cannot be
ignored. The Department believes that there are still a number of
higher skilled occupations for which OJT is appropriate and that it is
consistent with both the nature of OJT and with the intent of the Act
that States and SDA's seek to use OJT to provide training in those
kinds of occupations. Therefore, the language encouraging OJT in higher
skilled occupations remains in the final regulation. The Department
wishes to acknowledge several comments by noting that, while it
encourages OJT in high-skilled occupations, this is not a strict
requirement. Also, while OJT contracts may recognize training times
that are longer than 6 months, JTPA reimbursement to the employer is
limited to 6 training months.
A number of commenters wanted to know how the 500 hour exception to
the 6-month limitation works. First of all, it should be repeated that
the overall limitation on the duration of OJT is 6 months, not 500
hours. This exception will apply in only a limited number of
situations, such as in the cases of individuals who are disabled, who
have limited employment availability due to child-care or other needs,
or who must work a limited or part-time schedule. The final rule makes
it clear that individuals who have not received 500 hours of OJT within
6 months may receive 499 hours of OJT, even if this results in OJT in
excess of the 6-month duration. The 499 hour figure is used because it
reflects the ``less than 500 hours'' language contained in the Act. For
example, if an individual works for 15 hours a week and 6 months later
has only been in training for about 360 hours (roughly 60 hours a month
for 6 months), the participant could be continued in OJT for up to
another 139 hours. The objective is to assure that participants who
must work limited or part-time schedules receive up to 499 hours of
OJT, in situations when up to 499 hours of training is appropriate.
In response to a comment that the interim final rule unnecessarily
requires that the regular training duration provided for in a standard
reference be reflected in the participant's ISS, the final rule
provides that the training time for OJT must be reflected in the ISS
only when the training time varies from the average training time for
the occupation, using the methodology adopted for computing training
time. Thus, when greater or lesser OJT periods than those provided in
standard reference works are necessary, the variation must be reflected
in the participant's ISS.
Several commenters noted that the language in paragraph (c)(1) of
the interim final rule regarding employer payments is more restrictive
than the provisions in the Act. In response to these comments, the
final rule is revised to use the language of the Act, which provides
that payments shall not average more than 50 percent of the wages paid
by the employer to such participants. This change provides the SDA with
some flexibility in structuring OJT contracts with an individual
employer for multiple participants. Compliance with the statutory
requirement is based upon the total allowable wage base (i.e., regular
wages and scheduled increases reflected in the contract) for all JTPA
participants. Additionally, in response to comments which questioned
the wage basis for OJT reimbursement, the final rule clarifies in
paragraph (c)(2)(ii), that OJT reimbursement may be based upon regular
pay and scheduled increases, and not, as provided in paragraph
(c)(2)(iii), on overtime, shift differential or other premium pay. The
Department believes that regular pay and regular scheduled pay
increases reflect the wages specified in the Act and that overtime and
shift differential do not imply a greater level of training cost to the
employer. Finally, to clarify a longstanding issue in regard to OJT,
paragraph (c)(2)(iv) indicates that payments are not to be based on
time when the participant is not in training such as on holidays. Such
time may also be excluded from the calculation of the duration of OJT.
Section 141(g)(1) of the Act provides that payments to employers
``are deemed to be'' in compensation for the extraordinary costs
associated with training JTPA participants. Section 141(g)(3)(A) of the
Act provides that each contract ``specify the types and duration of on-
the-job training and other services to be provided in sufficient detail
to allow for a fair analysis of the reasonableness of proposed costs *
* *.'' This latter requirement was reflected in the interim final rule.
Some commenters raised a question about the apparent conflict between
these provisions, and the Department wishes to clarify this area. The
final rule prohibits the imposition of a requirement on employers to
document extraordinary costs. The Department believes that payments to
employers should not produce a recordkeeping burden on employers by
requiring the documentation of extraordinary costs that would
unnecessarily make OJT a less desirable training option.
The purpose of Sec. 627.240(d)(1) of the interim final rule was to
reflect the requirements of section 141(g)(3) of the Act. It was not
intended to require specific documentation of an employer's
extraordinary costs. The Department views the final rule as requiring
no more recordkeeping of an employer than is already required of the
employer for other purposes, (e.g., an employer would have to maintain
payroll records to demonstrate that a participant worked the number of
hours that were billed, but payroll records are already required to be
kept for a variety of other federal and state purposes). Rather, the
Department believes that the intent of this requirement is that the
contract accurately reflect the basis for the contract costs, including
the number of participants, occupations, wage rates, training content
and the duration of training, provisions for adjustment (such as
scheduled wage increases), and the basis for any other payments (such
as separately scheduled classroom training as described in paragraph
(d)(4) of this section).
The final rule is revised to clarify this requirement by removing
the confusing language regarding the analysis of the reasonableness of
costs and by reflecting the minimum criteria that will be necessary to
make the reasonableness analysis.
Several commenters thought that the requirements in paragraph
(d)(2) that the OJT agreement provide information on the training by
skill area or task was too prescriptive. These requirements have been
removed in the final rule.
In addition, in response to a comment seeking clarification of the
meaning of ``types'' of OJT, this language is removed in the final rule
to eliminate confusion. The idea behind this language was simply to
capture other kinds of training, such as classroom training, that will
be provided in the course of the OJT training period. The more specific
language in the final rule will capture the same information. Finally,
this discussion does not affect the requirements for broker contracts
in which there is to be an adequate reflection of the work performed by
the broker.
Section 627.240(f) of the final rule provides that JTPA
participants must be assessed and that OJT must be determined in the
ISS to be a suitable training vehicle. This provision is also
applicable if the participant is referred to JTPA by an employer. If
the participant is determined not to be suitable for OJT or for the OJT
slot available from the specific employer, the participant is not
eligible for OJT with that employer.
A commenter sought clarification of Sec. 627.240(f)(3) regarding
OJT with a participant's previous employer, particularly in connection
with ``upgrading''. This paragraph is intended to address a perceived
abuse of the OJT activity in which the JTPA program provides OJT
assistance to an employer to ``train'' a previous employee who had been
laid off or separated when the proposed participant already has the
skills required for the job. The training is in the same occupation for
virtually or nearly the same work. In view of the limited availability
of JTPA funds and services, individuals previously employed by or
recently hired by the employer prior to referral to JTPA should not
normally be enrolled in JTPA-funded OJT. In order to conduct skill
``upgrading'', which is allowable under section 204(b)(1)(L) of the
Act, and retraining, conditions for eligibility and participation must
be met and there must be a demonstrable difference between the job and
skill requirements of the upgraded job into which the participant is
being trained and those of the current or prior job. The prohibition
against using OJT for ``upgrading'' with the participant's employer is
maintained in the final rule because the Department believes that the
JTPA program should not unnecessarily subsidize an employer's normal
workforce training expenses. Paragraph (f)(3) is revised to eliminate
confusion about whether the rule was intended to address the
participant's previous employer or the participant's current employer.
The final rule makes it clear that the prohibition applies to both and
that it applies only to OJT.
Many commenters questioned the specific provisions of
Sec. 627.240(g)(1) of the interim final regulations which require that
an OJT ``employer who had two or more previous OJT contracts'' and
exhibited a pattern of failing to provide long term employment would be
ineligible for other OJT contracts. They pointed out that it is not
possible to establish a ``pattern'' with two cases. In response to
these comments, the final rule is revised to reflect Congress' intent
that employers who fail to offer continued employment, unless there is
an acceptable reason, should not receive additional OJT contracts and
that the State must issue procedures to implement this requirement. The
JTPA program should not be used to underwrite an employer's labor
turnover. The Department points out that the provision in the interim
final rule specified two contracts because, by definition, to have a
pattern there must be more than one. The Department accepts that there
may be instances in which a policy may use as few as two contracts, or
more than two, to establish a pattern and will accept reasonable
interpretations of what constitutes a pattern. The Department chooses
not to specify what constitutes a pattern and leaves that decision to
the State. In the final rule, Sec. 627.240(g) is redesignated
Sec. 627.240(h).
A number of commenters objected to the provisions in the interim
final rule that required on-site monitoring of each OJT contract and
on-site monitoring by an OJT brokering contractor before making
payments. The Department acknowledges these concerns and revises these
monitoring requirements. The final rule removes the prescriptive
requirements for monitoring each contract and specifies that recipients
and subrecipients are required to conduct periodic on-site monitoring
of OJT employers. The requirements pertaining to the areas to be
verified through monitoring remain the same. In addition, the
monitoring requirements for brokering OJT contractors remain the same
since they are requirements of the Act.
In response to several comments which argued in favor of providing
OJT through employment agencies, the final rule also provides a
clarification of the conditions under which employment agencies and
employee leasing agencies may be eligible for OJT agreements. The
purpose of OJT is to provide training through an employer, not to
subsidize wages or reduce agency costs. Thus, the final rule indicates
that OJT agreements with employment and employee leasing agencies are
to specify the employer that provides the training and the entity to be
reimbursed the costs of training. Note that the word ``temporary'' is
deleted from the rule since the term ``employment agency'' includes
agencies that may arrange employment on less than a full-time basis.
Work Experience
The provisions of Sec. 627.245 of the interim final rule set forth
requirements pertaining to work experience. The work experience
activity is related to other activities in which there is work-based
training, such as entry employment experience and limited internships,
but the activities may differ due to the circumstances of the work
experience assignment. Such circumstances could include whether the
participant is an adult or a youth, whether the host employer is
public, private non-profit, or private for-profit, whether an employer-
employee relationship is established, and whether there is an
expectation of continued employment, or whether the activity is a
short-term training opportunity. For example, entry employment
experience and limited internship in the private sector are not
allowable activities for adults. ``Work experience'' is available only
in the public or private non-profit sector. The Department acknowledges
the relationship among these activities but chooses not to provide
specific definitions beyond that for work experience so as not to
arbitrarily limit development of types of work-based training
activities. The Department wishes to encourage a variety of approaches
to these activities. For that reason, Sec. 627.245(a) is revised by
deleting the reference to limited internships and entry employment
experience.
The definition of work experience clarifies that work experience is
primarily a training, not an employment, assignment. The words
``employing agency'' are removed from the interim final rule to address
the concern that work experience automatically establishes an
employment relationship.
A few commenters noted that the provisions of paragraph (b) of the
interim final rule that dealt with the types of individuals for which
work experience would be ``suitable'' did not adequately reflect the
circumstances under which it would be appropriate to use work
experience. The final rule is revised to delete this characterization
of the individuals for whom work experience is appropriate. The
paragraph now only states how work experience is to be designed.
In response to comments criticizing the limitations on the duration
of work experience, entry employment experience, and limited
internships, the Department has decided to remove the limitations. The
Department believes that this change will permit the development of
activities that may better meet the individual needs of participants
and the final rule indicates that this should be reflected in the ISS.
The Department expects that discrete periods of work experience
participation will be limited in duration; although, in response to
comments and in recognition of successful program models, the
Department acknowledges that an individual may benefit from
participation in multiple work experience opportunities.
Many commenters asked for removal or revision of the provision that
work experience is suitable for individuals who have been ``out of the
labor force for an extended period of time * * *.'' They pointed out
that this is difficult to interpret, may vary depending on the previous
experience and other characteristics of the participant, and is the
kind of provision that could unnecessarily lead to varying
interpretations and audit exceptions. The final regulations provide
only that work experience should promote the development of good work
habits and basic work skills. In addition, it is the Department's
belief that the work experience activity provides an excellent
opportunity to provide non-traditional employment opportunities, in a
variety of settings, for women and youth.
Several commenters suggested that the prohibition of work
experience in title III be removed or revised. Since title III
dislocated workers generally have, by definition, previous employment
under which work habits and basic work skills are developed, the
provision in the interim final rule is not revised.
Finally, a few commenters asked for clarification of the
requirement that work experience be combined with basic or occupational
skills training--particularly in light of one of the examples provided
in Sec. 628.535. This is addressed in the discussion of Sec. 628.535,
but by way of general guidance, the prohibition may not be addressed by
combining work experience with any of the other proscribed stand-alone
activities such as job search or job club.
Subpart C--Payments, Supportive Services, Benefits, and Working
Conditions
A number of comments were received on Subpart C of the interim
final rule, Payments, Benefits and Working Conditions. The Department
has rethought its positions in response to these comments and the final
rule contains a considerable number of changes. Subpart C is revised,
retitled, and renumbered. The following discussion is intended to
clarify the Department's position on payments and supportive services
and identifies the changes from the interim final to the final
regulations. In keeping with the Amendments' emphasis on targeting
services to the hardest-to-serve and the need for longer-term
interventions, these regulations clarify the widened array of payments,
supportive services, benefits and working conditions available or
required under the Amendments.
The Amendments provide for comprehensive supportive services and
for their allocation to the training-related and supportive service
cost category. The regulations implement these provisions and also
provide for clarification of the various types of payments for title II
programs. Some payments can be allocated to the training-related and
supportive services cost category while others can be allocated to the
training cost category. The treatment of specific expenditures is
provided for at Sec. 627.440 of these regulations.
Service Strategy Overview
A number of commenters expressed confusion regarding appropriate
documentation procedures and requested clarification on the
requirements and the mechanisms for providing payments and supportive
services to participants. Several commenters suggested that while the
legislation clearly intended to increase supportive services and
payments, the requirements in the interim final regulations would
probably limit their usage. In response, the final rule is revised to
minimize the amount of documentation necessary to establish an
individual's need for supportive services and payments while
maintaining the necessary safeguards to prevent misuse of program
funds.
The final rule is revised to permit a simplified service strategy.
For example, under title II, it is intended that a participant, based
upon the needs identified in the objective assessment and recorded in
the ISS, will be provided or the program will arrange for the necessary
payments and supportive services to enable the participant to meet the
goals set out in the ISS. The necessary payments and supportive
services may be provided or paid for in different ways. For example,
participants may receive a payment from a training activity, such as an
employer-paid wage for OJT, or work-based training payment for work
experience which may be counted toward meeting their needs in addition
to other supportive services like child care. Participants may also
receive supportive services, such as financial assistance under title
II that will provide for the participant's general welfare. If the
participant has additional specific needs not met by the supportive
services, including a need for financial assistance, title II further
provides for an individually determined needs-based payment may be made
to the participant.
The final regulation provides for significantly different
documentation requirements than did the interim final rule. An
individual determination of need, over and above what normally occurs
in the objective assessment and ISS, is not required to justify the
provision of any supportive service. When a participant is given money
rather than a voucher for a supportive service, SDA's and SSG's need
not ensure that the payment is exactly equal to the participant's
expenditure. The policy of the SDA or SSG may allow for a fixed
reimbursement or a schedule of different reimbursement amounts for a
type of service, however, the policy must provide the rationale for
such amounts. Under title II, if the objective assessment and the ISS
indicate that a needs-based payment is also necessary, then that
determination will be sufficient to make the payment. A payment may
then be made in accordance with a locally developed policy and recorded
in the ISS along with the other services provided. Changes to reflect
this strategy are made throughout Secs. 627.305 and 627.310 of the
final rule.
Shifting to more specific recommendations, in response to comments
that the supportive services section be separated from the benefits and
working conditions section, the supportive services regulations are now
found under Sec. 627.310, while benefits and working conditions are now
addressed under a new Sec. 627.315. Section 627.300 and the title of
subpart C are also amended to clarify these changes.
A comment was received regarding the ability to ensure that
services were provided equitably. This concern is heightened with the
reduction in documentation required when providing supportive services
and payments. Therefore, a new provision is added at
Secs. 627.305(a)(3) and 627.310(d) requiring that SDA's ensure, to the
extent possible, that similarly situated participants receive similar
payments or supportive services, as appropriate.
Payments
A few commenters requested clarification on when payments shall
count towards the determination of income for other programs that serve
JTPA participants. To clarify, language from section 142(b) of the Act
is now included in Sec. 627.305(a)(4). Any payment under JTPA, broadly
defined for this section as any JTPA funds received by a participant
except OJT wages (since OJT wages are paid by an employer), shall not
be counted for purposes of determining income for other Federal or
federally assisted programs, except as provided under the Social
Security Act. For example, the Department of Housing and Urban
Development has issued a policy notice (PIH 92-48, October 16, 1992)
which states, ``[A]ll payments received under programs funded in whole
or part under the Job Training Partnership Act are excluded from Annual
Income'' for purposes of Public and Indian Housing. The major exception
to disregarding JTPA income is under title IV-A of the Social Security
Act which governs Aid to Families with Dependent Children (AFDC). The
AFDC regulations do allow States flexibility in allowing a dependent
child's JTPA income to be disregarded as income for AFDC purposes (45
CFR 233.20(a)(11)), but generally, any JTPA payment to an adult AFDC
recipient, except to cover the cost of child care, transportation,
work-related expenses or work-related services, is counted as earned
income. States are encouraged to work with their welfare departments in
developing State policies specifically for JTPA. SDA's also are
encouraged to coordinate with their local AFDC agency to determine
local policies on income disregards and to consider co-enrollment with
JOBS, where appropriate, so that the participant may be aware of all
available services.
Section 627.305(a) is revised to include a new paragraph (a)(6)
which authorizes SDA's to set fixed levels for payments. Section
627.305(b) is amended by replacing the words ``formula or procedure''
with the word ``policy''. These changes permit SDA's to make needs-
related payments based on a payment schedule without any other
documentation than that used to develop or support the schedule. Only
in cases in which a participant's needs exceed the payments available
under the payment schedule is any other documentation or justification
necessary. The change in the wording of Sec. 627.305(b) also is
intended to make it clear that there are no extraordinary documentation
requirements to support the SDA's system for payments above its payment
schedule. All that is needed is a reasonable policy based on the
circumstances of the local community.
Needs-based payments. Needs-based payments may be made in
circumstances where fixed or scheduled supportive services fail to meet
the needs of an individual to participate. For example, if a standard
transportation reimbursement is $2 a day for participants, but a
particular participant must spend $10 a day to commute to a training
program, this need would be identified in the objective assessment and
recorded in the ISS. Then a needs-based payment of $8 could be made to
meet that participant's transportation needs. No additional
documentation other than the transportation need identified in the
objective assessment and recorded in the ISS is required for the
initial $2. However, a specific notation of the additional need would
be identified in the objective assessment and recorded in the ISS for
the $8 needs-based payment. While this payment should be the amount
``necessary for participation,'' it also may be a scheduled or fixed
amount (see the discussion of supportive services, below, for an
additional discussion on ``scheduled'' or ``fixed amount''), as
provided for in the SDA policy.
Incentive and bonus payments. A number of comments were received
requesting that the ability to use incentive and bonus payments not be
limited to title II-C. Several commenters indicated they would prefer
to use incentive and bonus payments rather than a wage or training
payment to encourage participant performance. Since it is important to
have tools to reward participant accomplishment, and incentive and
bonus payments are not prohibited in those titles, the final rule is
amended to clarify that incentive and bonus payments also may be made
to participants under titles II-A and II-B.
Approximately equal numbers of comments were received requesting
that Sec. 627.305(c) require that incentive and bonus payments be based
upon attendance and performance as there were comments requesting
attendance or performance. Several commenters thought that teaching
life skills, such as good attendance, is an appropriate function of
JTPA and should be rewardable. Because section 264(c)(2)(D) of the Act
uses the word ``and'', the final regulation is revised to reflect the
statutory language. Payments are to be reasonable and commensurate with
the behavior being rewarded. The policy for such a payment is to be
included in the SDA job training plan, which is approved by the
Governor. The provisions of paragraph (c) are amended in the final rule
by removing paragraphs (c) (2) through (4), to reflect the
simplification of this topic.
Training payments. To permit longer term participation,
Sec. 627.305(d) provides for training payments to be paid for certain
title II activities, such as work experience and limited internships.
Section 627.305(e) provides for training payments for participation in
other activities, such as classroom training, if the concurrent work-
related activity is for more than 50 percent of the training time.
Several commenters indicated that the work-based training
requirement for adults in classroom training combined with work
experience at interim final Sec. 627.305(e)(2) may not always be
appropriate and was redundant with regard to the requirements of
section 204(c)(1) of the Act on workplace context and integration.
Therefore, the Department encourages SDA's to link classroom training
to the work-based training activity, but the condition for making such
payments to adults that the classroom training have a workplace context
is removed.
The term ``wage'' is replaced with ``training payment'' or
``training payment for combined activity'' to reflect the rare
circumstances when a participant may not be in an employee-employer
relationship as defined by the Internal Revenue Service, and also to
make clear that the SDA may not be required to make a payment equal to
the minimum wage. The minimum wage requirement still exists where
participants are receiving wages as outlined in section 142 of the Act.
The Department believes that payments in most work-based training
activities should be equal to or exceed the minimum wage to better
approximate a work setting. With the exclusion of on-the-job training
and disaster relief employment, this change from ``wage'' to
``payment'' runs through the entire payments section.
Supportive Services. Supportive services are often critical in
serving those most in need. The use of supportive services is
encouraged to enable the hard-to-serve population to participate in
longer term interventions. The objective assessment and, under title
II, the ISS, is the basis for determination of need for a particular
supportive service. The major change in Sec. 627.310 is that further
documentation of need is not required. Supportive services may be
provided in-kind, through cash assistance, or by arrangement with
another human service agency when necessary to enable an individual
eligible for JTPA training, but who cannot afford to pay for such
services, to participate in JTPA-assisted programs. Several commenters
indicated that the administrative determination and documentation of
participants' actual cost, for example, of lunch or transportation, was
unduly burdensome. Given the generally narrow variance in cost for
those services, most stated that a single dollar amount, or a schedule
of dollar amounts, would be equally prudent. The Department agrees that
such a method is acceptable and should be outlined in the supportive
services policy of the SDA or SSG. To reduce its administrative burden,
an SDA or SSG may set fixed levels of benefit for particular supportive
services; e.g., an SDA or SSG may reimburse participants who incurred
transportation expenses with identical payments, regardless of actual
cost to an individual participant, even though some participants may
receive a payment above their actual cost and others may be underpaid.
Section 627.310(a) sets forth the parameters for the provision of
supportive services. The preamble to the interim final rule noted that
``limited supportive services'' were permitted for applicants. A few
commenters requested that this be stated in the regulations. This
provision can now be found at Sec. 627.310(b). A comment was also
received requesting that the ``limited'' in limited supportive services
be defined. The Department declines to define ``limited''; rather, the
final rule is revised to indicate that such payments may be made to
provide the applicant with an opportunity to complete the application
process. The Department expects the restriction on the training-related
supportive services cost category to act as a natural control on SDA's
and SSG's while still permitting flexibility for local level decisions.
Section 627.310(g)(1) provides that supportive services may include
financial assistance under title II. In order to ensure a comprehensive
system of supportive services and payments, there have been changes to
the definition and allowable usage of financial assistance. Financial
assistance is intended for the purpose of general support typical of
stipends and allowances. A number of commenters indicated that
requiring additional documentation in order to receive any type of
financial support was redundant, particularly with JTPA's hard-to-serve
population. The Department agrees that participants pass through
significant income eligibility tests upon entering the program and that
additional eligibility checks are unnecessary, inefficient, and
discourage the provision of necessary services. Therefore, the final
regulations state, at Sec. 627.310(g)(2), that financial assistance may
be deemed to be necessary for eligible participants and, as a
supportive service, may be a fixed payment or based upon a schedule of
payments. The SDA shall include financial assistance in its policy on
supportive services.
Section 627.305(g) of the interim final rule dealing with needs-
related payments is redesignated Sec. 627.310(h) to reflect the
similarity of needs-related payments under title III with financial
assistance under title II. However, needs-related payments are the only
form of general ``cash'' assistance (excluding cash provided as a
reimbursement for transportation expenses, etc.) allowable under title
III.
A few commenters disagreed with the statement in the preamble to
the interim final rule that supportive services could not be based on a
group characteristic, such as welfare. In light of the other changes
made in the final rule, this statement is no longer applicable. In
developing the policy called for in the final rule, an SDA may use a
group characteristic as a basis for determining supportive service
needs. For example, under title II, a financial assistance payment to a
participant may be fixed, based upon an income schedule or group
characteristic (such as welfare recipient) identified in the objective
assessment and reported in the ISS, or may be determined in accordance
with another method determined by the SDA.
The regulations reflect the Department's intent that financial
assistance be treated as a supportive service for the general welfare
of the participant. This assistance is to be based upon the financial
needs of an eligible individual to permit the individual to participate
in training. With this basic premise, the Department intends that
financial assistance payments, in addition to not being considered as
income in accordance with section 142(b) of the Act, should not be
subject to income and employment taxes. However, all such decisions
need to be made on a case-by-case basis.
Benefits and Working Conditions. The provision of Sec. 627.310(b)-
(d) of the interim final rule are redesignated and revised as a new
Sec. 627.315. One commenter suggested that the regulations should not
require participants to work for employers that are violating labor
laws. In response, Sec. 627.315(a) is amended to reflect this concern
for compliance with applicable labor laws.
In addressing a number of other comments, redesignated
Sec. 627.315(b) (Sec. 627.310(b) of the interim final rule) is amended
to clarify that if a State workers' compensation law is not applicable,
recipients and subrecipients shall secure insurance coverage for
injuries suffered by participants in all JTPA work-related activities.
Subpart D--Administrative Standards
Grant Agreement and Funding. Section 627.405 establishes a new
annual grant agreement process to facilitate the obligation,
accounting, and closeout of JTPA funds by year of appropriation. No
specific comments were received on this section and comments generally
related to this section and other sections are responded to in other
sections of this Preamble. No changes are made to this section.
Reallotment and Reallocation. Section 627.410 implements the new
section 109 of the Act, which requires the Governor to reallocate,
among SDA's in the State, unobligated funds in excess of 15 percent of
any SDA's program year title II allocation.
A number of commenters responded on the provisions of this section.
Almost all of them recommended basing reallocations on obligations
rather than expenditures and questioned whether a State could adopt a
more restrictive reallocation policy based on expenditures. Most of the
other comments were requests that the regulations further clarify the
reallotment and reallocation provisions of the Act including an
interpretation of section 109(a)(3) of the Act concerning SDA's that
have the highest rates of unemployment for an extended period of time
and the highest poverty rates. One commenter pointed out a potential
conflict between the provisions of section 109 of the Act, which bases
reallocation on obligations, and section 161(b)(1) of the Act, which
ties reallocation to expenditures. Another commenter raised the issue
of whether Title II-B (summer) funds could be reallocated.
Given the legislative history of the statutory provision,
particularly the 1991 House Committee Report (H.R. Rep. No. 102-240, 63
and 64 (1991)), the Department believes that the intent of Congress was
to ensure effective, timely use of the funds. The Department previously
suggested that another interpretation, based upon the provisions of
section 161(b) of the Act, might permit a more rigorous standard, such
as expenditure. However, upon further review, the Department believes
that the language in the statute is clear in providing that the basis
for reallocation is to be the ``obligation'' of funds and the
Department now believes that an interpretation that is more restrictive
would be inconsistent with the Act. A new paragraph (a)(2) is added
that prohibits the Governor from imposing reallocation requirements
that are based on other than obligations. While it may be true, as some
commenters suggested, that basing reallocation solely on obligations
may lead to last minute obligations of funds which have little program
purpose simply to avoid reallocation, the Department is constrained by
the statutory language and cannot use that possibility as a basis for
varying from a clear statutory requirement.
In regard to further interpretation of section 109(a)(3) of the Act
concerning SDA's that have the highest rates of unemployment for an
extended period of time and the highest poverty rates, the Department
is not expanding on this criterion and is leaving the interpretation of
this section to each Governor, as provided in the Conference Committee
Report on the Amendments.
Insurance
A few commenters responded to the provisions of Sec. 627.415. A few
other commenters on Sec. 627.435, Allowable costs and cost principles,
suggested that Sec. 627.435 should include provisions for allowing the
costs of contributions to reserves for self-insurance to be
specifically allowed in that section.
After considering these comments, paragraph (c) of Sec. 627.415 of
the interim final rule is removed and the substance of the second
sentence concerning contributions to a reserve for a self-insurance
program is moved to Sec. 627.435(h). The first sentence of this
paragraph (c) basically repeated the provisions of Sec. 627.315(b),
Benefits and working conditions, and is, therefore, unnecessary in this
provision.
A few commenters were concerned about the scope of insurance
coverage required by the rule. Some asked whether the rule required
them to provide insurance coverage for work-related activities or for
all training. One thought that the regulation required ``no fault''
coverage that could be satisfied through an ordinary comprehensive
liability policy. Section 627.415 does not address the scope of
insurance coverage. Section 627.315(b) requires worker's compensation
or similar insurance coverage for work-related training activities.
States and SDA's/SSG's should provide such coverage as they deem
prudent and as are in accordance with their normal insurance
procedures, both in terms of the types of risks covered and the method
of coverage (self-insurance or purchase of insurance policies).
Procurement. Section 627.420 sets forth the procurement
requirements for titles I, II, and III of JTPA.
Some commenters thought that the procurement portion of the interim
final regulations is an example of overregulation, while others
believed that the regulations did not go far enough. In response to the
comments concerning overregulation, the Department notes that section
164(a)(3) of the Act requires the Secretary to take into consideration
the OMB circulars and that these regulations actually represent a
pared-down version of the OMB Circulars. As such, they represent less
federal regulation than is applied to other Federal grant programs. In
response to the comments concerning underregulation, the Department
does not agree. The requirements that are established should help
maximize competition, ensure fiscal accountability, and prevent fraud
and abuse in JTPA programs. The Department believes that the final
regulation represents a reasonable balance between providing guidance
on the issues on which the Secretary is required to set minimum
requirements under section 164(a)(3) of the Act and recognizing the
prerogatives of the Governors to develop their own procurement rules,
which also is recognized in that provision.
Although at the Federal level there are rules for when to use
contracts, grants and cooperative agreements, these rules are not
applicable to the JTPA. As a result, what one State calls a contract,
another State might call a grant. In order to avoid confusion in these
regulations, the following terms are being used: ``Award'' or
``agreement'' means a contract, grant, subcontract, subgrant or other
type of legal instrument; ``awardee'' means any one of the entities
receiving the award (e.g., contractors, grantees). There was concern
expressed over whether buying certain supplies, like floppy disks, at
office supply stores and other similar businesses constitutes an award.
Through these regulations, an upper limit for small purchases (which
can be lowered, but not raised, by the Governor's procurement
standards) is established. No further breakdowns are delineated in the
regulations. The Governor can, through the State procurement standards,
establish other thresholds for the purchasing of consumable materials
with credit cards and such, and not require a formalized award process
(e.g., competition or cost/price analysis) or document. As an example,
the current Federal ceiling is $2,500 per consumable item.
Section 627.420(a) reiterates the requirement established through
the Amendments that the Governor establish procurement standards to
ensure fiscal accountability and prevent fraud and abuse in JTPA
programs. This section further requires the State and local levels to
follow procurement policies and procedures used for non-Federal funds,
with some caveats, and reiterates the non-duplication requirement
contained in section 107(b) of the Act. A small number of commenters
were concerned that the requirement that the State and local levels
follow their own procurement policies and procedures used for non-
Federal funds would result in awards always being made to the lowest
bidder without other considerations, such as performance. State and
local rules are to be followed as long as they comply with the minimum
requirements of the procurement section. One of the requirements for
the selection of vendors and subrecipients (discussed below) is that
the awarding agency make a determination of demonstrated performance
prior to award. If, as a result of this determination, it is apparent
that the lowest bidder cannot perform the work at an acceptable level
of quality, SDA's should not make an award to that bidder.
A few commenters were concerned that the nonduplication requirement
of Sec. 627.420(a)(5) would make it difficult for SDA's to select
service providers. This requirement reflects the provisions of section
107(b) of the Act and is necessary to maximize the use of JTPA funds.
One of the initial steps in any JTPA procurement should be a
determination concerning whether or not procuring such services
(whether competitively or through sole source) would be a duplication.
The determination of non-duplication need not be exhaustive; it may
take into account such things as the cost of the existing services,
waiting lists, the effectiveness of the services to be provided, and
the likelihood of achieving performance goals. Although there may be
entities in the geographic area which provide the required services,
these entities may not provide the necessary customized training or may
not be able to provide these services in a timely manner.
A few commenters felt that the vendor/subrecipient distinction (see
the definitions sections of the preamble and the regulations) found in
other parts of the regulations was not clear in this section. This
section is intended to apply to all awards and, for the purposes of
this section, the same rules apply to the procurement of awards to both
vendors and subrecipients. Thus, the vendor/subrecipient distinction is
not treated in this section as it is in other provisions of the
regulations.
Section 107(e) of the Act requires that selection of service
providers include documentation of compliance with procurement
standards established by the Governor. Section 627.420(a) is expanded
by adding a definition of procurement to mean the process which leads
to any award of JTPA funds. Some commenters wondered if the
requirements for a determination of demonstrated performance, contained
in Sec. 627.422, Selection of Service Providers, applied to vendors.
Based on the definition of service providers, this requirement does
apply to vendors. On its surface it may appear that the requirement for
a determination of demonstrated performance goes against the
requirements for full and open competition. Since the overall goal of
JTPA is to provide high quality services to eligible participants, the
requirement of the determination of demonstrated performance leads to
the meeting of this goal by requiring the selection of entities that
can do the work effectively. This requirement further supports the
fiscal accountability and prevention of fraud requirements of the Act,
since demonstrated performance includes such things as a satisfactory
record of integrity.
Section 627.420(b) further delineates the Act's requirement of full
and open competition. A few commenters asked for definitions of certain
terms, such as ``arbitrary action'' and ``overly restrictive
specification.'' Since each procurement action and system must be
looked at on a case-by-case basis, the Department thinks that it would
be inappropriate to define these terms. If further definition is
required at the State level, the Governor may do so in the guidelines
that he/she establishes. A few commenters were concerned that stricter
State procurement codes could take precedence over Federal regulations.
These commenters are correct; the Governor has the discretion to make
the procurement rules more strict. However, the Governor does not have
the authority, unless indicated in the law or regulations, to make a
legislative and/or regulatory requirement less strict. One commenter
felt that paragraph (b)(2)(i) should require an identification of
quantities to be purchased. This change is made.
Section 627.420(c) establishes conflict of interest requirements.
Although there is a separate subsection that addresses PIC conflict of
interest, PIC's were also included in the subsections that address
recipient and subrecipient conflict of interest. A few commenters
correctly pointed out that by inclusion in the latter, it would make it
impossible for companies for which PIC members work to be awarded JTPA
funds. This section is amended to remove the reference to PIC members
in paragraph (c)(2) and is reorganized to increase clarity. Paragraph
(c)(4), which deals with PIC conflict of interest is redesignated as
paragraph (c)(3) but remains unchanged. Because of the separate
treatment of PIC's and recipients/subrecipients, the portions of
paragraph (c)(2), which provide information on when a conflict of
interest would arise for either PIC's or recipients/subrecipients, are
moved into a separate paragraph (c)(4). It should be noted that the
phrase ``is about to employ'' in paragraph (c)(4)(iv) also applies to
cases of negotiation for employment. The language is not changed in
order to maintain consistency with the OMB Circulars. The original
paragraph (c)(5) is combined with paragraph (c)(1), since both deal
with standards of conduct.
Several commenters submitted comments on Sec. 627.420(d). This
section is based on OMB Circular A-102, and describes the four
procurement methods that are available to JTPA entities. Language is
added to Sec. 627.420(d)(1)(i), prohibiting awards from being broken
down into several purchases merely to be able to use small purchase
procedures. The Department does not intend that small purchase
procedures be used improperly to avoid the more formal competitive
processes.
The majority of these comments concerned paragraph (d)(4) of the
interim final rule (redesignated in the final rule as (d)(1)(iv)),
which provides a listing of the circumstances under which recipients
and subrecipients may use the sole-source method of procurement. One of
the circumstances calls for awarding agency approval of noncompetitive
proposals. The final regulations are changed to state that for SDA's,
SSG's and subrecipients, the awarding agency provides authorization;
for States, the noncompetitive proposal is approved through the State's
normal sole source approval process. Without this change, States would
have had to submit their proposed sole source awards that do not meet
one of the circumstances to the Department of Labor, the awarding
agency.
The amendments require that all sole source awards be justified and
documented in writing. When a State or other subrecipient identifies
specific entities that may be sole-source awardees (e.g., the
Employment Service for assessment services) by their subrecipients, the
State or other subrecipient that identifies the specific entity is
responsible for the justification and documentation that serves as the
basis for that specific sole source selection.
In regard to both the OJT and classroom training (CRT) sole source
exceptions, there was some confusion concerning the requirement that
not only does the procurement have to meet one of the criteria, but
also has to be infeasible under small purchase procedures, sealed bids
or competitive proposals. Clearly, OJT and individual CRT placements
are unique in the procurement world. Neither is usually procured
through a competitive Request for Proposal (RFP) process. Although both
should be procurable under small purchase procedures, some State rules
may not allow this. As a result, the regulations are revised to allow
the sole source procurement of OJT (except awards to brokering
contractors) and individual CRT without having to demonstrate that the
three other methods of procurement are infeasible. This provision of
the regulation may be used in the written justification for such sole
source authority.
In regard to the sole source exception for procurement of
``Enrollment of individual participants in classroom training,'' some
commenters expressed a concern that this would be used to justify sole
source awards for the referral of a number of individuals to the same
classroom training. This exception may be used to justify a sole source
award to place an individual participant in classroom training. If a
recipient or subrecipient, over the course of a year, makes sufficient
individual referrals to the point that the small purchase maximum is
exceeded (either the level established through these regulations or the
State established level, whichever is lower), they will be expected to
compete the requirement the following year. If it is necessary to
procure a class for JTPA participants only, it is not appropriate to
use this sole source exception. It may, though, be appropriate to use
small purchase procedures or to justify the sole source procurement of
the class through other exceptions.
Several commenters thought that setting up Labor Management
Committees should be listed as one of the allowable sole source
criteria. The expenses incurred in the formation of these committees
promoted by the State's Dislocated Worker Units would be a rapid
response expense (section 314(b)(1)(B)), subject to the financial
management and procurement procedures of the States. In most cases, it
is expected that the costs of setting up a Labor Management Committee
would not be great and that small purchase procedures may apply.
Therefore, the regulations are not changed. If a committee were to
apply to be a service provider, procurement rules would apply. If a
committee, as a service provider, were to use JTPA monies to procure
services for participants, procurement rules also apply.
Section 627.420(d) is reorganized by redesignating the subordinate
paragraphs and including a new paragraph (d)(2), which authorizes units
of State or local government or SDA and SSG administrative entities to
pass through monies to like organizations, e.g., a public housing
authority, and not have the procurement requirements apply. When monies
are passed through, the receiving organization must either pass the
monies through to a similar organization, or procure services in
accordance with the procurement rules. The passing through of funds is
a method of transferring monies to the actual entity doing the
procuring which is practiced at the Federal, State, and local levels.
The new language reflects this acceptable practice. The Department
cautions that organizations which may receive pass throughs may also
receive funds as service providers, in which case procurement rules
will apply to awards to these entities.
A number of commenters submitted comments on Sec. 627.420(e).
Section 164(a)(3)(C) of the Act established the requirement that
``procurements shall include an appropriate analysis of the
reasonableness of costs and prices.'' Several of the commenters
disagreed with the use of the phrase ``cost or price analysis'' (as
compared to ``cost and price analysis''). The Department interprets the
requirement of ``an appropriate analysis'' to mean that recipients and
subrecipients are required to do whatever analysis (price or both cost/
price) is appropriate to their situation. This is supported by OMB
Circular A-102, which requires a price analysis alone under very
limited circumstances, and requires a price analysis whenever a cost
analysis is undertaken. Additionally, the commercial reality is that in
many cases you either cannot do both a cost and price analysis (when
there are no market prices or historical contract prices available) or
it would be superfluous to do both (when what is being bought is
available at catalogue prices).
Concern was also expressed over the requirement that recipients and
subrecipients perform a cost or price analysis in connection with every
procurement, including modifications. Some commenters believed that the
paragraph (e)(1) requirement for a cost or price analysis for all
modifications should be changed to exclude non-monetary modifications.
After consideration of this concern, paragraph (e)(2) is amended to
reflect this exclusion. Care should be taken, though, in determining
which modifications do not have monetary implications. For example, a
modification to reduce the number of participants may, on its face,
appear to be non-monetary. This is not the case. A modification to
reduce the number of participants, without a corresponding reduction in
funding, results in an increase in the cost per participant. Therefore,
this type of modification is one which has monetary impact.
Section 627.420(e)(2) describes cost or price analysis
requirements. This paragraph is revised in order to make it easier to
read, but the requirements are not changed. This paragraph requires
recipients and subrecipients to make independent estimates before
receiving bids or proposals. This requirement, which also comes from
OMB Circular A-102, appears to have caused confusion. A number of
commenters felt that SDA's would not be able to develop such estimates,
due to the fact that they do not know which specific activities will be
offered by a service provider until offers are received in response to
RFP's. In those cases where it is not known what specific services will
be provided, it will be appropriate for recipients and subrecipients to
develop ``rough yardsticks,'' such as cost per placement or cost per
enrollee, for specific types of training. These independent estimates
are used, in part, as a tool to determine whether or not the proposals
are correctly responding to the technical requirements of the RFP. The
estimates are also used to determine the reasonableness of costs/prices
which are offered. An offer which is priced too low may be indicative
of, among other things, an offeror who does not understand the
requirements of the RFP. An offer which is priced too high may contain
more expensive interventions than are required. Only through the
comparison of the costs and prices contained in each offer with the
estimate can these potential problems be identified. It should be
stressed, however, that the independent estimates are not absolute
barriers to accepting higher or lower cost proposals; the estimates are
merely meant for internal guidance. An awarding agency may select for
award a proposal that is more or less costly than the estimates, if it
determines that the costs and price(s) are reasonable and that the
services offered meet program requirements. The level of detail that
recipients and subrecipients need in developing these estimates may be
specified by the Governor in the State standards. Several commenters
indicated that awarding agencies should include the independent
estimates in the RFP. Under no circumstances is this to be done. Since
the purpose of developing the estimates is for internal control,
publicizing them would defeat the purpose for which they are developed
and might also skew the bidding.
One of the Sec. 627.420(e)(2) requirements for cost analysis comes
into play when the offeror is required to submit the elements of the
estimated cost. This is clarified by indicating that this requirement
applies in the case of subrecipient relationships. Subrecipients are
required to allocate costs to the various JTPA cost categories;
therefore, they are to submit the separate elements of their costs.
Section 627.420(e)(3) reiterates the requirement of section
164(a)(3)(D) of the Act that ``procurements shall not provide excess
program income * * * or excess profit.'' The Act lists some of the
factors that shall be taken into consideration in determining whether
program income or profit is excessive. Through the regulations,
additional factors from OMB Circular A-102 have been added. Further,
based on this Circular, the instances when profit or program income is
negotiated are defined.
A few commenters on this section, as well as Sec. 627.440,
Classification of Costs, raised questions concerning fixed unit price,
performance-based contracts (FUPC's), including whether FUPC's could
continue to be used and, if so, whether costs could be allocated to the
JTPA cost categories based on budgeted amounts or whether they must be
charged based on actual costs incurred. Concern also was expressed both
over the requirement that offerors certify their costs and the
prohibition of excess program income or profit, in relation to fixed-
price agreements.
The Department continues to believe that the use of performance
based awards may be of significant benefit in serving JTPA customers.
In addition, the use of a total fixed price or ceiling price in making
awards may also be an effective mechanism. The regulation does not
prohibit reasonable profits in the context of a fixed-price agreement.
Fixed-price agreements are instruments that place more risk on the
awardee than do cost reimbursement agreements. The reason for this is
that the awardee, under a fixed-price agreement must perform the work,
regardless of the costs to the awardee. In the case of an awardee under
a cost reimbursement type of agreement, the awarding agency will
reimburse the awardee for its allowable costs. If the awardee under a
fixed-price agreement is able to do the work at a lower cost, due to
efficiencies in operations, and this increases the level of profit, the
awardee is due that additional profit. If successful awardees who have
increased profit due to efficient performance are required to reduce
their earned profits to the budgeted levels, this would result in a
disincentive for organizations to perform their work more efficiently,
quickly, etc. If the additional profit results from cost data that was
not accurate, complete or current, as certified, then the awarding
agency may be able to recoup that excess from the awardee. Thus, the
requirement that costs be certified provides a needed protection to
awarding agencies. There has been skepticism that fixed price
contracts, as utilized in JTPA, did not contain risks for the awardee
or operate as performance/outcome based agreements. The system can
expect continued high levels of scrutiny by the OIG in the case of
fixed price agreements.
In the case of awards to subrecipients, when: (1) The awarding
agency has done a cost and price analysis; (2) this analysis has been
documented; (3) the conclusions arrived at are reasonable; and (4) the
offeror has certified in writing that to the best of its knowledge and
belief, the cost and pricing data submitted are accurate, complete and
current at the time of agreement on price, the awarding agency may find
it appropriate to use a fixed-price type of agreement. The costs of
such an agreement may be allocated among the benefitting cost
categories based upon the ratios established in the cost analysis.
One commenter did not believe that it was the Department's intent
to require SDA's/SSG's to track profit earned by commercial
organizations. In point of fact, section 165(g)(1) of the Act requires
each State, SDA, and SSG to maintain records with respect to
subrecipients, including commercial organizations, that identify any
program income or profit earned.
Section 627.420(e)(4) is amended to correct a miscitation from
Sec. 627.435(e) to Sec. 627.435(i).
Section 627.420(e)(5) prohibits the use of the cost-plus percentage
of cost method. This prohibition comes from both OMB Circular A-102 and
the FAR. A few commenters indicated that this was an advantageous
procurement method. This Federal-wide prohibition is being maintained
in the final regulations due to the fact that these types of agreements
provide a disincentive to vendors/subrecipients to reduce costs, since
the higher the overall cost of the agreement, the higher the profit. It
is recommended that JTPA entities negotiate specific dollar levels of
profit, or investigate the possible use of other types of agreements,
such as cost-plus award fee. Further, there appears to be some
misunderstanding concerning the allowability of using fixed-price
agreements. Fixed-price agreements are the preferred type of agreement
when using the sealed bid (Invitation for Bids) process. Fixed-price
agreements may be performance-based and may be chargeable to a
benefiting cost category based upon a documented cost analysis, as
discussed above, the services provided, and whether the agreement is
for tuition or for a commercially available training package, as
discussed in connection with Sec. 627.440.
Section 627.420(g) which reiterates the requirement found in
section 164(a)(3)(I) of the Act that procurement transactions between
units of State or local government or entities organized principally as
the administrative entity for SDA's or SSG's, shall be on a cost-
reimbursable basis. The final rule now clarifies that cost-plus types
of agreements are not allowable (e.g., cost-plus fixed-fee). Based on
one comment, language is added concerning the payment of tuition and/or
entrance fees to schools that are part of a governmental entity. The
specific instances under which tuition and entrance fees may be paid,
without breaking them down to their specific cost elements, are listed.
Several commenters addressed Sec. 627.420(h), which establishes the
requirement that recipient and subrecipient procurements clearly
specify deliverables and the basis for payment, and include specified
clauses. A few comments were received questioning the example that was
given in the preamble to the interim final regulations of withholding
final payment to an OJT contractor until the participant has been
retained on the job for a specified period of time after the completion
of training. The commenters wondered if the Department has
predetermined deliverables for OJT. The discussion was intended merely
as an example and does not set a hard and fast rule for OJT contracts,
although the Department sees that such a contract provision might
facilitate retention upon completion of OJT.
In the final regulations, paragraph (h)(2) on required clauses is
revised, to break it into three paragraphs: clauses required for
subrecipient awards; vendor awards; and vendor and subrecipient awards.
In response to concerns expressed, the applicability of clauses such as
copyright and rights in data is narrowed. Several commenters correctly
pointed out that the regulations did not specify what the patent,
copyright and rights and data clauses should be. The final rule is
amended to remove the requirement for patent rights (since it is not
expected that many patentable items will be developed using JTPA funds)
and to include additional information on copyright and rights in data
clauses. In the case of the copyrights clause requirement, the
application of this clause is limited to those awards which involve the
use or development of copyrighted materials. Also, the breach of award
and termination clauses are expanded to cover all awards. In the newly
designated paragraph (h)(4)(i), which relates to breach of agreements,
this clause is now required to be included in all agreements, rather
than be limited to those which exceed the small purchase limit. The
rationale for this change is that a breach in a small purchase
situation can be as damaging to the JTPA program as those in large
dollar awards.
Section 627.420(i) establishes the requirement that recipients and
subrecipients have written protest procedures. A few comments were
submitted on this section. One wondered how paragraph (i)(2), the
referral of violations of law, related to TEGL 6-84 and the incident
reporting system. This section of the regulations is amended to
reference Sec. 627.500(b) of the regulations, which establishes the
referral requirements.
Selection of Service Providers
Section 627.422 establishes the requirements for the selection of
service providers. One commenter felt that the selection of service
providers should be essentially a blind process, in which the specific
sector of the provider is secondary to the provider's demonstrated
ability. This is an accurate statement of the general intent of the
Amendments and of the Department in developing this section of the
regulations. Given the large amount of funds that are budgeted for JTPA
titles II and III, it is important to ensure that procurements are done
in a manner that will not only promote the integrity of the process and
the efficient expenditure of the monies but will also allow
organizations an opportunity to fairly compete to provide these
services. Although it may be administratively easier to sole source the
bulk of the JTPA monies, this not only is unfair to the other potential
service providers in a specific geographic area, but it also could
result in a diminution of the number of organizations that are able to
provide services to the JTPA system as well as in an increase of costs
due to the lack of competition.
One commenter correctly pointed out that the first sentence of
Sec. 627.422(b) was missing a reference to recipients and
subrecipients. The final rule is amended accordingly. A small number of
commenters wondered why the regulations call for the Governor to
establish guidelines on the selection of service providers, when the
Act calls for the Secretary to establish guidelines. The Secretary has
established minimum guidelines through these regulations. The Governor
is given the authority to expand on these guidelines.
Section 627.422(c) establishes the requirement that when a State,
SDA, SSG, or administrative entity determines that it will provide
services, it must first make a determination, in writing, under the
standards of Sec. 627.422(d), of the demonstrated performance of its
staff. A number of commenters expressed concern that this section went
beyond the intent of the Congress.
A number of commenters argued that the ``self-determination''
requirement is inappropriate because it infringes on the rights of
PIC's or SDA's to make their own decisions on the mix of services
according to local considerations. The self-determination requirement
implements the requirements of sections 107 (a) and (e) and
164(a)(3)(A) of the Act for competitive selection of service providers.
These requirements do reduce local discretion to the extent that they
prevent any SDA/SSG from selecting its service providers without
adherence to the rules of a competitive selection process. An SDA/SSG
may not select an ``independent'' service provider without adhering to
the competitive procurement rules which is as much an intrusion on its
discretion as is the requirement that it justify its selection of an
in-house service provider.
The purpose of the Act's new emphasis on competition in the
procurement process is to ensure that the JTPA program provides the
best available services at the most advantageous price. This rationale
is equally applicable no matter what the identity of the service
provider. Obtaining services through a competitive selection process
enables decisionmakers to periodically review the quality of, necessity
for, and cost of the services that are being used. It would defeat the
purpose of the competitive selection process if one kind of service or
one kind of service provider were exempted from this periodic review.
Thus, it is critical to the integrity of the competitive selection
process that the selection of all service providers, including in-house
providers, be subject to periodic review and to regular redetermination
of the quality and cost effectiveness of the services provided as well
as their responsiveness to the needs of the participants. For this
reason, the Department has decided to retain the self-determination
requirement in the final rule.
Other commenters thought that this requirement was not needed since
the sanctions that occur for failure to meet performance standards
provide all the protection needed against arbitrary decisions to
perform services in-house. It is true that these available sanctions
will help lead to a better program, but the earliest that they will
lead to the increased full and open competition required by the
Amendments is after two or three years when performance standards are
not met and the sanctions are imposed. Since it is the Department's
intent to increase competition immediately, it is appropriate to impose
the self-determination requirement.
The comments revealed some confusion over the types of services
that would be covered by the requirement of paragraph (c). Several
commenters indicated that intake and assessment should not be included
as services that should be competitively procured. Covered services, in
the final regulations, are defined to exclude intake and eligibility
determination, which are services that are the basic responsibility of
SDA's/SSG's.
Another concern expressed was that a vote by a PIC to provide an
activity in-house will require the PIC to vote on a matter that will
directly benefit the JTPA agency. Since the enactment of JTPA and the
formation of PIC's, PIC's have had to make decisions and vote on the
provision of services internally. This may well be an apparent conflict
of interest, but the conflict is inherent in the role of the PIC, and
it is a conflict whether or not the SDA is required to justify the
decision.
Further, if the requirement for self-determination had not been
established in the regulations, States, SDA's, SSG's, and
administrative entities for SDA's and SSG's would be required to
compete all of the services. It is not the Department's intent to
require recipients and subrecipients to go through a full fledged
competitive process or to impose onerous procedural requirements, but
merely to assure that they periodically consider whether the methods by
which the services are provided meet the Act's standards for cost and
quality. For States, SDA's and SSG's that have already been running
programs in-house, the determination to keep services in-house will be
relatively easy. The determination will be more involved for SDA's and
SSG's that propose to conduct services and activities which have
traditionally been contracted out and should have a rationale for so
doing.
Some commenters provided reasons why they provided services in-
house. These reasons included avoiding brokerage fees for OJT
development and providing backup capacity if contractors fail. Both
these reasons for performing these services in-house are legitimate
ones, which should suffice as part of the justification required by
this requirement.
Some commenters wondered where the self-determination of
demonstrated performance should be documented. Since it is not expected
that the documentation be voluminous, the Department believes that it
would be appropriate for recipient and subrecipient administrators to
address the criteria listed in paragraph (d) in writing, in the JTP,
GCSSP or EDWAA plan. In the case of the requirement of paragraph (d)(2)
that the service provider possess, ``[t]he ability to meet the program
design specifications at a reasonable cost,'' recipients and
subrecipients need not undertake extensive cost comparisons.
Section 627.422(d) implements the requirement in section 107(a) of
the Act that the Secretary develop guidelines on determining
demonstrated performance. Concern was also expressed that use of CBO's
might be restricted by the requirement in paragraph (d)(1) that service
providers have adequate financial resources or the ability to obtain
them. Comments indicated that many CBO's only support is JTPA programs
and their financial stability rests with their ability to win JTPA
contracts. Where the reimbursement method is used, the entity must
either have the financial resources to cover expenses until reimbursed,
or must be able to obtain the financial resources through loans, etc.
In the case of CBO's, many will be placed on an advance method of
payment. As a result, the financial resources test is considerably less
stringent. Awarding agencies should, however, check the financial
stability of all organizations in order to determine that they possess
the financial wherewithal to adequately undertake a JTPA program and
whether they are on the verge of bankruptcy.
Section 627.422 (e) and (f) reiterate the language of section 107
(a) and (c) of the Act concerning CBO's and educational institutions.
These provisions must be interpreted in conjunction with the goal of
the regulations to establish an ``even playing field.'' CBO's and
educational institutions are to be provided copies of any RFP's, etc.
Any proposals that are received from CBO's and educational institutions
are to be reviewed and rated in the same manner as proposals from any
other organizations. It must be noted that the 90/10 arrangements
authorized for use with CBO's or non-profits are not to be taken into
consideration in the rating criteria. Based on the special mention in
the Act of CBO's, it would be appropriate in instances where competing
proposals are rated the same, to use as a tie-breaker the status of the
organization submitting the proposal (i.e., CBO). In the case of
educational institutions that are providing education services, the
language in the Act is more prescriptive. Therefore, in the case of a
tie, the award must go to the educational institution, unless the
organization does not pass the demonstrated performance test. Further,
paragraph (e) is clarified in the final rule so that it is easier to
read.
Some questions were raised concerning instances where Statewide
procurement policies call for awarding extra points to proposals
received from such organizations as minority-business enterprises and
women-owned businesses. If this is a State, SDA or SSG-wide policy,
applicable to not only JTPA funds but other funds, the State, SDA or
SSG may continue applying these policies to JTPA funds. If these
policies apply only to JTPA funds, States, SDA's or SSG's may not
continue applying these policies to JTPA funds. This is discussed in a
new paragraph (l).
Section 627.422(h) is redesignated as Sec. 627.422(k) and
reiterates the Act's requirement that awards include appropriate
amounts necessary for administration and supportive services (section
108(b)(5)). Several commenters felt that SDA's/SSG's should be allowed
to continue making awards that do not include administrative funds. It
is because of this practice that new language was included in the
Amendments. In the past SDA's have indicated that, given the 15 percent
limitation on administrative costs, they do not receive sufficient
administrative funds to operate JTPA programs. It is equally difficult
for other service providers to provide these same services when they
are provided either an even lower level of or no administrative funds.
Some commenters thought that the regulations, as written, will give
service deliverers the right to claim whatever administrative costs
they want. This is not the intent of the regulation. While the
regulation does prevent an SDA from arbitrarily refusing to fund a
service provider's administrative costs or from arbitrarily
underfunding them, it creates no right in the service provider to
demand any particular level or amount of administrative funding. The
level of administrative funding to be covered by the agreement should
be determined through negotiations. If either party is dissatisfied
with the results of the negotiations, they should not sign the
agreement. Such disagreements may be handled under State and local
grievance procedures. Some commenters were concerned that awardees that
fail to perform would argue that insufficient administrative funds were
provided and, thus, were the cause of the failure. Because the
agreement should be mutual, it should be difficult for an awardee to
use this argument to excuse lack of performance. The Department does
wish to note that it is inappropriate for the SDA to pre-determine that
it will not provide administrative costs for awardees except in the
payment of tuition or off-the-shelf prices. Others requested that
guidance be given on how to determine appropriate amounts of
administrative funds. The Department thinks this type of clarification
is more appropriately provided at the State level.
No comments were received on paragraphs 627.422 (i) and (k). These
two paragraphs are redesignated as (h) and (j), respectively.
The redesignated Sec. 627.422(j) (now Sec. 627.422(i)), which
references back to section 204(d)(2)(B) of the Act, deals with the
selection of subrecipients for the provision of services to older
workers. One commenter thought that this section provides the
justification for sole-sourcing older worker programs at the State
level. This is not the Department's intent. These programs are to be
competed just like any other program. Others thought that only the
Governor has the responsibility for selecting service providers. With
the addition of the pass-through provision (at Sec. 627.420(d)(2)),
this does not have to be the case since the Governor can delegate his/
her authority for selection through the pass-through process.
Funding Restrictions for ``High-Risk'' Recipients and Subrecipients
A number of comments were submitted on Sec. 627.423. Several of the
commenters thought that this section was in conflict with
Sec. 627.422(d), which requires a determination of demonstrated
performance. The intent of this section is not to give preferential
status to high-risk recipients and subrecipients, but to provide JTPA
entities with the authority to impose funding restrictions should it be
necessary to contract with such an entity. There may be instances when
awarding agencies have to make subrecipient awards to high-risk
organizations because they are the only entity providing the required
service. By including this section, awarding entities may do so, but
are authorized to include restrictions on the award in order to protect
the Federal funds.
Other commenters thought that the regulations, as written, would
give high-risk grantees an argument that they have a right to be
considered and selected. This is not the case. This section does not
confer a right of selection to high-risk organizations. Given the
choice of comparable proposals from an offeror who has demonstrated
performance and a high-risk recipient/subrecipient, the award should be
made to the former, unless other factors indicate otherwise. Additional
language is added to Sec. 627.422(d) to clarify these points. Finally,
editorial changes are made to clarify that this section applies to all
awards, not just grants or subgrants.
Prohibition of Subawards to Debarred and Suspended Parties
Section 627.424 applies the Federal government-wide requirements on
awards to debarred or suspended parties contained in Executive Orders
12549 and 12689 and implemented for all Department of Labor grant
programs in regulations codified at 29 CFR part 98. These requirements
were previously issued to JTPA Liaisons in a Grant Officer Notice dated
April 30, 1992. As provided in 29 CFR part 98, certifications are not
required for the State legislatively required ``pass-through'' of JTPA
funds to SDA's/SSG's since these are considered ``mandatory awards''
and are, therefore, exempt from the 29 CFR part 98 requirements.
However, any other subaward over $25,000, such as an SDA award with a
service provider, must meet the ``lower-tier'' certification. These
``lower-tier'' certifications are to remain with the respective
awarding agency.
One commenter requested that language be added to this section that
tells States and subtier grantees that they may elect to subscribe to
the List of Parties Excluded from Procurement or Non-Procurement
Programs. This has not been done, since nothing in these regulations
prohibits JTPA entities from subscribing to this publication, and using
it as a resource.
Financial Management Systems and Generally Accepted Accounting
Principles (GAAP)
Section 627.425(b) of the interim final rule requires financial
systems and procedures of recipients and subrecipients to be in
accordance with GAAP and Sec. 627.435(a) requires costs charged to the
JTPA program to also be in accordance with GAAP.
Several commenters raised questions or issues about GAAP, including
requesting that the Department be more specific about how GAAP must be
applied by States and SDAs, requesting specification of which GAAP to
use, and, if GAAP is to be determined by the Governor, if the Governor
can waive GAAP provisions. A few commenters requested that the
statutory language of section 164(a)(1) of the Act pertaining to GAAP
applicable in each State be included in Sec. 627.425(b).
Language is added to Sec. 627.425(b) to provide for the
applicability of GAAP in each State. The Department recognizes that
GAAP vary by type of organization or entity and that, while there is
great similarity among them, multiple versions of GAAP exist for each
type of entity. It is the Department's intent, by adding this language,
in addition to the language in paragraph (a) of Sec. 627.435, to allow
the Governor to determine which specific versions of GAAP are to be
used in each State and by which types of entities, should this be at
issue in any State. It is not intended to give the Governor authority
to waive GAAP provisions since the Act requires the use of GAAP.
The word ``liabilities'' is added to the list of financial
information that financial systems must include at
Sec. 627.425(b)(1)(i). The inclusion of this term is to make the listed
items parallel.
A few commenters indicated that revised financial reporting
requirements need to be issued by the Department, consistent with
Sec. 627.455, so that changes to accounting and other financial systems
could be made that also meet the reporting requirements. Revised
financial reporting requirements for JTPA title II programs were issued
by the Department in Training and Employment Information Notice (TEIN)
No. 6-93 dated July 30, 1993 (OMB No. 1205-0323). Revised financial
reporting requirements for title III programs were issued by the
Department in TEIN's Nos. 14-93 and 12-93, dated August 30, 1993, and
September 8, 1993, respectively (OMB Nos. 1205-0326 and 1205-0318).
In regard to participant data systems, a few commenters sought
clarification regarding eligible applicants for whom information must
be maintained under Sec. 627.425(c). As used in the regulation, a
``formal'' determination of eligibility refers to a situation in which
sufficient information has been obtained by the program for a staff
person to make a determination of eligibility. The Department expects
that such a determination will be made within a reasonable time after
the information is obtained.
Grant Payments
Section 627.430 establishes standards by which the Department will
make payments to States as well as standards for States, SDA's, SSG's,
and other subrecipients for making payments to lower tier
subrecipients. Included within this section are standards for when
advances to subrecipients are appropriate, when the reimbursement
method is appropriate, and provision is made for using the working
capital advance payment method.
A number of commenters addressed the provisions of this section. A
few commenters raised concerns related to the Cash Management
Improvement Act (CMIA) and primarily suggested that the Department
should delay CMIA requirements since SDA's/SSG's are waiting on the
Department to publish CMIA standards. One commenter pointed out that at
the current time, the Treasury Department regulations at 31 CFR part
205 do not go beyond the State level.
CMIA applies only to States and does not carry through to
subrecipients that are not a part of the State government. The Treasury
Department published final regulations to implement CMIA at 31 CFR Part
205 on September 24, 1992. The Department does not plan to publish any
additional CMIA standards applicable to grant funds.
The Department recognizes that the September 24, 1992, Treasury
Department regulations dropped the requirements that previously existed
pertaining to subrecipients of States as well as non-State recipients.
Therefore, the basic cash management standard of paragraph (b) of this
section is revised to incorporate the standard that is generally
applicable to other Federal grant programs. That standard is also
generally consistent with the standard applicable to the JTPA program
prior to the publication of the interim final rule. In addition, the
requirement to maintain procedures as a part of the standard is deleted
so that the standard is based only on the demonstration of effective
cash management results.
A few commenters raised questions of whether subrecipients other
than CBO's and non-profit entities could receive advances or working
capital advances. A few commenters wanted clarification on the specific
requirements for payments to contractors. It is the intent of this
section to provide for advances to any subrecipient as long as the
subrecipient is in compliance with the basic cash management
requirement that cash on hand shall be limited to actual immediate
disbursement needs for program purposes. A subrecipient that does not
meet that standard may be paid by either of the other two payment
methods outlined in this section. The Department recognizes that, given
the definitions in Sec. 626.5 for subrecipient and contractor and the
procurement requirements of the Act and these regulations, there is no
need to establish separate payment requirements applicable to
contractors. Therefore, paragraph (b)(2) of the interim final rule is
removed from the final rule and corresponding language adjustments are
made throughout the remainder of this section.
A few commenters requested clarification of the requirement, in
paragraph (f) of this section, which requires disbursement of cash
received as a result of program income, rebates, refunds, contract
settlements, audit recoveries, and interest earned on such funds before
requesting additional cash payments in light of the time frame for the
use of program income at Sec. 627.450, Program income. The requirement
in Sec. 627.430(f) is a cash management requirement to ensure that cash
attributable to JTPA does not remain in a bank account while at the
same time the entity is drawing additional cash from the Treasury
Department to meet immediate JTPA disbursement needs. Any cash
attributable to JTPA should be immediately disbursed for whatever JTPA
disbursement need exists. That need does not have to be the same as the
entity's planned use of program income earnings nor does it relieve the
entity of its liability to provide, within the funding period, an
amount of program services equivalent to the amount of program income
earned. At the time cash is needed for disbursement for the purposes
for which the program income was planned to be used, it can be accessed
through normal JTPA grant payment processes. Language is added to
paragraph (f) of Sec. 627.430 to more clearly apply this requirement to
cash proceeds.
Cost Principles and Selected Items of Cost
Section 627.435 provides generic cost principles applicable to the
JTPA program in paragraphs (a) through (d) and provides specific
treatment for selected items of cost in paragraphs (e) through (h). A
few commenters stated that the Department should adopt the Circulars
for cost principles, thereby replacing this section.
Section 164(a)(2) of the Act requires the Secretary to prescribe
regulations establishing uniform cost principles substantially
equivalent to those generally applicable to recipients of Federal grant
funds. The generic cost principles in this section are intended to be
substantially the same as the provisions of Attachment A of the OMB
Circulars that contain cost principles and should generally be
interpreted the same as the Circulars. The Department has chosen not to
simply adopt the Circulars because they contain some restrictive
requirements in areas where the Department thinks that recipients and
subrecipients should retain operational flexibility.
A number of commenters recommended that the prohibition on the
shifting of funds in Sec. 627.435(c) should be changed to clarify that
it does not cover accounting errors. The Department agrees with this
comment and language is added to limit this prohibition to costs
``allocable'' to another Federal grant, program, or category.
Adjustments should be made for costs inappropriately charged because of
accounting errors or misclassification so that the costs ultimately
charged to a cost objective are those properly allocable to that
objective.
A few commenters requested revision of the prohibition on
contributions to contingency reserves at Sec. 627.435(e)(6),
particularly that they should be allowable if such contributions are
not made with Federal funds. The language on contingency reserves is
not changed since only those costs charged to the JTPA program are
regulated by this section and it does not extend to non-JTPA funds.
Amended Sec. 627.435(f) provides additional guidance on legal
costs. A number of commenters recommended changes in this area, with
most commenters opposed to the specific prohibition on the allowability
of costs for appeals to an Administrative Law Judge. Several commenters
suggested that the Department should review the Conference Report
language on this issue. A few commenters requested more specificity on
legal expenses, particularly settlement costs.
In response to the comments received on the specific prohibition on
the allowability of legal costs for appeals to an Administrative Law
Judge, the Department has reviewed the Conference Report (H.R. Conf.
Rep. No. 102-811, 102d Cong., 2d Sess., p. 137 (1992)) and engaged in
further dialogue on this subject. The discussion in section 221 of the
Conference Report pertained to title IV special programs for Migrants
and Seasonal Farmworkers and the Department does not view that language
as carrying through to the other titles of JTPA. The Department is also
aware that some Federal agencies are permitting the costs of appeals to
an ALJ as an allowable grant cost. The Department notes that, unlike
the process of the Department of Health and Human Services that is
referred to in the Conference Report, there are several opportunities
for informal resolution of disputes prior to the issuance of the
Department of Labor grant officer's final determination. In addition,
if the grant officer's decision is found, upon appeal, to be
substantially in error, there may be an opportunity for a grantee to
recover its legal costs under the provisions of the Equal Access to
Justice Act. Congress, in passing the Equal Access to Justice Act, has
set forth the conditions under which it is appropriate for parties in
contested administrative proceedings to recover their costs from the
federal government. The rule that is adopted in these regulations
maintains those conditions. Finally, it is the Department's position
that, absent any specific statutory direction, Federal taxpayers should
not bear the costs of both sides of a matter appealed to an ALJ. To do
so may increase the incidence of such costs and provides no incentive
for assuring that only matters of substantive merit are appealed.
With regard to the language on settlement costs, paragraph (f)(1)
of this section is changed to clarify that settlement costs are
allowable to the extent that the costs included in the settlement would
have been allowable if charged to the JTPA program at the time they
were incurred, e.g., if the settlement costs are for back pay then the
provisions of Sec. 627.435(e)(2) would control the allowability of the
settlement costs.
Section 627.435(h) of the interim final rule basically continued
the language on construction costs that has existed since the inception
of JTPA. However, a few commenters recommended changes to this
paragraph including that construction costs for alterations,
maintenance, and repairs should be allowable and that there is now a
conflict with amended Sec. 627.210(a)(3) concerning physical
accessibility, as required by section 504 of the Rehabilitation Act of
1973, as amended, and the Americans with Disabilities Act of 1990.
The Department agrees with these comments and the language on
construction costs is eliminated. The effect of this change is to allow
construction costs to the extent that such costs are necessary and
allocable to JTPA. Paragraph (h) of the final rule now contains
language on contributions to a reserve for self-insurance, as discussed
above in the discussion of Sec. 627.415(c), Insurance.
Governor's Guidelines on Allowable Costs
Section 627.435(i) requires the Governor to prescribe and implement
guidelines on allowable costs not otherwise treated in Sec. 627.435 and
contains a listing of selected items of costs in paragraph (i) for
which the Governor's allowable cost guidelines must, at a minimum,
prescribe treatment.
Many commenters responded to the provisions of this subsection.
Most of them saw it as a requirement for Governors to set actual
amounts for salaries and other commonly incurred JTPA costs and opposed
this subsection. One commenter recommended that the Department should
clarify the intent of this provision and a few commenters asked whether
the requirements of the regulation would be met if the OMB Circulars on
cost principles were adopted.
This provision is not basically different from the requirement, in
existence since the beginning of JTPA in 1983, that ``[t]he Governor
shall issue guidelines on allowable costs for * * *.'' Such guidelines
should set parameters and guidance, rather than actual amounts. The
Department's intent is simply to ensure that the Governor's guidelines
cover at least the items included in the list, since issues have been
raised on each of these items during the past 10 years of JTPA.
Recognizing that SDA's retain some flexibility, within the Governor's
guidelines, to establish amounts for allowable costs such as personnel
compensation and travel, the final rule is changed by replacing the
words ``and amounts'' with ``or the extent of allowability.'' In
addition, since other sections of the final rule now provide guidelines
on item No. 11, the extent of allowability for supportive services
costs and payments to participants, that item is removed from the list
in this section of the final rule.
For most States, the existing allowable cost guidelines of the
Governor already meet the requirements of this paragraph and few, if
any, changes are necessary. All States should review their current
allowable cost guidelines and ensure that each of the 16 listed cost
items are treated consistently, as well as any other cost items for
which the Governor thinks consistent treatment is necessary. A
commenter raised the question about whether the regulatory requirement
would be met if the OMB Circulars on Cost Principles were adopted. The
Department agrees that all 16 cost items would be covered if the
Circulars were adopted. The Department cautions, however, that: (1) It
does not intend to approve or disapprove any prior approval requests,
as required by the Circulars, and (2) the OMB Circulars contain
restrictive requirements in areas in which States, SDA's, and SSG's may
desire greater flexibility, e.g., staff compensation, fees/profits,
fund-raising.
Administrative Cost Pools
Section 627.440(a) is amended in the final rule to add language on
cost pools. Section 627.440(f) of the interim final rule required that
costs charged initially to a JTPA administrative cost pool (ACP) be
allocated, for JTPA Federal reporting purposes, to the benefitting
programs based on the benefits received by each program. The Department
recognized that this language represented a departure from previously
established policy on the manner in which pooled administrative costs
could be reported. Commenters were requested to identify the impact, if
any, of the revised requirement to allocate pooled administrative costs
solely on the basis of ``benefits received''.
Many commenters responded to the provisions of this paragraph. Most
of the responses fell into one of three groups. One group viewed the
ACP language as effectively prohibiting ACP's by requiring detailed
time distribution or some type of cost allocation process for each item
of joint administrative cost. These commenters thought the new
requirements involved too much recordkeeping, were an unreasonable
burden, inefficient, illogical, and went beyond the requirements of OMB
Circular A-87.
A second group expressed concerns about the effect of the ACP
requirement on the administrative cost limitations for each program and
that they would lose their ability to ensure cost limits are not
exceeded. They were also concerned programs would be overexpended. A
few commenters stated that there are not enough administrative funds
available for EDWAA at the State level to absorb its share of costs.
The third group of commenters made suggestions that included going
back to the old regulatory language, which allowed ``true cost pools'',
specifying that using direct expenditures was an acceptable
methodology, and requiring application of A-87 principles. One
commenter suggested eliminating any mention of ACP's in the regulations
and, instead, requiring JTPA entities to follow GAAP and section 108(a)
of the Act. In addition, a few commenters requested guidance on the use
of intake cost pools. Several commenters raised questions about the
proper charging of title II-B administrative costs at the State level.
Several commenters also raised questions about the ``benefits
received'' language of paragraph (a) in Sec. 627.440, which requires
all JTPA costs to be charged to the benefitting programs and cost
categories based on benefits received. That language has been a part of
the JTPA regulations since the inception of the program. A few
commenters recommended that this paragraph should specifically allow
cost pools.
The ACP language contained in Sec. 627.440(f) of the interim final
rule was not intended to eliminate the use of ``true cost pools'' in
accounting for the costs of JTPA programs. It was also not intended to
go beyond the requirements of section 108(a) of the Act, GAAP,
paragraph (a) of this section or similar provisions in OMB Circular A-
87. The final rule removes the specific ACP provisions in paragraph (f)
and adds a new sentence on cost pools within paragraph (a). The new
sentence is intended to be consistent with the A-87 meaning and
treatment of cost pools.
JTPA entities may continue to use ACP's. They may also continue to
use indirect cost pools, training cost pools, intake cost pools, pools
for supplies expense, and any other pool they find beneficial to have
in their accounting system, including intermediate cost pools for the
recording and temporary accumulation of joint or similar types of
costs, pending distribution (allocation) at a later date to the
benefitting cost objectives, e.g., programs and/or JTPA cost
categories.
Having, or using, a JTPA ACP has never been an issue and is not one
now. The issue is how to distribute or allocate those accumulated costs
back to the benefitting programs and whether allocation methodologies
other than ``benefits received'' by each of the benefitting programs
can be used. The ``old'' JTPA regulations did not address this issue.
Since the 1992 Amendments directly incorporate the requirement to
follow GAAP, and GAAP requires costs to be charged based on ``benefits
received,'' the basic issue is whether the Department can waive a
specific statutory requirement, especially when it affects up to 20
percent of the funds.
It is the Department's experience that allocation based on
``benefits received'' has not added much workload burden and
alternative methodologies have been developed by most JTPA entities.
For many JTPA entities, allocating administrative costs based on each
program's share of total direct costs, salaries and fringe benefits, or
total program costs compared to the total direct costs, total salaries
and fringe benefits, or total costs of all programs administered by an
entity are acceptable methodologies. The Department cautions, however,
that some of these methodologies may not be acceptable for particular
JTPA entities. Each organization is different and costs, particularly
direct costs, are charged differently. It will require a self-
examination by each entity to determine the best approach. Assistance
can also be obtained from the State's or SDA's auditor. The use of
financial-based methodologies is encouraged; however, the Department
will accept any treatment of pooled costs and allocation methodologies
that are consistent with GAAP applicable in each State. The Department
cautions that a methodology that is based solely on contribution to the
pool may be questioned in audits.
Finally, in response to the questions about the proper charging of
title II-B administrative costs at the State level, Sec. 627.440(b)
establishes the JTPA cost objectives for State-administered programs
and the State's overall administration of title II activities. To
clarify this issue, however, Sec. 627.440(b)(10) is revised in the
final rule to specifically include State administrative costs
associated with title II-B.
Classification of Costs
Section 627.440 establishes the minimum levels of accountability
for JTPA funds, provides the Secretary's definitions of the cost
categories, and provides specific treatment for the classification of
certain types of costs that have frequently been at issue in the JTPA
system.
At Sec. 627.440(c)(2), the regulations provide that incentive
funds, both title II-A and II-C, received by an SDA may be combined and
used without regard to cost categories or cost limitations. A number of
commenters on this provision were pleased with the treatment accorded
incentive funds, however, several commenters appeared to have missed or
misread this provision. No change is made to the final rule.
Within the definitions of the JTPA cost categories, at
Sec. 627.440(d), a number of comments expressed concern about the
treatment of tuition, work experience wages, insurance, and the
difference between public information costs and the costs of outreach.
Another frequent comment concerned the treatment of project directors
and other positions that perform both administrative and program
functions. Commenters on this subject fell into two groups. One group,
which appeared to have missed the provisions of paragraph (e)(1),
argued that the costs of such positions should not all be charged to
administration. Some requested that such positions be charged entirely
to training. The other group, focusing on paragraph (e)(1), commented
on the burden and mechanics of time distribution.
The Department agrees that the language in the preamble of the
interim final rule concerning tuition was somewhat inconsistent and
more restrictive than this section of the regulations. The Department's
intent is to permit costs frequently associated with tuition costs,
such as entrance fees, to also be charged to the direct training
category. The Department believes that the regulation adequately
expresses this intent. In addition, tuition, entrance fees, and other
usual and customary fees of other educational institutions, such as
postsecondary vocational institutions specified at section 481(c) of
the Higher Education Act, are another example of payments to vendors
that are appropriately charged to the direct training category. The
final rule removes the reference to section 141(d)(3)(B) of the Act to
clarify that such payments to any educational institution in a vendor
relationship that also satisfies the other criteria of paragraph
(d)(1)(vi)(B), are direct training costs.
Where tuition is part of a subrecipient agreement, rather than a
vendor relationship, and the agreement also includes other components,
the costs of tuition are chargeable to the direct training category.
A new paragraph (d)(1)(vii) is added to the final rule specifying
that payments to participants that represent hours spent in a direct
training activity (such as work experience) are direct training costs.
In addition, the word ``insurance'' is removed from the definition of
administration since this is a type of cost that should be charged or
allocated to each of the benefitting categories.
Some commenters raised the question of how the costs of curriculum
development or training materials should be charged. The Department
believes that these costs are properly charged to the direct training
cost category.
A few comments were received on public relations costs versus the
costs of outreach. These comments tended to view public relations as an
outreach cost and recommended that it be charged to the training
related and supportive services category. The Department agrees that
public relations can be an effective tool that enhances outreach
activity, but also believes that the costs of general public relations
is more appropriately a part of the overall costs of administration. No
change is made in the final rule.
The Department also agrees with commenters that time distribution
should be reasonable and not burdensome and that alternative
distribution bases should be allowable. Language is added to paragraphs
(d)(1)(i), (d)(3)(i), and (e)(1) to provide that other equitable cost
allocation methods may be used. Other equitable cost allocation methods
may be either financial based or non-financial based methods.
Limitations on Certain Costs
Section 627.445(d) of the interim final rule clarified the
provision made in section 141(d)(3)(C) of the Act for excluding
administrative costs incurred by CBO's or non-profit organizations from
the SDA's administrative cost limitation under certain criteria and
conditions specified in the Amendments. A number of commenters
responded to that provision and regulatory clarification. Most of these
commenters incorrectly perceived the 10-percent limitation as an
absolute ceiling on administrative costs for CBO's and other non-profit
service providers and requested relief from that ceiling. Other
commenters raised questions of whether the 90/10 provisions were based
on budget or actual expenditures and the effect on the 90/10 provision
if more than 10 percent is expended by the CBO or other non-profit
service provider for administrative costs.
The Department emphasizes that the provisions of section
141(d)(3)(C) of the Act and paragraph (d) of the regulations do not
constitute a mandatory ceiling on administrative costs for CBO's and
other non-profit service providers. The relief provisions apply to the
SDA's administrative cost limitation and are only applicable for those
situations in which the SDA and the CBO or other non-profit service
provider agree to the 90/10 arrangement. Where such agreement is
reached, the SDA may avail itself of the relief to total administrative
costs only if the actual expenditures of the CBO or other non-profit
service provider conforms to the 90/10 provisions. Costs charged to the
JTPA program for the costs of a CBO or other non-profit service
provider that are for less than 90 percent for direct training and
training-related and supportive services costs or for more than 10
percent for administrative costs negate the applicability of this
provision.
No changes other than grammar and deletion of the word ``private''
are made to this section.
Program Income
Section 627.450 contains a definition of what is and what is not
program income for JTPA purposes, including the incorporation of the
new provisions of section 141(m) of the Act, and establishes timeframes
and requirements for the treatment and use of program income. The JTPA
cost categories and the administrative cost limitations are also made
applicable to program income.
A number of commenters responded to the provisions of this section.
The comments contained a number of suggestions, including: That the
Department should adopt the OMB Circular A-102 definition of program
income; that program income should not be subject to the cost
categories or administrative cost limitation; and that the regulations
should eliminate the presumption that a contractor is entitled to the
earned revenues by law, especially a contractor with whom the State or
SDA is no longer contracting. Other commenters raised the question of
whether earned program income must be used for the same program or
subtitle that earned it and still others requested clarification of the
time frame for use of program income.
It is the Department's intent to adopt the basic A-102 definition
of program income and to add to that definition the specific provisions
of section 141(m) of the Act. In addition, the Department recognizes
that the potential to earn significant amounts of program income exists
within the Act and these regulations. To avoid the possibility of
creating windfalls of administrative funds available to entities that
choose to use the new provisions in such a manner, the Department is
imposing the administrative cost limitation on program income.
Section 141(m) of the Act specifies that program income may be
retained by the entity that earned it and used for program purposes.
The Department believes that the regulations, as written, are
consistent with the statutory provision and that there is no authority
to empower any other entity to use the funds, as long as the entity
that earned the program income uses the funds for program purposes.
In response to the questions about whether program income must be
used for the same program or subtitle that earned it, or if it may be
used for any JTPA program or title, the Department agrees that
clarification is needed. While the interim final regulations limited
the use of program income to the particular JTPA grant or subgrant
under which it was earned, it is recognized that particular grants or
subgrants may provide funds for multiple programs or subtitles.
Therefore, paragraph (c) of this section of the final rule is amended
to also limit its use to the JTPA title under which it was earned. In
addition, language is added to paragraph (c)(3) to clarify that the
time period for the use of program income is the funding period,
usually up to three years.
It was brought to the Department's attention that section 141(m) of
the Act does not exempt interest earnings by States from the provisions
applicable to income under the Act and, therefore, the regulations
could not either. The Department agrees, however, the State is required
by the CMIA, codified at 31 U.S.C. 6503(c), to pay interest on advanced
funds from the time that the funds are deposited by the United States
to the State's account until the time that the funds are paid out by
the State for program purposes.
The Department believes that it is equitable that the State be able
to use the interest it may earn on these funds towards satisfying the
interest debt created by the CMIA and does not desire to cause States
to both meet any interest liability under the CMIA and provide
additional JTPA program services with the same interest earnings.
Therefore, paragraph (a)(v) is revised in the final rule to eliminate
the exception for interest earnings by States and paragraph (c), Use of
program income, is revised to permit the State's use of such income to
meet its CMIA liability. In addition, the application of the
administrative cost limitations in paragraph (c) is also revised to
exempt program income used by States to meet its CMIA liability from
the administrative cost limitation.
Reports Required
Section 627.455 requires financial reporting to be on a quarterly
basis and costs to be reported on an accrual basis by year of
appropriation. A few commenters asked whether participants must also be
reported by year of appropriation and several commenters asked whether
costs may be charged to the oldest available appropriation, i.e.,
first-in, first-out (FIFO) basis.
As specified in Sec. 627.455(a), reporting instructions are to be
issued by the Secretary. The statutory requirement to report by year of
appropriation is limited to financial data. With regard to FIFOing of
costs, the Department has no objections to an entity FIFOing costs it
incurs itself as long as obligational authority exists for multiple
years and the costs are for the same purposes and under the same terms
and conditions that accompanied each year's obligational authority.
This approach limits FIFOing to each individual JTPA entity and does
not include one entity FIFOing costs incurred by another entity, even
if the other entity is a subrecipient of the original one. Restated,
once a JTPA cost is recorded by any subrecipient, it must be recorded
against a given year of funds and remains a cost charged to that year
of funds. It may not be recorded or reported by another entity against
a different year of funds. No changes are made to the final rule.
Requirements for Records
Section 627.460(a) imposes the record retention requirements of
section 165(e) of the Act on State records and provides the State two
options for subrecipient records. A few commenters encouraged the
Department to drop the option for subrecipient records and require all
subrecipients to comply with the record retention provisions imposed on
subrecipients by the Act.
Since the Act is unclear about its effect on subrecipient records,
it is the Department's intent, by providing an option for retention of
subrecipient records, to allow each State to determine if subrecipients
of the State should each have its own clock for the starting point for
record retention, rather than having all records of all subrecipients
throughout a State controlled by the one State clock. This option
avoids requiring all subrecipients in a State to maintain records
beyond the prescribed period just because a claim, audit, or litigation
has started that affects only one or a few subrecipients. It also
enables JTPA subrecipients to maintain and dispose of JTPA records in
the same timeframes that apply to other records of the subrecipient
that are covered by applicable OMB Circulars. It is expected that
either approach will result in most JTPA records, other than property
records, being maintained for the same total 5-year period of time.
Subrecipients that are opposed to this approach should encourage their
State to not adopt the option provided.
Paragraph (a)(2) of this section is changed in the final rule to
add the statutory requirement for property records to be retained for
three years after final disposition.
Section 627.460(d) of the interim final regulations authorizes the
substitution of copies made by microfilming for original records. A few
commenters raised questions about the allowability of retaining records
in forms other than microfilming, such as computer imaging or scanning,
and other types of computer generated data and electronic files. In
response to these comments, the Department has revised this provision.
Instead of authorizing a particular medium for record retention, the
revised provision sets a standard that the method of retention must be
sufficient to assure that the record is useable as evidence in an audit
or any other JTPA proceeding. As before, the substitution of
microfilmed or photocopied records can continue to be used since these
media are generally accepted as admissible for evidentiary purposes.
The Department takes no position on the use of records stored on
electronic media and the revised regulation neither authorizes nor
specifically forbids their use. If electronic storage media were to be
considered for use, the user would have to be certain that there are
sufficient security safeguards and protections against tampering so
that a court would accept the record as evidence in a proceeding. As in
any case where a record is maintained, the burden of producing and
authenticating it is on the custodian of the record and the failure to
authenticate the record will lead to the custodian's being unable to
use the record for any evidentiary purpose. Thus, if an SDA maintains
its participant eligibility records on computer files and is unable to
show that the records were secure or were tamperproof, the records
could not be used to prove that participants were eligible for JTPA
services.
Public Access to Records
Section 165(a)(4) of the Act requires recipients to make available
to the public upon request certain records which are maintained by the
recipients pursuant to section 165(a)(1) of the Act. Section 637.463 of
the interim final rule was intended to merely reflect the statutory
requirement.
A number of comments were received expressing concerns that such
disclosure would result in the invasion of personal privacy and would
breach basic notions of customer confidentiality. In this same regard,
some comments contended that this requirement conflicts with State
privacy laws and that the statement in the regulation with this
requirement applied ``notwithstanding the provisions of state or local
law'' goes beyond the plain meaning of section 165(a)(4) of the Act.
Another comment asked for a definition of the word ``clearly'' in the
term ``clearly unwarranted invasion of privacy''. One comment
questioned the provision in the regulation ``excepting'' recipient and
subrecipient records from the Freedom of Information Act (5 U.S.C.
552). Several comments requested that the regulations place reasonable
time and place restrictions on the right of access.
Section 627.463 is revised to follow more closely the statutory
language. There is no intent to modify or expand on the plain meaning
of the statute.
It is clear that reasonable conditions can be placed on the
mechanics of providing access, including time and place restrictions.
It is preferable that such management details be developed at the State
and local levels and not in these regulations.
The statute and the regulations permit customer confidentiality by
excluding from mandatory disclosure information which would constitute
a clearly unwarranted invasion of personal privacy. A Federal
definition of that phrase is unnecessary since it is a term best
defined in local situations by State or local law. A State or local
privacy law or requirement which prohibits or restricts the disclosure
of information which constitutes an unwarranted invasion of personal
privacy would not be in conflict with the JTPA public access
requirement. On the other hand, the Act's requirement of public access
is a statutory condition to the receipt of grant funds and a
conflicting State requirement does not excuse a failure to comply. In
other words, if a State or local law applicable to all records exempts
certain specific kinds of identifying information (e.g., name, address,
social security number or other personal identifying information), it
could be applied to restrict the disclosure of some of the information
in a JTPA applicant's or participant's file. On the other hand, a State
or local law which prohibited disclosure of all employment and training
records would sweep so broadly that it would conflict with the Act's
disclosure requirement. In order to emphasize that requirement, the
informational provision in the regulation that the public access
requirement applies ``notwithstanding the provision of the State or
local law'' is retained in the final regulation.
The ``informational'' statement regarding the Freedom of
Information Act produced some confusion and is removed from the final
regulation. The only reason this statement was put into the interim
final regulation was that the coverage, or non-coverage, of the Federal
Freedom of Information Act has been a recurring subject of inquiry. The
Freedom of Information Act applies to the disclosure of records in the
custody of Federal agencies. In like manner, the Privacy Act (5 U.S.C.
552a) applies to records described in section 165 of the Act. Section
627.460 records are not Federal records until submitted to the
Secretary. Until then, they are not covered by federal ``freedom of
information'' or ``privacy'' requirements.
Property Management Standards
Section 627.465 reflects the requirements of section 141(r) of the
Act, which provides that the Federal requirements generally applicable
to Federal grants to States and local governments are the requirements
governing the title, use, and disposition of real property, equipment,
and supplies purchased with JTPA funds.
The Federal requirements generally applicable to Federal grants to
States and local governments are codified for Department of Labor grant
programs at 29 CFR part 97. Therefore, the provisions of those
regulations applicable to property requirements are incorporated into
this section for governmental recipients and subrecipients.
The Federal requirements generally applicable to Federal grants to
States and local governments provide that subrecipients that are
institutions of higher education, hospitals, and other nonprofit
organizations will follow the Federal agency regulations that implement
OMB Circular A-110, as codified in DOL regulations at 29 CFR part 95
(59 FR 38270 (July 27, 1994), therefore, those requirements are also
incorporated into this section for those types of entities. It is
expected that this approach will provide administrative relief for such
subrecipients since it will prevent an organization administering other
Federal grants or subgrants from having to follow two different sets of
requirements. In addition, the Federal requirements applicable to
intangible personal property have been incorporated into this section.
There are no Federal requirements generally applicable to
commercial subrecipients; therefore, Sec. 627.465(c) provides specific
JTPA requirements for these organizations.
A small number of commenters raised the question of whether prior
approval by the Department of Labor is necessary for property
acquisitions. Language is added to paragraphs (a) and (b) of this
section to waive any Department of Labor prior approvals relative to
property acquisitions.
Section 627.465 specifically provides that the new rules apply only
to property acquired after July 1, 1993. Several commenters inquired
about the rules applicable to property acquired prior to July 1, 1993.
It was the Department's intent in the interim final rule that such
property would continue to be governed by the rules in effect at the
time the property was acquired. To ensure that this intent is explicit,
the previous JTPA regulations on property are added as a new paragraph
(e) in the final rule. The only change is the citation for records
retention requirements.
The JTPA regulations in effect prior to July 1, 1993, provided that
the Governor was to maintain accountability for property in accordance
with State procedures, but applied three specific Federal requirements:
(1) A reservation of the Secretary's rights to such property; (2)
record retention requirements; and (3) either reimbursement to the JTPA
program of the fair-market value for any unneeded JTPA acquired
property retained for use in a non-JTPA program or the use of proceeds
from the sale of such property used for JTPA purposes.
It is recognized that the Department has no rights in property
acquired with title II or III funds awarded to States from the
inception of JTPA in 1983 through July 1, 1993, but that the Department
does have rights in property transferred to JTPA from CETA. Therefore,
as long as the proceeds from the sale of JTPA acquired property or the
fair-market value of such property transferred to other uses are
expended for JTPA purposes and records maintained accordingly, the
Department views any further requirements governing such property to be
the responsibility of the Governor. For CETA-acquired property
transferred to JTPA, the Department's rights in such property are
specified in the current Department regulations implementing the
applicable OMB Circulars. Recipients and subrecipients are expected to
follow those regulations in disposing of CETA-acquired property.
Performance Standards
In addition to adult and youth programs under title II-A and II-C
and dislocated workers under title III, Sec. 627.470 provides for the
establishment of performance standards for older worker programs under
section 204(d) of the Act. The standards for both adults and youth may
include standards for employment competencies which are to be based on
such factors as entry-level skills and other hiring requirements. The
purpose of the performance standards guidance set forth in these
regulations is to establish the general requirements for implementing
title II-A, title II-C, and title III performance standards. Specific
policy requirements will be developed in consultation with the JTPA
system and will be subject to a formal public comment process.
Several commenters asked when the new performance standards
requirements would take effect. Current performance standards measures
and implementing provisions, as specified in TEGL's 10-89, 7-91, and
11-92, will remain in effect through Program Year (PY) 1993. In
accordance with the transition provision of section 701(b) of the JTPA
Amendments, revised performance standards were published July 11, 1994
(59 FR 35381 (July 11, 1994); standards pertaining to 6-month retention
in unsubsidized employment shall not take effect before July 1, 1995.
In regard to setting 6-month retention standards, several
commenters advised the Department to conduct a study to identify and
address technical issues related to using Unemployment Insurance (UI)
wage records to document placement and retention of participants. In
preparation for developing and implementing policy in this regard, the
Department of Labor has already undertaken a study to examine the
technical and operational issues associated with the use of UI wage
records for the purpose of implementing performance standards related
to employment retention. The study was conducted in 16 States and
focused on such issues as quality of data, timing for incentives, and
out-of-State and uncovered employment. The results of the study will be
available in the fall of 1994 and will provide important input into the
decisionmaking process and guidelines for implementing the 6-month
retention standard. The Department recognizes that there will be a
variety of issues to be addressed in developing and implementing a
retention standard. When the results of the study are available, the
Department will work with State and local staff to introduce, wherever
feasible, alternative post-program measures.
In addition, it is important to note that interim credit, which a
few commenters believed should be incorporated in the performance
standards, will be considered in the development process. The
Department emphasizes, however, that there is no maximum participation
limit and no Department-imposed requirement that everyone be terminated
at the end of a given program year. Performance standards are based
only on those individuals who do, in fact, terminate.
A number of commenters provided advice on implementing the
performance standards required under section 204(d) of the Act, which
implies that these standards are to parallel those developed for title
II programs. While the specifics of older worker performance standards
will not be addressed in the regulations, the process for developing
these standards began in the summer of 1993. Program experts and
advocate groups for older workers were consulted in developing
performance standards for older workers programs.
In addition, in response to other comments recommending adoption of
performance standards for adults based on competency attainment, it is
important to note that skill acquisition for adults is included among
several possible performance standards factors identified in section
106(b)(3)(E) of the Act. In order to insure that any standards
established for skill acquisition are fair and practical, the
Department has begun to collect relevant administrative data and also
to examine experience with youth employment competencies and
initiatives, such as the Secretary's Commission on Achieving Necessary
Skills (SCANS) and apprenticeship programs. In addition, beginning in
1994 the Department will consult with academics and program
practitioners to determine practical approaches to defining adult
competencies. Performance standards for adult skill acquisition will be
issued in PY 1996, at the earliest.
With the exception of the older worker program, the Governor is
responsible for establishing an incentive policy that rewards
performance in title II programs and for: (1) Establishing a process
for adjusting performance standards to account for local conditions,
and (2) providing technical assistance to SDA's which fail to meet
performance standards for a given program year.
Several commenters voiced concern that a performance standard
relating to costs might be required. Accordingly, Sec. 627.470(c)(2) is
amended to clarify that Governors may not tie standards relating gross
program expenditures to performance measures in making incentive
awards. Governors are encouraged to make full use of available
expenditure and participant data in monitoring SDA fiscal practices; at
the same time, SDA's should closely monitor local service providers.
States and SDA's are encouraged to explore ways of relating overall
costs of job training to long-term employment, earnings and reductions
in welfare.
The final regulation also incorporates the requirement, in section
106(j) of the Act, for the imposition of a reorganization plan on SDA's
failing for 2 consecutive years to meet an appropriate proportion of
the performance standards, with the exception of the older worker
programs. The Governor is to notify the Secretary and the SDA of the
continued failure and to impose a reorganization plan within 90 days of
the end of the second program year; otherwise, the Secretary will
develop and impose the reorganization plan. As mentioned before, with
regard to the 90-day deadline for imposing sanctions, a few commenters
believed that 90 days was insufficient time for States to evaluate and
implement an effective reorganization plan. In addition, a few
commenters sought clarification of what might constitute the imposition
of a reorganization plan. The Department acknowledges that there may be
some difficulty in timing but points to the language in section
106(j)(5)(A) of the Act. In response to the latter comments and in an
attempt to alleviate the level of concern about the imposition of a
reorganization plan, the final rule is amended by adding a new
paragraph (c)(4)(iv) to Sec. 627.470 which provides the minimum
requirements for the imposition of a reorganization plan. The Secretary
will give the Governor and the SDA 30 days in which to comment to the
Secretary on the proposed reorganization plan prior to its imposition.
Further, the Secretary will recapture or withhold up to one-fifth of
the State's administration set-aside to provide technical assistance to
an SDA where the Secretary has imposed the reorganization plan or where
the Governor has not provided appropriate technical assistance.
Reorganization Plan Appeals
No comments were received on the provisions of this section and no
changes are made in the final rule.
Oversight and Monitoring
Several comments were received on oversight and monitoring. Section
627.475 summarizes the roles of each administrative level in a
comprehensive monitoring and oversight system. The monitoring
provisions are expanded to require the Governor to develop a monitoring
plan which requires that each SDA and SSG be monitored at least once
annually. The plan must also require the collection and review of
sufficient information to enable the Governor to determine whether
substate entities have demonstrated substantial compliance with the
oversight requirement to permit a waiver of the imposition of sanctions
authorized under section 164(e) of the Act, or to determine whether a
job training plan should be disapproved pursuant to section 105 of the
Act. The regulations also require the Governor to be responsible for
issuing standards to SDA's and SSG's for the development of a local
monitoring plan. Additionally, the regulations require the Governor to
develop general standards for PIC oversight responsibility for
inclusion in the Governor's coordination and special services plans.
One commenter requested that the Department of Labor provide
greater details regarding its own monitoring responsibilities as well
as those of the States. The Department is in the process of developing
guidance in this area and, when completed, will provide more detailed
information on monitoring and oversight through administrative
issuances.
One commenter observed that the emphasis in paragraph (b)(3) was
unnecessarily on criteria for disapproval of the plan when, in fact,
the Act called for the Governor to approve a plan unless it did not
meet certain criteria. The commenter suggested that paragraph (b)(3) be
revised to read ``Determines that a job training plan shall be
disapproved if the plan does not meet the criteria established in
section 105(b)(1) of the Act which states in part, the Governor shall
approve the job training plan or modification thereof unless he finds
that the plan does meet the criteria found in section 105(b)(1)''. The
Department concurs with this comment and, although the Department did
not adopt the suggestion in toto, paragraph (b)(3) is revised to better
reflect the statutory criteria for disapproval of the job training
plan.
A few commenters requested clarification of what elements of an
SDA's and SSG's operation must be monitored not less than once
annually. The Department believes that an effective monitoring program
is important to improving or maintaining high levels of program
performance. The Department wishes to provide states with flexibility
in designing the nature and extent of their monitoring programs while
assuring that monitoring is thorough. Paragraph (b)(5) is revised to
indicate that all aspects of the SDA and SSG program must be reviewed
annually, although the Department wishes to clarify that the degree of
emphasis placed upon the review of each area of a program may vary from
year to year.
A few commenters expressed concern with the PIC responsibility for
oversight as it relates to the Governor and the chief elected official.
The commenters suggested that the PIC should be allowed flexibility to
determine the type and amount of PIC oversight. Section 103(a) of the
Act states that it shall be the responsibility of the PIC to provide
policy guidance for, and exercise oversight with respect to, activities
under the job training plan for its SDA in partnership with the unit or
units of local government within its SDA. The Department agrees that it
is primarily the responsibility of the PIC to determine its monitoring
and oversight role. While the regulations give the Governor a role in
PIC oversight in an overall context, the Department does not expect any
guidelines issued by the Governor to be overly prescriptive. Therefore,
the PIC should have a great deal of flexibility in setting its
monitoring role. No change is made to the final regulation.
Governor's Authority to Remedy Violations
In reviewing the interim final regulations, the Department realized
that it had not fully implemented section 164(b) of the Act in the
regulations. Sections 627.477 and 627.607 are added to complete the
regulatory implementation of section 164(b) regarding the Governor's
actions where there are substantial violations of the Act or the
regulations and corrective actions have not been taken. Conforming
changes have been made in Secs. 627.601(b), 627.471(a) and 627.702.
These added provisions and changes are not intended to modify or expand
on the plain meaning of the statute.
Audits and Audit Resolution
Because there are both non-profit and commercial organizations
which are direct recipients of JTPA Title III program funds, the
language at Sec. 627.480(a)(2) and (3) is modified by the addition of
the term ``recipients'', as well as by substituting the term
``organizations'' for ``subrecipient'' in paragraph (a)(2). The interim
final regulations implied that non-profit and commercial organizations
can only be subrecipients.
Audits of Commercial Organizations
Several commenters raised questions concerning the audit
requirement for ``commercial organizations''.
A few commenters wanted clarification concerning whether or not the
audits of proprietary schools, which are required by the U.S.
Department of Education because of their involvement with Pell grants
and other subsidies, would satisfy the JTPA audit requirement. One
commenter was concerned that the regulation did not provide a timeframe
within which these audits were to be completed, and another expressed
concern that the requirement for an annual audit was more frequent than
that for non-profit institutions. The regulation, at
Sec. 627.480(a)(3), is amended to provide for audit timeframes and
frequencies that are consistent with the OMB Circular A-133
requirements for non-profit organizations. This provision also provides
the option of either a Federal funds audit or an organization-wide
audit as long as the audit includes financial and compliance coverage
of the JTPA program within its scope. The option of a Federal funds
audit should be satisfied by the audit required by the U.S. Department
of Education so long as it includes financial and compliance coverage
of the JTPA program within its scope.
A few commenters requested clarification concerning the audit
requirement for OJT employers, commercial off-the-shelf training
packages, tuition-based individual referral contracts, and other
``vendor'' type arrangements. The regulation imposes an audit
requirement only on organizations that are ``subrecipients'' and not on
those that are ``vendors''.
A few commenters asked if the regulation prohibited a Governor
(this would also apply to any awarding agency) from procuring a program
specific audit for commercial organizations and directing them to
exclude JTPA from their organization-wide audit. The regulation only
talks to the requirement to have an audit done, not to who will procure
and/or conduct the audit. If the awarding agency and its subrecipient
agree that the awarding agency will procure and/or conduct the audit,
the requirement of the regulation would be satisfied.
Responsibility for Subrecipient Audits
A few commenters had difficulty with the language at
Sec. 627.480(d). One of these commenters thought that the regulation
went beyond OMB Circular A-128 and required that debt collection be
completed within the 6-month resolution period. This is not the case.
When costs are disallowed and debt collection is the appropriate
sanction, those efforts should be initiated or started within the 6
month period. This often is accomplished by including appropriate
language in a final determination. However, the actual repayment most
often occurs after the 6-month resolution period. Also, debt collection
efforts are often put on hold when a final determination is appealed.
To address these concerns, the parenthetical reference in paragraph
(d)(2) is moved to the end, and the phrase ``where appropriate,'' is
inserted. Paragraph (d)(3) is divided into two sentences.
Waivers of Liability
One commenter pointed out a conflict between Sec. 627.480(f) and
Sec. 627.704(a). Paragraph (f) is removed from this section and added
to Sec. 627.704. The remaining paragraphs of Sec. 627.480 are
redesignated.
Stand-in Costs
There were a number of commenters who raised concerns and questions
about Sec. 627.480(g), which is now redesignated as paragraph (f).
Several of these commenters were among those who commented on the
definition of ``stand-in costs''.
A few commenters indicated that stand-in costs should not have to
be from the same cost category as the unallowable costs. Others pointed
out the discrepancy between the definition and this regulation
concerning the time when such costs were incurred. As a result, the
last sentence of redesignated paragraph (f) is revised so that both it
and the definition at Sec. 626.5 state that the costs are to be from
the same program year and that the substitution cannot result in a
violation of the applicable cost limitations.
Several commenters stated that ``stand-in costs'' should be allowed
as substitutes regardless of the year or program/title that generates
them. Such an interpretation runs counter to the intuitive concept of
substituting to make whole the program that bore the cost of the
misexpenditures. It is also contrary to ETA's interpretation of the
General Accounting Office (GAO) Comptroller General decision which is
the basis for the position on ``stand-in'' costs. The GAO-decision
indicates that, when an audit reveals total allowable program costs
which exceed the total amount authorized and paid with program funds,
the resolving agency is obligated to accept those program costs as
substitutes for disallowed costs. This is true because funds which
become available due to the disallowance of costs should be treated as
funds never expended by the auditee. Thus, the stand-in process
constitutes a part of the totality of allowed and disallowed costs
which occurs at the audit resolution stage before a collectible debt is
established. The regulation, at Sec. 627.480(f), is written to
incorporate this concept of substitution for unallowable costs incurred
by the auditee when the stand-in costs are reported (on the JTPA
quarterly financial report form) and accounted for in the auditee's
financial system, and are included within the scope of the auditee's
audit report. Although potential stand-in costs are aggregated for
reporting purposes only, this does not create a pool of stand-in costs
at the higher tier when funds are merely passed through from one level
to the next (e.g., State to SDA or other government entity). When
``stand-in'' costs are reported on the JTPA quarterly financial report
and included within the scope of an entity's audit, they are readily
identifiable and available to substitute for unallowable costs
identified in the same report. This is important because by the time an
audit report is finally resolved, the three-year availability period
for the costs disallowed has often lapsed or is nearing its end. By
having contemporaneous allowable JTPA costs incurred (but paid for with
local resources) during the same period as the unallowable costs, there
is no question about the propriety of the substitution.
A few commenters raised questions concerning the requirement to
report ``stand-in costs''. A few asked if they needed to be reported on
the quarterly reports required by the Department. One asked if these
costs could be reported after the fact only when needed, instead of
being reported whether or not an SDA is permitted to and/or needs use
them. Others suggested that they should be allowed even if not
reported. One suggested that the requirement to report exceeded the
statutory requirement that they be recorded. As explained above, it is
ETA's position that ``stand-in costs'' must be subjected to audit
coverage in order to be accepted. Imposing the requirement that the
costs be reported and providing a line for these costs on the JTPA
quarterly financial report(s), insures that these costs are included
within the scope of the audit report.
A few commenters suggested that the JTPA compliance supplements for
OMB Circulars A-128 and A-133 audits be revised to require that such
audits include a separate schedule for ``stand-in costs'' and to
specify the documentation requirements for same. The documentation
requirements, including retention requirements, are the same as for all
JTPA costs incurred. While the Department is not in a position to
dictate whether A-128 and A-133 audits include an additional schedule,
when the compliance supplements are revised, it may be possible to
suggest how ``stand-in costs'' should be treated in such audits.
Direct Appeals by SDA's
Several commenters suggested that Sec. 627.480(h) should be revised
to provide the right of a direct appeal by an SDA, especially in those
instances when a State chooses not to appeal. However, the initial and
final determination process utilized by the ETA Grant Officer imposes a
sanction on the direct recipient of funds from ETA, and it is that
recipient that ETA holds liable for the sanction. If the entity upon
whom the sanction is imposed chooses not to appeal, there is no dispute
between that entity and ETA. If an appeal of a Grant Officer's final
determination is taken, affected subrecipients are permitted to
intervene in the proceedings. An SDA has the right to appeal any
adverse determination against it within the State appeal system.
Audit Resolution
Section 627.481 is not changed from the interim final regulations.
One commenter suggested that Sec. 627.481(a)(1) should permit direct
recipients to have 6 months within which to submit their resolution
report. The Department believes that to do so would mean that the
recipient's audit would not be resolved with its awarding agency within
the 6 months required by the OMB Circulars. Another commenter suggested
that the title for the paragraph at Sec. 627.481(c) should be State
level audit resolution. However, this paragraph also applies to
resolution beyond the State level (e.g., the resolution of a service
provider audit by an SDA). A third commenter suggested that the
regulation at Sec. 627.481(c) should mandate that audit work papers be
accessible to the auditee. Since these audits are procured by the
auditee, it is within their purview, and not the Department's, to
include requirements concerning work papers in their agreement with the
auditors.
Closeout
One commenter suggested that waiting 3 years (the full period
during which funds are available for expenditure) to close out a grant
that can be closed in 1 to 1\1/2\ years is confusing and unnecessary.
It was also stated that this provision should allow closeout to occur
as soon as all of the funds are expended or within 90 days after the
end of the funding period. A second commenter suggested that the word
``timely'' is a subjective term and that the provision should require
closeout to occur within 90 days after the end of the funding period,
unless the deadline is extended. This same commenter indicated that the
regulation should be clear that closeouts are based on year of
appropriation. Several of the comments indicated an apparent
misunderstanding that Sec. 627.485 applies to subrecipient awards. In
fact, this provision is intended to inform the direct recipients of the
Department's intention to close out each annual grant agreement within
a short period after the availability of the funds has lapsed. The
Department has determined that it is much more appropriate and less
confusing to close out all of the annual JTPA grant agreements
(described at Sec. 627.405 as the funding document for an individual
program year's funds) at the same time.
One commenter suggested that the language in the last sentence of
paragraph (b) should allow for additional revisions, as long as there
is a good reason that is adequately documented; further, the commenter
suggested such revisions could be handled through an increase or
decrease in the ``carryover'' amount. The first sentence of the
paragraph allows for a 90-day period within which revisions may be made
without a requirement for justification. The second sentence allows the
Grant Officer to extend the period for revisions if the recipient
requests an extension and provides a justification for same. The
Department sees no need for any change to this provision. Also, at the
end of the three-year funding period, there are no ``carryover'' funds,
only funds for which the three-year availability has lapsed. These
funds must be returned in accordance with paragraph (c) if they have
been drawn down, and will be deobligated by ETA.
Later Disallowances and Adjustments
One commenter stated that the final rule should identify the period
within which the Grant Officer has the authority to disallow costs.
Such an action is not necessary. If an audit or review is conducted
while the records are still available in accordance with the
requirements of Sec. 627.460 (i.e., 3 years after submittal of the
final expenditure report for the funding period) and there are
unallowable costs, then the Grant Officer can disallow those costs.
Collection of Amounts Due
One commenter indicated that this provision must acknowledge that
there are processes at the local level which impede collection of
disallowed costs and which prohibit collection efforts by the Federal
Government (or State) during the time when the State (or local)
collection actions are in process. Other sections of these regulations
(e.g., Sec. 627.485) contain provisions which allow recipients to
request additional time to complete such a process. However, once a
Federal debt is established against a recipient, it is that direct
recipient which the Department holds liable. The provision is not
changed.
Grievances and Sanctions
The interim final rule revised, redesignated, and reordered the
regulatory provisions formerly found at 20 CFR part 29, Subpart D--
``Grievances, Investigations, and Hearings'' in a new part 627,
subparts E, F, G, and H. The interim final regulations more clearly
defined the various JTPA grievance procedures required to be
established by section 144 of the Act. The procedures applicable to a
particular grievance process level were consolidated into discrete
subparts.
Subpart E--Grievance Procedures at the State and Local Level
The new part 627, subpart E, sets forth the grievance procedures
required at the State and SDA and SSG levels, including State review,
that were generally found at 20 CFR 629.52.
A commenter suggested that the reference to the handling of
complaints alleging discrimination in Sec. 627.500(a) be made a
separate paragraph.
The Department agrees with the suggestion and Sec. 627.500 is
revised to redesignate the last sentence in paragraph (a) as a new
paragraph (b), Handling of discrimination complaints. In addition,
paragraphs (b) and (c) are redesignated as paragraphs (c) and (d),
respectively.
A commenter observed that under the previous regulations,
complaints involving fraud, waste, abuse, or criminal activity were to
be reported to the Secretary, and that Sec. 627.500(b) of the interim
final regulations now provides that such complaints are to be reported
to the DOL OIG. The commenter's concern was that ETA might not be aware
of, but had a need to know of, such complaints, and recommended that
the regulations be amended to also include notification to ETA for such
complaints. Another commenter suggested that complaints be reported
concurrently to ETA and the OIG.
The purpose of the interim final regulations was to ensure that
criminal activity was directed to the OIG for resolution. Other
processes set forth in the regulations for the handling of complaints
are designed for non-criminal JTPA complaints. The provision at
Sec. 627.500(b) is amended to provide for reporting criminal activity
to the OIG, Office of Investigations through the Department's Incident
Reporting System, with a copy simultaneously provided to ETA. Other
non-criminal complaints will continue to be handled under the
procedures set forth at part 627, subparts E and F, and through the
Department's Incident Reporting System.
A commenter recommended deleting Sec. 627.500(c)(2) concerning a
private right of action with respect to alleged violations of JTPA
statute or regulations in pursuing non-JTPA remedies since there is no
statutory authority for the provision.
The provision at Sec. 627.500(c)(2) is not a new provision. Prior
to the interim final rule, it was set forth at 20 CFR 629.51(b)(3)
since the March 15, 1983 regulations implementing JTPA. It does not
preclude a private right of action if one exists, but rather indicates
that nothing in the Act or in the regulations creates such a right. No
change is made to the final rule.
A commenter recommended that States, SDA's, and SSG's be required
to develop their grievance procedures in such a way as to broadly
inform participants under the JTPA system of their rights.
The Department believes that the Act and regulations clearly set
out the broad outlines of the grievance, hearings, and appeal rights
under JTPA for interested parties. The specific complaint and grievance
procedures to be followed are appropriately developed at the State and
local level in accordance with the provisions of the Act and these
regulations. Such procedures are routinely made available to
participants upon entering the program, and to subrecipients and other
interested parties. No change is made to the final rule.
A commenter recommended that States should be required to establish
timeframes for resolving complaints and recommended a 60-day time
period.
The Department expects that State, SDA and SSG grievance procedures
already address this issue as an integral and necessary part of their
procedures. In any case, the regulations already include a 60-day time
period at Secs. 627.502(c) and 627.503 (a) and (c) of the interim final
rule. Therefore, no change is made to the final rule.
A commenter recommended that a neutral third party be included in
the grievance processes at the State level under Sec. 627.501, and the
SDA and SSG level under Sec. 627.502, to hear and act upon complaints.
In addition, the commenter suggested that programs should be encouraged
to take advantage of recent Federal initiatives related to mediation of
disputes.
The interim final regulations already provide for the use of
neutrals in the JTPA grievance process in certain situations. For
instance, such use is included in binding arbitration proceedings under
the alternate procedure for handling labor standards violation under
section 144 of the Act, and the alternative dispute resolution
provisions at Sec. 627.805 available to parties to a complaint under
Sec. 627.801, Procedures for filing a request for hearing. The
regulations also provide for an independent review of complaints at the
State level pursuant to the provisions at Sec. 627.503. No change is
made to the final rule.
A commenter recommended increased DOL participation in monitoring
and handling complaint processes at the State and SDA and SSG levels,
including regular participation in grievance hearings.
The grievance procedures established pursuant to section 144 of the
Act, and set forth at Secs. 627.501 and 627.502 of the interim final
rule, are intended to ensure due process and to provide for the timely
and orderly processing of JTPA complaints at the State and local
levels. The regulations also provide for a State-level review of local
grievances, as set forth at Sec. 627.503. There is also provision for
Federal-level review of State and local-level complaints without
decision at Secs. 627.601(a) and 627.605. It would be premature and
improper to interject the Department into a State or local grievance
process before it is completed. It would also create problems in the
event that the Department was subsequently requested to review a
complaint in which it had participated. The Department believes that
the regulations set forth in the interim final rule are appropriate and
consistent with the legislative provisions. Therefore, no change is
made to the final rule.
A commenter recommended that the time period for requesting a
State-level review of a local complaint, provided under Sec. 627.503(c)
of the interim final rule, be increased from 10 and 15 days to 30 days.
Under the statutory provisions at section 144, and the regulatory
provisions at part 627, subparts E, F, G and H, the grievance
procedures established at the various levels are intended to provide
the speedy processing of filed complaints. The Department believes that
the timeframes established in the regulations are consistent with the
statutory scheme. No change is made to the final rule.
A commenter recommended including examples of independent reviewers
at Sec. 627.503(b) pertaining to State level review of complaints.
The Department does not believe that it is appropriate to include a
laundry list of examples of possible independent reviewers in the
regulations, but agrees that some clarification in this area is
warranted. Section 627.503(b) is amended in the final rule to indicate
that independent review should be conducted by a reviewer who is not
connected with the JTPA program.
A commenter recommended amending the employer-level grievance
provisions at Sec. 627.504 to indicate that if an employer is required
to use grievance procedures under a covered collective bargaining
agreement, then those should be the operative procedures for the
handling of JTPA complaints at that level. In addition, it was
recommended that if no collective bargaining agreement exists,
participants should be made fully aware of their rights to file a
grievance either by using the employer's grievance procedures or the
SDA's JTPA grievance procedures.
The Department agrees that where the employer is required to follow
a certain grievance procedure under the provisions of a collective
bargaining agreement, those procedures should be followed for
complaints pertaining to the terms and conditions of employment of JTPA
participants, therefore, Sec. 627.504(b) is revised accordingly. The
regulations provide that recipients, SDA's and SSG's shall ensure that
employers have grievance procedures available to their JTPA
participants. Some commenters suggested that participants be permitted
to choose a grievance procedure under which to process a complaint. The
regulations indicate that employers of JTPA participants may elect to
operate their own grievance procedures or use the recipient's, SDA's or
SSG's grievance procedures established pursuant to section 144 of the
Act. The employer must inform participants of the procedures they are
to follow when they begin employment. The choice of which grievance
procedure to follow does not extend to the individual participants.
Since the relationship exists between the employer and the JTPA entity
in the first instance, it is important that all of the procedures and
provisions applicable to a given employer, including grievance
procedures, are clearly established in the agreement. The Department
believes that the existing regulatory provision is consistent with the
provisions of the Act, avoids potential confusion that could result
from the recommended change, and provides for the consistent treatment
and processing of JTPA complaints at the employer level. No change is
made to the final rule.
Subpart F--Federal Handling of Non-criminal Complaints and Other
Allegations
A commenter recommended that the reference to the handling of
discrimination complaints at 20 CFR 627.600 be made a separate
paragraph. The Department agrees with this recommendation and is
amending the final regulations to redesignate the first two sentences
of Sec. 627.600 as paragraph (a), and the last sentence, pertaining to
discrimination complaints, as paragraph (b).
A commenter recommended revising Sec. 627.601, noting that section
authorizes the receipt of complaints at the Federal level without
mention of the statutory preconditions for such acceptance that are
partially explained in paragraphs (a)(2), (a)(3) and (a)(5) of that
section. Further, the commenter argued that although some of the
preconditions for acceptance of a complaint at the Federal level appear
in later sections of the regulations, Sec. 627.601, as written, is
unauthorized by the Act and is misleading.
The provisions at Sec. 627.601 are not intended, by themselves, to
spell out all of the preconditions that apply to the various complaints
and allegations that may be filed at the Federal level, but rather are
intended to indicate the types of such complaints that may be received
and the options available to the Secretary for the handling of such
complaints. The provisions that apply to the Federal handling of non-
criminal complaints and other allegations are set out in all of subpart
F and must be viewed in their entirety to determine how they apply. The
various sections in subpart F either include the preconditions for
filing a complaint or cite other provisions of the Act and/or JTPA
regulations which spell out such preconditions. The Department believes
that the regulatory provisions are consistent with, and accurately
reflect, the provisions of the Act. No change is made to the final
rule.
A commenter suggested that, under the provision at Sec. 627.601,
the Governor does not have final determination authority in any
complaint because the regulations specify that Federal level reviews
may include all of paragraph (a), which includes any violation of the
Act, and recommended that the final rule provide clarification in this
area.
The regulations, at Sec. 627.503(d), provide that, with the
exception of complaints alleging violations of the labor standards at
section 143 of the Act, the Governor's decision is final unless the
Secretary exercises the authority for Federal-level review set forth at
Sec. 627.601 of the interim final regulations. The provisions at
Sec. 627.601(a) reserve the Secretary's authority to receive and review
complaints alleging a specific violation of the Act and/or JTPA
regulations, notwithstanding resolution of a complaint under procedures
at a lower level. Upon receipt, the Secretary may handle such
complaints, as set forth at paragraph (b) of that section. The
Department believes that the regulations accurately reflect the
Secretary's and Governor's authority in this area and that further
clarification in the regulations is not needed. No change is made to
the final rule.
A commenter noted that, in the remedies available for labor
standards violations, Sec. 627.603(c)(3) refers to ``back pay,'' and
paragraph (d)(2) of that section refers to ``lost wages'' and asked for
a definition of these terms.
The interim final regulations incorporated the statutory language
pertaining to remedies for labor standards violations at section 143(f)
of the Act, which includes these two terms. The Department believes
that, from a practical standpoint, there is no difference in these two
terms. Both terms refer generically to ``compensation'' in the context
of appropriate remedies; under paragraph (c)(3), wages are not an
available remedy, while they are an available remedy under paragraph
(d)(2). In applying a remedy, these terms would refer to the amount of
compensation (excluding benefits which are separately provided for)
that a person would have received had the violation not occurred. The
Department believes that the regulations are sufficiently clear and
that further clarification is not needed. No change is made to the
final regulations.
A commenter disagreed with the provision at Sec. 627.603(b)(4)
which provides that there is no ALJ review of the Secretary's decision
upholding the Governor's decision in complaints alleging section 143
labor standard violations.
The Act, at section 144(d)(2), specifically provides that the
Secretary may modify or reverse the Governor's decision on a complaint
alleging a labor standards violation, or issue a decision if no
decision has been issued, only after an opportunity for a hearing
before an administrative law judge of the Department of Labor. The
opportunity for an ALJ hearing is limited to actions by the Secretary
to change a Governor's decision or to issue a decision as provided for
at section 144(d)(2) of the Act. The provisions at section 144(d)(3),
pertaining to the Secretary upholding the Governor's decision,
specifically state that the Secretary's decision ``shall become the
final decision of the Secretary.'' The Department believes that the
regulations accurately reflect, and implement, the provisions at
section 144(d) of the Act. No change is made to the final regulations.
No comments were received on Sec. 627.604 and no change is made to
the final rule.
A commenter recommended that under the provisions at Sec. 627.605,
Special Federal review of SDA and SSG-level complaints without
decision, where there has been no action on a complaint at the local
level the Department should not only act on the individual complaint,
but also conduct a thorough review of the administrative capabilities
of the SDA/SSG. In addition, the Secretary should be prepared to impose
more than just a sanction for failing to issue a complaint decision,
but also impose corrective actions up to and including reorganization
of the SDA/SSG.
The provision at Sec. 627.605 pertains to actions that may be taken
against the Governor for failing to provide a decision as required at
Sec. 627.503(a) of the regulations. These actions may include imposing
a sanction for failing to issue a decision pursuant to the provisions
at Sec. 627.605(b). The right of the Secretary to review SDA/SSG
operations for compliance with the Act and applicable JTPA regulations
is reserved at Sec. 627.601(b) of the regulations. The Department
believes that the regulations provide adequate and appropriate
procedures for the handling of complaints alleging violations of the
Act and JTPA regulations at the Federal, State, and SDA/SSG levels,
consistent with implementing the provisions of the Act. No change is
made to the final rule.
A commenter indicated that there were two paragraphs (d) in
Sec. 627.606. The second is now redesignated as paragraph (e). Another
commented that the correct reference in Sec. 627.606(d)(2)(vii) should
be subpart H. The final rule is corrected. Also, the heading of
Sec. 627.606(c) is changed to read, ``Informal resolution''.
Subpart G--Sanctions for Violations of the Act Liability of Units of
Local Government
A few commenters objected to the Department's singling out units of
local government for bearing liability for funds misexpended by their
SDA/SSG. It is not the Department's intent to single out units of local
government to bear liability, but it is the Department's intent to make
clear that neither a separately incorporated administrative entity
(e.g., a PIC) nor a local unit of government can insulate (liability-
proof) itself from responsibility for misexpended funds. This is a more
clearly expressed statement of the Department's position, and does not
constitute a change in policy or position. One commenter expressed full
support for the provision while another thought it should be made even
stronger by requiring local government units to be held liable. The
provision is not changed. The Department encourages incorporated PIC's
to be active participants in the delivery of JTPA services. To this
end, the provisions of Sec. 628.415(b) indicate that the Governor's
requirements on responsibility for JTPA funds may not, on their face,
preclude the selection of an incorporated PIC as the grant recipient.
Waiver of State Liability
As a result of a comment concerning Sec. 627.480(f), discussed
above, the second sentence of Sec. 627.704(a) is removed. It is
replaced with two new paragraphs, (b)(1) and (b)(2), which address the
timing of requests for waiver of State liability. The remaining two
paragraphs are redesignated as paragraphs (c) and (d), respectively.
A few commenters suggested that SDA's should be allowed to request
waivers. Some indicated that such requests should be made in
conjunction with States, while others seemed to imply that such
requests could be made directly, bypassing the State. However, as
indicated at Sec. 627.702(e), it is the recipient that is held liable
by ETA. Therefore, the only liability that ETA can waive is the
recipient's liability for the sanction imposed on it.
Several commenters suggested that the provision should be revised
to permit a waiver in those instances where the fraud was perpetrated
against the recipient/subrecipient so as to avoid penalizing entities
which discover, report, investigate and prosecute the perpetrator of
such fraud. Both this provision at Sec. 627.704 and the provision at
Sec. 627.706 Process for advance approval of a recipient's contemplated
corrective actions are revised for such situations.
Offset Process
A few commenters expressed the belief that States would not request
``offset'' if it were limited to State-level administrative funding. A
commenter also indicated that most misexpenditures occur at the
subrecipient level and that, if it is not a section 164(e)(1)
violation, offset should be allowed at the level where the
misexpenditure occurred. Another suggested the need to be flexible
after considering all of the circumstances in the individual case.
Section 164(d) of the Act indicates that offset may be ``against any
other amounts to which the recipient is or may be entitled * * *.''
(Emphasis added) Under title II, the recipient must allocate 77 percent
of the funds to SDA's and is entitled to retain 23 percent of the funds
allotted for specifically identified activities. It is the Department's
position that a reduction in the funds available through the ``offset''
process should not adversely impact the delivery of training and
services to participants, nor the incentive grant and capacity building
activities. Therefore, the Department believes that only the title II
five percent (5 percent) administrative funds to which the recipient is
entitled should be available for offset. Similar reasoning applies to
the Department's restriction for title III funds. The Department fully
expects that recipients will seriously consider their options, and the
consequences thereof, and will not make frivolous use of this
provision.
A commenter indicated that use of the phrase, ``amounts
chargeable'', in Sec. 627.708(b), conveys the implication that the
administrative costs must be incurred before they can be ``offset''.
This was not the Department's intent. The provision is rewritten to
indicate that ``offset'' may be against amounts allotted that are
expected to be used for recipient-level administrative costs.
Subpart H--Hearings by the Office of Administrative Law Judges
A commenter recommended amending the regulations at Sec. 627.800(a)
to include Grant Officer Final Determinations made pursuant to
Sec. 627.606 under the ALJ hearing process in addition to those
specified at section 166(a) arising in connection with alleged
violations of sections 141(c), 144 (d) and (e), 164(f) and 167 of the
Act.
Section 166(a) of the Act provides that an ALJ hearing may be
requested by any recipient upon whom a corrective action or sanction
has been imposed by the Secretary. By definition this would include
final determinations made by the Grant Officer. The Department believes
that the general provision included in section 166(a) of the Act is
sufficiently clear in establishing the jurisdiction of the ALJ and that
further clarification is not needed. No change is made to the final
regulations.
A commenter objected to the restrictions placed on the jurisdiction
of the OALJ regarding specific sections of the law which the commenter
believes will reduce the opportunity for complainants to have full
redress of their grievances at the highest levels.
The OALJ coverage is as provided for at section 166 of the Act, and
set forth at Sec. 627.800 of the interim final regulations. As noted in
the response to the preceding comment, the OALJ's jurisdiction includes
more than just the specific sections cited at section 166(a) of the
Act. No change is made to the final rule.
A commenter raised some concerns regarding the entities specified
at Sec. 627.801(a) that may request an ALJ hearing based on a Grant
Officer's final determination which imposes a sanction, a corrective
action, or denies financial assistance. It was correctly suggested that
the Grant Officer might issue a sanction upon a ``vendor'' and
paragraph (a) is amended to cover such situations. A commenter
recommended that the provisions at Sec. 627.801(a) pertaining to
procedures for filing a request for an ALJ hearing could be made clear
that a request for a hearing must be submitted by certified mail, by
changing the words ``may transmit by certified mail'' to ``must
transmit by certified mail.''
The Department agrees that the provision at Sec. 627.801(a) of the
interim final regulations seems to indicate that the use of certified
mail to transmit a request for a ALJ hearing is discretionary, which
was not intended. The provision at Sec. 627.801(a) is amended to
indicate that the Grant Officer's final determination to impose a
sanction or corrective action, or to deny financial assistance may be
appealed to the OALJ within 21 days of receipt of the final
determination, and that a request for a hearing shall be transmitted by
certified mail, return receipt requested to the Chief Administrative
Law Judge.
The Department has reviewed Sec. 627.802(e) in light of the recent
Supreme Court decision in Director, Office of Workers' Compensation
Programs v. Greenwich Collieries, 114 S.Ct. 2251, 62 U.S.L.W. 4543
(June 20, 1994) which addresses the allocation of burden of proof in
cases governed by Sec. 7(c) of the Administrative Procedure Act and has
concluded that no change in this section is required. In Greenwich
Collieries, the Supreme Court concluded that a claimant for benefits
under the Black Lung Benefits Act was the ``proponent of a rule or
order'' under section 7(c) of the APA and, as such, carried the burden
of persuasion. Section 627.802(e) of these regulations is predicated on
the fact that in appeals from Grant Officer Final Determinations the
grantee is the proponent of the rule since, in the absence of an
appeal, the Final Determination would represent a final debt due and
owing the United States. The grantee seeking to avoid this outcome is
clearly the ``proponent of the rule or order.'' This construction is
also consistent with section 165 of the Act which places on grantees
the affirmative obligation to maintain adequate documentation to prove
the allowability of costs incurred. While the grantee has the burden of
persuasion, in our desire to ensure orderly presentation of evidence,
the Grant Officer retains the obligation to prepare and present the
administrative file.
In addition, a few of the commenters noted typographical errors or
incorrect statutory and/or regulatory citations in part 627, subparts
E, F, G, and H which are corrected in the final rule.
Subpart I--Transition and Implementation
On June 3, 1993, the interim final rule was amended to revise the
transition provisions at part 627, subpart I (58 FR 31471). Those
requirements are restated in the final rule, along with the addition of
a definition of ``initiation of procurement'' (Sec. 627.904(e)) and a
provision for the transfer of summer program funds
(Sec. 627.904(k)(2)).
A number of general comments were received on the difficulties and
uncertainties of the transition to the new program to be implemented on
July 1, 1993 and whether the contents of the interim final rule
adequately addressed a range of questions on the transition. Subsequent
to the publication of the interim final rule on December 29, 1992, the
Department conducted implementation training for the States in February
and March of 1992, provided transition guidance in Training and
Employment Guidance Letter 7-92 on March 8, 1993, and issued two sets
of questions and answers on the transition and interim final rule to
the Department of Labor regional offices by Field Memorandum that were
widely circulated throughout the JTPA system. The Department believes
that these mechanisms with the additional guidance reflected in the
June 3, 1993 Federal Register document, referenced above, substantially
answered the various transition questions and issues that were raised
and that a further discussion here is not required.
Part 628--Programs under Title II of the Job Training Partnership
Act
Nontraditional Employment for Women (NEW) Act (Pub. L. 102-235)
The Nontraditional Employment for Women (NEW) Act includes a series
of amendments to the JTPA. NEW's purposes are to provide a wider range
of training opportunities for women under existing JTPA programs; to
provide incentives for the establishment of programs that train, place,
and retain women in nontraditional fields; and to facilitate
coordination of JTPA and vocational education resources available for
training and placing women in nontraditional employment. Further, the
NEW Act is consistent with the overall goal of JTPA programs to
increase participants' employment, earnings, educational and
occupational skills. This separate discussion of the NEW Act is
provided as a reminder to States and SDAs of the importance of efforts
to train and place women in nontraditional employment and the emphasis
the Department places on such efforts. There are contained in the final
rule various references to the requirements pertaining to
nontraditional employment for women, especially as they pertain to
planning and setting goals, the assessment process and development of
the individual service strategy, and to the various reports required by
the Act.
``Nontraditional employment'' is defined in the NEW Act as
occupations or fields of work where women comprise less than 25 percent
of the individuals employed in such occupation or field of work.
Although nontraditional occupations are usually thought of only as
construction or skilled trades, these occupations encompass a much
broader spectrum of jobs, including those in technical and other
fields.
Nontraditional occupations have the potential for greatly improving
the economic status of women, particularly when they are growth
occupations with increased wage potential. Nontraditional training for
women also provides benefits for the States and the SDA's. The
Department believes that this kind of training expands the occupational
mix available to all customers, and can enhance coordination with other
education and training programs, as well as with labor and
apprenticeship programs. It helps advance efforts by the States and/or
SDA's to be a valuable source of trained individuals for employers and
unions. Through the implementation of NEW, it is the Department's
intent that changes will occur throughout the job training system so
that training in nontraditional occupations becomes institutionalized
in each State. The GCSSP and the job training plan prepared by each SDA
were required to include goals, actions, and accomplishments for the
training and placement of women in nontraditional employment for the 2-
year period beginning July 1, 1992 and beyond. NEW does not establish
specific numerical goals by SDA or State. However, using General
Accounting Office data (GAS/HRD-89-152FS, September 1989), the
Department estimates that the proportion of women currently trained by
JTPA in nontraditional occupations nationwide is about 9 percent.
Therefore, at their option, States and SDA's may use this figure as a
substitute for a particular State's baseline until they can collect
data specific to that State. States should strive for a goal for
training and placing more than 9 percent of women participants in
nontraditional occupations.
The Department expects that the GCSSP and the SDA's job training
plan will reflect specific measurable activities to train and to place
women in nontraditional employment and apprenticeships, as required by
the statute. As mentioned earlier, SDA's may wish to consider using the
national figure of 9 percent as an indication of the pre-NEW level of
nontraditional training until geographic-specific data becomes
available. Sections 104(b)(6) and (13), 121(b)(3) and 122(b)(5)-(7) of
the Act require the States and SDA's to set goals and report on program
accomplishments. The Department intends to look closely at these
activities to ensure compliance with requirements of NEW.
Further, the Department expects that each State's and SDA's plans
and activities will reflect the development of outreach and promotional
materials and/or activities aimed at making women aware of the programs
and the services available through JTPA, particularly of nontraditional
training and placement opportunities. Examples of outreach materials
include, but are not limited to, nontraditional career information
modules, video and print materials on nontraditional career options
(for counselors), recruitment brochures targeted at both the customer
and the employer, and dissemination of preexisting resource materials
and/or model curricula. States may also wish to undertake statewide
public education campaigns, similar to those conducted for literacy
programs, on nontraditional training and employment opportunities. The
Department expects statewide dissemination of model programs/approaches
to serve as a method of encouraging the replication and
institutionalization of nontraditional training in the State. The
Department encourages the States to disseminate to SDA's and service
providers the SJTCC's summary report on promising programs funded by
JTPA or the Carl Perkins Vocational Education and Applied Technology
Act.
Most of the comments that pertained to NEW sought to add to the
regulations a number of specific requirements regarding services to
women and focussed on nontraditional employment. These suggested
requirements ranged from language to requiring OJT goals for women in
nontraditional employment, as well as standards for OJT contracts, to
specific procurement requirements as they pertain to women-owned
businesses, and specific monitoring requirements. The Department
believes that many of these ideas have merit but does not believe that
it is appropriate to establish them as Federal regulatory requirements
beyond that which would otherwise be required by the provisions of the
Act--particularly as the Federal Government looks to reduce
administrative requirements. On the other hand, a commenter suggested
that the regulations ought to reflect the statutory requirements. The
Department is persuaded that the NEW's requirements should be
emphasized by referencing them, as appropriate, in the regulations and
has done so in appropriate sections, including: Sec. 627.455, for the
annual report to the Governor that is to be described in the job
training plan; Sec. 628.205, pertaining to the State goals for the
training and training-related placement of women in nontraditional
employment and apprenticeships; Sec. 628.210, for the responsibility of
the SJTCC to review and analyze the annual reports of SDA's and to
distribute them in the State and to the Secretary; and Sec. 628.420,
for the SDA's local goals for the training and training-related
placement of women in nontraditional employment. These are not new
regulatory requirements; rather they are reflections of statutory
requirements.
Specific changes in PART 628--Programs under Title II of the Job
Training Partnership Act are as follows:
Governor's Coordination and Special Services Plans
Several comments were received on the Governor's coordination and
special services plans. Section 628.205(c) of the interim final
regulations required the States to provide their respective SDA's prior
to December 31 of the year preceding the program years for which the
plan is developed, information on its plans to undertake State
activities in program areas, including education coordination and
services to older workers, and capacity building.
Several commenters requested removal of the December 31 date. The
commenters suggested the language be revised to say that the State
should issue this information to SDA's in sufficient time for them to
be able to take it into consideration in developing plans. The
Department agrees with the commenters and this change is made to the
final regulations in a new paragraph (c)(2).
State Job Training Coordinating Council
One commenter suggested that there should be a representative of
the JOBS program on the Council. The Department agrees that this would
be a good step. However, since JOBS representatives can be included
within the meaning of ``representatives of state public assistance
agencies'', as set forth at section 122(a)(3)(b)(i) of the Act, no
change is made in the final regulations.
State Human Resource Investment Council
Several commenters were concerned that the regulations did not
require, or at least encourage, that membership on the SJTCC or the
HRIC include the State Agency on Aging or a designee to ensure that the
needs of older workers are addressed. It was stressed that such
representation on these councils would improve the commitment to older
workers and promote the development of integrated service systems for
older workers. The Department agrees that the needs of older
individuals should be addressed in the provision of JTPA services;
however, in interpreting requirements of the Act at sections
122(a)(3)(B)(i)(SJTCC) and 702(b)(5)(HRIC), the Department believes
there is already sufficient latitude and flexibility for the Governor
to appoint a representative from the State Agency on Aging and further
regulation is not necessary.
A commenter noted that it would be helpful to clarify in paragraph
(a) of the regulation that, when the State Council on Vocational
Education (SCOVE) is incorporated in the HRIC, the HRIC is responsible
for carrying out the functions of the SCOVE. The Department believes
that this is clear in the provisions of the Act and in Sec. 628.215(e)
of the regulations. No change is made to the final rule.
A commenter suggested that, when the SCOVE is included within the
HRIC, it would be beneficial to include the State Director of
vocational education on the HRIC since the State Director plays an
important role in education within each State, especially in
coordination and improvement of educational services. The Department
agrees and the final rule at Sec. 628.215(c) encourages the Governor to
consider appointment of the State Director to the HRIC.
A few commenters questioned the accounting basis for funds that are
made available to the HRIC. Some wished to ensure that when funds are
made available to the council the statutory activities for which they
are intended are accomplished. Another commenter pointed out that the
requirement to allocate funds on the basis of ``benefits received''
goes beyond the requirements of the Act and the Conference Report,
which simply specified that State agencies were encouraged to provide
funds in a manner consistent with their representation on the council
and that no agency's contribution be disproportionate. The Department
has examined this issue and believes that the Act contemplates some
flexibility in terms of how the costs of the activities of the Council
relate to the various applicable programs. This is particularly true
under circumstances in which there is a reasonable contribution on
behalf of an applicable program. The Department has determined that, as
specified in the Conference Report, the costs of the Council may be
allocated upon the basis of the relationship of each funding source to
the total funding of all applicable sources or programs that are
represented on the Council. Finally, on the condition that there is a
reasonable contribution from other involved Federal and State programs,
the various activities of the council fall within the overall
coordination mandates of the Act and the related costs are allowable
JTPA costs to the extent that JTPA funds are available from applicable
JTPA sources. The final rule is revised accordingly in paragraph (d).
In order to clarify the requirement of paragraph (g) regarding the
certification of the HRIC by the Governor, the final rule is changed to
indicate that the certification is to be in writing with a copy
provided to the Secretary of Education.
Education Coordination and Grants
A number of comments were received on State education coordination
and grants found at Sec. 628.315 of the interim final regulations. In
addition to the specific areas discussed below, the comments suggested
confusion about the administrative framework for the development of the
section 123 program and the need for a general description of the
program. The section 123 program is to be a partnership between the
JTPA program and the education system in the State. The Act provides a
strong role for the State education agency by requiring that funds be
allocated to the agency, and that the agency have a central role in
planning and in the operation of the program. In order to foster
coordination at the State level, the Act requires that the Governor and
the State education agency agree on the use of funds as part of the
joint development of the education part of the GCSSP. If there is no
agreement, the regulations provide that neither party may use the
funds. To foster coordination at the local level, the Act requires the
State education agency to enter into agreements with the JTPA SDA
administrative entities. If there is no agreement with the
administrative entity, the Act indicates that the amount of funds
specified for the SDA in the State-level agreement may be unilaterally
used by the Governor for meeting the goals of section 123(c).
Several commenters raised concerns regarding the definition of
State education agency. The commenters requested that the final
regulations specify that the Governor may allocate the 8 percent funds
only to the State Education Agency, as defined by the Elementary and
Secondary Education Act of 1965. The Department believes that
clarification is needed. The commenters argued that the definition of
``state educational agency'' in section 4(23) of the Act specifically
refers to the agency defined in the Elementary and Secondary Education
Act as the state education agency for JTPA purposes. The Department
interprets the Act differently. The term ``state educational agency''
is a different term from the term ``state education agency,'' which is
used in section 123(a) of the Act. The term defined in section 4 of the
Act is used in section 122(a)(3)(B)(1) of the Act to describe
membership on the SJTCC. Support for the view that the terms used in
sections 4 and 123 of the Act are intended to be different is found in
the use of the phrase ``any State education agency'' in section 123(a).
If the Department were to read this phrase to mean a single agency, the
reading would render the word ``any'' redundant. The Department reads
section 123(a) to mean that, at a minimum, the Governor may consider as
the State education agency that agency responsible for primary and
secondary education, or responsible for vocational education programs
under the Carl Perkins Vocational and Applied Technology Education Act
and the Adult Education Act. In addition, the Department finds that a
number of States have consolidated a number of education functions and
agencies into various cabinet arrangements. For this reason, the
Department has determined that the regulations should retain the
statutory language ``any education agency,'' but some changes are made
in Sec. 628.315(a) of the final rule. The phrase ``or agencies'' is
removed from the final rule because the Department does not intend to
cause confusion or appear to encourage the designation of multiple
agencies; however, the rule should not be read to absolutely prohibit
this practice under justifiable circumstances when significant parts of
the education function are not within one agency. As previously
reflected in the interim final rule, the Governor is not permitted to
designate any agency for which ``education'' is not the primary and
operational function, which means that the entity must actually be
responsible for the operation of educational programs.
A commenter questioned the conditions under which the State JTPA
entity can be found eligible to be a subrecipient of the 8-percent
monies. The Act envisions the state education agency as receiving and
using the section 123 funds. The State JTPA entity is only eligible to
be a subrecipient if the agreement with the Governor and State
education agency stipulates this as a part of the agreement. In
response to the question of whether a portion of the funds may be used
for certain administrative functions (i.e., audit, oversight) the
Department has stated in previous guidance that limited funds may be
set aside for this purpose. This would be described in the joint
agreement.
A commenter raised a concern regarding the time limit for
negotiation between the Governor and the State education agency when
negotiating the joint agreement in accordance with the provisions found
at Sec. 628.315(b) of the interim final regulations. While there is no
specific time limit, the Department expects that the agreement would be
in place in time to allow for the expenditure of funds allotted for the
designated program period. No change is made to the final rule.
A few commenters questioned whether the State JTPA entity or the
State education agency was responsible for the development of the plan
for the use of funds. The Department believes that the State education
agency has the primary role in development of the plan, but that the
plan is to be developed jointly or in consultation. In practice, most
arrangements for development of the plan which are satisfactory to the
parties will be accepted by the Department, so long as there is joint
agreement.
Several commenters raised concerns about the provision of the
interim final rule that stipulates that when the Governor and the State
education agency fail to agree to develop a joint plan for use of the
Education Coordination and Grants funds ``the Governor shall not
allocate funds under section 123(a)(1) to such education agency, nor
shall such funds be available for expenditure by the Governor''. The
purpose of the rule is to indicate that neither party should benefit
from a failure to agree on the use of education coordination funds. The
Department believes that this position is consistent with the
provisions of the Act that call for joint agreement between the
Governor and the State education agency and, therefore, no change is
made to this section of the regulations. The Department wishes to
clarify that this agreement between the Governor and the State
education agency is not the same as specified in section 123(e) between
the State education agency and the SDA.
A commenter requested that the barriers discussed in
Sec. 628.315(d) be defined. The barriers discussed in this section are
the same barriers that are specified under title II-A and II-C of the
Act or any additional barriers the Governor may specify. No changes are
made to this section.
A commenter pointed out that Sec. 628.315(d)(1)(i) of the interim
final rule did not contain a citation to the provision of title II-C
authorizing funds for section 123 programs. The Department agrees and
the final rule contains that citation.
Some commenters inquired whether youth who are in compensatory
education programs under chapter I of title I of the Elementary and
Secondary Education Act of 1965, who are found to meet the eligibility
requirements for free lunch under the National School Lunch Act, or who
are in school-wide projects would fall within the meaning of
economically disadvantaged to satisfy the requirement to serve the
disadvantaged. The Department believes that they do, and has drafted
the regulations to reflect the applicability of the eligibility
criteria from one section or part of the Act to other parts wherever
practicable. So, for example, the final rule is revised, in
Sec. 628.315(d)(1)(ii), to indicate that the criteria discussed above
apply to the education coordination grant program.
A few commenters questioned whether Sec. 628.315(d)(1)(iii) should
refer directly to the non-economically disadvantaged. Additionally, the
commenters expressed concern that priority for these funds should be
given to in-school projects as opposed to Title III eligible
participants. The interim final rule referenced non-economically
disadvantaged. The final rule is revised to reflect the statutory
language, although the meaning is not changed. No change is made to the
regulations regarding the priority for Title III eligible participants
since that priority is statutory.
Several commenters thought that the regulations should allow for
direct allocation of State education coordination and grants funds to
the SDA. No change is made in the regulations since the Act is specific
as it relates to the Governor allocating funds to the State education
agency and the State education agency being the entity that determines
how and where the funds will be distributed.
Several commenters were concerned with the State matching
requirements which changed the requirement from an 80 percent to a 100
percent match for Federal funds received for the State education
coordination grants. These comments do not appear to have recognized
the change in statutory language wrought by the amendments. Prior to
the amendments, section 123(c) of the Act required only that matching
funds be provided for three of the four kinds of projects specified in
section 123(a). The amended law, in section 123(a)(3), requires
matching funds for all the kinds of projects specified. Thus, while the
matching requirement originally applied only to the kinds of projects
to which 80 percent of the funds available under section 123 were
allotted, the law has been changed so that all funds are required to be
matched. Similarly, the language in section 123 describing the ``20%''
projects has been changed. The original language was that Federal funds
could be used to pay the cost of ``20%'' projects based on JTPA section
123(c)(2)(A). The new language is that Federal funds may be used to pay
the Federal share of ``20%'' projects based on JTPA section
123(d)(2)(A). The final rule is revised to clarify that the matching
requirement for the State is for an amount equal to the total of
section 123 funds. Further, the rule clarifies that if there is no
agreement between the State education agency and the administrative
entity in the SDA, the matching requirement does not apply.
Services to Older Individuals
The State set-aside program for older workers was incorporated into
section 204(d) of the Act. Requirements for the older workers program
are set forth in Sec. 628.320 of the interim final rule. The Governor
continues to be responsible for carrying out these programs pursuant to
agreements with public agencies, PIC's, SDA's, non-profits or private
businesses. The Amendments require that, in entering into these
agreements, the Governor is to give priority to organizations which
have a record of demonstrated effectiveness in serving older
individuals.
During the development of the final rule, the Older Americans Act
was amended by Public Law 103-171 to revise the eligibility criteria as
they pertain to older workers served in JTPA programs. It provides, as
had been the case for the regular title II program (and as is reflected
at Sec. 628.605(e) of this rule), that older individuals participating
in joint programs with sponsors under title V of the Older Americans
Act who are eligible under title V are deemed to satisfy the
requirements of section 203(a) of the Act. A new paragraph (d)(2) is
added to Sec. 628.320 to reflect this amendment. It is important to
recognize that a purpose of the Older Americans Act Amendments is to
enable Senior Community Service Employment Program participants who are
in joint programs to participate in JTPA activities. In response to
questions concerning the nature of an agreement for a joint program
between JTPA and the title V program sponsor, the Department notes
that, for purposes of both Secs. 628.320(d)(2) and 628.605(e), the
written agreement that sets forth the joint program should be
structured so that both the JTPA and the title V program provide
services to participants consistent with the objective of the
participant and the resources of the participating program. For JTPA
participants, services will be provided under the ISS.
Several commenters were concerned that the inclusion of Social
Security and Supplemental Security Income in the definition of ``family
income'' severely limits the number of older individuals who are
eligible for the program. This issue is addressed under the definition
of ``family income'' in Sec. 626.5 of the final rule. The revised
definition clarifies the treatment of Social Security income and that
Supplemental Security Income is not considered in the calculation of
family income. No change is made in this section of the final rule.
A few commenters recommended the removal of limitations on job
search assistance in Sec. 628.535 as they might apply to older workers.
Job search assistance, including the application of the job search
limitation restrictions as they apply to older workers, is covered in
the discussion of the job search limitations under Sec. 628.535
elsewhere in this preamble.
A few commenters recommended that the Department define ``equitable
basis'' as it relates to fund availability for older worker services.
The Department's view is that the definition of ``equitable basis''
will vary from State to State based upon local circumstances and,
therefore, the Governor should determine the basis upon which funds
will be distributed, taking into account the population of eligible
older workers, their distribution throughout the State, and the
availability of resources for this population. However, in considering
the question of whether funds are distributed on an ``equitable
basis'', the Department does not believe that all circumstances require
that each SDA or area within the State receive funds under this set-
aside. Each State is to develop some reasonable measure, including
older individuals' share of the population or share of the labor force,
in determining how these funds and services will be provided throughout
the State. No change is made to the final rule.
Several commenters expressed concern that the performance standards
for the older worker set-aside should be specifically tailored to the
unique needs of this population. As noted earlier in the discussion of
the performance standards section, the Department has convened a
technical work group on the development of the new performance
standards which includes representatives of older workers, and will
take these and other comments under consideration in developing
performance standards.
Capacity Building and Technical Assistance
The JTPA has been amended to include capacity building and
technical assistance as priorities at the national, State and local
levels for JTPA and other related human service programs. Section 453
of the Act calls for the creation of a national Capacity Building and
Information and Dissemination Network and a Replication Grant Program.
State and local priorities are established through sections
202(c)(2)(A) and 262(c)(2)(A) of the Act, which make available up to 33
percent of the 5 percent incentive funds for capacity building and
technical assistance activities. Section 121(a)(3) of the Act, requires
that capacity building and technical assistance plans be included in
the GCSSP. Greater emphasis is placed on general technical assistance
activities for the development and training of State, SDA, and service
provider staff.
The majority of comments received on the interim final regulations
supported the use of incentive funds for capacity building and
technical assistance activities and supported the need to develop the
capacity of JTPA personnel at all levels.
Commenters requested that Private Industry Councils and other job
training councils, as well as those who administer JTPA, be included in
capacity building activities. It was also requested that the inclusion
of front-line staff be made more evident. It is the Department's intent
that capacity building and technical assistance activities be targeted
to all personnel who staff and administer JTPA at all level of the
system. Section 628.325(c)(1) is revised to include PIC's and other
councils, as well as other related human service systems provided for
in section 205(a) of the Act. The word ``administer'' is added to the
definition of capacity building at Sec. 626.5, and ``front-line'' staff
are included in Sec. 628.325(c)(2)(ii).
Comments were received requesting further clarification on the use
of funds for the upgrade of Management Information Systems (MIS).
Section 628.325(c)(2)(iii) provides for the use of the 33 percent of
the 5-percent incentive funds authorized under the JTPA amendments for
the purchase of hardware and/or software only if directly related to
capacity building and technical assistance activities of the National
Capacity Building and Information Dissemination Network (Network).
These 5-percent funds may not be used exclusively for MIS;
Sec. 628.325(c)(2)(iii) sets forth specific guidance on the purchase of
hardware/ software. Funding for MIS redesign is addressed in Training
and Employment Information Notice 2-92, which provides for the use of
PY 1992 6-percent incentive funds for MIS upgrading and re-design.
Some commenters continued to express concern that the non-
duplication provision in section 202(c)(3)(B) of the Act could
seriously hamper State and local flexibility in developing products and
delivering training. Section 628.325(c)(2)(iv) of the final regulations
specifies that State and local capacity building efforts are to be
coordinated and integrated with the National Capacity Building
Information Dissemination Network (Network), pursuant to sections
202(c)(3)(B) and 262(c)(3)(B) of the Act. In order to maximize funds
available, the Network will build, to the extent possible, on what
already exists in the system. Through its clearinghouse, it will make
information accessible to the JTPA system on current and planned
Network products so that duplication of effort may be avoided as States
and SDA's plan their capacity building agendas. Non-duplication should
be viewed by the system as a means for maximizing scarce resources and
not as limiting the flexibility of States and SDA's to tailor Network
products to their own needs and/or to produce and train on similar or
related products when local circumstances so dictate.
Some commenters requested that the regulations mandate that the 33
percent of 5 percent incentive grant funds available to the States for
capacity building be passed to the SDA level for capacity building and
technical assistance activities. The final regulations continue to
strongly encourage Governors to use these funds for the development of
staff capabilities at all levels, and particularly for front-line
staff, through a comprehensive capacity building and technical
assistance strategy. While neither the Act nor the regulations require
that funds be passed directly to the SDA's, the final regulations, at
Sec. 628.325(c)(2)(ii), offer a variety of State options for ensuring
coverage of SDA and front-line staff. Section 628.205 encourages
Governors to share capacity building plans in advance with SDA's and
requires that capacity building plans be included in the GCSSP.
More specific information was requested as to what related human
service programs are covered under section 453 of the Act. Section
628.325 (c)(1) and (d) includes those programs listed in section 205(a)
of the Act among those human service programs.
Several commenters requested clarification on the allowable uses
for incentive funds by SDA's, specifically asking if there is any limit
on the amount of incentive funds used for capacity building and if
incentive funds can be used solely for administration. One commenter
suggested a maximum limit of 30% on the use of incentive funds for
administration in order to insure that their primary use focuses on
training and capacity building. The Department intends to allow the
SDA's flexibility in determining how their incentive funds are best
utilized. Section 627.440(c)(2) specifies that incentive funds may be
used without regard to cost limitations. However, a new paragraph (5)
is added to Sec. 628.325(b) specifying that SDA's should use incentive
funds for capacity building, technical assistance and services to
eligible participants. The former paragraphs (3) and (6) in
Sec. 628.325(b) which dealt with this topic are removed; the remaining
paragraphs are redesignated accordingly. Further clarification on SDA
capacity building responsibilities is also found in Sec. 628.420, the
Job Training Plan.
A technical correction is made at Sec. 628.325(c)(1) to include the
citation of section 262(c)(1)(B) of the Act.
SDA Designation Process
The interim final regulations, at Sec. 628.405, clarified the SDA
designation process. The language in the supplementary information
section indicated that SDA designations are to occur every 2 years,
consistent with the preparation of the 2-year GCSSP and the SDA job
training plan. This information is incorrect and will be addressed in
the context of discussing the comments received in this area.
The regulations also: established minimum criteria to be used by
the Governor in considering discretionary SDA designation requests
under the provisions at section 101(a)(4)(B) of the Act; provided
clarification on the handling of competing SDA designation requests
under section 101(a)(4)(A) of the Act; and defined the terms
``substantial portion'' and ``substantial part'' of a labor market area
for the purposes of SDA designations under section 101(a)(4) (A)(ii)
and (B) of the Act.
A few commenters noted that there was nothing at section 101 of the
Act nor Sec. 628.405(a) that indicates that SDA designations are
required to occur every two years, as indicated in the preamble of the
interim final rule. The concerns expressed in the comments were that to
mandate that SDA's be designated every two years would be disruptive
and would serve to increase the number of SDA's rather than decrease
them as intended.
The commenters are correct that there is nothing in the Act nor the
regulations that requires that SDA's be designated by the Governor
every two years. The preamble did not clearly convey the intent of the
interim final regulations. The intent of the preamble was to indicate
that SDA designations, when they occurred, were to coincide with the 2-
year cycle for the GCSSP and the local job training plan. This was to
clarify that SDA designations could not be made for an off year of a 2-
year period covered by the approved GCSSP and local job training plans.
Section 628.405 is amended to more clearly convey this requirement.
A commenter indicated that SDA designation, under
Sec. 628.405(a)(3) of the interim final rule, should not be required
for a previously designated SDA which has complied with all of the JTPA
mandates and has successfully operated good training programs.
There is nothing in the Act or interim final regulations that
requires existing SDA's to formally apply for designation or
redesignation by the Governor when such designations are to be made
within the State. Section 628.405(a)(3) only indicates that the
Governor should address the treatment of existing SDA's in the
procedures developed to govern the SDA designation process within the
State. Thus, the Governor may choose to require reapplication for each
designation cycle or to permit existing SDA's to continue without the
need for a new application. Section 628.405(a)(2) of the interim final
regulations is redesignated, in part, as (a)(3), and is amended to
clarify this issue.
A few commenters took exception to the requirement that the
Governor establish standards by which to evaluate discretionary SDA
designation requests under section 101(a)(4)(B) of the Act which, at a
minimum, must include the criteria set forth at Sec. 628.405(d). These
requirements are viewed as overly prescriptive, limiting the Governor's
discretion in making SDA designations and establishing a higher
standard than that provided for in the Act.
The Department believes that neither the provisions of the Act nor
the interim final regulations, at Sec. 628.405(d), inhibit the Governor
from making discretionary SDA designations, pursuant to section
101(a)(4)(B) of the Act. The Department does not believe that the
regulatory provisions are overly prescriptive in establishing some
uniform minimum standards for the Governor to evaluate such designation
requests. With approximately one-third of the over 640 current SDA's
being discretionary designations, it is necessary to ensure the
viability of such SDA's to adequately administer and promote effective
delivery of JTPA services to a substantial portion of the eligible
population in the area to be served. The regulations simply formalize
the minimum standards that Governors would need to consider and, in
most instances, probably already have established, in making
discretionary SDA designations consistent with the provisions at
section 101 of the Act. The Department believes that the regulations in
this area are consistent with the provisions at section 101 of the Act
and the Secretary's authority to promulgate regulations to implement
the provisions of the Act. No change is made to the final regulations.
Several commenters took exception to defining ``substantial part''
and ``substantial portion'' of a labor market area (LMA) for the
purposes of SDA designations under section 101(a)(4) (A)(ii) and (B) of
the Act, respectively. These commenters argue that the requirement that
the prospective SDA serve 10 percent of the population of an LMA is
arbitrary, artificial and exceeds the language in the Act, unduly
limiting the Governor's flexibility to determine SDA's for the State.
The commenters recommended that the 10-percent provision be withdrawn
from the final rule. A few of the commenters suggested including a
``grandfather'' provision for existing SDA's in the regulations, if the
10-percent provision is not removed in the final rule.
The Act provides that prospective entities seeking SDA status under
the provisions of section 101(a)(4) (A)(ii) and (B) of the Act serve a
substantial portion/part of an LMA as a statutory criteria for
designation. In the past, the Department has deferred to the Governor's
definition of ``substantial'' for the purposes of such designations,
which has resulted in a wide range of thresholds being established,
from levels significantly below the 10 percent provided for in the
regulations, to a majority of an LMA. The Department reached the 10-
percent figure taking into consideration the need for a rational figure
which would assist the Governors in the SDA designation process and
still ensure the statutory mandate for serving a substantial portion or
part of an LMA, as appropriate. The regulations still provide that the
Governor defines these terms, with the 10 percent floor as a minimum
requirement. The Department believes that the 10-percent figure is
reasonable and consistent with the provisions of the Act and the
Secretary's authority to promulgate regulations implementing the Act,
while still maintaining the Governor's flexibility in designating
SDA's. No change is made to the final rule.
On the suggestion that existing SDA's be ``grandfathered''
notwithstanding the 10-percent requirement, part 627, Subpart I,
Transition Provisions, of the interim final rule addresses this issue.
The regulation, at Sec. 627.904(l), indicates that, at the Governor's
discretion, SDA's designated prior to July 1, 1992, need not be subject
to the provisions at Sec. 628.405. The Department does not believe that
further clarification is needed. No change is made to the final rule.
Private Industry Council
Section 628.410 of the interim final rule set forth requirements
relating to the establishment and functioning of the PIC. Comments on
the provisions of this section fell mainly into three areas: PIC
recertification, joint agreement on the plan for Wagner-Peyser
activities of the employment service and PIC representation.
A number of commenters questioned the requirement of
Sec. 628.410(a)(2) that the Governor recertify the PIC biennially, one
year prior to the date of submission of the job training plan. The
commenters indicated that this requirement was an undue administrative
burden and appeared to go beyond the provisions of section 102(g) of
the Act, which states: ``The Governor shall certify a private industry
council if the Governor determines that its composition and
appointments are consistent with this subsection.'' In response to this
concern, Sec. 628.410(a)(2) is amended to require the Governor to
review the PIC certification biennially rather than to formally
recertify the PIC. The review process is intended to afford the
Governor a continuing role in ensuring that the PIC is an effective
local policy making body. The requirements specified in
Sec. 628.410(a)(3) encompass three areas: the PIC membership and the
nomination process, the PIC/chief elected official agreement, and the
responsibilities of the PIC to carry out its role.
Several commenters indicated that the requirement for a new PIC/CEO
agreement was beyond the requirements of the Act and was potentially
disruptive of agreements and arrangements that had been carefully and
delicately worked out at the inception of JTPA. There is no requirement
to negotiate or renegotiate an otherwise satisfactory agreement which
is in place. The regulations only require the Governor to review the
sufficiency of the PIC/CEO agreement in terms of the requirements of
the Act.
In response to comments on Sec. 628.410(a)(3) of the interim final
rule which requested clarification of the meaning of paragraph
(a)(3)(iv), this paragraph is removed in the final rule, since it is
largely redundant of the contents of the PIC/CEO agreement and the
material that follows in paragraph (b) which the Governor may review in
the course of normal oversight.
A few commenters asked for clarification on the components of the
Wagner-Peyser plan which were applicable to SDA's. The SESA agreement
requirements are set forth in the Wagner-Peyser Act, at section
8(b)(1). These requirements generally deal with employment service
operational plans for carrying out the provisions of the Wagner-Peyser
Act which must be developed jointly with the PIC and local chief
elected official.
Regarding PIC membership selection, a few comments touched on the
selection process for representatives of organized labor. One comment
asked that the regulations define ``labor federation'' to mean the AFL-
CIO at the State and local levels and that a process be instituted for
the Chief Elected Official (CEO) to ensure PIC representation by the
local AFL-CIO rather than by individual workers. As provided in section
102(c)(3) of the Act, CEO's are to consult recognized State and local
labor federations for recommendations for the labor representatives to
the PIC and not an individual labor organization. For this reason, a
description of the nomination process is specifically required to be
included in the PIC certification to be reviewed by the Governor. The
Department agrees, however, that there is a need for clarification as
to what constitutes a labor federation and is adding language in the
final rule, at Sec. 628.410(a)(3), to indicate that a labor federation
is an alliance of two or more labor unions, an example of which is the
AFL-CIO.
With respect to PIC representation in general, several commenters
stressed the importance of ensuring that the nomination process is
opened up to balance important interests in the community, including
the interests of older individuals and women. The Department recognizes
the importance of balanced demographic and community interest
representation and sensitivity to the diverse populations being served.
This sensitivity is best displayed at the local level where the
composition of the community is known. While the Department strongly
encourages CEO's and PIC's to make every effort to assure that PIC
membership is broadly representative of the community, the Department
does not believe it is appropriate to require this result through
national rules. Thus, the Department has decided not to impose
membership requirements beyond those enumerated in section 102 of the
Act. In communities with public housing agencies, given the
similarities in target populations, the Department does, however,
encourage chief elected officials to include such representation in
their PIC membership under the category of ``public assistance
agency''.
A few commenters were concerned that appointing representatives of
certain kinds of organizations to the PIC would represent an inherent
conflict of interest. Conflict of interest rules for PIC members are
discussed in Procurement (Sec. 627.420(c)(4)).
Selection of SDA Grant Recipient and Administrative Entity
One commenter indicated that the intent of this section was
unclear. The Department believes that the lack of clarity may pertain
to the kinds of criteria that the Governor may establish that would
affect the PIC's and CEO's selection of a grant recipient and
administrative entity. The Act, at section 103(b)(1)(B), specifies
entities that may be selected as grant recipient and administrative
entity, which may be the PIC, a unit of local government or a non-
profit organization. While the Governor may establish criteria for the
selection of grant recipients and administrative entities, the criteria
may not specifically exclude a type of entity specified in the Act from
being selected.
Job Training Plan
Sections 628.420 through 628.430 deal with the submission, review
and approval of the job training plan. There were a few comments
regarding the contents of the job training plan which are addressed in
Sec. 628.420(b)(1), through a reference to the requirements of section
104(b) of the Act. There were requests for certain specific references
in the text of the regulation. One comment requested that the
requirements of the NEW Act be specifically referenced. As previously
discussed in this supplementary information section, the Department
agrees and has added a reference to the requirements of section
104(b)(7) in Sec. 628.420(b)(1). Another commenter requested that a
specific reference be made to consultation with public housing
agencies. While these agencies are not specifically referenced in
section 104 of the Act, they are included among those agencies with
which the SDA is to develop the coordination and linkage arrangements
that would be described pursuant to section 104(b)(4) of the Act.
A few commenters raised concerns about the requirement in paragraph
(e) of Sec. 628.420 that modifications are to be submitted jointly by
the PIC and chief elected officials (CEO's) to the Governor. These
commenters appear to be confusing modifications to the SDA job training
plan with contract modifications. The commenters stated that the
procurement regulations in Sec. 627.420 require that every contract
change order, such as a decrease of one participant, necessitates a
contract modification. The procurement process requirements in
Sec. 627.420 do not apply to the plan and plan modification process,
and Sec. 628.420(e) addresses the requirements for the modification of
the job training plan, not contract modifications. Language is added to
paragraph (e) to clarify that a ``major'' modification is to be
specified by the Governor. In so specifying, the Department suggests
that the Governor consider conditions which result in a variance of 20
percent from the approved plan in the budget, level of participant
services, number of participants served, participant outcomes, or other
core elements.
Further, there was an inadvertent oversight in the interim final
rule in Sec. 628.420(d) and (e), concerning the submission of local
plans or plan modifications to the Governor. The interim final rule
indicated that the plan or plan modifications must be jointly submitted
but omitted the statutory requirement that such plans or plan
modifications also must be jointly approved as a condition for
submittal to the Governor. Paragraphs (d) and (e) of Sec. 628.420 are
amended to more accurately reflect the statutory provisions of section
103(d) of the Act.
One commenter requested that the time limit provided in
Sec. 628.426(b) for chief elected officials and the PIC to correct any
deficiencies the Governor identifies in disapproving a job training
plan be changed from 20 days to 30 days to allow SDA's adequate time.
This change is incorporated into the final rule.
Finally, a commenter requested that the final rule clarify that the
references in the Act and regulations refer to ``working days''. In
fact, this is not the case and the references, as is the practice,
refer to consecutive calendar days. No change is made in the final
rule.
Subpart E--Program Design Requirements for Programs Under Title II of
the Job Training Partnership Act
In response to a few comments, the final rule is revised in a few
introductory statements to clarify that references to title I refer to
programs undertaken pursuant to sections 121 or 123.
General Program Design Requirement
The Act contains significant requirements in the front-end
operations for most SDA's, which will cause major alterations in the
intake structure and will necessitate revisions in the appraisal of
each participant's capabilities, needs, and occupational goals. In the
final regulations, the Department has provided necessary direction
based on the Amendments and has clarified and highlighted significant
changes from the ``old'' statute.
Eligibility Determination and Intake
Two major criteria must be considered in the process of determining
which applicants are eligible for title II JTPA program services. As
set forth in Sec. 628.505, the first criterion is age. The second is
economic disadvantage. The standard for determining economic
disadvantage will be income as described in the annual Department of
Health and Human Services poverty guidelines. The use of these
guidelines provides a standardized income determination across
federally funded programs. The Department's approach to the eligibility
determination process has been to attempt to minimize the amount of
documentation necessary to establish an individual's eligibility for
services, while maintaining the necessary safeguards to prevent misuse
of program funds.
A number of commenters encouraged a streamlining of the eligibility
documentation process, including use of self-attestation. Several
requested guidance on what documentation would be required for
barriers. The Department has issued, in February 1993, and provided
training on an eligibility documentation TAG to be used by SDA's in the
eligibility determination process. This should provide clarification of
these issues. The procedures in this title II, Eligibility
Documentation TAG, if followed by the SDA's, will protect them from
audit disallowances based on inadequate documentation. In response to
several comments that the Department should stick by its guidance, the
final rule clarifies the intent of the interim final rule that when it
is determined that the State, SDA or service provider followed the
Department's written guidance, the Grant Officer will not disallow
costs related to required documentation of an individual's eligibility.
Section 628.510 describes the requirements for intake, targeting
and referral of applicants. During the intake process, personal data on
individuals are collected and a preliminary determination regarding
suitability for title II services is made. A number of commenters
expressed the need for clarification of the suitability issue.
Suitability for program participation is a determination, based on
preliminary information, of which eligible applicants should be
considered for JTPA program services. This determination is made
against the backdrop of the limited availability of JTPA resources and
services and the practical necessity that the JTPA program must decide
which individuals fall within the 5 to 10 percent of the eligible
population that can be served. It includes a determination whether an
individual falls within a category targeted for service by virtue of
having a ``barrier'' to employment and whether there are other programs
and services reasonably available to an individual within the
community. The JTPA title II program is not intended or structured to
remove all barriers to employment that applicants for services may
have. Therefore, the suitability determination also should consider
which eligible applicants, with the provision of locally available
supportive services, can best be served and benefit from JTPA
participation by acquisition of educational and occupational skills or
competencies and eventual employment. The regulations provide that some
limited assessment activities may be undertaken, the results of which
may be used in connection with a determination of suitability. A
determination that an individual may be eligible but not suitable
results in referrals to other sources of assistance, provision of
information on other programs, or in the case of a service provider, in
referral to the SDA for further consideration. In making suitability
determinations, SDA's should keep in mind their obligations under
applicable civil rights and equal opportunity laws. SDA's should
consider advising applicants of the process and possible results of
intake, assessment and suitability determinations and, particularly,
that not all eligible applicants can be served.
In order to focus program services on harder to serve individuals,
not less than 65 percent of participants must have one or more barriers
to employment, as specified at section 203(b) of the Act. SDA's may
also specify an additional barrier for each of the title II-A and II-C
programs. An example of an appropriate ``additional barrier'' under
section 203(b)(7) of the Act was requested. In response to this
request, the Department is providing several examples, however, SDA's
are not limited to these and are encouraged to develop ``additional
barrier'' guidelines tailored to local population and labor market
needs. For communities with public housing, the Department believes
that ``public housing assistance recipients'' who are otherwise income
eligible would constitute an appropriate ``additional barrier''. An
employment-authorized refugee might be included, as well as a displaced
homemaker, or substance abuser. Finally, the Department counsels that a
member of a group protected under the civil rights statutes may not be
designated as having a barrier to employment solely on the basis of the
characteristics that cause them to fall under the civil rights
legislation. So, for example, a racial group could not be designated
under the additional barrier provisions.
Several commenters requested clarification of the documentation
requirements for referrals in Sec. 628.510(d). The Department describes
the minimum required documentation at Sec. 628.510(d) and at
Sec. 628.530(c). The Department expects that SDA's will develop
standardized information on programs and services available in the
community. This information may be provided in written form to the
eligible applicant. A record of the referral will be maintained and may
take the form of an incomplete ISS. No further followup is required
beyond referral. Section 628.510(d) is revised to incorporate this
principle. The idea is that the SDA must assume some limited
responsibility to eligible applicants who come for services even though
the Act recognizes that not all will be served. The SDA should be in a
better position than an individual applicant to be aware of the
services available within the community and to make referrals so that
the applicant can benefit from these other sources. In part, this is a
principle behind recent initiatives by States, SDA's and the Department
to facilitate a concept of ``one-stop'' service.
In addition, Sec. 628.510(d) is amended to specifically mention
referrals to Job Corps to parallel the amendment to Sec. 628.803(d)(2).
This change is made to foster JTPA/Job Corps coordination.
Section 628.510(e) describes the requirement for service providers
to refer eligible applicants or participants who cannot be served by
its program back to the SDA for further assessment, if necessary, and
suitable referral to other appropriate programs. Several commenters
questioned whether there is a requirement for centralized intake. There
is no such requirement. The requirement is that the SDA put in place a
system that works independently of an individual service provider. This
``system'' would also cover situations described by commenters in which
the SDA administrative entity does not perform intake. In other words,
an SDA must have some mechanism by which an eligible applicant or
participant can be considered for enrollment in all of the services
available through the SDA, not just those of a single service provider.
The Department believes that this is a program design issue for local
discretion and that there will be a number of effective approaches to
meet these requirements. The intent of the regulation is simply to
assure that participants will be exposed to the full range of available
services and that they will have a fair opportunity to receive services
appropriate to their individual needs.
The States and/or SDA's will establish procedures to ensure
compliance with the targeting requirements of sections 203 and 263 of
the Act and to determine actions to address noncompliance with the
requirements. Many commenters questioned how compliance would be
calculated. Some noted that a strict reading of the Act would provide
that any ``participant'' (i.e., any individual who has been determined
eligible and received a service, including objective assessment) could
be included in the calculation to meet the targeting requirement.
Others observed that while assessment was an important activity, it did
not necessarily constitute a training or employment service that would
result in a measurable outcome of the effectiveness of the program. In
considering the comments, the Department recognizes that, at the
suggestion of individuals identifying implementation issues, it was
determined that only individuals enrolled in an activity subsequent to
objective assessment would be included in performance standards
calculations. The rationale for that decision was that many individuals
had not made a final decision to participate in the program and have
dropped out before any meaningful intervention. Therefore, for
consistency, the Department has determined that the 65-percent
requirement also is to be calculated on those participants who receive
services or training subsequent to the objective assessment. Section
628.510 is revised to add a new paragraph (f)(2) to this effect.
Objective Assessment
Objective assessment should be a continuous, customer-centered and
flexible process. The objective assessment should not be viewed as a
discrete activity that begins and ends early in the stages of program
participation, but rather as one that will continue throughout
participation in JTPA.
Several comments received on the front-end design of the JTPA
program discussed the assessment process. All supported the concept and
the intent of individualized program services. A few commenters
expressed concern over staff development needs for implementing
assessment. Many commenters requested guidance in the development of
assessment and service strategies. While the Department expects that
States and SDA's will retain authority for program design, technical
assistance has and will continue to be provided on assessment and
development of the ISS. The Department encourages use of funds for the
capacity building of staff (see Sec. 628.325), including staff training
in objective assessment techniques; however, the Department declines to
establish credentialing standards as one commenter suggested. The
Department believes that staffing and standards should be a State and
local decision.
A few commenters addressed confidentiality issues arising in the
intake, assessment and referral processes. The same kinds of concerns
over disclosure of information were expressed in connection with the
discussion of Sec. 627.463. The Department has not addressed
confidentiality in Sec. 627.515 because confidentiality issues are not
new. The Department thinks that traditional standards of professional
conduct on confidentiality issues should be continued. Further, the
Department expects that protections against the disclosure of
information that would constitute a clearly unwarranted invasion of
personal privacy, as permitted by section 165(a)(4)(B)(i) of the Act,
will protect the confidentiality of customer information.
A number of commenters expressed confusion over the determination
of when an applicant becomes a participant, how much assessment could
be provided at the intake/ eligibility stage prior to enrollment of an
eligible applicant and to which cost category this would be charged.
Costs incurred on behalf of an applicant, including intake, eligibility
and suitability determination (which may include some limited
assessment of an applicant), and any assessment necessary to facilitate
the eligibility determination, consistent with the provisions of
Sec. 627.440(d)(3)(i) are to be charged to the training-related and
supportive services cost category. Once an applicant is determined to
be eligible and the decision made to enroll the applicant, a full
objective assessment may begin and the applicant may receive other
program services. As specified in Sec. 627.440(d)(1)(i), assessment at
this stage may be charged to the direct training cost category. Receipt
of objective assessment or other services would confer participant
status consistent with the definition of participant in section 4(37)
of the Act. The Department believes that the preoccupation with
participant status may be misplaced because the principal issue of
program credit has been addressed in the context of when the
performance standards are to be applied.
The Department expects assessment of eligible applicants to be used
only in those cases when an eligible applicant's suitability for
enrollment is unclear. While the regulations afford an opportunity to
charge the costs of preliminary assessment functions to the training-
related and supportive services cost category to aid in the
determination of an applicant's suitability, the Department expects the
restriction on the cost categories to act as a natural control on SDA's
while still allowing the flexibility for individual decisions. The
Department would like to emphasize that the limited availability of
funds will restrict over-use of preliminary assessment as part of the
decision to enroll. SDA's are expected to finance intensive services
expected to enable participants to complete successfully the longer
term JTPA service strategies within this cost category.
Section 628.515 sets forth the requirements of the objective
assessment. The scope of the objective assessment should not be limited
to only services or training programs already available in an SDA.
A few commenters questioned whether basic skills evaluation was
required as part of the objective assessment. The Department intends
the evaluation to be of both basic and occupational skills. The
definition of ``objective assessment'' in Sec. 628.515(b)(1) is
revised, therefore, to include basic as well as occupational skills
evaluation.
The objective assessment is ongoing and should not be viewed as a
one-time event. It should be a multi-faceted process which includes a
full array of options including items such as structured interviews,
paper and pencil tests, performance tests, behavioral observations,
interest inventories, career guidance instruments, aptitude tests, and
basic skills tests. From these options, and others, assessment staff
may select the most appropriate tools for each participant to measure
skills, abilities, aptitudes, interests, supportive service and
financial needs, and to counsel participants on how their assessment
results relate to local labor market demands.
SDA's are strongly encouraged to prudently select appropriate
measuring tools that will provide necessary information for the
reasonable development of an individual service strategy leading to a
realistic employment goal. JTPA resources are limited and JTPA is not
an entitlement program. The Department expects SDA's to develop
practical applications for career counseling and assessments for basic
skills and occupational training.
The objective assessment process should be sensitive to the testing
and evaluation environment and the comfort and confidence level of the
participant. The temptation to over-test or over-evaluate, providing
excess information for which there is no immediate application, does
not serve the customer's best interest, is detrimental to the customer/
counselor relationship, and is costly to the SDA. The objective
assessment is to be revisited regularly and the resulting information
used to amend the ISS, as appropriate, when additional needs are
identified or goals achieved.
Assessments recently conducted by other human service programs or
schools are viable options and their use is encouraged, where
appropriate, rather than requiring the customer to undergo additional
assessments that duplicate information already obtained.
Finally, the Department notes that the objective assessment process
for title II-B may be different in scope than that for the regular
title II-A and II-C program, as indicated in Sec. 628.515(b)(2). This
may also be the case for limited function programs (such as literacy
programs) mounted under section 123, although this is clearly an
exception to the normal expectation in conducting an assessment.
Individual Service Strategy
Section 628.520 establishes the requirements for the Individual
Service Strategy (ISS). The ISS is an individual plan that is developed
based on information obtained through the objective assessment. It is
the framework within which decisions regarding individual participants
are recorded. It should be considered a living document that reflects
decisions concerning the appropriate mix and sequence of services to be
provided leading to, and including, a realistic employment goal.
Several commenters requested clarification of the outcomes to be sought
in the development of the ISS for youth. The Department agrees that
there is a need to focus on youth returning to or remaining in school
and, thus, that the ISS should focus more on education as it relates to
a long term career. In title II-B and II-C, the employment goal should
be interpreted broadly for those individuals returning to school and
may reflect long-term career goals.
A few commenters asked for clarification of what had to be listed
in the ISS. The ISS should briefly note any need for financial
resources or supportive services and record the amount of each. The
expected outcome of each activity should be indicated with a notation
of the provision and schedule for each. Referral to other programs, and
referral out of title II must be noted on the ISS. The rationale or
justification for other decisions may be referenced in the ISS, but
need not be recorded there. The Department provides further
clarification of the use of the ISS for recording referrals out of
title II by revising Sec. 628.530(c), as was requested by several
commenters. This section now states that further tracking or follow-up
is not required for referrals out of title II. This section is also
revised to correct language in the interim final regulations that
indicated referrals out of title II would not be calculated in
performance standards only if an ISS had not been completed. Since, as
commenters noted, an ISS is to be developed for each participant, this
section now allows recording the referral in a partial ISS without any
effect on performance standards.
Several commenters indicated confusion over counseling and the
development of the job goal in the ISS. The provisions of this section
reflect the need for program-related application of career counseling,
but the Department cautions program operators to prudently provide
career counseling related to the realistic goals of the JTPA program.
While the objective assessment/individual service strategy process is
customer-centered, JTPA services are expected to guide participants
toward realistic employment goals for which training and job demand are
available in the community. Pure career counseling for its own sake
should be left to other, more appropriate, sources. Development of a
final employment goal may be delayed where the objective assessment
indicates a need for further career exploration or assessment. In this
case, a career cluster should temporarily be indicated in place of the
employment goal. The ISS should be revised to reflect the employment
goal prior to the start of specific occupational skills training. The
employment goal may be revised if the continuing objective assessment
indicates a need to do so.
A number of comments were received concerning participant
signatures on the ISS. This requirement was perceived as an unnecessary
administrative burden. Section 628.520(c) is revised to indicate that
there is not a requirement for a participant signature. However, the
decisions reflected in the service strategy about goals, objectives and
services to be provided are to be made in partnership with the
participant and are to be determined in conformance with applicable
civil rights provisions.
Participant signatures on the ISS may be requested, but are not
required to indicate the joint development of the document.
The Department encourages communication with participants and
reminds program operators, especially program monitors and auditors,
that the intent of the ISS is to be a program tool and not a compliance
document that forms the basis for cost disallowance. The Department
does not doubt that participant records, including the ISS, will be
reviewed to determine whether SDA's and others have adhered to certain
requirements of the Act. This is unavoidable. However, for the ISS to
have the anticipated value as a program tool, it must not be developed
and used with compliance in mind, but rather with the needs of the
customer as its focus. One commenter suggested that if documentation is
required, e.g., to document a payment decision, that it be recorded
elsewhere in the participant record so that the ISS and compliance
documentation can be kept separate. While somewhat artificial, if this
concept helps, the Department has no objection to using it. Ultimately,
however, the decision on how much detailed information to record on the
ISS is one for States and SDA's.
The final rule is revised by adding a new paragraph (h) in
Sec. 628.520 to emphasize that the ISS is a working record of progress
and references to ``documentation'' are revised to read ``record.''
The ISS, to be effective, must be regularly reviewed and adjusted
to reflect the progress and to meet the continuing needs of each
participant. The ISS will serve as the basis for the entire case
management strategy. Case management is an allowable direct training
activity and the Department encourages its use as an effective strategy
for providing quality services to the participant.
A few commenters indicated confusion over the application of case
management to the JTPA program. The Department encourages application
of case management principles to participant services. In section 4(32)
of the Act, the term case management is defined to mean the provision
of a customer-centered approach in the delivery of services, designed
to prepare and coordinate comprehensive employment plans to ensure
access to the necessary training and supportive services, and to
provide job and career counseling during program participation and
after job placement. The Department expects SDA's to make every
reasonable effort to provide the services and training indicated by the
assessment and ISS and, where possible, to apply standard case
management principles. The Department recognizes, however, that JTPA is
not an entitlement program and that not all services and training will
be available regardless of the level of coordination in an area. Case
management is an administrative management tool, not an individual
service to be delivered to participants. There is no change in the
final rule.
A few commenters expressed concern over the ability to provide all
services indicated by the objective assessment and the ISS. Section
628.520(e) recognizes that an SDA may not always be able to provide the
full array of services indicated by the objective assessment and
recorded in the ISS. In arranging for the mix and sequence of
appropriate services, it is fully expected that SDA's will refer
participants to other programs for certain specified activities as part
of the JTPA service strategy. In those cases, particularly in rural
areas, where services required are indicated on the ISS and not
available from any source in the SDA, such information is to be
recorded in the ISS and an alternate plan developed which may include
referral to another program. SDA's are expected to make every
reasonable effort to make available the recommended training or
services to each participant; however, consistent with Sec. 628.525, it
is understood that the objective assessment and ISS do not give legal
or entitlement rights to participants for services. JTPA is not an
entitlement program and available resources are limited.
Some commenters thought that language in the preamble to the
interim final regulations authorized States and SDA's not to serve the
disabled or other hard-to-serve persons, if they needed substantial
supportive services. The Department acknowledges that it may have
inadvertently suggested that an individual, with excessive supportive
service needs, such as a person with a disability, could automatically
be referred out of the program to other sources. This is not the case.
Such decisions must be made on the basis of the individual's and the
program's circumstances. While JTPA is not required to directly serve
every person, including every person with a disability, it is intended
to focus more on the hard-to-serve. The fact that an individual may be
difficult or costly to serve should not, in itself, preclude serving
that person.
Consistent with Sec. 628.520(f), service providers and contractors
may conduct the objective assessment and develop the ISS. It is the
responsibility of the SDA administrative entity to ensure that the
objective assessment and the development of the ISS reflect the
customer-centered approach required by law are provided to each
participant whether they are provided in-house or by service providers.
Limitations
In response to comments on the provisions of Sec. 628.510 and
Sec. 628.530, Sec. 628.525 is also revised for further clarity to
indicate that neither eligibility nor participation create a right to
JTPA services.
Referrals of Eligible Applicants and Participants to Other Programs
The final regulations further clarify the subject of referrals of
both eligible applicants and participants due to confusion expressed by
a number of commenters. The regulations, at Sec. 628.510(d) and at
Sec. 628.530(c), specify the requirements for referral of eligible
applicants and participants for whom available title II services are
not deemed suitable or adequate to appropriate human service programs
in the community. Section 628.510(d) deals with the situation in which
an eligible applicant is referred to non-title II services during the
intake process. Section 628.530 refers to referrals of participants,
those individuals who have been determined to be eligible and have
begun to receive objective assessment or other services. In the final
regulations, both provisions are revised for clarity and to reduce the
burden of documenting the referrals. Section 628.510(d) allows the SDA
to conduct limited assessment of eligible applicants as a part of a
determination of suitability, before they are enrolled as participants.
The purpose of this pre-participation assessment is to enable SDA's to
make more precise judgments as to the suitability of the applicant for
participation in JTPA and/or additional services.
The responsibility of the SDA at this point in the intake process
is to assure that eligible applicants not suitable for title II
participation are ``provided information on the full array of
applicable or appropriate services that are available.'' (Section
204(a)(2)(A) of the Act) and that necessary arrangements are made for
individuals to make contact with those services.
Section 628.530(c) addresses referral of participants out of title
II services. A number of commenters indicated concern over burdensome
paperwork requirements for referral of participants to other than title
II programs. The Department has addressed these concerns by amending
Sec. 628.320(c) to permit referral decisions for participants with whom
there will be no continuing relationship to be recorded in a partial
ISS. No further tracking of such referred participants is required. Of
course, where there will be a continuing relationship with the referred
participant, Sec. 628.530(a) provides that the referral decision should
be recorded in the ISS and that the participant's progress should be
tracked.
In the case of service providers who discover that an eligible
applicant cannot be served by its program, Sec. 628.510(e) requires
that service providers refer such individuals to the SDA for further
assessment and referral.
Clarification of referral responsibilities was requested by a
number of commenters. In addition to the above explanations,
Sec. 628.510(d) and Sec. 628.530(c) are revised to specify that no
follow-up is required for referrals of eligible applicants or
participants with whom there will not be a continuing relationship.
Further, the Department wishes to point out that either an applicant or
a participant may be referred out of JTPA at any time, if warranted by
customer need or preference. Some commenters seemed to think that both
an objective assessment and ISS ``must be completed'' prior to referral
outside the program. Since both assessment and the ISS are presumed to
be continually reviewed and evolving during participation, this
assumption is not warranted.
Job Search Limitations
A fundamental change in section 204(c)(2) of the Act regarding
program design is the requirement that job search, job clubs, and work
experience activities be accompanied by other services that increase a
participant's educational and occupational skills. This change reflects
evidence that, in some cases, suggests that quick turnaround placement
programs have minimal long-term impact when provided in isolation from
other more comprehensive and intensive services. The Department's
Inspector General, in a 1988 report, concluded that the number of JTPA
participants on public assistance was only slightly reduced after
completion of JTPA programs. On the other hand, The National JTPA Study
found a 39% earnings gain for adult women from the provision of stand
alone job search services. This new limitation reflects an overall
thrust of JTPA to provide quality services to participants. For
example, short-term job search assistance alone might result in a job
placement for low-skilled individuals, but job retention is not likely
without concomitant services aimed at increasing participants' needed
basic or occupational skills. Accordingly, Sec. 628.535 codifies
section 204(c)(2)(B) of the Act which limits the provision of stand-
alone job search assistance, job search skills training, and job club
activities to title II participants. ``Job search assistance'' itself
is defined in Sec. 626.5.
Comments generally addressed two issues: Interfacing with the
Employment Service (ES), and the preference of older individuals for
immediate job placement. With regard to the Employment Service, many
questioned the ability of the local ES office to provide adequate
services to JTPA participants. They were concerned that ES may lack in-
house expertise to provide sufficient assistance for groups with
special needs. Citing the provisions in the Act governing the
determination of duplicative services, several commenters believed that
the ability of the ES office to provide assistance to special needs
groups should be a criterion for this determination. Others pointed out
that, since job search activities are a critical part of any ISS, and
service providers have already established successful networks of
employer contacts, ES offices should not be the presumptive deliverer
for providing adequate job search activities for all participants.
These commenters suggested that Sec. 628.535(d) be either deleted or
revised to permit SDA's to determine whether to use the ES to provide
job search services.
On the other hand, several commenters stated that allowing SDA's to
determine unilaterally whether adequate job search assistance is
available through the local ES office (Sec. 628.535(c)(2)) defeats one
of the basic goals of the Amendments: To focus JTPA on providing more
training and less stand-alone job placement. Unless there is a
mechanism for ES input into the determination as to whether job search
services are available, the concern is that an SDA could simply assert
that services are not available to avoid coordinating with the ES,
leading to duplication. One suggestion was that the Governor decide the
criteria for the availability of job search assistance. Another
commenter stated that any requirement to document that job search
services are unavailable from the ES for each participant or training
program should be done only once per program year or Job Training Plan
cycle.
Another commenter pointed out that because job search assistance
was defined as a service ``designed to give a participant skills in
acquiring full-time employment,'' and the local job service office was
considered the appropriate purveyor of these skills (Sec. 628.535(d)),
this provision should be removed because ES offices may not always be
able to provide such services.
The Department decided not to remove Sec. 628.535(d) because it
interprets section 204(c)(2)(B)(ii) of the Act to accord the employment
service a special status in terms of providing job search. Also, this
provision of the Act is not substantially different from the provisions
of sections 107 and 141 of the Act which prohibit duplication of
services. It remains to be determined whether job search assistance is
universally available within each community from the Employment
Service. The SDA may look at whether local employment service resources
are sufficient to provide the job search assistance for all potential
JTPA referrals.
The final rule, at Sec. 628.535(d), is amended to indicate that a
determination is to be made by the SDA in active consultation with the
employment service and other public agencies. These determinations must
be documented in the SDA's job training plan since the employment
service is on the PIC and coordination with the employment service is
among the topics to be included in the plan. Standardized inquiries
regarding local job search assistance availability from the employment
service may be developed by the Governor in consultation with the State
ES Director.
A number of commenters representing older workers recommended
either a waiver of the stand-alone job search limitations for this
population or a provision allowing the Governor to request a waiver
when sufficient evidence demonstrates that the interests of older
workers would not be well served by these limitations. These commenters
recognized the priority placed on training for younger individuals but
expressed doubts that career training was a realistic and relevant goal
for older workers who, generally are not attracted to long-term
assistance that mandates skills training, who do not thrive in
classroom training designed for youth and young adults, and who do not
tend to seek assistance from the ES or other public agency
environments. For these reasons, several commenters asked that older
workers, or the older worker set-aside program, be exempted from this
section altogether and that job search assistance be a service strategy
for this population without justification in the ISS.
The Department considered these comments carefully and has decided
that, like all title II-A participants, older worker participants
require assessment and need a justification in the ISS for stand-alone
job search activities. However, a new Sec. 628.535(e) is added in the
final regulations to recognize the preference of older individuals for
immediate job placement and to provide some flexibility in recognition
of the special characteristics of older workers. The Department's view
is that this provision should not establish a routine practice to avoid
the provision of needed training services. The intent of the JTPA
program remains to provide needed services to the hard to serve,
including older workers.
A few commenters noted an ambiguity in the interim final
regulations, that Sec. 628.804(d) and (e) limit the provision of
preemployment and work maturity skills training and work experience, in
addition to job search assistance, unless they are accompanied by
additional services; while Sec. 628.535(b)(2) states, as an example,
that work experience can be combined with job search training.
Accordingly, Sec. 628.535(b)(2) is revised to specifically exclude this
example as well as other services which may not be used to meet the
combination requirement. Additional services which may be provided in
conjunction with job search may include the training services specified
in JTPA section 204(b)(1), except stand-alone skill assessment,
counseling, work experience and case management, and the direct
training services listed in 264(b) of the Act excluding tutoring,
stand-alone skill assessment, counseling, work experience and case
management. Commenters also pointed out that the title II-C program
does not contain an ``exceptions'' provision to this requirement as
section 204(c)(2)(B)(ii) of the Act does for the title II-A program. To
address this inconsistency, Sec. 628.535(c) is amended to state that
the exceptions are not applicable to title II-C. On the other hand, it
is important to note that, for the purposes of this section, because
title II-C in-school youth are enrolled in educational programs, they
meet the requirement of being enrolled in ``other additional services''
(Sec. 628.804(d) and (e)).
The Volunteer Program
Several commenters felt that the requirements at Sec. 628.540 were
too restrictive and burdensome. In response, and in consideration of
the principle that a volunteer program should, in fact, be voluntary
for former participants, the Department is removing the goals,
objectives and documentation requirements in the final rule. Section
628.540, as revised, merely repeats the statutory requirement which the
Department believes is self-explanatory. The Department encourages the
SDA's to work with former participants to have them share their
experiences in the program and in the workplace with current
participants. The Department also advises the SDA's to document any use
of JTPA funds for this volunteer program.
Linkages and Coordination
Sections 205 and 265 of the Act require that SDA's operating adult
and year-round youth programs establish appropriate linkages with other
Federal human resource programs, including Department of Health and
Human Services' (HHS) JOBS program, the Department of Housing and Urban
Development's (HUD) Comprehensive Modernization Program, the Department
of Energy's (DOE) Low Income Weatherization Grant program and programs
under the National Service Act. Other linkages may also be established
with appropriate State and local educational, social service, and
public housing agencies, including CBO's, business and labor
organizations, volunteer groups and others, such as women and older
worker organizations, to avoid duplication and to enhance the delivery
of services. In addition, youth programs are required to establish
linkages with appropriate educational agencies which include formal
agreements for procedures for referring and serving in-school youth,
methods of assessment, notification when students drop out of school,
and arrangements with educational agencies for services for in-school
and out-of-school youth. These provisions are reflected in
Sec. 628.545.
Several commenters urged that coordination should begin at the
Federal level. The Department agrees and has begun discussions with a
number of other Federal agencies to increase coordination at the
Federal level and, as the commenters requested, to seek ways to develop
common definitions and procedures applicable across program lines. The
commenters were concerned that all the responsibility for coordination
rests on the JTPA system. It is, of course, true that the Act and these
regulations, since they focus on the JTPA system place a burden on the
system to be a prime mover in the process of developing coordinated
program relationships. A State or SDA is required to make good faith
efforts to seek coordination and cooperation where it is possible to do
so.
Several commenters questioned the ability of SDA's to establish
appropriate linkages if other agencies are not operating under similar
mandates. Some comments recommended that the Governor encourage
coordination efforts through the SJTCC and, where feasible, develop
agreements at the State level which would provide the basis and
authority for local agreements and ensure the best utilization of funds
between agencies. The Department agrees that these recommendations are
a good way to establish effective and systematic coordination and
language to this effect is added to Sec. 628.545(a). The new language
recognizes both the SJTCC and the HRIC, whichever is in place in a
State, as useful focus points for coordination efforts. In addition, a
few comments referred to the importance of the SDA's documenting
instances of attempted coordination efforts and of sharing this
information with the Governor's office. This provision also is included
in Sec. 628.545(a) to link State coordination agreements with local
achievements by means of the job training plans.
In addition, to emphasize the importance of ``one-stop shop''
career centers and seamless ``single point of contact'' delivery
systems, which was the concern of several commenters, a new
Sec. 628.545(b) is added. SDA's are encouraged to facilitate such
delivery systems in coordination with other agencies, which may include
both the development of ISS plans and of a common program application,
as well as a unified job development effort and comprehensive program
design. Such linkages may provide for a JTPA entity jointly funding or
administering a program with funds from another agency, such as an SDA
jointly funding aspects of a public housing agency's Comprehensive
Modernization Program or the local JOBS program. Alternatively, when
appropriate, the SDA could earmark funds to be spent within public
housing areas for services to residents.
Other coordination issues discussed were the difficulty of defining
and receiving information on dropouts from some local educational
agencies and the fact that agreements should be limited to those
education agencies which plan in-school activities. With regard to
obtaining information on school dropouts, the Department has initiated
discussions with the Department of Education with the goal of working
out a common definition and systematic approach for identifying and
serving dropouts. In the meantime, States are encouraged to negotiate
agreements with State educational agencies to facilitate this task.
With regard to limiting the agreements required at the local level with
educational agencies, Sec. 628.545(c) is amended to reflect these
concerns by the addition of the qualifying terms ``appropriate'' and
``which participate in JTPA programs.''
Transfer of Funds
A few commenters raised questions concerning timing issues not
addressed in Sec. 628.550 of the interim final rule: whether transfers
must occur at the beginning of the program year; whether they may occur
at any time during the 3-year funding period; and whether the
provisions are applicable to the 1993 title II-B program. The
Department does not address these issues in the final rule, leaving the
first two issues to be addressed at the Governor's discretion. In
response to the third issue, the provisions are applicable to the 1993
title II-B program; this issue is addressed in the transition
provisions at Sec. 627.904(k)(2) of the final rule.
In addition, paragraph (b) is revised to permit transfers of up to
20% of the title II B funds allocated to an SDA under section 252(b) of
the Act to title II C. This change is consistent with the amendment
made to section 256 of the Act by the Goals 2000: Educate America Act,
Pub. L. 103-227.
Title II-A--The Adult Program
Most of the general requirements of title II-A appear in subpart E
of part 628 of the interim final rule. There are a few specific
requirements of title II-A which appear in part 628, subpart F. These
include sections on eligibility; requirements to assist hard-to-serve
individuals; types of training services, counseling and supportive
services; and linkages and coordination.
In response to commenters who were confused about whether the
provisions of the formula for allocation of funds set a maximum age of
participation at 72 years, Sec. 628.605(a) is amended to clarify that
there is no maximum age of participation.
A few commenters asked for clarification on the determination of
the 65-percent threshold of serving the hard-to-serve. Section
628.605(c)(1) is amended to clarify that all participants, including
the non-disadvantaged (10 percent window), are considered in
determining the 65 percent who are hard-to-serve. Section 628.605(c)(2)
now addresses the question of when, in the service continuum, an
individual is counted for determining compliance with the 65-percent
barrier requirement by clarifying, as discussed earlier, that it is
calculated upon participants who have received a service subsequent to
objective assessment.
Several commenters questioned the inconsistency in the provisions
regarding the ten-percent window in section 204(d) of the Act and the
provisions for eligibility in the basic title II-A program, set forth
in Sec. 628.605(e), when an older worker is in a joint program between
JTPA and title V of the Older Americans Act. As discussed in connection
with the provisions of Sec. 628.320, this inconsistency has been
addressed by the Congress in amendments to the Older Americans Act.
Finally, on the regulatory provisions of Sec. 628.605(c) and
Sec. 628.803(d) addressing the 65-percent requirement, several
commenters asked what would be the ramifications of non-compliance. Of
course, the Department does not expect difficulty in meeting these
requirements. Since the Act imposes these percentage service
requirements, as well as the requirement on the in-school, out-of-
school 50/50-percent ratio, on participants and not to funds, the
Department believes that they would be the subject of administrative
corrective action by the SDA and, subsequent action by the Governor
under the provisions of section 164(b)(1) of the Act and part 628,
subpart G of the final rule, as appropriate.
Summer Youth Employment and Training Program
Subpart G of part 628 covers the Summer Youth Employment and
Training Program (SYETP under title II-B, effective with calendar year
1994. It reflects the policy of closer integration for youth between
academic fundamentals (such as reading and mathematics) and work
requirements.
A number of commenters raised issues related to the SYETP
authorized under title II-B. Several commenters requested broad
flexibility in the scope of the objective assessment and ISS required
for summer program participants. Some expressed the fear that these
requirements will result in a reduction of the number of SYETP
participants due to the increased burden on current staff. The
Department recognizes that the achievement objectives and resulting
service strategies for summer youth differ from what might be expected
in the adult program and that the corresponding assessment processes
would vary accordingly. Section 253(c)(1)(A) of the Act states that
SYETP programs shall include objective assessment of the basic skills
and the supportive service needs of each participant. The SDA may use
school records on math and reading levels to determine basic skills.
Similarly, the fully developed ISS, described in subpart E, is not
required for a participant who is enrolled only in the SYETP, as is
reflected in Sec. 628.515(b)(2). For those participants transferring to
the year-round program under title II-C, the full objective assessment
and ISS would be required. The results of any post-title II-B
participation test should be used as part of the assessment process
when transferring the individual to a program under title II-C. Within
the limits imposed by any applicable state or local privacy laws or
rules, SDA's are encouraged to make as much use as possible of existing
information from schools and from title II-B participation in
developing the full objective assessment for a transferring
participant, as well as sharing available JTPA information with school
counselors and other appropriate school officials.
A few commenters addressed the inability of SDA's to provide the
required basic and remedial education services without reducing the
number of youth served or other services to youth. While this is a
difficult tradeoff in some areas, the Department is bound by the
emphasis in the amendments to provide educational services to
participants. In some instances, it may be necessary to reduce the
number of participants served in order to get high-quality experiences
under title II-B. Coordination and leveraging of resources is
recommended to allow more participants to receive educational services.
In order to more closely conform to sections 251 and 253(a) of the
Act, Sec. 628.701(a), on Program Goals and Objectives, is amended. The
``enhancement of basic educational skills'' is added to the list of
possible SDA goals and objectives. Other additions include
``encouragement of school completion or enrollment in supplementary or
alternative school programs'' and ``improvement of employability skills
including provision of vocational exploration opportunities and
exposure to the world of work, and enhancement of youth citizenship
skills.''
A few commenters spoke of various difficulties involved with the
determination and documentation of eligibility under the National
School Lunch Act. Guidance on eligibility verification pertaining to
the determination and documentation of eligibility under the National
School Lunch Act will be developed in consultation with the Department
of Agriculture and will be provided outside of these regulations. See
the further discussion of this subject in the section pertaining to
programs under title II-C.
For the reasons discussed previously, in connection with
eligibility for the education coordination grant program, the
Department has determined that the criteria for eligibility, as they
relate to the ``economically disadvantaged'' eligibility criterion and
alternatives for in-school youth, should be consistently applied across
programs under parts A, B, and C of title II of the Act. Therefore, in
addition to eligibility for free lunch under the National School Lunch
Act, the Department adds participation in a compensatory education
program under title I chapter I of the Elementary and Secondary
Education Act and in a schoolwide program, as specified at section
263(g) of the Act, to the criteria at Sec. 628.702 of the final rule.
In response to commenters who raised the issue of the perceived
limitation of 500 hours on the duration of work experience for youth
and its effect on the summer program, the Department refers to the
discussion of work experience that appears in connection with
Sec. 627.245 and the fact that the limitations on duration of work
experience are removed.
Section 628.705(d), dealing with concurrent enrollment, is amended
to clarify that 65 percent of the total number of title II-C
participants shall have one or more barriers to employment. This is
necessary because no such additional barrier to employment requirement
exists in title II-B. The SDA must decide who is enrolled in title II-C
programs from title II-B or elsewhere.
A new paragraph (e) on follow-up services is added to Sec. 628.705.
Section 253(d) of the Act requires that followup services be provided
for participants if the ISS indicates that such services are
appropriate. Title II-B funds may be used such follow-up services up to
one year after program participation, including when this coincides
with title II-C participation when determined appropriate during
participation in the title II-B program and recorded in the participant
record. All supportive services in section 4(24), except financial
assistance, are included in followup services. Appropriate followup
activities for title II-B participants include counseling, mentoring,
or tutoring.
Finally, with the enactment of the Goals 2000: Educate America Act,
there were amendments to the program under Title II-B. The Department
believes that these are important changes and wishes to call attention
to them in this rulemaking process. Therefore, some of the statutory
provisions have been directly included in this final rule at Sec. 628.
Subpart H--Youth Training Program
A number of commenters suggested that the term ``out-of-school
youth'' be clarified or defined in Sec. 628.803(h). Several commenters
specifically cited attendance in an alternative school or education
program as a criterion. A few commenters specifically said that the
Congressional Conference Committee Report makes clear that this
definition encompasses youth enrolled in alternative education
programs. They encouraged the inclusion of alternative education
programs in the definition of ``out-of-school youth''. Other comments
stressed a combination of options including students attending area
learning centers, adult basic education classes, general educational
development (GED) preparation, vocational schools, or colleges. Others
wanted truants, dropouts, and those on suspension status specifically
included. One recommended that the State define out-of-school.
A few commenters wanted the term ``in-school youth'' clarified or
defined. Some commenters had specific suggestions such as leaving the
definition up to the Governor or placing it in Sec. 625.5, Definitions.
In an earlier attempt to provide administrative clarification in
this area, the Department had provided guidance to the Regional Offices
on the definition of ``in-school youth'' and out-of-school youth'' in
Field Memorandum No. 34-93. This guidance indicated that an in-school
youth was a youth who had not received a high school degree and was
attending school on a full-time compulsory basis. An out-of-school
youth was a youth who was not in school, or as suggested by the report
of the Conferees, was attending alternative school or was habitually
truant.
In comments to the Department, it was indicated that the interim
guidance was problematic for two reasons. First, a 14 or 15-year-old
youth attending alternative school would not be eligible to participate
if defined as out-of-school since a 14 or 15-year-old could only be
eligible as in-school youth. Second, if a youth was in alternative
school and considered in-school by the school system, but defined as
out-of-school for JTPA, the eligibility criteria of participation in a
compensatory education program or eligibility for free lunch could not
be applied.
The issue is of some interest to the JTPA system, especially in
light of the requirement that at least 50 percent of the youth served
be out-of-school youth. The Department has given careful consideration
to this matter and has determined to take a slightly different course.
The regulations define ``in-school youth'' at Sec. 628.803(b). The
Department has not included the concept of being subject to compulsory
attendance requirements because in some States these requirements end
at an age before a youth has attained a diploma and the Department
believes that attainment of a diploma is key to the criteria for being
in school. The word ``diploma'' is substituted for ``degree'' to
distinguish from post-secondary attainment. Any other youth is out-of-
school. Rather than further define ``out-of-school'' in a way that
would create the problems noted above or create a number of unnecessary
exceptions, the Department has decided to adopt, in Sec. 628.803(h),
the exceptions suggested in the Conference Report which set forth the
requirement that 50-percent of youth served must be out-of-school. The
Conference Report indicates that youth in alternative schools or who
are ``habitually truant'' may be considered as out-of-school for
purposes of meeting the statutory requirement. ``Alternative school''
also is defined. Section 628.803(h) is revised accordingly so that
paragraph (h)(2) is redesignated as paragraph (h)(3) and a new
paragraph (h)(2) is added.
Several commenters were concerned that the status of high school
graduates was unclear. The intent of the revision of the definitions in
the final rule is to make it clear that all youth who are not in-school
are out-of-school. Thus, high school graduates or GED recipients, who
are not enrolled in post-secondary education programs, would qualify as
out-of-school youth. It should be stressed, however, that the primary
intent of including the ``out-of-school'' eligibility category in title
II-C was to stress services to high school dropouts. SDA's should focus
their services on this group.
A few commenters noted the problems with documenting the free lunch
program as an eligibility criterion for youth. That program has strict
confidentiality provisions. One urged the Department to work with the
appropriate agency to improve the existing process. While section 9 of
the National School Lunch Act assures confidentiality, schools may
release summary information such as the number of eligible children in
a school. Parents may sign waivers of confidentiality for specific
programs. Households may voluntarily provide evidence of eligibility.
The U.S. Department of Agriculture (USDA) is requesting that their
regional offices notify State agencies of these regulations and suggest
they share this information with local school administrators. The
Department plans to work with USDA staff to coordinate this effort.
Section 628.803(c) is amended to reflect that the Department will
provide further guidance on the verification of documentation regarding
the free lunch program.
Regarding the requirement to serve hard-to-serve individuals,
Sec. 628.803(d)(2) is amended to state that all Job Corps participants
shall be considered as out-of-school and shall be automatically
considered to have a barrier to employment. This change is made to
foster JTPA/Job Corps coordination. SDA's now will have an incentive to
provide job development and placement services for Job Corps
participants. All positive program terminations will be enjoyed by both
systems.
A commenter sought clarification as to whether non-economically
disadvantaged youth enrolled as a part of a schoolwide project are to
be counted as part of the 10 percent non-economically disadvantaged
stated in Sec. 628.803(f). As stated in Sec. 628.803(h)(2), these youth
do not count against the 10-percent window.
Commenters sought clarification of the provisions of the
regulations regarding title II-C eligibility based on schoolwide
project participation. Section 628.803 is amended to add a paragraph
(g)(3) to restate the provisions of the Act on the criteria for schools
that qualify for schoolwide projects, and a paragraph (g)(4) which
states that the SDA determines its schoolwide projects and provides a
list of examples of possible projects.
One commenter pointed out that section 263(g)(1)(C) of the Act
requires that projects be in schools in which not less than 70 per cent
are hard-to-serve and that the regulations should define a reasonable
standard to determine this. This is addressed in DOL's Technical
Assistance Guide on Eligibility which specifies that the school makes
the certification that 70 percent of its students meet the criteria.
The SDA may rely upon the school's certification for purposes of
compliance.
A few commenters suggested that for a school-wide project, an
entire school district should be allowed to qualify and not just an
individual school. The Department believes that the provisions of the
Act clearly apply to an individual school. No change is made to the
final rule.
Several commenters sought clarification of when SDAs would be
required to have complied with the requirement to serve 50-percent
youth who are out-of-school. Section 628.803(h)(1) is amended to state
that the Governor has the responsibility to determine the period for
which the 50 percent out-of-school requirement will be calculated based
either on the period covered by the job training plan or on a program
year.
A few commenters maintained that the term ``dropout'' needed
clarification. ``School dropout'' is defined at section 4(38) of the
Act as an individual who is no longer attending any school and who has
not received a secondary school diploma or a certificate from a program
of equivalency for such a diploma. That definition is now referenced at
Sec. 628.804(c).
There were many comments on title II-C authorized services
including limited internships, entry employment experiences,
cooperative education, tryout employment, youth work experience, youth
OJT, and others. Most of these comments indicated confusion and asked
for clarification in a variety of ways.
A few commenters wanted limited internships clarified. A few
commenters expressed surprise at how open limited internships were
compared to OJT with 100-percent wage reimbursement at a private-for-
profit employer and no classroom training component. A few commenters
thought the provision on entry employment experience was poorly written
and confusing. Some wanted clarification on cooperative education.
Entry employment experience, cooperative education, and limited
internship offer work-based training experiences in a work setting. The
Department believes that the particulars of how they are designed and
carried out should be a matter of State and local policy, so long as
they are consistent with general provisions of the regulations. The
Department encourages the development of such work-based training
programs in conjunction with education components that reinforce the
experience. The 500-hour limitation on entry employment experience and
limited internship is removed and Sec. 628.804(h)(2) of the final rule
is amended accordingly. With regard to cooperative education programs,
the Department wishes to emphasize that, as has been the practice, no
subsidized wages may be paid to participants in this activity.
In response to commenters who sought clarification of what
constituted an alternative course of study, the Sec. 628.803(h)(2)
includes examples of an alternative school program including an
alternative course of study in connection with the in-school, out-of-
school ratio. Section 628.804(b) indicates that the alternative course
of study shall be approved by the local educational authority and may
be delivered by a CBO. The Department believes that the JTPA rules
should not specify the characteristics of an alternative course of
study when, in almost all instances, this falls within the
responsibility of the local educational authorities.
A commenter asked whether tryout employment is allowable under
title II-C. Tryout employment previously was described in section 205
of the Act. If conducted under the provisions of title II-C, it would
be a kind of entry employment experience. The design of such an
activity and the decision to use it is made at the local level.
A few commenters stressed that youth work experience should not be
limited to 500 hours. As previously discussed, the final rule is
revised to clarify that work experience has no duration limitation.
Several commenters expressed alarm over the title II-C OJT
requirement that the youth OJT wage equal or exceed the average wage at
placement of title II-A wage. Commenters stated, in various ways, that
the new provisions on OJT for youth will eliminate youth OJT as a
program option and that JTPA will lose its ability to serve this
special needs population. There were several recommendations on how to
compute wage. Several wanted the wage to be computed based totally on
youth wages. It is clear that the language at section
264(d)(3)(C)(i)(I) of the Act intends the youth OJT wage to be based on
the adult wage in title II-A. Section 628.804(j)(1)(i) is amended to
clarify that wages for OJT positions meet or exceed the average wage at
placement in the SDA for participants under title II-A ``based on the
most recent available data.'' This replaces the language in the interim
final rule of ``in the preceding program year.'' Some may still view
these provisions as eliminating private sector work for youth. The Act,
however, provides other opportunities for youth in the private sector,
such as entry employment experience, limited internships, and
cooperative education. A few commenters expressed concern that disabled
youth will be hurt by the new wage restrictions for youth OJT. These
new training options may be developed with the disabled in mind. These
options can be used to provide sheltered or supported work experiences
for disabled youth similar to those available under OJT.
Section 628.804(k) is amended to clarify that supportive services
may be provided after termination. They include the full range of
supportive services defined at section 4(24) of the Act, except for
financial assistance, for up to a year after termination. In the title
II-B section of this Preamble, ``follow-up services'' that would help
bring JTPA closer to the goal of a year round program for youth are
discussed.
Part 631--Programs Under Title III of the Job Training Partnership
Act
A number of comments received by the Department in response to the
December 29, 1992, interim final rule specifically addressed title III
issues and concerns. The revisions to the regulations for part 631,
Programs under Title III of the Job Training Partnership Act, were
driven by changes to the legislative provisions contained in the Job
Training Amendments of 1992 and the Defense Authorization Act for
Fiscal Year 1993. Only those comments pertaining to the proposed
regulatory revisions stemming from the legislative changes were
considered. After the issuance of the interim final rule, the enactment
of the NAFTA Worker Security Act required additional revisions to the
regulations.
Several commenters recommended editorial changes to the proposed
regulatory language. These suggestions were incorporated depending on
their accuracy and usefulness. Major comments on the proposed revisions
to Part 631, the Department's analysis of and reaction to those
comments, and major changes to the final rule are discussed below.
Definitions
The interim final rule at Sec. 631.2 added an additional definition
of ``substantial layoff (for rapid response assistance)'', which
establishes a minimum threshold for the provision of rapid response
assistance. This minimum threshold cannot be waived, but a new
provision, at Sec. 631.30(b)(6), which provides the Governor with
alternatives for complying with the threshold and providing rapid
response assistance in exceptional circumstances has been clarified. In
addition, that provision has been expanded to reflect a requirement of
the NAFTA Worker Security Act.
A few commenters questioned whether the ``employment loss'' in this
new definition relates to a single business or to the geographic area.
To maintain consistency with the Worker Adjustment and Retraining
Notification (WARN) Act, ``employment loss'' in this context relates to
a single site of employment .
Regarding the new definition of ``substantial layoff'', another
commenter stated that employers periodically lay off, temporarily, 50
or more employees during a 30-day period and then recall these
individuals. Therefore, the commenter recommends that rapid response
assistance should only be authorized if the duration of a layoff is
expected to last for 6 months or more. The Department believes that,
after determining a layoff meets the definition of substantial layoff
for rapid response assistance purposes, a State is still required to
determine, among other things, the expected duration of the layoff, the
level of need of the affected individuals and their individual
eligibility for services. Ascertaining their need for assistance should
include contacting the employer and a representative of the workers.
The State should then decide whether or not to offer services based on
these determinations.
A few commenters believed the new definition would exclude rapid
response assistance for numerous small scale reductions and stated
that, if the definition could not be altered, more latitude should be
given to the States under the ``exceptional circumstances'' provision
to respond to smaller layoffs. A commenter suggested expanding
``exceptional circumstances'' to include other situations, and another
commenter suggested alternative language for Sec. 631.30(b)(6) to allow
the Governor to establish a threshold below 50 for rapid response
assistance purposes. Finally, one commenter thought Sec. 631.30(b)(6)
directly contradicted the definition of ``substantial layoff (for rapid
response assistance)'' and questioned the legislative basis for this
new provision.
As a statutory provision, the minimum threshold of 50 employees
established by the new definition of substantial layoff cannot be
waived. However, through Sec. 631.30(b)(6), the regulations do provide
flexibility to States to establish policies that allow rapid response
assistance to be provided to layoffs of less than 50 workers at a
single site. The Governor must establish guidelines defining parameters
for ``impact on a local community.'' The only limitation is that States
must maintain a capability to respond to single site layoffs of 50
workers or more. In other words, States cannot establish policies which
would exhaust their ability to provide effective and timely rapid
response to layoffs of at least 50 workers.
A few comments reflected concerns with both definitions of
substantial layoff or with having two separate definitions. One
commenter believed the Governor should have the discretion to reduce
the worker threshold below 50, while another believed the definitions
must be flexible enough to accommodate local circumstances. A few
commenters stated that having two different definitions was
administratively confusing and could lead to disallowed costs as a
result of the difficulty of ascertaining if the 33 percent threshold
had been met. To promote consistency, they recommended using the
definition of ``substantial layoff for rapid response purposes'' as the
sole definition of the term. Other commenters believed having two
distinct definitions established a possible conflict (i.e., individuals
who receive services through rapid response assistance may not meet the
title III eligibility criteria), and indicated that a single definition
of rapid response was preferable.
The definitions of ``substantial layoff for participant
eligibility'' and of ``substantial layoff for rapid response purposes''
are different as a result of responsive title III policy evolution.
Originally, the Department used the WARN definition of ``mass layoff''
to establish a linkage between title III programs and WARN, and to set
forth a minimum threshold for the provision of State rapid response
services. To provide greater flexibility for State rapid response
assistance, Congress provided an additional definition of substantial
layoff, but clearly made it exclusively for rapid response purposes.
Therefore, the two definitions of substantial layoff will remain
intact.
Participant Eligibility
Broader eligibility rules (criteria) are established in
Sec. 631.3(b) for the receipt of selected readjustment and
retraining services in instances where an employer makes a public
announcement of a plant closure, pursuant to section 314(h) of the Act.
A few commenters asked what constitutes a public announcement of a
planned closure. One commenter specifically asked what constitutes a
public announcement for the State, and if a WARN notice or a letter to
the Governor or locally elected official from the employer would
suffice.
Section 631.3(b)(4) states that ``the Governor shall establish
criteria defining `public announcement'. Such criteria shall include
provisions that the public announcement shall be made by the employer
and shall indicate a planned closure date for the facility (section
314(h) of the Act).'' The Department believes a WARN notice, and most
likely a less formal declaration by an employer, would meet these
criteria. However, within the parameters established in the
regulations, the Governor ultimately determines what constitutes a
public announcement of a planned closure.
A few commenters questioned what would happen if a decision to
close a plant was changed. A few commenters specifically asked what
would occur if a decision was reversed (e.g., Would the project be
canceled? What happens to the workers who were determined eligible and
enrolled? Are they terminated? What impact would a reversal have on
cost category limitation, performance standards and outcomes?). They
recommended the institution of a hold harmless provision. One commenter
asked if an individual would remain eligible for retraining should a
closure date be delayed or if an individual in classroom training never
received a notice of layoff. Finally, another commenter stated that the
participants should not be denied service or experience an interruption
in enrollment due to delays in closing dates.
The determination of EDWAA eligibility for any of the program's
services and activities is determined based on the best information
available at the time. If the circumstances upon which the eligibility
decision(s) were based change, a reevaluation of the continued need for
the services/activities is appropriate. It is expected that
consideration would be given to such factors as the exact nature of the
employer action (postponement or reversal), where the participant is in
the system (e.g., whether the participant is enrolled and participating
in a retraining activity), and the impact of a termination on the
individual. However, title III expenditures for services/activities to
a participant who was correctly determined to be eligible are not, in
and of themselves, disallowed costs.
A commenter asked how States should define ``plant or facility
closing'' within the context of Sec. 631.3(b). Specifically, they asked
if WARN rules should be used in defining these terms (i.e., whether
line closings within a plant or the elimination of a shift should be
considered a plant closing). While the Department believes the WARN
rules provide helpful guidance, this determination is left to the
discretion of the Governor.
Another commenter requested the addition of language requiring the
availability of ``rapid response-like activities'' to a firm entering
bankruptcy, whether or not a formal public announcement has been made.
Section 631.3(b)(1) provides for participant eligibility in the event
of a formal public announcement of a plant closure. While no change is
made in the final rule, a State may, pursuant to section 314(b) of the
Act, provide rapid response assistance after becoming aware of a
current or projected permanent closure or substantial layoff. Moreover,
the firm's employees may receive the services authorized in section 314
of the Act if they meet the eligibility criteria established at section
301. In assessing the circumstances of an impending bankruptcy, it is
expected that the Governor would determine whether the filing would
result in a closing, a layoff, or a Chapter 11 restructuring with no
contemplated change in manpower.
A commenter questioned whether or not a participant had to be
enrolled to receive basic readjustment services and if limited basic
readjustment services could be provided to eligible workers prior to
enrollment into a title III program. Section 314(c) of the Act (Basic
Readjustment Services), of course, includes outreach and intake. The
Department believes that outreach and intake services include limited
assessment of an eligible applicant to allow service providers to
evaluate an applicant's suitability for JTPA training and services. The
definition of ``participant'' at section 4 of the Act provides that:
``Participation shall be deemed to commence on the first day, following
determination of eligibility, on which the participant began receiving
subsidized employment, training or other services.''
A few commenters felt that Sec. 631.3(b)(3) inappropriately
excluded certain groups from consideration as ``eligible dislocated
workers'' pursuant to Sec. 631.3(b). A few believed involuntary, forced
and early retirements should be excepted from this provision, since
many individuals falling into this category have lost jobs through no
fault of their own. Stating that individuals are often forced or
``seduced'' into early retirement, another commenter wished to except
any individual who is likely to retire.
The exclusion of individuals ``likely to retire instead of seeking
new employment'' is statutorily required at section 314(h)(1) of the
Act and, therefore, will remain. The Department interprets the Act to
preclude services to those who are unlikely to need them because they
will remain employed with the employer or because they will retire. The
decision about whether any individual who has ``voluntarily'' retired
does, in fact, intend to remain unemployed must be made on a case-by-
case basis. This decision is best made at the state or local level.
Therefore, the Governor is responsible for the interpretation of this
phrase and its subsequent application.
Another commenter questioned what was acceptable documentation that
a person is ``likely to remain employed with the employer or to
retire'' when no individual notice is provided. It is within the
Governor's discretion to determine what would be acceptable
documentation.
A new Sec. 631.3(j) is added to set forth the requirements of
section 250(b)(2)(C) of the Trade Act of 1974 (19 U.S.C. 2271, et
seq.), as amended by the NAFTA Worker Security Act (Title V of Pub. L.
103-182).
Approved Training Rule
Section 314(f)(2) of the Act states that eligible individuals
participating in title III programs may receive unemployment
compensation benefits consistent with State policies under the Approved
Training Rule and defines eligible workers as those ``participating in
training (except on-the-job training).'' The language in the final rule
at Sec. 631.4 is revised from participation in ``any of the programs''
to ``any retraining activity, except on-the-job training.''
One commenter thought that limiting the receipt of unemployment
compensation benefits to only those trainees participating in a
retraining activity was inappropriate. Specifically, the commenter
believed trainees in a class providing assessment and the preparation
of an individual service strategy (ISS) are not available and looking
for work, and they too need compensation.
Objective assessment and preparation of an individual readjustment
plan are defined in section 314(c) of the Act as basic readjustment
services and, therefore, individuals participating solely in these
activities fail to meet the criteria established under section
314(f)(2) of the Act and Sec. 631.4.
Classification of Costs at State and Substate Levels
Section 631.13 was not altered in the interim final regulations.
However, a few commenters suggested redefining ``retraining'' to be
consistent with ``direct training services'' under titles II-A and II-C
and ``basic readjustment services'' to be consistent with ``training-
related services'' under titles II-A and II-C.
While the Department acknowledges that statutory requirements often
present barriers to coordination, it must be pointed out that titles
II-A and II-C and title III authorize separate programs with distinct
goals, structures, services and requirements. For example, objective
assessment is defined in titles II-A and II-C as a direct training
service while it is defined in title III as a basic readjustment
service. The statute and, in turn, the regulations reflect this fact.
Therefore, the different terms with their distinct definitions remain
intact in the final rule.
Limitations on Certain Costs
The basis for computing the cost limitations which apply to
expenditures of title III funds has been changed from annual
expenditures to program year allocation (for substate grantees), or to
funds reserved by the Governor from the program year allotment (for
States). This change reflects the amendments to section 315 and
recognizes that grantees are permitted to have up to 3 years in which
to spend allotted funds, subject to certain adjustments applied through
the reallotment process for under-expenditure. Other major changes to
this subject area include the addition of Sec. 631.14(i) to clarify
that the funds allocated (or distributed) to a substate grantee under
the provisions of section 302(c)(1)(E) of the Act shall be included in
the substate areas formula allocation for purposes of applying the cost
limits, and the addition of Sec. 631.14(h) to allow neighboring
substate grantees to combine funds to serve dislocated workers from two
or more substate areas.
A few commenters asked if it is allowable to provide funds to
substate grantees under the provisions of section 302(c)(1)(A)-(D) of
the Act and, if so, whether these funds must be considered funds
allocated to a substate grantee for the program year of the funds'
initial allotment to the State and included in the cost limitations of
Sec. 631.14(a)-(c).
While funds reserved by a State for activities under section
302(c)(1)(A)-(D) of the Act may be expended through a subgrant or
contract with a substate grantee, these funds would still be considered
funds allocated to the Governor, as defined at Sec. 631.14(i)(3), for
the program year of the funds' initial allotment to the State and
included in the cost limitations applicable to the Governor. As the
statute allocates these funds to the Governor for the explicit purpose
of carrying out responsibilities assigned to the State, expenditures of
these funds are to be treated as State-level expenditures, regardless
of the operator incurring those expenses.
One commenter asked whether TEGL No. 1-90, Change 1, which
specified that cost limitations would be calculated based on ``total
maximum allowable expenditures'', would remain in effect after July 1,
1993 and if new guidelines would be issued for calculating/determining
title III cost limitation compliance.
TEGL 1-90, Change 1 was issued on June 18, 1991, and its content
was based on the statutory and regulatory provisions effective at that
time. The Department will review this TEGL and issue appropriate
guidance.
This same commenter also asked if the minimum/maximum percentage
requirements would be applied to the total final expenditures for each
cost category to determine the minimum/maximum amounts after July 1,
1993. In a separate issuance, the Department will issue reporting
requirements which will clarify the application of the cost
limitations.
One commenter discussed the inconsistency between the 15 percent
cap on administrative costs under the title III program and the 20
percent cap on administrative costs under the title II-A and II-C
programs.
For titles II-A and II-C, section 108 of the Act established a
revised limit of 20 percent of funds that may be expended for
administration. However, as noted above, while the basis for computing
the cost limitations which apply to expenditures of title III funds has
changed, the statutory provision requiring a 15 percent cap on
administrative cost has not. Therefore, this difference between the
programs shall remain.
Questioning the application of Sec. 631.14(g), one commenter asked
if cost limitations must be complied with immediately if funds are
deobligated and, therefore, are no longer available. Cost limitations
are applied at the time funds are no longer available for expenditure,
in other words, when the 3-year availability period ends. When funds
are deobligated, the total pool of funds which is available for
expenditure is reduced and becomes the new base on which cost
limitations will be applied. However, a State or substate grantee still
has the entire period of fund availability to comply with the cost
limitations as they apply to this new base.
Federal Reporting Requirements
A new provision was added in the interim final regulations, at
Sec. 631.15, requiring the State to provide a breakdown of all
administrative expenditures by the dislocated worker unit, pursuant to
section 311(b)(11) of the Act.
A few commenters asked what cost breakdowns and line items are
required in the reports. As indicated in Sec. 631.15, the specifics
regarding the reports' content and format will be addressed through
instructions to be issued by the Secretary. These were included in the
reporting instructions for title III programs for PY 1993.
Federal Monitoring and Oversight
A new provision is added, at Sec. 631.17, clarifying the
Secretary's authority to oversee the State's provision of rapid
response assistance and to require corrective action as necessary, as
provided for in section 314(b)(3) of the Act.
One commenter questioned why the word ``may'' was used in
Sec. 631.17 in lieu of the word ``shall'' which is found in the
language of section 314(b)(3) of the Act. This section is revised to
reflect the language of the Act.
By prescribing how rapid response is to occur, another commenter
thought this new provision, along with other sections of the
regulations, resulted in ``micro-management by the Department'' and
reduced the flexibility available to the States and local areas. The
Amendments direct the Secretary to conduct oversight of rapid response
to ensure the ``effectiveness, efficiency and timeliness'' of these
actions. It remains the responsibility of the State to manage its
program in accordance with the Act and the regulations.
Needs-Related Payments
An amended provision in section 314(e)(1) regarding eligibility for
needs-related payments requires that a participant be unemployed, and
this requirement is incorporated in Sec. 631.20(c).
One commenter disapproved of the change since it denies needs-
related payments to participants working any number of hours. This
commenter indicated that not only were they able to keep the costs of
these payments down by having participants work part-time, but full-
time students could work part-time and have these earnings supplemented
by the payments to allow them to complete their program.
As stated above, section 314(e)(1) of the Act clearly states that a
participant must be unemployed to receive needs-related payments. As a
result, the final rule remains unchanged.
Designation or Creation and Functions of a State Dislocated Worker Unit
or Office, and Rapid Response Assistance
A provision at Sec. 631.30(a)(8) requires the State to immediately
(within 48 hours) notify the substate grantee of current or projected
layoffs and closures in the local area for the purpose of continuing
and expanding upon the services initiated by the rapid response team,
as required in section 311(b)(3)(D) of the Act. Moreover, section
311(b)(12) of the Act stipulates that accountability for rapid response
assistance resides in the dislocated worker unit (DWU), although the
DWU may contract with other entities for the provision of these
services. This is reflected in the provisions at Sec. 631.30(b).
One commenter questioned whether 48 hours meant 48 working hours
and what would happen if the information was made available on a Friday
afternoon. The Department believes the Governor is responsible for the
interpretation and application of the term ``48 hours.''
Another commenter indicated stronger language needed to be
incorporated into the regulations to ensure that the State did not pass
off its rapid response responsibilities to the substate grantees. After
reviewing Sec. 631.30(b), the Department feels the language adequately
addresses this concern. The regulatory provision remains unchanged.
Allocation of Funds by the Governor
In the Interim Final Regulations, a provision was added to
Sec. 631.32(b)(2) to clarify that Governors must give consideration to
each of the substate allocation formula factors required by section
302(d) of the Act unless the factor is not relevant to economic
dislocation conditions of the State.
A few commenters had questions regarding the formula for making
substate allocations. One commenter indicated that Sec. 631.32(b)(3)
should also allow a zero weight factor to be used where data are not
adequate or not provided or funded by a Federal partner. Specifically,
they mentioned that plant closing and mass layoff data are no longer
funded and farmer-rancher economic hardship data have never been
provided by the Department and the USDA.
The Mass Layoff Statistics program was temporarily suspended by the
Bureau of Labor Statistics. The Department intends to resume the Mass
Layoff Statistics Program early in 1995. During the interim period,
however, States will have to develop their own data and proxies for
mass layoffs. Similarly, States have been responsible for developing
their own data and proxies for farmer-rancher economic hardship data.
It is inconceivable that a State government would have no idea as to
economic circumstances in its own State. If ``a review of the available
data indicates that the factor is not relevant to determining the
incidence of need for worker dislocation assistance within the State'',
then a zero weight may be assigned (Sec. 631.32(b)(3)). However,
current lack of data is not an adequate reason for invalidating a
factor which is relevant to dislocation activity in the State.
Another commenter wondered if the Governor had an obligation beyond
the requirements of Sec. 627.463 (public access to records) to
publicize the elements of the formula or describe the rationales for
them.
The Department requires each State Plan to include a description of
the State's substate allocation formula methodology, including the data
elements and allocation formula to be used. Moreover, pursuant to
section 311(b)(9) of the Act, the Plan must be made available to the
State job training coordinating council to review and comment on prior
to its submittal to the Department. Therefore, through this process,
both the State Council and the Department will have an opportunity to
examine the within-State distribution formula.
Substate Plan
While no significant revisions were made to Sec. 631.50 of the
regulations, one commenter stated that the interim final rule omits any
requirement for SSG's to meet program goals, develop an oversight plan
and build capacity and noted that comparable provisions for SDA's are
at Sec. 628.420(b)(2), (3) and (c).
As stated earlier, the proposed revisions to the regulations for
part 631 were driven by changes to the legislative provisions contained
in the Job Training Amendments of 1992 and the Defense Authorization
Act for Fiscal Year 1993. The Department has chosen not to regulate in
areas unaffected by statutory change. Only those comments pertaining to
the proposed regulatory revisions stemming from the legislative changes
were considered for incorporation into the final rule. Therefore,
Sec. 631.50 remains unchanged.
Cost Limitations
Section 631.62 of the interim final rule stipulated that the cost
limitations under part A of title III will apply to projects operated
under part B of title III, except when waived or altered by the
application guidelines, or by the Grant Officer in the terms of the
grant. In response to comments, the Department has modified this
provision in the final rule. The Department still intends to use the
title III-A cost limitations in cases where applicants for grants do
not ask for a different allocation of costs among the cost categories,
but the Department does not wish to discourage applicants from
designing their programs in the manner that will best serve the
affected population. The final rule is revised to make it clear that
applicants for grants can propose costs and that the Grant Officer has
the discretion to accept them. It is the Department's intent to provide
grant applicants flexibility in designing the mix of services in their
programs. However, the Department will agree to proposals with
administrative cost in excess of 15% only in extraordinary
circumstances.
One commenter asked if this provision will apply to the Defense
Conversion Adjustment (DCA) Program projects currently in operation or
whether these projects will continue to operate under the regulations
in effect at the time of award. Each discretionary project is subject
to the grant agreement and modifications as approved by the Grant
Officer. Modifications to an existing grant may be requested by the
grantee and agreed to by the Grant Officer according to the provisions
of this final rule.
Finally, three commenters discussed the difficulty of applying the
Act's section 315 cost limitations to Clean Air Employment Transition
Assistance projects. As stated above, the cost limitations in the grant
agreement control, however, modifications to existing grants may be
requested. For future grants, applicants are free to apply for other
cost limits that fit their programs.
Reporting
A provision was added at Sec. 631.63 of the interim final rule,
setting forth the Federal reporting requirements for recipients of
title III discretionary grants, consistent with section 322(a)(4) of
the Act.
One commenter thought the process for notifying the Secretary
regarding significant developments concerning the grant or subgrant was
too complicated and could delay the implementation of the project and
workers' access to services.
Section 631.63(b) simply requires the grantees to provide
information to the Department on any significant developments that
impact the project. This reporting requirement should not affect or
delay the project's execution.
Special Provisions for CAETA and DDP Programs
Section 631.60 has been clarified to state that Subpart G relates
to programs and funds reserved to the Secretary for use under part B of
title III of the Act: Including section 323 (20% discretionary funds);
section 324 (Demonstration Programs); section 325 (Defense Conversion
Adjustment Program); section 325A (Defense Diversification Program);
and section 326 (Clean Air Employment Transition Assistance).
The National Defense Authorization Act for 1993 authorized the
Defense Diversification Program (DDP) as an amendment to JTPA, at
section 325A. Its purpose is to provide retraining and readjustment
assistance to workers and military personnel dislocated by defense
cutbacks and closures of military facilities; and to provide planning
support and conversion assistance for diversification of affected
facilities within an area impacted by reductions in military
expenditures or closure of military facilities. Section 631.65(c) of
this final rule prescribes the needs-related payments procedure in
accordance with the requirements in section 326(f) of the Act, as
required by section 325A(i) of the Act.
The Clean Air Act is administered by the Environmental Protection
Agency; however, the Clean Air Act Amendments of 1990, Pub. L. 101-549,
at section 110(a), amended the Job Training Partnership Act by adding a
new section 326, establishing the Clean Air Employment Transition
Assistance (CAETA) program. Section 326 is designed to assure the
establishment of programs to provide assistance to workers dislocated
as a result of a firm's compliance with the Clean Air Act. The purpose
of these programs is to provide readjustment and retraining assistance
to eligible workers to enable such workers to return to work.
The Department published proposed CAETA regulations for comment on
March 24, 1992 (57 FR 10232). Thirteen State, substate entities and
other organizations submitted comments. Upon review, the Department has
determined that there is no programmatic justification to have separate
regulations for Clean Air. It is necessary, however, to make specific
provision in the JTPA regulations for specific statutory requirements
applicable to the CAETA program. The specific statutory requirements
for that program are implemented herein at Sec. 631.65.
Most of the comments received pursuant to the proposed regulations
requested clarification of general JTPA title III areas that were
subsequently addressed in the Interim Final Regulations on December 29,
1992 (57 FR 62004). The following discussion relates to comments on
issues specific to the Clean Air Act.
Administration of Clean Air Act
One commenter suggested including a statement that the Clean Air
Act is administered by the Environmental Protection Agency. DOL agrees
with this comment and has added this statement in the preamble.
Needs-Related Payments
Several comments were received on the provisions of needs-related
payments. One commenter indicated that the language in the proposed
regulations might discourage grant applicants from serving those
eligible for payments so they can conserve funds for training, and that
applicants could perceive ETA as biased toward proposed grants with
limited needs-related payments (NRP's). It was also believed that grant
applicants should be encouraged to seek eligible dislocated workers
most-in-need, particularly those requiring income support during
training. The language at Sec. 631.65(c) of the final rule is intended
to reflect the statutory requirement that CAETA programs provide for
adequate needs-related payments. The language is not intended to permit
a programmatic restriction against those dislocated workers who are
eligible to receive NRP's.
Another commenter raised a question about when grantees should
start using family income to determine eligibility for needs-related
payments. The Department agrees that there should be a time frame; it
is only upon actual enrollment in a training and/or education program
that one becomes eligible for consideration to receive needs-related
payments. Individual or family income for the six-month period
immediately prior to a participant's enrollment in training and
education programs is to be annualized to determine eligibility for
needs-related payments.
One commenter stated that the determination of family income at the
time of eligibility determination, and that the three-month re-
determination requirement in the proposed rule would create
administrative burdens. The determination of family income only applies
to those dislocated workers who (1) have been determined eligible
pursuant to section 326(a) of the Act, (2) have exhausted or are not
eligible for unemployment compensation benefits, and (3) have been
enrolled in training and education programs pursuant to section 326(f)
of the Act. Section 326(f)(4) of the Act requires adjustments
reflecting changes in family income. The final rule is revised to
require that eligibility determinations ``shall be reviewed
periodically;'' however, it is expected that an equitable system would
be outlined in a grant application. It is expected that a grantee's
system would be sensitive to participants' probable decreasing family
income (depending upon the date of layoff) under the six-month income
determination rule.
Another commenter suggested clarifying restrictions on needs-
related payments to participants when relocation, out-of-area job
search, or TAA allowances have ceased, or when OJT has been completed.
The statute requires that needs-related payments be available to enable
participants to complete training or education programs. Relocation and
out-of-area job search allowances would normally be provided to
participants who possess marketable skills, and, therefore, are not
enrolled in training or education. If TAA allowances were being
provided for training or education, needs-related payments may be used
when TAA allowances are exhausted (if a participant is otherwise
eligible for and enrolled in an education or training program under
CAETA). After OJT, a participant ordinarily is employed and receives
wages from the employer. If the participant is not employed, NRP's
could only be made if the participant is enrolled in other training.
Two commenters asked what constitutes ``satisfactory progress'' in
order for a participant to continue to receive NRP's, and how often
this determination must be made. The Department expects a grant
application to define a system to address this issue, based upon the
training to be provided.
A commenter believed that the wording in the proposed rule, that
grantees must provide needs-related payments, seemed less definitive
and suggested stating whether the projects will be funded without
providing for payments to any participant. Another commenter suggested
having States check the needs-related payment policies of SDA's before
initiating the needs-related payments requirement. Two commenters
suggested using the same eligibility criteria for needs-related
payments for CAETA as are used in other title III programs. Two
commenters suggested allowing State or local flexibility in determining
who receives payments and payments policy. Another commenter suggested
that it would be confusing to make the needs-related payment rate
applicable to the weekly unemployment compensation payment level or to
the poverty level, which the commenter believed would limit the number
of eligible individuals in classroom training.
The Department is unable to accede to the requests of these
commenters. Needs-related payments are discretionary under title III of
JTPA, and grantees have some flexibility in providing such payments.
However, under section 326(c)(2) of the Act, CAETA funds must be used
to provide needs-related payments in accordance with the requirements
set forth at section 326(f) of the Act. Similarly, section 325A(i) of
the Act provides that in DDP programs, needs-related payments must be
made in accordance with section 326(f). The Act requires that the
Secretary prescribe regulations with respect to needs-related payments
for CAETA and DDP. The needs-related payments regulations at
Sec. 631.65(c) follow the statutory requirements at section 326(f) of
the Act. Because of these statutory requirements of CAETA and DDP,
grantees have little discretion and must provide needs-related payments
in the manner set forth in Sec. 631.65(c).
One commenter suggested developing regulations that require
grantees to document reasons for denial of payments and give
opportunities for participants who had payments suspended to seek
redress up to and including the federal level. The Department agrees
that grantees should include descriptions of systems in grant
applications which document payments, reasons for denial of payments
and suspensions. In addition, the regulations at Sec. 631.64 require
each grantee to establish and to maintain a grievance procedure which,
among other things, would handle grievances related to needs-related
payments. The regulations at subpart F of 20 CFR part 627 provide
procedures for the federal handling of allegations of violations of the
Act or regulations.
Participant Eligibility
Nine commenters raised questions regarding participant eligibility
provisions for dislocated workers under CAETA. One commenter suggested
expanding the eligible population to workers needing skills upgrading
or retraining on new or modified equipment. Sections 301 and 326(a) of
the Act establish eligibility criteria for CAETA. Dislocated workers
may receive skills training in the same occupation in which they were
previously employed if their current skills are obsolete, and such
training is required for them to meet the local labor market hiring
requirements for that occupation.
Two commenters suggested including a statement regarding the
eligibility of workers who had been laid off from mines that supply
coal to plants. The Department agrees that workers dislocated from
mines as a result of compliance with the Clean Air Act would be
eligible.
Another commenter raised the question of how one determines that an
individual's dislocation is the consequence of compliance with the Act
if the layoff notice does not specifically mention the impact of the
Clean Air Act, and whether the grantee has to assure verification is
done for each applicant. The CAETA grantee must determine and document
that a layoff is Clean Air Act-related and must verify that each
applicant was a part of such layoff. The application guidelines will
provide for reasonable documentation which could establish that the
layoff was related to the Clean Air Act.
Another commenter suggested allowing temporary employment with the
employer from which the worker was dislocated. Participant eligibility
for enrollment in CAETA is specified at section 326(a) of the Act. The
Department believes that temporary employment with the same employer is
inconsistent with the definition of dislocation and is restricted at
Sec. 631.3(i)(2).
Eligible Grantees
The Department received seven comments regarding entities eligible
to apply for grants under CAETA. Three commenters indicated that
submitting applications directly to the Department of Labor, rather
than through the State, could lead to such problems as a lack of
coordination, and duplication. Another commenter suggested that
recipients should provide assurances that they are administratively
capable of operating the program. Two commenters suggested that
limiting eligible grantees to States and territories of the United
States would ensure coordination with State entities and SSGs. Section
326(b) of the Act permits the Secretary to recognize five types of
eligible grantees, and it does not require applicants to apply through
the State. The Department recognizes that there would be benefits to
submitting all applications through the States, and encourages such
action. It should be noted, however, that an ``eligible grantee'' may
not be an appropriate applicant for a particular project. The nature
and extent of the proposed project, and the capacity of an applicant,
will be factors in evaluating an application and an applicant's ability
to perform the work.
Subpart I--Disaster Relief Employment Assistance
A new Subpart I, to be administered under the title III National
Reserve Grants program, provides for Disaster Relief Employment
Assistance, as authorized by the new Amendments to title IV-J of the
Act.
Section 631.84(a) discusses the projects that a unit of general
local government in a disaster area may operate under this subpart. One
commenter suggested substituting the phrase, ``Davis-Bacon provisions
shall apply on all projects related to demolition, cleanup, repair * *
*'' for ``on projects regarding demolition, cleanup, repair * * *.''
While Davis-Bacon does apply to Federal programs, the inclusion of
this phrase does not change or clarify the meaning of this provision.
Therefore, the section will remain unchanged.
Section 631.85 outlines the participant eligibility criteria under
the Disaster Relief Employment Assistance Program. The statutory
language regarding eligibility is not accurately reflected in this
section. The final rule is revised to correct this problem. In
addition, one commenter thought the Department should have the
authority to declare persons who are eligible for titles II-A and II-C
programs eligible for title III Disaster Relief Programs. Since the
statute does not grant the Department this blanket authority, expansion
of participant eligibility criteria will not occur.
Section 631.86 limits the length of disaster relief employment. One
commenter questioned the difference between this type of employment and
public service employment which is prohibited under titles II and III.
Although the statute prohibits public service employment funded
under title II-A and C and title III-A, public service employment is
contemplated under title IV-J of the Act. Disaster relief employment is
narrowly defined and exclusively limited to the activities described
under Sec. 631.84. Allowable activities will not be expanded beyond the
statutorily established parameters.
This same commenter asked how costs incurred for disaster relief
employment should be classified and what criteria should be used in
determining the monetary extent to which a cost category has benefited.
The Department has chosen not to issue detailed regulations for this
program. Specific information regarding Disaster Relief Employment
Assistance projects, including any guidance on cost classification
issues, will be contained in application guidelines published by the
Secretary. Until they are issued, an applicant for these funds should
follow the guidelines and information published in the July 9, 1992
Federal Register regarding Emergency Dislocated Worker Projects.
PART 637--JOBS FOR EMPLOYABLE DEPENDENT INDIVIDUALS (JEDI)
Several commenters addressed this section of the interim final
regulations.
The majority of the comments addressed inconsistencies in the
numbering of the sections and in the cross-references. The part has
been revised to correct the numbering.
In addition, several of the commenters raised questions concerning
how the program can be implemented in the absence of any Congressional
appropriation. While bonuses will not be awarded under title V of the
Act until funds are appropriated by Congress, individuals who are
eligible to be counted for title V purposes may be served under other
titles of the Act. Since those individuals who would be eligible to be
counted for the incentive bonuses under title V must also be eligible
for, and have participated in, other activities under the Act, the
costs associated with their participation in these activities would be
charged to the appropriate program(s) and title(s) of the Act. If a
State wishes to participate in the title V bonus program, if it is ever
funded, the State may wish to keep track of the outcomes of training
for individuals eligible to be counted for bonus purposes.
Effective Date
The Department recognizes that the regulations are being issued
after the beginning of a program year. To avoid administrative
difficulties, the Department has made the effective date of the
regulations June 30, 1995, the beginning of Program Year 1995. This
will give states and SDA's/SSG's time to plan for the changes that may
result from the amendments made in this final rule. States or SDA's/
SSG's are, of course, free to implement any of the changes that they
find will benefit their programs earlier than the effective date and
the Department will treat those changes as legally effective when
adopted in any subsequent monitoring or audit resolution activity.
Consistent with the Department's desire to enable states and SDAs to
implement the beneficial changes in the final rule as quickly as they
choose, the provisions of Sec. 627.210, authorizing the Department to
grant waivers of regulatory requirements are made effective within 30
days of publication to enable states to apply for waivers to be
effective before the beginning of PY 1995.
Catalog of Federal Domestic Assistance Number
These programs are listed in the Catalog of Federal Domestic
Assistance at No. 17-246, ``Employment and Training Assistance--
Dislocated Workers'' (JTPA Title III Programs); and No.17-250, ``Job
Training Partnership Act (JTPA)'' (JTPA Titles I, II, and V Programs).
List of Subjects in 20 CFR Parts 626 Through 631 and 637
Dislocated worker programs, Grant programs, Labor, Manpower
training programs.
Final Rule
Accordingly, chapter V of title 20, Code of Federal Regulations is
amended, as follows:
1. Part 626 is revised to read as follows:
PART 626--INTRODUCTION TO THE REGULATIONS UNDER THE JOB TRAINING
PARTNERSHIP ACT
Sec.
626.1 Scope and purpose of the Job Training Partnership Act.
626.2 Format of the Job Training Partnership Act regulations.
626.3 Purpose, scope, and applicability of the Job Training
Partnership Act regulations.
626.4 Table of contents for the Job Training Partnership Act
regulations.
626.5 Definitions.
Authority: 29 U.S.C. 1579(a); Sec. 6305(f), Pub. L. 100-418, 102
Stat. 1107; 29 U.S.C. 1791i(e).
Sec. 626.1 Scope and purpose of the Job Training Partnership Act.
It is the purpose of the Job Training Partnership Act (JTPA or the
Act) to establish programs to prepare youth and adults facing serious
barriers to employment for participation in the labor force by
providing job training and other services that will result in increased
employment and earnings, increased educational and occupational skills,
and decreased welfare dependency, thereby improving the quality of the
work force and enhancing the productivity and competitiveness of the
Nation (section 2).
Sec. 626.2 Format of the Job Training Partnership Act regulations.
(a) Regulations promulgated by the Department of Labor to implement
the provisions of the Act are set forth in parts 626 through 638 of
title 20, chapter V, of the Code of Federal Regulations, with the
exception of the veterans' employment program's chapter IX regulations
of the Office of the Assistant Secretary for Veterans' Employment and
Training, which are set forth at part 1005 of title 20.
(b) Nondiscrimination and equal opportunity requirements and
procedures, including complaint processing and compliance reviews, will
be governed by the provisions of 29 CFR part 34 and will be
administered by the Department of Labor (Department or DOL) Directorate
of Civil Rights.
(c) General authority for the JTPA regulations is found at section
169 of the Act. Specific statutory authorities other than section 169
are noted throughout the JTPA regulations.
Sec. 626.3 Purpose, scope, and applicability of the Job Training
Partnership Act regulations.
(a) Parts 626 through 638 of this chapter and part 1005 of chapter
IX (Veterans' employment programs under title IV, part C of the Job
Training Partnership Act) establish the Federal programmatic and
administrative requirements for JTPA grants awarded by the Department
of Labor to eligible grant recipients.
(b) Parts 626 through 638 of this chapter and part 1005 of chapter
IX apply to recipients and subrecipients of JTPA funds.
Sec. 626.4 Table of contents for the Job Training Partnership Act
regulations.
The table of contents for the regulations under the Job Training
Partnership Act, 20 CFR parts 626-638 and 1005, is as follows:
PART 626--INTRODUCTION TO THE REGULATIONS UNDER THE JOB TRAINING
PARTNERSHIP ACT
Sec.
626.1 Scope and purpose of the Job Training Partnership Act.
626.2 Format of the Job Training Partnership Act regulations.
626.3 Purpose, scope and applicability of the Job Training
Partnership Act regulations.
626.4 Table of contents for the Job Training Partnership Act
regulations.
626.5 Definitions.
PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER THE ACT
Subpart A--Scope and Purpose
627.100 Scope and Purpose of Part 627.
Subpart B--Program Requirements
627.200 Governor/Secretary agreement.
627.205 Public service employment prohibition.
627.210 Nondiscrimination and nonsectarian activities.
627.215 Relocation.
627.220 Coordination with programs under title IV of the Higher
Education Act including the Pell grant program.
627.225 Employment generating activities.
627.230 Displacement.
627.235 General program requirements.
627.240 On-the-job training.
627.245 Work experience.
627.250 Interstate agreements.
Subpart C--Payments, Supportive Services and Benefits and Working
Conditions
627.300 Scope and purpose.
627.305 Payments.
627.310 Supportive Services.
627.315 Benefits and working conditions.
Subpart D--Administrative Standards
627.400 Scope and purpose.
627.405 Grant agreement and funding.
627.410 Reallotment and reallocation.
627.415 Insurance.
627.420 Procurement.
627.422 Selection of service providers.
627.423 Funding restrictions for ``high-risk'' recipients and
subrecipients.
627.424 Prohibition of subawards to debarred and suspended parties.
627.425 Standards for financial management and participant data
systems.
627.430 Grant payments.
627.435 Cost principles and allowable costs.
627.440 Classification of costs.
627.445 Limitations on certain costs.
627.450 Program income.
627.455 Reports required.
627.460 Requirements for records.
627.463 Public access to records.
627.465 Property management standards.
627.470 Performance standards.
627.471 Reorganization plan appeals.
627.475 Oversight and monitoring.
627.477 Governor's determination of substantial violation.
627.480 Audits.
627.481 Audit resolution.
627.485 Closeout.
627.490 Later disallowances and adjustments after closeout.
627.495 Collection of amounts due.
Subpart E--Grievances Procedures at the State and Local Level
627.500 Scope and purpose.
627.501 State grievance and hearing procedures for noncriminal
complaints at the recipient level.
627.502 Grievance and hearing procedures for noncriminal complaints
at the SDA and SSG levels.
627.503 Recipient-level review.
627.504 Noncriminal grievance procedure at employer level.
Subpart F--Federal Handling of Noncriminal Complaints and other
Allegations
627.600 Scope and purpose.
627.601 Complaints and allegations at the Federal level.
627.602 Resolution of investigative findings.
627.603 Special handling of labor standards violations under
section 143 of the Act.
627.604 Alternative procedure for handling labor standards
violations under section 143--Binding arbitration.
627.605 Special Federal review of SDA and SSG-level complaints
without decision.
627.606 Grant officer resolution.
627.607 Grant Officer resolution of Governor's failure to promptly
take action.
Subpart G--Sanctions for Violations of the Act
627.700 Scope and purpose.
627.702 Sanctions and corrective actions.
627.703 Failure to comply with procurement provisions.
627.704 Process for waiver of State liability.
627.706 Process for advance approval of a recipient's contemplated
corrective actions.
627.708 Offset process.
Subpart H--Hearings by the Office of Administrative Law Judges
627.800 Scope and purpose.
627.801 Procedures for filing request for hearing.
627.802 Rules of procedure.
627.803 Relief.
627.804 Timing of decisions.
627.805 Alternative dispute resolution.
627.806 Other authority.
Subpart I--Transition Provisions
627.900 Scope and purpose.
627.901 Transition period.
627.902 Governor's actions.
627.903 Actions which are at the discretion of the Governor.
627.904 Transition and implementation.
627.905 Guidance on contracts and other agreements.
627.906 Determinations on State and SDA implementation.
PART 628--PROGRAMS UNDER TITLE II OF THE JOB TRAINING PARTNERSHIP ACT
Subpart A--Scope and Purpose
628.100 Scope and purpose of part 628.
Subpart B--State Planning
628.200 Scope and purpose.
628.205 Governor's coordination and special services plan.
628.210 State Job Training Coordinating Council.
628.215 State Human Resource Investment Council.
Subpart C--State Programs
628.300 Scope and purpose.
628.305 State distribution of funds.
628.310 Administration.
628.315 Education coordination and grants.
628.320 Services for older individuals.
628.325 Incentive grants, capacity building and technical
assistance.
Subpart D--Local Service Delivery System
628.400 Scope and purpose.
628.405 Service delivery areas.
628.410 Private Industry Council.
628.415 Selection of SDA grant recipient and administrative entity.
628.420 Job training plan.
628.425 Review and approval.
628.426 Disapproval or revocation of the plan.
628.430 State SDA submission.
Subpart E--Program Design Requirements for Programs Under Title II of
the Job Training Partnership Act
628.500 Scope and purpose.
628.505 Eligibility.
628.510 Intake, referrals, and targeting.
628.515 Objective assessment.
628.520 Individual service strategy.
628.525 Limitations.
628.530 Referrals of participants to non-title II programs.
628.535 Limitations on job search assistance.
628.540 Volunteer program.
628.545 Linkages and coordination.
628.550 Transfer of funds.
Subpart F--The Adult Program
628.600 Scope and purpose.
628.605 Eligibility.
628.610 Authorized services.
Subpart G--The Summer Youth Employment and Training Program
628.700 Scope and purpose.
628.701 Program goals and objectives.
628.702 Enriched Educational Component.
638.703 Private Sector Summer Jobs.
628.704 Eligibility.
628.705 SYETP authorized services.
628.710 Period of program operation.
Subpart H--Youth Training Program
628.800 Scope and purpose.
628.803 Eligibility.
628.804 Authorized services.
PART 629--[RESERVED]
PART 630--[RESERVED]
PART 631--PROGRAMS UNDER TITLE III OF THE JOB TRAINING PARTNERSHIP ACT
Subpart A--General Provisions
631.1 Scope and purpose.
631.2 Definitions.
631.3 Participant eligibility.
631.4 Approved training rule.
Subpart B--Additional Title III Administrative Standards and Procedures
631.11 Allotment and obligation of funds by the Secretary.
631.12 Reallotment of funds by the Secretary.
631.13 Classification of costs at State and substate levels.
631.14 Limitations on certain costs.
631.15 Federal reporting requirements.
631.16 Complaints, investigations, and penalties.
631.17 Federal monitoring and oversight.
631.18 Federal by-pass authority.
631.19 Appeals.
Subpart C--Needs-Related Payments
631.20 Needs-related payments.
Subpart D--State Administration
631.30 Designation or creation and functions of a State dislocated
worker unit or office and rapid response assistance.
631.31 Monitoring and oversight.
631.32 Allocation of funds by the Governor.
631.33 State procedures for identifying funds subject to mandatory
Federal reallotment.
631.34 Designation of substate areas.
631.35 Designation of substate grantees.
631.36 Biennial State plan.
631.37 Coordination activities.
631.38 State by-pass authority.
Subpart E--State Programs
631.40 State program operational plan.
631.41 Allowable State activities.
Subpart F--Substate Programs
631.50 Substate plan.
631.51 Allowable substate program activities.
631.52 Selection of service providers.
631.53 Certificate of continuing eligibility.
Subpart G--Federal Delivery of Dislocated Worker Services Through
National Reserve Account Funds
631.60 General.
631.61 Application for funding and selection criteria.
631.62 Cost limitations.
631.63 Reporting.
631.64 General Administrative Requirements.
631.65 Special Provisions for CAETA and DDP.
Subpart H--[Reserved]
Subpart I--Disaster Relief Employment Assistance
631.80 Scope and Purpose.
631.81 Availability of funds.
631.82 Substate allocation.
631.83 Coordination.
631.84 Allowable projects.
631.85 Participant eligibility.
631.86 Limitations on disaster relief employment.
631.87 Definitions.
PART 632--INDIAN AND NATIVE AMERICAN EMPLOYMENT AND TRAINING PROGRAMS
Subpart A--Introduction
632.1 [Reserved]
632.2 Scope and purpose.
632.3 Format for these regulations.
632.4 Definitions.
Subpart B--Designation Procedures for the Native American Grantees
632.10 Eligibility requirements for designation as a Native
American grantee.
632.11 Designation of Native American grantees.
632.12 Alternative arrangements for the provision of services,
nondesignation.
632.13 Review of denial of designation as a Native American
grantee, or rejection of a comprehensive annual plan.
Subpart C--Program Planning, Application and Modification Procedures
632.17 Planning process.
632.18 Regional and national planning meetings.
632.19 Grant application content.
632.20 Submission of grant applications.
632.21 Application disapproval.
632.22 Modification of a Comprehensive Annual Plan (CAP) and/or
Master Plan.
632.23 Termination and corrective action of a CAP and/or Master
Plan.
Subpart D--Administrative Standards and Procedures
632.31 General.
632.32 Financial management systems.
632.33 Audits.
632.34 Program income.
632.35 Native American grantee contracts and subgrants.
632.36 Procurement standards.
632.37 Allowable costs.
632.38 Classification of costs.
632.39 Administrative cost plan.
632.40 Administrative staff and personnel standards.
632.41 Reporting requirements.
632.42 Grant closeout procedures.
632.43 Reallocation of funds.
632.44 Sanctions for violation of the Act.
Subpart E--Program Design and Management
632.75 General responsibilities of Native American grantees.
632.76 Program management systems.
632.77 Participant eligibility determination.
632.78 Training activities.
632.79 Employment activities.
632.80 Other activities.
632.81 Payments to participants.
632.82 Benefits and working conditions for participants.
632.83 FICA.
632.84 Non-Federal status of participants.
632.85 Participant limitations.
632.86 Nondiscrimination and nonsectarian activities.
632.87 Equitable provision of services to the eligible population
and significant segments.
632.88 General responsibilities of the Department.
632.89 Performance standards.
Subpart F--Prevention of Fraud and Program Abuse
632.115 General.
632.116 Conflict of interest.
632.117 Kickbacks.
632.118 Nepotism.
632.119 Political patronage.
632.120 Political activities.
632.121 Lobbying activities.
632.122 Unionization and antiunionization activities; work
stoppages.
632.123 Maintenance of effort.
632.124 Theft or embezzlement from employment and training funds;
improper inducement; obstruction of investigations and other
criminal provisions.
632.125 Responsibilities of Native American grantees, subgrantees
and contractors for preventing fraud and program abuse and for
general program management.
Subpart G--[Reserved]
Subpart H--Job Training Partnership Act Programs Under Title IV,
Section 401
632.170 Eligibility for funds.
632.171 Allocation of funds.
632.172 Eligibility for participation in Title IV, Section 401.
632.173 Allowable program activities.
632.174 Administrative costs.
Subpart I--Summer Youth Employment and Training Programs
632.250 General.
632.251 Eligibility for funds.
632.252 Allocation of funds.
632.253 Special operating provision.
632.254 Program startup.
632.255 Program planning.
632.256 Submission of applications.
632.257 Eligibility for participation.
632.258 Allowable activities.
632.259 Vocational exploration program.
632.260 Worksite standards.
632.261 Reporting requirements.
632.262 Termination date for the summer program.
632.263 Administrative costs.
PART 633--MIGRANT AND SEASONAL FARMWORKER PROGRAMS
Subpart A--Introductory Provisions
633.102 Scope and purpose of Title IV, Section 402 programs.
633.103 Format for these regulations.
633.104 Definitions.
633.105 Allocation of funds.
633.106 Eligibility for allocable funds.
633.107 Eligibility for participation in Section 402 programs.
Subpart B--Grant Planning and Application Procedures
633.201 Grant planning and application procedures in general.
633.202 Announcement of State planning estimates and invitation to
submit a grant application.
633.203 Review of funding request.
633.204 Responsibility review.
633.205 Notification of selection.
Subpart C--Program Design and Administrative Procedures
633.301 General responsibilities.
633.302 Training activities and services.
633.303 Allowable costs.
633.304 Section 402 cost allocation.
633.305 General benefits and working conditions for program
participants.
633.306 Retirement benefits.
633.307 Packages of benefits.
633.308 Non-Federal status of participants.
633.309 Recordkeeping requirements.
633.310 Bonding.
633.311 Management information systems.
633.312 Grantee contracts and subgrants.
633.313 Administrative staff and personnel standards.
633.314 Reports required.
633.315 Replacement, corrective action, termination.
633.316 Closeout procedures.
633.317 Reallocation of funds.
633.318 Nondiscrimination and nonsectarian activities.
633.319 Lobbying, political activities and unionization.
633.320 Nepotism.
633.321 Performance standards for Section 402 programs.
633.322 Sanctions for violation of the Act.
PART 634--LABOR MARKET INFORMATION PROGRAMS UNDER TITLE IV, PART E OF
THE JOB TRAINING PARTNERSHIP ACT
Comprehensive Labor Market Information System
634.1 General.
634.2 Availability of funds.
634.3 Eligible recipients.
634.4 Statistical standards.
634.5 Federal oversight.
PART 635--[RESERVED]
PART 636--COMPLAINTS, INVESTIGATIONS, AND HEARINGS
636.1 Scope and purpose.
636.2 Protection of informants.
636.3 Complaint and hearing procedures at the grantee level.
636.4 Grievance procedures at the employer level.
636.5 Exhaustion of grantee level procedure.
636.6 Complaints and investigations at the Federal level.
636.7 Subpoenas.
636.8 Initial and final determination; request for hearing at the
Federal level.
636.9 Opportunity for informal review.
636.10 Hearings before the Office of Administrative Law Judges.
636.11 Final action.
PART 637--PROGRAMS UNDER TITLE V OF THE JOB TRAINING PARTNERSHIP ACT
Subpart A--General Provisions
Sec.
637.100 Scope and purpose.
637.105 Definitions.
Subpart B--Program Planning and Operation
637.200 Allotments to States.
637.205 Notice of intent to participate.
637.210 Incentive bonus program applications.
637.215 Review and approval of applications for incentive bonus
payments.
637.220 Eligibility criteria for individuals to be counted in
determining incentive bonuses.
637.225 Determination of incentive bonus.
637.230 Use of incentive bonuses.
Subpart C--Additional Title V Administrative Standards and Procedures
637.300 Management systems, reporting and recordkeeping.
637.305 Federal monitoring and oversight.
637.310 Audits.
Subpart D--Data Collection [Reserved]
PART 638--JOB CORPS PROGRAM UNDER TITLE IV-B OF THE JOB TRAINING
PARTNERSHIP ACT
Subpart A--Purpose and Scope
638.100 General.
Subpart B--Definitions
638.200 Definitions.
Subpart C--Funding, Site Selection, and Facilities Management
638.300 Eligibility for funds and eligible deliverers.
638.301 Funding procedures.
638.302 Center performance measurement.
638.303 Site selection and facilities management.
638.304 Historical preservation.
638.305 Capital improvements.
638.306 Protection and maintenance of contract center facilities
owned or leased by Job Corps.
638.307 Facilities surveys.
Subpart D--Enrollment, Transfers, Terminations, and Placements in the
Job Corps
638.400 Eligibility for participation.
638.401 Outreach and screening of participants.
638.402 Enrollment by readmission.
638.403 Selective service.
638.404 Transfers.
638.405 Extensions of enrollment.
638.406 Federal status of students.
638.407 Terminations.
638.408 Transportation.
638.409 Placement and job development.
Subpart E--Center Operations
638.500 Orientation program.
694.501 Student handbook.
638.502 Job Corps basic education program.
638.503 Vocational training.
638.504 Occupational exploration programs.
638.505 Scheduling of training.
638.506 Purchase of vocational supplies and equipment.
638.507 Work experience.
638.508 Sale of services or objects.
638.509 Leisure-time employment.
638.510 Health care and services.
638.511 Drug use and abuse.
638.512 Sexual behavior and harassment.
638.513 Death.
638.514 Residential support services.
638.515 Recreation/avocational program.
638.516 Laundry, mail, and telephone service.
638.517 Counseling.
638.518 Intergroup relations program.
638.519 Incentives system.
638.520 Student government and leadership program.
638.521 Student welfare associations.
638.522 Evaluation of student progress.
638.523 Food service.
638.524 Allowances and allotments.
638.525 Clothing.
638.526 Tort and other claims.
638.527 Federal employees' compensation.
638.528 Social Security.
638.529 Income taxes.
638.530 Emergency use of personnel, equipment, and facilities.
638.531 Limitations on the use of students in emergency projects.
638.532 Annual leave.
638.533 Other student absences.
638.534 Legal services to corpsmembers.
638.535 Voting rights.
638.536 Religious rights.
638.537 Disclosure of information.
694.538 Disciplinary procedures and appeals.
638.539 Complaints and disputes.
638.540 Cooperation with agencies and institutions.
638.541 Job Corps training opportunities.
638.542 Child care services.
638.543 Community relations program.
Subpart F--Applied Vocational Skills Training (VST)
638.600 Applied vocational skills training (VST) through work
projects.
638.601 Applied VST budgeting.
Subpart G--Experimental, Research, and Demonstration Projects
638.710 Experimental, research, and demonstration projects.
Subpart H--Administrative Provisions
638.800 Program management.
638.801 Staff training.
638.802 Student records management.
638.803 Safety.
638.804 Environmental health.
638.805 Security and law enforcement.
638.806 Property management and procurement.
638.807 Imprest and petty cash funds.
638.808 Center financial management and reporting.
638.809 Audit.
638.810 Reporting requirements.
638.811 Review and evaluation.
638.812 State and local taxation of Job Corps deliverers.
638.813 Nondiscrimination, nonsectarian activities.
638.814 Lobbying; political activities; unionization.
638.815 Charging fees.
PART 1005--VETERANS' EMPLOYMENT PROGRAMS UNDER THE TITLE IV, PART C OF
THE JOB TRAINING PARTNERSHIP ACT
Subpart A--General Provisions
1005.1 Scope and purpose.
1005.2 Program administration.
1005.3 Participant eligibility.
Subpart B--Program Funding
1005.11 Availability of funds.
1005.12 Eligibility for funds.
1005.13 Application for funding.
1005.14 Review of application for funding.
1005.15 Approval of funding requests.
Subpart C--Program Design and Management
1005.21 General.
1005.22 Allowable activities.
1005.23 Program management and performance standards.
1005.24 Recordkeeping and reporting requirements.
1005.25 Monitoring and oversight.
1005.26 Grievance procedures.
Sec. 626.5 Definitions.
In addition to the definitions contained in section 4 of the Act,
the following definitions of terms used in the Act or parts 626-631 of
this chapter apply as appropriate to programs under titles I, II, and
III of the Act:
Accrued expenditures means charges made to the JTPA program.
Expenditures are the sum of actual cash disbursements, the amount of
indirect expense incurred, and the net increase (or decrease) in the
amounts owed by the recipient for the goods and other property
received, for services performed by employees, contractors,
subgrantees, subcontractors, and other payees, and other amounts
becoming owed under programs for which no current services or
performance are required, such as annuities, insurance claims, and
other benefit payments.
Act means the Job Training Partnership Act.
ALJ means an administrative law judge in the Office of
Administrative Law Judges of the U.S. Department of Labor.
Awarding agency means: (1) With respect to a grant, the Department
of Labor; and (2) with respect to a subgrant or contract, the party
that awarded the subgrant or contract.
Capacity building means the systematic improvement of job
functions, skills, knowledge, and expertise of the personnel who staff
and administer employment and training and other closely related human
service systems. Capacity building is designed to enhance the
effectiveness, to strengthen the caliber of customer services provided
under the Act and other Federal, State, and local employment and
training programs, and improve coordination among them. Capacity
building includes curriculum development, appropriate training,
technical assistance, staff development, and other related activities.
Chief elected official (CEO) means the official or officials, or
their representatives, of the jurisdiction or jurisdictions which
requested designation by the Governor as a service delivery area.
Commercial organizations means private for-profit entities.
Commercially available off-the-shelf training package means a
training package sold or traded to the general public in the course of
normal business operations, at prices based on established catalog or
market prices. To be considered as ``sold to the general public,'' the
package must be regularly sold in sufficient quantities to constitute a
real commercial market to buyers that must include other than JTPA
programs. The package must include performance criteria pertaining to
the delivery of the package which may include participant attainment of
knowledge, skills or a job.
Contractor means the organization, entity, or individual that is
awarded a procurement contract under the recipient's or subrecipient's
procurement standards and procedures.
Cost means accrued expenditure.
Department means the U.S. Department of Labor.
DOL means the U.S. Department of Labor.
ETA means the Employment and Training Administration of the U.S.
Department of Labor.
Family is defined at section 4(34) of the Act. An ``individual with
a disability'' shall, for the purposes of income eligibility
determination, be considered to be an unrelated individual who is a
family unit of one, consistent with the definition of ``economically
disadvantaged'' at section 4(8) of the Act. The Governor may provide
interpretations of the term ``family'' related to how ``dependent
children'' are defined for programs within a State, consistent with the
Act, and all applicable rules and regulations, and State or local law.
Such interpretations by the Governor may address the treatment of
certain individuals who may need to be viewed discretely in the income
eligibility determination process, such as runaways, emancipated youth,
and court adjudicated youth separated from the family.
The phrase ``living in a single residence'' with other family
members includes temporary, voluntary residence elsewhere (e.g.,
attending school or college, or visiting relatives). It does not
include involuntary temporary residence elsewhere (e.g., incarceration,
or placement as a result of a court order).
Family income means ``income'' as defined by the Department of
Health and Human Services in connection with the annual poverty
guidelines. Such income shall not include unemployment compensation,
child support and public assistance (including Aid to Families with
Dependent Children, Supplemental Security Income, Emergency Assistance
money payments, and non-federally funded General Assistance or General
Relief money payments), as provided for at section 4(8) of the Act. In
addition, such income shall also exclude foster child care payments,
educational financial assistance received under title IV of the Higher
Education Act (20 U.S.C. 1087), as amended by section 479(B) of the
Higher Education Act Amendments of 1992), needs-based scholarship
assistance, and income earned while on active military duty and other
benefit payments specified at 38 U.S.C. 4213, items (1) and (3). The
Governor may, for the purposes of determining income eligibility for
services to older individuals under section 204(d)(5) of the Act,
exclude up to 25 percent of Social Security and Old Age Survivors'
Insurance benefit payments under title II of the Social Security Act,
(42 U.S.C., section 401, et seq.) from the definition of family income.
In addition, when a Federal statute specifically provides that income
or payments received under such statute shall be excluded in
determining eligibility for and the level of benefits received under
any other federal statute, such income or payments shall be excluded in
JTPA eligibility determinations.
Funding period means the period of time when JTPA funds are
available for expenditure. Unless a shorter period of time is specified
in a title III discretionary award, the JTPA funding period is the 3-
year period specified in JTPA section 161(b); the program year in which
Federal funds are obligated to the recipient, and the two succeeding
program years.
Governor means, in addition to the definition at section 4(9) of
the Act, the recipient of JTPA funds awarded to the State under titles
I through III.
Grant means an award of JTPA financial assistance by the U.S.
Department of Labor to an eligible JTPA recipient. (Also, see
Secs. 627.405 and 627.430 of these regulations).
Grantee means the recipient.
Individual service strategy (ISS) is defined in Sec. 628.520 of
this chapter.
Job search assistance (also including job search skills training
and job club activities) means the provision of instruction and support
to a participant to give the participant skills in acquiring full time
employment. The services provided may include, but are not limited to,
resume writing, interviewing skills, labor market guidance, telephone
techniques, information on job openings, and job acquisition
strategies, as well as the provision of office space and supplies for
the job search.
Job Training Partnership Act means Public Law (Pub. L.) 97-300, as
amended, 29 U.S.C. 1501, et seq.
JTPA means the Job Training Partnership Act.
Nontraditional employment, as applied to women, means occupations
or fields of work where women comprise less than 25 percent of the
individuals employed in such occupation or field of work as provided
periodically by the Department in the Federal Register. (Pub. L. 102-
235, Nontraditional Employment for Women Act).
OALJ means the Office of Administrative Law Judges of the U.S.
Department of Labor.
Obligations means the amounts of orders placed, contracts and
subgrants awarded, goods and services received, and similar
transactions during a funding period that will require payment by the
recipient or subrecipient during the same or a future period.
OIG means the Office of Inspector General of the U.S. Department of
Labor.
PIC means a private industry council.
Participant means an individual who has been determined to be
eligible to participate in and who is receiving services (except post-
termination services authorized under sections 204(c)(4) and 264(d)(5)
and followup services authorized under section 253(d)) under a program
authorized by the JTPA. Participation shall be deemed to commence on
the first day, following determination of eligibility, on which the
participant began receiving subsidized employment, training, or other
services provided under the JTPA. (section 4(37)).
Program year means the 12-month period beginning July 1 of the
indicated year.
Recipient means the entity to which a JTPA grant is awarded
directly from the Department of Labor to carry out the JTPA program.
The recipient is the entire legal entity that received the award and is
legally responsible for carrying out the JTPA program, even if only a
particular component of the entity is designated in the grant award
document. For JTPA grants under titles I, II and III, except for
certain discretionary grants awarded under title III, part B, the State
is the recipient.
SDA means a service delivery area designated by the Governor
pursuant to section 101(a)(4) of the Act. As used in these regulations,
SDA may also refer to the entity that administers the JTPA program
within the designated area.
SDA grant recipient means the entity that receives JTPA funds for a
service delivery area directly from the recipient.
Secretary means the Secretary of Labor.
Section, as used in this chapter, means a section of the Act unless
the text specifically indicates otherwise.
Service provider means a public agency, private nonprofit
organization, or private-for-profit entity that delivers educational,
training, employment or supportive services to JTPA participants.
Awards to service providers may be made by subgrant, contract,
subcontract, or other legal agreement.
Stand-in costs means costs paid from non-Federal sources that a
recipient proposes to substitute for Federal costs that have been
disallowed as a result of an audit or other review. In order to be
considered as valid substitutions, the costs (1) shall have been
reported by the grantee as uncharged program costs under the same title
and in the same program year in which the disallowed costs were
incurred (2) shall have been incurred in compliance with laws,
regulations, and contractual provisions governing JTPA, and (3) shall
not result in a violation of the applicable cost limitations.
State is defined at section 4(22) of the Act. For cash payment
purposes, the definition of ``State'' contained in the Department of
the Treasury regulations at 31 CFR 205.3 shall apply to JTPA programs.
State council means the State Job Training Coordinating Council
(SJTCC) or, in a State with a Human Resource Investment Council (HRIC)
pursuant to Sec. 628.215 of this chapter, the HRIC.
Subgrant means an award of JTPA financial assistance in the form of
money, or property in lieu of money, made under a grant by a recipient
to an eligible subrecipient. It also means a subgrant award of JTPA
financial assistance by a subrecipient to a lower tier subrecipient.
The term includes financial assistance when provided by any legal
agreement, even if the agreement is called a contract, but does not
include procurement purchases from vendors nor does it include any form
of assistance received by program participants.
Subgrantee means a subrecipient.
Subrecipient means the legal entity to which a subgrant is awarded
and which is accountable to the recipient (or higher tier subrecipient)
for the use of the funds provided. For JTPA purposes, distinguishing
characteristics of a subrecipient include items such as determining
eligibility of applicants, enrollment of participants, performance
measured against meeting the objectives of the program, responsibility
for programmatic decisionmaking, responsibility for compliance with
program requirements, and use of the funds awarded to carry out a JTPA
program or project, as compared to providing goods or services for a
JTPA program or project (vendor). Depending on local circumstances, the
PIC, local elected official, or administrative entity may be a
subrecipient. SDA grant recipients and JTPA title III substate grantees
are particular types of subrecipients.
Substate grantee (SSG) means that agency or organization selected
to administer programs pursuant to section 312(b) of the Act. The
substate grantee is the entity that receives JTPA title III funds for a
substate area directly from the Governor.
Technical assistance is a facet of capacity building which may
include but is not limited to information sharing, dissemination and
training on program models and job functions; peer-to-peer networking
and problem solving; guides; and interactive communication
technologies.
Title, as used in this chapter, means a title of the Act, unless
the text of the regulation specifically indicates otherwise.
Vendor means an entity responsible for providing generally required
goods or services to be used in the JTPA program. These goods or
services may be for the recipient's or subrecipient's own use or for
the use of participants in the program. Distinguishing characteristics
of a vendor include items such as: Providing the goods and services
within normal business operations; providing similar goods or services
to many different purchasers, including purchasers outside the JTPA
program; and operating in a competitive environment. A vendor is not a
subrecipient and does not exhibit the distinguishing characteristics
attributable to a subrecipient, as defined above. Any entity directly
involved in the delivery of program services not available to the
general public, with the exception of an employer providing on-the-job
training, shall be considered a subrecipient rather than a vendor.
Wagner-Peyser Act means 29 U.S.C. 49, et seq.
2. Part 627 is revised to read as follows:
PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II,
AND III OF THE ACT
Subpart A--Scope and Purpose
627.100 Scope and purpose of this Part 627.
Subpart B--Program Requirements
627.200 Governor/Secretary agreement.
627.201 Waivers.
627.205 Public service employment prohibition.
627.210 Nondiscrimination and nonsectarian activities.
627.215 Relocation.
627.220 Coordination with programs under title IV of the Higher
Education Act including the Pell grant program.
627.225 Employment generating activities.
627.230 Displacement.
627.235 General program requirements.
627.240 On-the-job training.
627.245 Work experience.
627.250 Interstate agreements.
Subpart C--Payments, Supportive Services, and Benefits and Working
Conditions
627.300 Scope and purpose.
627.305 Payments.
627.310 Supportive services.
627.315 Benefits and working conditions.
Subpart D--Administrative Standards
627.400 Scope and purpose.
627.405 Grant agreement and funding.
627.410 Reallotment and reallocation.
627.415 Insurance.
627.420 Procurement.
627.422 Selection of service providers.
627.423 Funding restrictions for ``high-risk'' recipients and
subrecipients.
627.424 Prohibition of subawards to debarred and suspended parties.
627.425 Standards for financial management and participant data
systems.
627.430 Grant payments.
627.435 Cost principles and allowable costs.
627.440 Classification of costs.
627.445 Limitations on certain costs.
627.450 Program income.
627.455 Reports required.
627.460 Requirements for records.
627.463 Public access to records.
627.465 Property management standards.
627.470 Performance standards.
627.471 Reorganization plan appeals.
627.475 Oversight and monitoring.
627.477 Governor's determination of substantial violation.
627.480 Audits.
627.481 Audit resolution.
627.485 Closeout.
627.490 Later disallowances and adjustments after closeout.
627.495 Collection of amounts due.
Subpart E--Grievances Procedures at the State and Local Level
627.500 Scope and purpose.
627.501 State grievance and hearing procedures for noncriminal
complaints at the recipient level.
627.502 Grievance and hearing procedures for noncriminal complaints
at the SDA and SSG levels.
627.503 Recipient-level review.
627.504 Noncriminal grievance procedure at employer level.
Subpart F--Federal Handling of Noncriminal Complaints and Other
Allegations
627.600 Scope and purpose.
627.601 Complaints and allegations at the Federal Level.
627.602 Resolution of investigative findings.
627.603 Special handling of labor standards violations under
section 143 of the Act.
627.604 Alternative procedure for handling labor standards
violations under section 143--Binding arbitration.
627.605 Special Federal review of SDA- and SSG-level complaints
without decision.
627.606 Grant officer resolution.
627.607 Grant Officer resolution of Governor's failure to promptly
take action.
Subpart G--Sanctions for Violations of the Act
627.700 Scope and purpose.
627.702 Sanctions and corrective actions.
627.703 Failure to comply with procurement provisions.
627.704 Process for waiver of State liability.
627.706 Process for advance approval of a recipient's contemplated
corrective actions.
627.708 Offset process.
Subpart H--Hearings by the Office of Administrative Law Judges
627.800 Scope and purpose.
627.801 Procedures for filing request for hearing.
627.802 Rules of procedure.
627.803 Relief.
627.804 Timing of decisions.
627.805 Alternative dispute resolution.
627.806 Other authority.
Subpart I--Transition Provisions
627.900 Scope and purpose.
627.901 Transition period.
627.902 Governor's actions.
627.903 Actions which are the discretion of the Governor.
627.904 Transition and implementation.
627.905 Guidance on contracts and other agreements.
627.906 Determinations on state and SDA implementation.
Authority: 29 U.S.C. 1579(a); Sec. 6305(f), Pub. L. 100-418, 102
Stat. 1107; 29 U.S.C. 1791i(e).
Subpart A--Scope and Purpose
Sec. 627.100 Scope and purpose of this part 627.
(a) This part sets forth requirements for implementation of
programs under titles I, II, and III of the Job Training Partnership
Act.
(b) Subpart B provides general program requirements that apply to
all programs under the titles I, II, and III of the Act, except as
provided elsewhere in the Act or this chapter. These requirements
include the Governor/Secretary agreement, the nondiscrimination and
nonsectarian activity provisions, coordination provisions with Higher
Education Act programs, and the prohibitions on public service
employment, relocation assistance, displacement, and employment
generating activities. This subpart also sets forth comprehensive rules
for on-the-job training for JTPA participants as well as for work
experience.
(c) Subpart C sets forth requirements for allowable payments to
JTPA participants.
(d) Subpart D establishes the administrative and financial
standards and requirements that apply to funds received under the Act.
(e) Subpart E establishes the procedures that apply to the handling
of noncriminal complaints under the Act at the Governor, the SDA, and
title III SSG levels.
(f) Subpart F establishes the procedures that apply to the filing,
handling, and review of complaints at the Federal level.
(g) Subpart G sets forth the provisions that apply to the sanctions
and corrective actions that may be imposed by the Secretary for
violations of the Act, regulations, or grant terms and conditions.
(h) Subpart H sets forth procedures that apply to hearing by the
Office of the Administrative Law Judges.
Subpart B--Program Requirements
Sec. 627.200 Governor/Secretary agreement.
(a)(1) To establish a continuing relationship under the Act, the
Governor and the Secretary shall enter into a Governor/Secretary
agreement. The agreement shall consist of a statement assuring that the
State shall comply with (i) the Job Training Partnership Act and all
applicable rules and regulations and (ii) the Wagner-Peyser Act and all
applicable rules and regulations. The agreement shall specify that
guidelines, interpretations, and definitions, adopted and issued by the
Governor and identified pursuant to section 124 of the Act, shall, to
the extent that they are consistent with the Act and applicable rules
and regulations, be accepted by the Secretary.
(2) Either the Governor or the Secretary may seek a modification,
revision, or termination of the agreement at any time, to be effective
at the end of a program year.
(b) Except as provided at part B of title III of the Act and part
631, subpart G, of this chapter, the State shall be the grant recipient
of JTPA funds awarded under titles I, II, and III.
Sec. 627.201 Waivers.
(a)(1) The Governor may request, and the Secretary may grant, a
waiver of specific provisions of these regulations to the extent that
such request is consistent with the provisions of the Act.
(2) In requesting a waiver under paragraph (a)(1) of this section,
the Governor shall demonstrate how it will either improve the targeting
of services to the hard to serve, increase the level of basic and
occupational skills training provided by the JTPA program in the State,
contribute to the provision of academic enrichment services to youth,
promote coordination of JTPA programs with other human resource
programs, or substantially improve the job placement outcomes of the
JTPA program.
(3) Waivers granted by the Secretary shall be effective for no more
than four years from the date the waiver is granted.
Sec. 627.205 Public service employment prohibition.
No funds available under titles I, II-A, II-C, or III-A of the Act
may be used for public service employment (sections 141(p) and
314(d)(2)).
Sec. 627.210 Nondiscrimination and nonsectarian activities.
(a)(1) Recipients, SDA grant recipients, title III substate
grantees, and other subrecipients shall comply with the
nondiscrimination provisions of section 167 of the Act.
(2) Nondiscrimination and equal opportunity requirements and
procedures, including complaint processing and compliance reviews, are
governed by the provisions of 29 CFR part 34 and are administered and
enforced by the DOL Directorate of Civil Rights.
(3) Funds may be used to meet a recipient's or subrecipient's
obligation to provide physical and programmatic accessibility and
reasonable accommodation in regard to the JTPA program as required by
Section 504 of the Rehabilitation Act of 1973, as amended, and the
Americans with Disabilities Act of 1990.
(b) The employment or training of participants in sectarian
activities is prohibited.
Sec. 627.215 Relocation.
(a) No funds provided under the Act shall be used, or proposed for
use, to encourage or to induce the relocation of an establishment, or
part thereof, that result in the loss of employment for any employee or
such establishment at the original location.
(b) For 120 days after the commencement or the expansion of
commercial operations of a relocating establishment, no funds provided
under this Act shall be used for customized or skill training, on-the-
job training, or company-specific assessments of job applicants or
employees, for any relocating establishment or part thereof at a new,
or expanded location, if the relocation of such establishment or part
thereof results in a loss of employment for any employee of such
establishment at the original location.
(c) For the purposes of this section, relocating establishment
means a business entity, including a successor-in-interest, which is
moving any operations from a facility in one labor market area within
the United States and its territories to a new or expanding facility in
another labor market area. For the purposes of this section, a labor
market area is an area within which individuals can readily change
employment without changing their place of residence.
(d) Pre-award review. To verify that an establishment which is new
or expanding is not, in fact, relocating employment from another area,
standardized pre-award review procedures developed by the State shall
be completed and documented jointly by the service delivery area or
substate grantee and the establishment as a prerequisite to JTPA
assistance. The review should include names under which the
establishment does business, including successors-in-interest; the
name, title, and address of the company official certifying the
information; the name and address of the facility in the other
geographic location which is being closed or from which business is
being transferred; a statement from the employer about job losses at
that location; the nature of the products or business being
transferred; the date the facility will commence or expand operations,
and whether JTPA assistance is sought in connection with past or
impending job losses at other facilities.
(e) Violations and sanctions. The Department will promptly review
and take appropriate action with regard to alleged violations of the
provisions of paragraphs (a) and (b) of this section. Procedures for
the investigation and resolution of the violations are provided for
under subpart F of this part. Sanctions and remedies are provided for
under subpart G of this part.
Sec. 627.220 Coordination with programs under title IV of the Higher
Education Act including the Pell grant program.
(a) Coordination. Financial assistance programs under title IV of
the Higher Education Act of 1965, as amended (HEA) (the Pell Grant
program, the Supplemental Education Opportunity Grant program, the
Work-study program, and Federal loan programs such as Federal Perkins
Loans. Federal Stafford Loans and Federal Direct Stafford Loans)
provide student financial aid and are available to JTPA participants
enrolling in postsecondary level education programs. SDA's and title
III SSG's shall establish coordination procedures and contractual
safeguards to ensure that JTPA funds are used in addition to funds
otherwise available in the area and are coordinated with these funding
sources.
(b) Affordable programs. (1) The SDA shall assist the participant
early in the objective assessment, as appropriate, to establish
eligibility for Pell Grants, student loans and other forms of financial
aid.
(2) The SDA or SSA shall record in the ISS or participant record
the participant's training-related financial assistance needs and the
mix of JTPA and other funds, including Pell Grant funds (sections
141(b), 107(b), 205(b) and 265(b)).
(3) The SDA shall ensure, to the extent practicable, that available
Federal, State, and local resources are coordinated sufficiently to
meet the training and education-related costs of services, so that the
participant can afford to complete the agreed-upon program
successfully.
(4) Participants shall not be required to apply for or access
student loans, or incur personal debt as a condition of JTPA
participation.
(c) Information sharing. To prevent duplication of funding and to
streamline the tracking of the participant's financial needs and use of
funds when HEA, title IV programs are involved, contracts and
agreements with educational institutions shall require the educational
institution's financial aid officer to inform the SDA's/SSG's of the
amounts and disposition of any HEA, title IV awards and other types of
financial aid to each JTPA participant awarded after the enrollment of
the participant, as part of a continuing, regular information sharing
process (section 141(b)).
Sec. 627.225 Employment generating activities.
(a)(1) No funds available under the Act shall be used for
employment generating activities, economic development activities,
investment in revolving loan funds, capitalization of businesses,
investment in contract bidding resource centers, or similar activities.
(2) No funds available under titles I, II, or III of the Act shall
be used for foreign travel for employment generating activities,
economic development activities, or similar activities.
(b) JTPA funds may be used for normal employer outreach and job
development activities including, but not limited to: contacts with
potential employers for the purpose of placement of JTPA participants;
participation in business associations (such as chambers of commerce);
JTPA staff participation on economic development boards and
commissions, and work with economic development agencies, to provide
information about JTPA and to assist in making informed decisions about
community job training needs; subscriptions to relevant publications;
general dissemination of information on JTPA programs and activities;
labor market surveys; and development of on-the-job training (OJT)
opportunities, as defined in Sec. 627.240; and other allowable JTPA
activities in the private sector.
Sec. 627.230 Displacement.
(a) No currently employed worker shall be displaced by any
participant (including partial displacement such as a reduction in the
hours of nonovertime work, wages, or employment benefits).
(b) No participant shall be employed or job opening filled: (1)
When any other individual is on layoff from the same or any
substantially equivalent job, or
(2) When the employer has terminated any regular employee without
cause or otherwise reduced its workforce with the intention of filling
the vacancy so created by hiring a participant whose wages are
subsidized under the Act.
(c) Violations and sanctions. The Department will promptly review
and take appropriate action with regard to alleged violations of the
provisions of paragraphs (a) and (b) of this section. Procedures for
the investigation and resolution of violations are provided for under
subpart F of this part. Sanctions and remedies are provided for under
subpart G of this part.
Sec. 627.235 General program requirements.
(a) The requirements set forth in sections 141, 142 and 143 of the
Act apply to all programs under titles I, II, and III of the Act,
except as provided elsewhere in the Act.
(b) Recipients shall ensure that an individual enrolled in a JTPA
program meets the requirements of section 167(a)(5) of the Act, Section
3 of the Military Selective Service Act (50 U.S.C. App. 453) and other
requirements applicable to programs funded under the specific section
or title of the Act under which the participant is enrolling (section
604).
(c) Recipients shall ensure that individuals are enrolled within 45
days of the date of eligibility determination or a new eligibility
determination (including new application, if necessary) shall be made,
except that eligible summer program applicants under title II-B may be
enrolled within 45 days into a summer youth enrollee pool, and no
subsequent eligibility determination need be made prior to
participation during the period of that summer program. In addition,
the 45-day enrollment requirement shall not apply for individuals who
have a valid certificate of continuing eligibility under the title III
program, as described in Sec. 631.3 and Sec. 631.53 of this chapter.
(d) Programs operated under titles I, II, and III of the Act are
not subject to the provisions of 29 CFR part 97, ``Uniform
Administrative Requirements for Grants and Cooperative Agreements to
State and Local Governments,'' except as otherwise explicitly provided
in this chapter.
(e) If a recipient or SDA imposes a requirement that is in addition
to the provisions of the Act and these regulations relating to the
administration and operation of programs funded by the Act, the
recipient or SDA shall identify the requirement as a State- or SDA-
imposed requirement (section 124).
Sec. 627.240 On-the-job training.
(a) General--(1) On-the-job training (OJT) means training by an
employer in the private or public sector given to a participant who,
after objective assessment, and in accordance with the ISS, has been
referred to and hired by the employer following the development of an
agreement with the employer to provide occupational training in
exchange for reimbursement of the employer's extraordinary costs. On-
the-job training occurs while the participant is engaged in productive
work which provides knowledge and skills essential to the full and
adequate performance of the job.
(2) This does not preclude a participant who has been trained by
one employer from ultimately being placed in a comparable training-
related position with another employer.
(3) On-the-job training may be sequenced with or accompanied by
other types of training such as classroom training or literacy
training.
(b) Duration of OJT.--(1) OJT authorized for a participant shall be
limited to a period not in excess of that required for the participant
to acquire the skills needed for the OJT position. Except as described
in paragraph (b) (3) of this section, the period of reimbursement to
the employer under an OJT agreement shall not exceed 6 months of
training.
(2) The 6-month duration of OJT may be expressed as a number of
hours, days, or weeks the participant is expected to work in a 6-month
period if the participant works full-time.
(3) In the event that a participant's regular employment is less
than full-time and less than 500 hours of OJT has occurred by the end
of 6 months, that participant may remain in OJT until 499 hours OJT
hours have occurred.
(4)(i) Recipients shall develop policies and procedures for
determining the average training duration for occupations including to
reflect an individual participant's need for additional training time,
or reduction in training time to reflect the individual participant's
partial acquisition of needed skills. (In no case should an individual
who is fully skilled in an occupation be placed in OJT in that
occupation.)
(ii) In determining the average training time, consideration should
be given to recognized reference materials, such as the ``Dictionary of
Occupational Titles'' (DOT) and employer training plans. Such materials
need not be limited to the DOT, however.
(5) On-the-job training is encouraged, but not required, in all
occupations with significant training content, particularly in higher-
skill occupations appropriate to the participant's needs. Training
plans may be developed that recognize the full duration of the OJT
period necessary for the full and adequate performance of the job, but
the period of reimbursement may not exceed the duration in paragraph
(a)(1) or (a)(2) of this section.
(6) When the OJT period in a given occupation for a participant for
whom the ISS identifies OJT as appropriate varies from the average for
that occupation, the basis for the variation shall be recorded in the
ISS.
(c) On-the-job training payments to employers. (1) On-the-job
training payments to employers are deemed to be in compensation for the
extraordinary costs associated with training participants and in
compensation for the costs associated with the lower productivity of
such participants. Employers shall not be required to document such
extraordinary costs or lower productivity (section 141(g)(1)).
(2)(i) On-the-job training payments to employers shall not, during
the period of such training, average more than 50 percent of the wages
paid by the employer to OJT participants.
(ii) On-the-job training payments to employers may be based upon
scheduled raises or regular pay increases.
(iii) On-the-job training payments may not be based on overtime,
shift differential, premium pay and other nonregular wages paid by the
employer to participants.
(iv) On-the-job training payments may not be based upon periods of
time such as illness, holidays, plant downtime or other events in which
no training occurs.
(3) Employers which provide classroom or vestibule training to meet
the specific training needs of JTPA participants to equip them with
education and knowledge necessary to the OJT occupation may be
separately reimbursed for training costs, such as instructors and
training material.
(d) On-the-job training agreements. (1) Each OJT agreement shall,
at a minimum, specify the occupation(s) for which training is to be
provided, the duration of the training, the number of participants to
be trained in each occupation, wage rates to be paid, the rate of
reimbursement, the maximum amount of reimbursement, a job description
or training outline that reflects what the participant will learn, and
any other separate classroom training that may be provided.
(2) The agreement shall provide that the employer will maintain and
make available time and attendance, payroll and other records to
support amounts reimbursed under OJT contracts.
(e) Labor standards. OJT participants shall be compensated by the
employer at the same rates, including periodic increases, as similarly
situated employees, but in no event less than the higher of the minimum
wage specified under the Fair Labor Standards Act of 1938, as amended
or the applicable State or local minimum wage. Participants must
receive the same benefits and have the same working conditions as
similarly situated employees.
(f) Suitability of participants. (1) Only those participants who
have been assessed and for whom OJT has been determined as an
appropriate activity in the participant's ISS may be referred to an
employer for participation in OJT.
(2) An individual referred to the JTPA program by an employer may
be enrolled in an OJT program with such employer only upon completion
of the objective assessment and individual service strategy in which
OJT with such employer has been determined to be an appropriate
activity and only if the employer has not already hired such
individual.
(3) OJT with the participant's previous or current employer in the
same, a similar, or an upgraded job is not permitted.
(g) Monitoring. (1) OJT agreements shall be monitored periodically
on-site by the entity issuing the contract to assure that the validity
and propriety of amounts claimed for reimbursement are substantiated by
payroll and time and attendance records and that the training is being
provided as specified in the agreement.
(2) Brokering contractors shall conduct on-site monitoring of the
OJT employers and other subcontractors to verify compliance with
subcontract terms before making payments.
(3) Nothing in this paragraph (g) shall relieve recipients and
SDA's from responsibility for monitoring expenditures under the Act.
(h) Employer eligibility. (1) OJT agreements shall not be entered
into with employers which, under previous agreements, have exhibited a
pattern of failing to provide OJT participants with continued long-term
employment as regular employees with wages, benefits and working
conditions at the same level and to the same extent as similarly
situated employees. This prohibition does not apply to OJT agreements
for youth in the program under title II-B who are returning to school.
(2) Governors shall issue procedures and criteria to implement the
requirement in paragraph (h)(1) of this section, which shall specify
the duration of the period of loss of eligibility. The procedures and
criteria shall provide that situations in which OJT participants quit
voluntarily, are terminated for cause, or are released due to
unforeseeable changes in business conditions will not necessarily
result in termination of employer eligibility.
(i) Brokered OJT. Each agreement with an OJT employer that is
written by a brokering contractor (not written directly by the SDA/SSA
or recipient) shall specify and clearly differentiate the services to
be provided by the brokering contractor (including but not limited to
outreach, recruitment, training, counseling, assessment, placement,
monitoring, and followup), the employer and other agencies and
subcontractors, including services provided with or without cost by
other agencies or subcontractors.
(j) Youth OJT. OJT conducted under title II-C shall meet the
requirements of subpart H of part 628 of this chapter (628.804), as
well as the requirements of this section. Where OJT is provided to
youth concurrently enrolled under titles II-B and II-C, the source of
funding for the OJT shall govern which requirements apply.
(k) Employment and employee leasing agencies.
(1) Definition. The terms employment agency and employee leasing
agency mean an employer that provides regular, on-going employment
(i.e., not probationary, temporary, or intermittent employment) in a
specific occupation and, for a fee, places employees at the worksite of
another employer to perform work for such employer.
(2) Employment and employee leasing agencies that meet the other
requirements of this section may be eligible for OJT agreements when
the agreement specifies the source of training and specifies that the
payments are for the extraordinary training costs of the entity
providing the training.
Sec. 627.245 Work experience.
(a) Definition.--Work Experience means a short-term or part-time
training assignment with a public or private nonprofit organization for
a participant who needs assistance in becoming accustomed to basic work
requirements. It is prohibited in the private for-profit sector.
(b) Suitability. Work experience should be designed to promote the
development of good work habits and basic work skills.
(c) Duration of work experience. Participation in work experience
shall be for a reasonable length of time, based on the needs of the
participant. The duration of work experience shall be recorded in the
participant's ISS.
(d) Combination with other services. Work experience under titles
II-A and C shall be accompanied either concurrently or sequentially by
other services designed to increase the basic education and/or
occupational skills of the participant, as recorded in the ISS.
(e) Work experience is not an allowable activity under title III of
the Act. (Sections 204(b) and (c), 253(a), and 264 (c) and (d).)
Sec. 627.250 Interstate agreements.
The Secretary hereby grants authority to the several States to
enter into interstate agreements and compacts in accordance with
section 127 of the Act and, as specified in Sec. 627.420(g),
Procurement.
Subpart C--Payments, Supportive Services, and Benefits and Working
Conditions
Sec. 627.300 Scope and purpose.
This subpart sets forth requirements for allowable payments to JTPA
participants under titles I and II. These include needs-based payments
under title II, incentive and bonus payments under title II, work-based
training payments under title II, and payments for combined activities
under title II. Requirements for supportive services under titles I,
II, and III, including financial assistance and needs-related payments,
are also included in this subpart. This subpart also sets forth rules
for benefits and working conditions for JTPA participants. These
include requirements for: Compliance with applicable labor laws;
workers' compensation coverage or medical and accident insurance where
there is no State workers' compensation coverage; and working
conditions which are not detrimental to the participant's health and
safety.
Sec. 627.305 Payments.
(a)(1) General. Allowable types of payments which may be made to
participants are: Needs-based payments for eligible individuals in
programs under title II; incentive and bonus payments for participants
in title II programs; work-based training payments for work experience,
entry employment experience, internships and other work-based training
activities; payments for participants in title II-B activities; and
training payments for combined activities in title II programs. These
payments shall be made in accordance with paragraphs (b) through (f) of
this section.
(2) A participant shall receive no payments for training activities
in which the participant fails to participate without good cause
(section 142(a)(1)).
(3) The SDA shall ensure to the extent possible that similarly
situated participants receive similar payments.
(4) Payments to participants, broadly defined for this subsection
as all funds distributed to participants except OJT wages, shall not be
considered as income for the purposes of determining eligibility for
and the amount of income transfer and in-kind aid furnished under any
Federal or federally assisted program based on need, other than as
provided under the Social Security Act (section 142(b)).
(5) The SDA is responsible for meeting any applicable Internal
Revenue Service and Fair Labor Standards Act requirements (section
142(a)(3)).
(6) An SDA may set fixed levels for any non-wage payment.
(b) Needs-based payments. (1) Participants in programs funded under
title II may receive needs-based payments when such payments are
necessary to enable the individual to participate in training programs.
Payments shall be made in accordance with a locally developed policy
which is included in the job training plan approved by the Governor.
(2) The individual determination of participants' needs-based
payments and the amount of such payments shall be based upon the
results of the continuing objective assessment and determined in
accordance with a locally developed policy. The provisions and amount
of such payments shall be recorded in the ISS.
(c) Incentive and bonus payments. Participants in programs funded
under title II may receive incentive and bonus payments based on their
attendance and performance in accordance with a locally developed
policy. The policy shall be described in the job training plan approved
by the Governor and shall include a specification of the requirements
for the receipt of such payments and the level of payments.
(d) Work-based training payments. Individuals participating in work
experience, in entry employment experience programs, in limited
internships for youth in the private sector, or in other work-based
training activities under title II of the Act may receive work-based
training payments which may be wages.
(e) Summer participants may receive training payments for
participation in activities under title II-B.
(f) Training payments for combined activities. For title II
programs, participants in one of the activities described in paragraph
(d) of this section for which work-based training payments are payable
for more than 50 percent of the participant's time, including classroom
training, may also receive training payments for hours of participation
in classroom training.
Sec. 627.310 Supportive services.
(a)(1) The SDA or SSG shall develop a policy on supportive services
in accordance with the definition at section 4(24) of the Act. This
policy shall be included in the job training plan approved by the
Governor (section 4(24)). Supportive services may be provided to
participants through in-kind or cash assistance, or by arrangement with
another human service agency when necessary to enable an individual who
is eligible for training under a JTPA assisted program, but who cannot
afford to pay for such services, to participate in such JTPA-assisted
program.
(2) In the event that an SDA or SSG adopts a policy of providing a
fixed reimbursement for a particular supportive service to all
participants, it shall, as part of its policy, state the rationale for
its choice and the fixed amounts it has adopted.
(b) Limited supportive services may be provided to applicants in
order to permit them to complete the application process.
(c) Necessary supportive services shall be recorded in a
participant's ISS under title II or should be recorded in a
participant's individual readjustment plan under title III. When
supportive services are provided in accordance with paragraph (b) of
this section, information on any supportive service provided may be
maintained for future inclusion in an ISS.
(d) The SDA or SSG shall ensure, to the extent possible, that
similarly situated participants receive similar supportive services.
(e) For title II participants, necessary supportive services (with
the exception of financial assistance) may be provided for up to one
year following termination as post-termination or followup services
(sections 4(24), 204(b)(2)(J), and 204(c)(4)). For title III
participants, the provisions at section 314(c)(15) of the Act shall
apply.
(f) An SDA or SSG may set fixed levels of benefit for any
supportive service.
(g)(1) For purposes of title II, financial assistance is defined as
a general supportive service payment for the purpose of retaining
participants in training.
(2) Financial assistance payments may be considered to be necessary
for participation in training for title II participants, i.e., a
separate, individual determination of need is not necessary.
(h) Needs-related payments. The requirements pertaining to needs-
related payments provided for under section 315(b) under title III of
the Act, are described in part 631 of this chapter.
Sec. 627.315 Benefits and working conditions.
(a) In the development and conduct of programs funded under the
Act, SDA's and SSG's shall ensure that participants are not assigned to
work for employers which do not comply with applicable labor laws,
including wage and hour, occupational health and safety, and child
labor laws (29 CFR part 570).
(b) To the extent that a State workers' compensation law is
applicable, workers' compensation benefits in accordance with such law
shall be available with respect to injuries suffered by participants.
Where a State's workers' compensation law is not applicable, recipients
and subrecipients shall secure insurance coverage for injuries suffered
by such participants in all JTPA work-related activities. Income
maintenance coverage (e.g., contributions for unemployment
compensation), is not required for participants (section 143(a)(3)).
(c) Where a participant is engaged in activities not covered under
the Occupational Safety and Health Act of 1970, as amended, the
participant shall not be required or permitted to work, be trained, or
receive services in buildings or surroundings or under working
conditions which are unsanitary, hazardous, or dangerous to the
participant's health or safety. A participant employed or trained for
inherently dangerous occupations, e.g., fire or police jobs, shall be
assigned to work in accordance with reasonable safety practices
(section 143(a)(2)).
Subpart D--Administrative Standards
Sec. 627.400 Scope and purpose.
This subpart establishes the administrative and financial standards
and requirements that apply to funds received under the Act.
Sec. 627.405 Grant agreement and funding.
(a)(1) Pursuant to Sec. 627.200 of this part and the Governor/
Secretary agreement, each program year there will be executed a grant
agreement signed by the Governor or the Governor's designated
representative and the Secretary or the Secretary's designated
representative (Grant Officer).
(2) The grant agreement described in paragraph (a)(1) of this
section shall be the basis for Federal obligation of funds for the
program year for programs authorized by titles I, II, and III,
including any title III discretionary projects awarded to the State,
and such other funds as the Secretary may award under the grant.
(b) Funding. The Secretary shall allot funds to the States in
accordance with sections 162, 202, 252, 262, and 302 of the Act. The
Secretary shall obligate such allotments through Notices of Obligation.
(c) Pursuant to instructions issued by the Secretary, additional
funds may be awarded to States for the purpose of carrying out the
administrative activities described in section 202(c)(1)(A) when a
State receives an amount under such section that is less than $500,000
(section 453(d)).
(d) Termination. Each grant shall terminate when the period of
availability for expenditure (funding period), as specified in section
161(b) of the Act, has expired and shall be closed in accordance with
Sec. 627.485, of this part, Closeout.
Sec. 627.410 Reallotment and reallocation.
(a)(1) The Governor shall reallocate title II-A and II-C funds
among service delivery areas within the State in accordance with the
provisions of section 109(a) of the Act. The amount to be reallocated,
if any, shall be based on SDA obligations of the funds allocated
separately to each SDA for title II-A or II-C programs.
(2) The Governor shall not establish reallocation requirements that
are inconsistent with the provisions of section 109(a) of the Act.
(b) The Secretary shall reallot title II-A and II-C funds among the
States in accordance with the provisions of section 109(b) of the Act.
The amounts to be reallotted, if any, shall be based on State
obligations of the funds allotted separately to each State for title
II-A or II-C programs, excluding funds allotted under section
202(c)(1)(D) and the State's obligation of such funds.
(c) Title III funds shall be reallotted by the Secretary in
accordance with section 303 of the Act.
Sec. 627.415 Insurance.
(a) General. Each recipient and subrecipient shall follow its
normal insurance procedures except as otherwise indicated in this
section and Sec. 627.465, Property Management Standards.
(b) DOL assumes no liability with respect to bodily injury,
illness, or any other damages or losses, or with respect to any claims
arising out of any activity under a JTPA grant or agreement whether
concerning persons or property in the recipient's or any subrecipient's
organization or that of any third party.
Sec. 627.420 Procurement.
(a) General. (1) For purposes of this section, the term procurement
means the process which leads to any award of JTPA funds.
(2) The Governor, in accordance with the minimum requirements
established in this section, shall prescribe and implement procurement
standards to ensure fiscal accountability and prevent waste, fraud, and
abuse in programs administered under this Act.
(3) When procuring property and services, a State shall follow the
same policies and procedures it uses for procurements from its non-
Federal funds, provided that the State's procurement procedures also
comply with the minimum requirements of this section.
(4) Each subrecipient shall use its own procurement procedures
which reflect applicable State and local laws and regulations, provided
that the subrecipient's procurement procedures also comply with the
requirements of this section and the standards established by the
Governor, pursuant to paragraph (a)(2) of this section.
(5) States and subrecipients shall not use funds provided under
JTPA to duplicate facilities or services available in the area (with or
without reimbursement) from Federal, State, or local sources, unless it
is demonstrated that the JTPA-funded alternative services or facilities
would be more effective or more likely to achieve performance goals
(sections 107(b) and 141(h)).
(6) Awards are to be made to responsible organizations possessing
the demonstrated ability to perform successfully under the terms and
conditions of a proposed subgrant or contract. A determination of
demonstrated ability shall be done in accordance with the requirements
contained in Sec. 627.422 (b) and (d).
(b) Competition. (1) Each State and subrecipient shall conduct
procurements in a manner which provides full and open competition. Some
of the situations considered to be restrictive of competition include,
but are not limited to:
(i) Placing unreasonable requirements on firms or organizations in
order for them to qualify to do business;
(ii) Requiring unnecessary experience and excessive bonding;
(iii) Noncompetitive pricing practices between firms or
organizations or between affiliated companies or organizations;
(iv) Noncompetitive awards to consultants that are on retainer
contracts;
(v) Organizational conflicts of interest;
(vi) Specifying only a ``brand name'' product instead of allowing
``an equal'' product to be offered and describing the performance of
other relevant requirements of the procurement;
(vii) Overly restrictive specifications; and
(viii) Any arbitrary action in the procurement process.
(2) Each State and subrecipient shall have written procedures for
procurement transactions. These procedures shall ensure that all
solicitations:
(i) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured
(including quantities). Such description shall not, in competitive
procurements, contain features which unduly restrict competition; and
(ii) Identify all requirements which the offerors must fulfill and
all other factors to be used in evaluating bids or proposals.
(3) Each State and subrecipient shall ensure that all prequalified
lists of persons, firms, or other organizations which are used in
acquiring goods and services are current and include sufficient numbers
of qualified sources to ensure maximum open and free competition.
(c) Conflict of interest. (1) Each recipient and subrecipient shall
maintain a written code of standards of conduct governing the
performance of persons engaged in the award and administration of JTPA
contracts and subgrants. To the extent permitted by State or local law
or regulation, such standards of conduct will provide for penalties,
sanctions, or other disciplinary actions for violations of such
standards by the awarding agency's officers, employees, or agents, or
by awardees or their agents.
(2) Staff conflict of interest. Each recipient and subrecipient
shall ensure that no individual in a decisionmaking capacity shall
engage in any activity, including participation in the selection,
award, or administration of a subgrant or contract supported by JTPA
funds if a conflict of interest, real or apparent, would be involved.
(3) PIC conflict of interest. (i) A PIC member shall not cast a
vote, nor participate in any decisionmaking capacity, on the provision
of services by such member (or any organization which that member
directly represents), nor on any matter which would provide any direct
financial benefit to that member.
(ii) Neither membership on the PIC nor the receipt of JTPA funds to
provide training and related services shall be construed, by itself, to
violate provisions of section 141(f) of the Act or Sec. 627.420.
(4) A conflict of interest under paragraphs (c) (2) and (3) of this
section would arise when:
(i) The individual,
(ii) Any member of the individual's immediate family,
(iii) The individual's partner, or
(iv) An organization which employs, or is about to employ, any of
the above, has a financial or other interest in the firm or
organization selected for award.
(5) The officers, employees, or agents of the agency and PIC
members making the award will neither solicit nor accept gratuities,
favors, or anything of monetary value from awardees, potential
awardees, or parties to subagreements. States and subrecipients may set
minimum rules where the financial interest is not substantial or the
gift is an unsolicited item of nominal intrinsic value.
(d) Methods of procurement. (1) Each State and subrecipient shall
use one of the following methods of procurement, as appropriate for
each procurement action:
(i) Small purchase procedures--simple and informal procurement
methods for securing services, supplies, or other property that do not
cost more than $25,000 in the aggregate. Recipients and subrecipients
shall not break down one purchase into several purchases merely to be
able to use small purchase procedures. The Governor shall establish
standards for small purchase procedures to ensure that price or rate
quotations will be documented from an adequate number of qualified
sources.
(ii) Sealed bids (formal advertising)--bids are publicly solicited
procurements for which a firm-fixed-price award (lump sum or unit
price) or other fixed-price arrangement is awarded to the responsible
bidder whose bid, conforming with all the material terms and conditions
of the invitation for bids, is the lowest in price. The Governor shall
establish standards for sealed bids which include requirements that
invitations for bids be publicly advertised, and that bids be solicited
from an adequate number of organizations.
(iii) Competitive proposals--normally conducted with more than one
source submitting an offer and either a fixed-price or cost-
reimbursement type award is made. The Governor shall establish
standards for competitive proposals which include requirements for the
establishment of a documented methodology for technical evaluations and
award to the responsible offeror whose proposals are most advantageous
to the program with price, technical, and other factors considered.
(iv) Noncompetitive proposals (sole source)--procurement through
solicitation of a proposal from only one source, the funding of an
unsolicited proposal, or when, after solicitation of a number of
sources, competition is determined inadequate. Each State and
subrecipient shall minimize the use of sole source procurements to the
extent practicable, but in every case the use of sole source
procurements shall be justified and documented. On-the-job training
(OJT) awards (except OJT brokering awards, which shall be selected
competitively) and the enrollment of individual participants in
classroom training may be sole sourced. For all other awards,
procurement by noncompetitive proposals may be used only when the award
is infeasible under small purchase procedures, sealed bids, or
competitive proposals and one of the following circumstances applies:
(A) The item or service is available only from a single source;
(B) The public exigency or emergency need for the item or service
does not permit a delay resulting from competitive solicitation;
(C) For SDAs, SSGs and subrecipients, the awarding agency
authorizes noncompetitive proposals; for States, the noncompetitive
proposal is approved through the State's normal sole source approval
process;
(D) After solicitation of a number of sources, competition is
determined inadequate;
(2) Pass Throughs--The procurement rules do not apply to pass
throughs of monies from any unit of State or local government (or SDA
or SSG administrative entities) to other such units, such as a local
educational agency or public housing authority. To qualify as a pass
through, the receiving entity must either further pass through the
monies to another such entity or procure services in accordance with
the procurement rules.
(e) Cost or price analysis. (1) Each recipient, in accordance with
the minimum requirements established in this section, shall establish
standards on the performance of cost or price analysis.
(2) Each recipient and subrecipient shall perform a cost or price
analysis in connection with every procurement action, including
modifications (except for modifications where a determination has been
made that they do not have a monetary impact). The method and degree of
analysis depends on the facts surrounding the particular procurement
and pricing situation. At a minimum, the awarding agency shall make
independent estimates before receiving bids or proposals. A cost
analysis is necessary when the offeror is required to submit the
elements of the estimated cost (e.g., as in the case of subrecipient
relationships), when adequate price competition is lacking, and for
sole source procurements, including modifications or change orders. A
price analysis shall be used when price reasonableness can be
established on the basis of a catalog or market price of a commercial
product sold in substantial quantities to the general public or based
on prices set by law or regulation (including situations involving
inadequate price competition and sole source procurements where a price
analysis may be used in lieu of a cost analysis). When a cost analysis
is necessary and there is inadequate price competition, the offeror
shall certify that to the best of its knowledge and belief, the cost
data are accurate, complete, and current at the time of agreement on
price. Awards or modifications negotiated in reliance on such data
should provide the awarding agency a right to a price adjustment to
exclude any significant sum by which the price was increased because
the awardee had knowingly submitted data that were not accurate,
complete, or current as certified.
(3) JTPA procurements shall not permit excess program income (for
nonprofit and governmental entities) or excess profit (for private for-
profit entities). If profit or program income is included in the price,
the awarding agency shall negotiate profit or program income as a
separate element of the price for each procurement in which there is no
price competition and in all cases where cost analysis is performed. To
establish a fair and reasonable profit or program income, consideration
shall be given to:
(i) The complexity of the work to be performed;
(ii) The risk borne by the awardee;
(iii) The offeror's investment;
(iv) The amount of subcontracting/subgranting;
(v) The quality of the offeror's record of past performance;
(vi) Industry profit rates in the surrounding geographical area for
similar work; and
(vii) Market conditions in the surrounding geographical area.
(4) Each recipient and subrecipient may charge to the agreement
only those costs which are consistent with the allowable cost
provisions of Sec. 627.435 of this part, including the guidelines
issued by the Governor, as required at Sec. 627.435(i) of this part.
(5) The cost plus a percentage of cost method shall not be used.
(f) Oversight. (1) Each recipient and subrecipient shall conduct
and document oversight to ensure compliance with the procurement
standards, in accordance with the requirements of Sec. 627.475 of this
part, Oversight and monitoring.
(2) Each recipient and subrecipient shall maintain an
administration system which ensures that vendors and subrecipients
perform in accordance with the terms, conditions, and specifications of
their awards.
(g) Transactions between units of government. (1) Except as
provided in paragraph (g)(2) of this section, procurement transactions
between units of State or local governments, or any other entities
organized principally as the administrative entity for service delivery
areas or substate areas, shall be conducted on a cost reimbursable
basis. Cost plus type awards are not allowable.
(2) In the case of procurement transactions with schools that are a
part of these entities, such as State universities and secondary
schools, when tuition charges or entrance fees are not more than the
educational institution's catalogue price, necessary to receive
specific training, charged to the general public to receive the same
training, and for training of participants, the tuition and/ or
entrance fee does not have to be broken out by items of cost.
(h) Award provisions. Each recipient and subrecipient agreement
shall:
(1) Clearly specify deliverables and the basis for payment; and
(2) In the case of awards to subrecipients, contain clauses that
provide for:
(i) Compliance with the JTPA regulations;
(ii) Assurance of nondiscrimination and equal opportunity as found
in 29 CFR 34.20, Assurance required; duration of obligation; covenants.
(3) In the case of awards to vendors, contain clauses that provide
for:
(i) Access by the recipient, the subrecipient, the Department of
Labor, the Comptroller General of the United States, or any of their
duly authorized representatives to any books, documents, papers, and
records (including computer records) of the contractor or subcontractor
which are directly pertinent to charges to the program, in order to
conduct audits and examinations and to make excerpts, transcripts, and
photocopies; this right also includes timely and reasonable access to
contractor's and subcontractor's personnel for the purpose of
interviews and discussions related to such documents;
(4) In the case of awards to both subrecipients and vendors,
contain clauses that provide for:
(i) Administrative, contractual, or legal remedies in instances
where contractors/subgrantees violate or breach agreement terms, which
shall provide for such sanctions and penalties as may be appropriate;
(ii) Notice of 29 CFR 97.34 requirements pertaining to copyrights
(agreements which involve the use of copyrighted materials or the
development of copyrightable materials);
(iii) Notice of requirements pertaining to rights to data.
Specifically, the awarding agency and the Department of Labor shall
have unlimited rights to any data first produced or delivered under the
agreement (agreements which involve the use/development of computer
programs/ applications, or the maintenance of databases or other
computer data processing program, including the inputing of data);
(iv) Termination for cause and for convenience by the awarding
agency, including the manner by which the termination will be effected
and the basis for settlement;
(v) Notice of awarding agency requirements and regulations
pertaining to reporting;
(vi) Audit rights and requirements;
(vii) Payment conditions and delivery terms;
(viii) Process and authority for agreement changes; and
(ix) Provision against assignment;
(5) The Governor may establish additional clauses, as deemed
appropriate, for State and subrecipient procurements.
(i) Disputes. (1) The Governor shall ensure that the recipient and
each subrecipient have protest procedures to handle and resolve
disputes relating to their procurements. A protester shall exhaust all
administrative remedies with the subrecipient before pursuing a protest
at a higher level.
(2) Violations of law will be handled in accordance with the
requirements contained in Sec. 627.500(c).
(j) Each recipient and subrecipient shall maintain records
sufficient to detail the significant history of a procurement. These
records shall include, but are not necessarily limited to, the
following: rationale for the method of procurement, selection of
agreement type, awardee selection or rejection, and the basis for the
agreement price.
Sec. 627.422 Selection of service providers.
(a) Service providers selected under titles I, II, and III of the
Act shall be selected in accordance with the provisions of section 107
of the Act, except that section 107(d) shall not apply to training
under title III.
(b) Consistent with the requirements of this section, the Governor
shall establish standards to be followed by recipients and
subrecipients in making determinations of demonstrated performance,
prior to the award of all agreements under titles I, II, and III of the
Act. These standards shall comply with the requirements of this
section, Sec. 627.420, of this part, Procurement, and section 164(a)(3)
of the Act. The standards shall require that determinations of
demonstrated performance will be in writing, and completed prior to the
award of an agreement.
(c) Each recipient and subrecipient, to the extent practicable,
shall select service providers on a competitive basis, in accordance
with the standards established in Sec. 627.420(b) of this part,
Procurement. When a State, SDA, SSG, or administrative entity
determines that services other than intake and eligibility
determination will be provided by its own staff, a determination shall
be made of the demonstrated performance of the entity to provide the
services. This determination: Shall be in writing; shall take into
consideration the matters listed in paragraph (d) of this section; and
may, if appropriate, be documented and described in the Job Training
Plan, GCSSP, or EDWAA plan.
(d) Awards are to be made to organizations possessing the
demonstrated ability to perform successfully under the terms and
conditions of a proposed subgrant or contract. Where comparable
proposals have been received from an offeror which has demonstrated
performance and a high-risk recipient/subrecipient, and a determination
has been made that both proposals are fundable, the award should be
made to the offeror which has demonstrated performance, unless other
factors dictate a contrary result. Determinations of demonstrated
performance shall be in writing, and take into consideration such
matters as whether the organization has:
(1) Adequate financial resources or the ability to obtain them;
(2) The ability to meet the program design specifications at a
reasonable cost, as well as the ability to meet performance goals;
(3) A satisfactory record of past performance (in job training,
basic skills training, or related activities), including demonstrated
quality of training; reasonable drop-out rates from past programs;
where applicable, the ability to provide or arrange for appropriate
supportive services as specified in the ISS, including child care;
retention in employment; and earning rates of participants;
(4) For title II programs, the ability to provide services that can
lead to the achievement of competency standards for participants with
identified deficiencies;
(5) A satisfactory record of integrity, business ethics, and fiscal
accountability;
(6) The necessary organization, experience, accounting and
operational controls; and
(7) The technical skills to perform the work.
(e) In selecting service providers to deliver services in a service
delivery area/substate area, proper consideration shall be given to
community-based organizations (section 107(a)). These community-based
organizations, including women's organizations with knowledge about or
experience in nontraditional training for women, shall be organizations
which are recognized in the community in which they are to provide
services. Where proposals are evenly rated, and one of these proposals
has been submitted by a CBO, the tie breaker may go to the CBO.
(f) Appropriate education agencies in the service delivery area/
substate area shall be provided the opportunity to provide educational
services, unless the administrative entity demonstrates that
alternative agency(ies) or organization(s) would be more effective or
would have greater potential to enhance the participants' continued
educational and career growth (section 107(c)). Where proposals are
evenly rated, and one of these proposals has been submitted by an
educational institution, the tie breaker shall go to the educational
institution.
(g) In determining demonstrated performance of institutions/
organizations which provide training, such performance measures as
retention in training, training completion, job placement, and rates of
licensure shall be taken into consideration.
(h) Service providers under agreements to conduct projects under
section 123(a)(2) shall be selected in accordance with the requirements
of this section.
(i) The requirements of section 204(d)(2)(B) shall be followed in
entering into agreements to provide services for older individuals
funded under title II, part A.
(j) Additional requirements for selection of service providers by
substate grantees are described at section 313(b)(6) of the Act and
Sec. 631.52 of this chapter.
(k) Amounts for service providers. Each SDA/SSG shall ensure that,
for all services provided to participants through contracts, grants, or
other agreements with a service provider, such contract, grant, or
agreement shall include appropriate amounts necessary for
administration and supportive services (section 108(b)(5)).
(l) When a State, SDA or SSG has a policy of awarding additional
points to proposals received from such organizations as minority
business enterprises and women-owned businesses, and this policy is
generally applicable to its other funds, the State, SDA or SSG may
apply this policy to the JTPA funds.
Sec. 627.423 Funding restrictions for ``high-risk'' recipients and
subrecipients.
(a) A recipient or subrecipient may be considered ``high-risk'' if
an awarding agency determines that the recipient or subrecipient is
otherwise responsible, but:
(1) Has a history of unsatisfactory performance;
(2) Is not financially stable;
(3) Has a management system which does not meet the management
standards set forth in this part; or
(4) Has not conformed to terms and conditions of a previously
awarded grant or subgrant.
(b) If the awarding agency determines that an award will be made to
a ``high-risk'' recipient or subrecipient, then special funding
restrictions that address the ``high-risk'' status may be included in
the award. Funding restrictions may include, but are not limited to:
(1) Payment on a reimbursement basis;
(2) Requiring additional and/or more detailed financial or
performance reports;
(3) Additional monitoring;
(4) Requiring the recipient or subrecipient to obtain specific
technical or management assistance; and/or
(5) Establishing additional prior approvals.
(c) If an awarding agency decides to impose such funding
restrictions, the awarding official will notify the recipient or
subrecipient as early as possible, in writing, of:
(1) The nature of the funding restrictions;
(2) The reason(s) for imposing them;
(3) The corrective actions which must be taken before they will be
removed and the time allowed for completing the corrective actions; and
(4) The method of requesting reconsideration of the restrictions
imposed.
Sec. 627.424 Prohibition of subawards to debarred and suspended
parties.
(a) No recipient or subrecipient shall make any awards or permit
any awards at any tier to any party which is debarred or suspended or
is otherwise excluded from or ineligible for participation in Federal
assistance programs in accordance with the Department of Labor
regulations at 29 CFR part 98.
(b) Recipients and subrecipients shall comply with the applicable
requirements of the Department of Labor regulations at 29 CFR part 98.
Sec. 627.425 Standards for financial management and participant data
systems.
(a)(1) General. The financial management system and the participant
data system of each recipient and subrecipient shall provide federally
required records and reports that are uniform in definition, accessible
to authorized Federal and State staff, and verifiable for monitoring,
reporting, audit, program management, and evaluation purposes (sections
165(a)(1) and (2), and 182).
(2) An awarding agency may review the adequacy of the financial
management system and participant data system of any recipient/
subrecipient as part of a preaward review or at any time subsequent to
award.
(b) Financial systems. Recipients and subrecipients shall ensure
that their own financial systems as well as those of their
subrecipients provide fiscal control and accounting procedures that
are:
(1) In accordance with generally accepted accounting principles
applicable in each State including:
(i) Information pertaining to subgrant and contract awards,
obligations, unobligated balances, assets, liabilities, expenditures,
and income;
(ii) Effective internal controls to safeguard assets and assure
their proper use;
(iii) A comparison of actual expenditures with budgeted amounts for
each subgrant and contract;
(iv) Source documentation to support accounting records; and
(v) Proper charging of costs and cost allocation; and
(2) Sufficient to:
(i) Permit preparation of required reports;
(ii) Permit the tracing of funds to a level of expenditure adequate
to establish that funds have not been used in violation of the
applicable restrictions on the use of such funds;
(iii) As required by section 165(g), permit the tracing of program
income, potential stand-in costs and other funds that are allowable
except for funding limitations, as defined in Sec. 627.480(f) of this
part, Audits; and
(iv) Demonstrate compliance with the matching requirement of
section 123(b)(2).
(c) Applicant and participant data systems. Each recipient and
subrecipient shall ensure that records are maintained:
(1) Of each applicant for whom an application has been completed
and a formal determination of eligibility or ineligibility made;
(2) Of each participant's enrollment in a JTPA-funded program in
sufficient detail to demonstrate compliance with the relevant
eligibility criteria attending a particular activity and with the
restrictions on the provision and duration of services and specific
activities imposed by the Act; and
(3) Of such participant information as may be necessary to develop
and measure the achievement of performance standards established by the
Secretary.
Sec. 627.430 Grant payments.
(a) Except as provided in paragraph (h)(2) of this section, JTPA
grant payments shall be made to the Governor in accordance with the
Cash Management Improvement Act of 1990 (31 U.S.C. 6501, et seq.),
Department of Treasury regulations at 31 CFR part 205, and the State
Agreement entered into with the Department of the Treasury.
(b) Basic standard. Except as provided in paragraphs (d) and (e) of
this section, each recipient and subrecipient shall be paid in advance,
provided it demonstrates the willingness and ability to limit advanced
funds to the actual immediate disbursement needs in carrying out the
JTPA program.
(c) Advance payments. To the maximum extent feasible, each
subrecipient shall be provided advance payments via electronic funds
transfer, following the procedures of the awarding agency.
(d) Reimbursement. (1) Reimbursement is the preferred method when
the requirements in paragraph (b) of this section are not met.
(i) Each recipient shall submit requests for reimbursement in
accordance with the provisions at 31 CFR part 205.
(ii) Each subrecipient shall submit requests for reimbursement in
accordance with requirements established by the awarding agency.
(2) Each subrecipient shall be paid as promptly as possible after
receipt of a proper request for reimbursement.
(e) Working capital advance payments. If a subrecipient cannot meet
the criteria for advance payments described in paragraph (b) of this
section, and the awarding agency has determined that reimbursement is
not feasible because the subrecipient lacks sufficient working capital,
the awarding agency may provide cash on a working capital advance
payment basis. Under this procedure, the awarding agency shall advance
cash to the subrecipient to cover its estimated disbursement needs for
an initial period, generally geared to the subrecipient's disbursing
cycle. In no event may such an advance exceed 20 percent of the award
amount. Thereafter, the awarding agency shall reimburse the
subrecipient for its actual cash disbursements. The working capital
advance method of payment shall not be used by recipients or
subrecipients if the reason for using such method is the unwillingness
or inability of the recipient or subrecipient to provide timely
advances to the subrecipient to meet the subrecipient's actual cash
disbursements.
(f) Effect of program income, refunds, and audit recoveries on
payment. Each recipient and subrecipient shall disburse cash received
as a result of program income, rebates, refunds, contract settlements,
audit recoveries, and interest earned on such funds before requesting
additional cash payments.
(g) Cash depositories. (1) Consistent with the national goal of
expanding the opportunities for minority business enterprises, each
recipient and subrecipient is encouraged to use minority-owned banks (a
bank which is at least 50 percent owned by minority group members).
Additional information may be obtained from the Minority Business
Development Agency, Department of Commerce, Washington, DC 20230.
(2) A recipient or subrecipient shall not be required to maintain a
separate bank account but shall separately account for Federal funds on
deposit.
(h) Interest earned on advances. (1) An interest liability shall
accrue on advance payments between Federal agencies and State
governments, as provided by the Cash Management Improvement Act (31
U.S.C. 6501, et seq.) and implementing regulations at 31 CFR part 205.
(2) Each recipient and subrecipient shall account for interest
earned on advances of Federal funds as program income, as provided at
Sec. 627.450 of this part, Program income.
Sec. 627.435 Cost principles and allowable costs.
(a) General. To be allowable, a cost shall be necessary and
reasonable for the proper and efficient administration of the program,
be allocable to the program, and, except as provided herein, not be a
general expense required to carry out the overall responsibilities of
the Governor or a governmental subrecipient. Costs charged to the
program shall be accorded consistent treatment through application of
generally accepted accounting principles appropriate to the JTPA
program, as determined by the Governor.
(b) Whether a cost is charged as a direct cost or as an indirect
cost shall be determined in accordance with the descriptions of direct
and indirect costs contained in the OMB Circulars identified in DOL's
regulations at 29 CFR 97.22(b).
(c) Costs allocable to another Federal grant, JTPA program, or cost
category may not be shifted to a JTPA grant, subgrant, program, or cost
category to overcome fund deficiencies, avoid restrictions imposed by
law or grant agreements, or for other reasons.
(d) Applicable credits such as rebates, discounts, refunds, and
overpayment adjustments, as well as interest earned on any of them,
shall be credited as a reduction of costs if received during the same
funding period that the cost was initially charged. Credits received
after the funding period shall be returned to the Department as
provided for at Sec. 627.490(b).
(e) The following costs are not allowable charges to the JTPA
program:
(1) Costs of fines and penalties resulting from violations of, or
failure to comply with, Federal, State, or local laws and regulations;
(2) Back pay, unless it represents additional pay for JTPA services
performed for which the individual was underpaid;
(3) Entertainment costs;
(4) Bad debts expense;
(5) Insurance policies offering protection against debts
established by the Federal Government;
(6) Contributions to a contingency reserve or any similar provision
for unforeseen events;
(7) Costs prohibited by 29 CFR part 93 (Lobbying Restrictions) or
costs of any salaries or expenses related to any activity designed to
influence legislation or appropriations pending before the Congress of
the United States; and
(8) Costs of activities prohibited in Sec. 627.205, Public service
employment prohibition; Sec. 627.210, Nondiscrimination and
nonsectarian activities; Sec. 627.215, Relocation; Sec. 627.225,
Employment generating activities; and Sec. 627.230, Displacement, of
this part.
(f)(1) The cost of legal expenses required in the administration of
grant programs is allowable. Legal expenses include the expenses
incurred by the JTPA system in the establishment and maintenance of a
grievance system, including the costs of hearings and appeals, and
related expenses such as lawyers' fees. Legal expenses does not include
costs resulting from, and after, the grievance process such as fines
and penalties, which are not allowable, and settlement costs, which are
allowable to the extent that such costs included in the settlement
would have been allowable if charged to the JTPA program at the time
they were incurred.
(2) Legal services furnished by the chief legal officer of a State
or local government or staff solely for the purpose of discharging
general responsibilities as a legal officer are unallowable.
(3) Legal expenses for the prosecution of claims against the
Federal Government, including appeals to an Administrative Law Judge,
are unallowable.
(g) Costs of travel and incidental expenses incurred by volunteers
are allowable provided such costs are incurred for activities that are
generally consistent with section 204(c)(6) of the Act.
(h) Contributions to a reserve for a self-insurance program, to the
extent that the type and extent of coverage and the rates and premiums
would have been allowed had insurance been purchased to cover the
risks, are allowable.
(i) The Governor shall prescribe and implement guidelines on
allowable costs for SDA, SSG, and statewide programs that are
consistent with the cost principles and allowable costs provisions of
paragraphs (a) through (h) of this section and that include, at a
minimum, provisions that specify the extent to which the following cost
items are allowable or unallowable JTPA costs and, if allowable,
guidelines on conditions or the extent of allowability, documentation
requirements, and any prior approval requirements applicable to such
cost items:
(1) Compensation for personal services of staff, including wages,
salaries, supplementary compensation, and fringe benefits;
(2) Costs incurred by the SJTCC, HRIC, PIC's, and other advisory
councils or committees;
(3) Advertising costs;
(4) Depreciation and/or use allowances;
(5) Printing and reproduction costs;
(6) Interest expense;
(7) Expenditures for transportation and travel;
(8) Payments to OJT employers, training institutions, and other
vendors;
(9) Fees or profits;
(10) Insurance costs, including insurance coverage for injuries
suffered by participants who are not covered by existing workers'
compensation, and personal liability insurance for PIC members;
(11) Acquisitions of capital assets;
(12) Building space costs, including rent, repairs, and
alterations;
(13) Pre-agreement costs;
(14) Fund-raising activities;
(15) Professional services, including organizational management
studies conducted by outside individuals or firms; and
(16) Taxes.
Sec. 627.440 Classification of costs.
(a) Allowable costs for programs under title II and title III shall
be charged (allocated) to a particular cost objective/category to the
extent that benefits are received by such cost objective/category.
Joint and similar types of costs may be charged initially to a cost
pool used for the accumulation of such costs pending distribution in
due course to the ultimate benefitting cost objective/category. The
classification of costs for programs under title III of the Act are set
forth at Sec. 631.13 of this chapter, Classification of costs at State
and substate levels.
(b) For State-administered programs under Title II, the State is
required to plan, control, and charge expenditures against the
following cost objectives/categories:
(1) Titles II-A and II-C (combined)--capacity building and
technical assistance (sections 202(c)(1)(B) and 262(c)(1)(B) of the Act
to carry out activities pursuant to sections 202(c)(3)(A) and
262(c)(3)(A) of the Act);
(2) Titles II-A and II-C (combined)--8 percent coordination
(sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry out
activities pursuant to section 123(d)(2)(A) of the Act);
(3) Titles II-A and II-C (combined)--8 percent services/direct
training (sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry
out activities pursuant to section 123(d)(2)(B) of the Act);
(4) Titles II-A and II-C (combined)--8 percent services/training-
related and supportive services (sections 202(c)(1)(C) and 262(c)(1)(C)
of the Act to carry out activities pursuant to section 123(d)(2)(B) of
the Act);
(5) Titles II-A and II-C (combined)--8 percent services/
administration (sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to
carry out activities pursuant to section 123(d)(2)(B) of the Act);
(6) Titles II-A and II-C (combined)--8 percent services to
disadvantaged (section 202(c)(1)(C) and 262(c)(1)(C) of the Act to
carry out activities pursuant to section 123(d)(2)(C) of the Act);
(7) Title II-A--older individuals/direct training (section
202(c)(1)(D) of the Act to carry out activities pursuant to section
204(d) of the Act);
(8) Title II-A--older individuals/training-related and supportive
services (section 202(c)(1)(D) of the Act to carry out activities
pursuant to section 204(d) of the Act);
(9) Title II-A--older individuals/administration (section
202(c)(1)(D) of the Act to carry out activities pursuant to section
204(d) of the Act); and
(10) Title II--administration (sections 202(c)(1)(A) and
262(c)(1)(A) of the Act to carry out activities pursuant to Title II of
the Act, including Title II-B).
(c)(1) SDA grant recipients and their subrecipients shall plan,
control, and charge expenditures, excluding incentive funds received
pursuant to sections 202(c)(1)(B) and 262(c)(1)(B) of the Act, against
the following cost objectives/categories:
(i) Title II-A--direct training services;
(ii) Title II-C--direct training services;
(iii) Title II-A--training-related and supportive services;
(iv) Title II-C--training-related and supportive services;
(v) Title II-B--training and supportive services;
(vi) Title II-A--administration;
(vii) Title II-B--administration; and
(viii) Title II-C--administration.
(2) Incentive funds received pursuant to sections 202(c)(1)(B) and
262(c)(1)(B) of the Act, may be combined and accounted for in total,
without regard to cost categories or cost limitations.
(d) States and subrecipients shall use the following definitions in
assigning costs to the cost categories contained in paragraphs (b) and
(c) of this section:
(1) Direct training services--title II-A. Costs for direct training
services that may be charged to the title II-A program are:
(i) The personnel and non-personnel costs directly related to
providing those services to participants specified in section 204(b)(1)
of the Act and which can be specifically identified with one or more of
those services. Generally, such costs are limited to:
(A) Salaries, fringe benefits, equipment, supplies, space, staff
training, transportation, and other related costs of personnel directly
engaged in providing training; and
(B) Salaries, fringe benefits, and related non-personnel costs of
program component supervisors and/or coordinators as well as clerical
staff, provided such staff work exclusively on activities or functions
specified in section 204(b)(1) of the Act or allocations of such costs
are made based on actual time worked or other equitable cost allocation
methods;
(ii) Books, instructional materials, and other teaching aids used
by or for participants;
(iii) Equipment and materials used in providing training to
participants;
(iv) Classroom space and utility costs;
(v) Costs of insurance coverage of participants as specified at
Sec. 627.315(b) of this part, Benefits and Working Conditions;
(vi) Payments to vendors for goods or services procured for the use
or benefit of program participants for direct training services,
including:
(A) Payments for commercially available training packages purchased
competitively pursuant to section 141(d)(3) of the Act;
(B) Tuition charges, entrance fees, and other usual and customary
fees of an educational institution when such tuition charges, entrance
fees, or other fees are not more than the educational institution's
catalogue price, necessary to receive specific training, charged to the
general public to receive the same training, and are for training of
participants; and
(C) Payments to OJT employers, but not brokering contractors. Costs
incurred under brokering arrangements shall be allocated to all of the
benefitting cost categories, and
(vii) Payments to JTPA participants that represent hours spent in a
direct training activity (e.g., wages, work-based training payments,
training payments for combined activities), including work experience,
vocational exploration, limited internships, and entry employment.
(2) Direct training services--title II-C. Costs for direct training
services that may be charged to the title II-C program are the costs
identified in paragraph (d)(1) of this section as well as costs
directly related to providing those services to participants specified
in section 264(c)(1) of the Act and which can be specifically
identified with one or more of those services.
(3) Training-related and supportive services--title II-A. Costs for
training-related and supportive services that may be charged to the
title II-A program are:
(i) The personnel and non-personnel costs directly related to
providing outreach, intake, and eligibility determination, as well as
those services to participants specified in section 204(b)(2) of the
Act, and which can be specifically identified with one or more of those
services. Generally, such costs are limited to:
(A) Salaries, fringe benefits, equipment, supplies, space, staff
training, transportation, and other related costs of personnel directly
engaged in providing training-related and/or supportive services; and
(B) Salaries, fringe benefits, and related non-personnel costs of
program component supervisors and/or coordinators as well as clerical
staff, provided such staff work exclusively on activities or functions
specified in section 204(b)(2) of the Act or allocations of such costs
are made based on actual time worked or another equitable allocation
method.
(ii) Needs-based payments, cash incentives and bonuses, other
financial assistance and supportive services to participants and
applicants, where applicable.
(4) Training-related and supportive services--title II-C. Costs for
training-related and supportive services that may be charged to the
title II-C program are the costs identified in paragraph (d)(3) of this
section, as well as costs directly related to providing those services
to participants specified in section 264(c)(2) of the Act and which can
be specifically identified with one or more of those services.
(5) Administration. The costs of administration are those portions
of necessary and allowable costs associated with the overall management
and administration of the JTPA program and which are not directly
related to the provision of services to participants or otherwise
allocable to the program cost objectives/categories in paragraphs
(b)(1)-(8) or (c)(1) (i)-(v) of this section. These costs can be both
personnel and non-personnel and both direct and indirect. Costs of
administration shall include:
(i) Except as provided in paragraph (e)(1) of this section, costs
of salaries, wages, and related costs of the recipient's or
subrecipient's staff or PIC staff engaged in:
(A) Overall program management, program coordination, and general
administrative functions, including the salaries and related costs of
the executive director, JTPA director, project director, personnel
officer, fiscal officer/bookkeeper, purchasing officer, secretary,
payroll/insurance/property clerk and other costs associated with
carrying out administrative functions;
(B) Preparing program plans, budgets, schedules, and amendments
thereto;
(C) Monitoring of programs, projects, subrecipients, and related
systems and processes;
(D) Procurement activities, including the award of specific
subgrants, contracts, and purchase orders;
(E) Providing State or local officials and the general public with
information about the program (public relations);
(F) Developing systems and procedures, including management
information systems, for assuring compliance with program requirements;
(G) Preparing reports and other documents related to the program
requirements;
(H) Coordinating the resolution of audit findings;
(I) Evaluating program results against stated objectives; and
(J) Performing such administrative services as general legal
services, accounting services, audit services; and managing purchasing,
property, payroll, and personnel;
(ii) Costs for goods and services required for administration of
the program, including such goods and services as rental or purchase of
equipment, utilities, office supplies, postage, and rental and
maintenance of office space;
(iii) The costs of organization-wide management functions; and
(iv) Travel costs incurred for official business in carrying out
program management or administrative activities, including travel costs
incurred by PIC members.
(e) Other cost classification guidance. (1) Personnel and related
non-personnel costs of the recipient's or subrecipient's staff,
including project directors, who perform services or activities that
benefit two or more of the cost objectives/categories identified in
this section may be allocated to the benefitting cost objectives/
categories based on documented distributions of actual time worked or
other equitable cost allocation methods.
(2) Indirect or overhead costs normally shall be charged to
administration, except that specific costs charged to an overhead or
indirect cost pool that can be identified directly with a JTPA cost
objective/category other than administration may be charged to the JTPA
cost objective/category directly benefitted. Documentation of such
charges shall be maintained.
(3) Where an award to a subrecipient is for a ``commercially
available off-the-shelf training package,'' as defined at Sec. 626.5 of
this chapter, the subrecipient may charge all costs of such package to
the direct training services cost category.
(4) Profits, fees, and other revenues earned by a subrecipient that
are in excess of actual costs incurred, to the extent allowable and
consistent with the guidelines on allowable costs prescribed by the
Governor in accordance with Sec. 627.435(i). Cost principles and
allowable costs, may be allocated to all three cost categories based on
the proportionate share of actual costs incurred attributable to each
category.
Sec. 627.445 Limitations on certain costs.
(a) State-administered programs.--(1) Services for older
individuals. Of the funds allocated for any program year for section
202(c)(1)(D) of the Act to carry out activities pursuant to section
204(d) of the Act--
(i) Not less than 50 percent shall be expended for the cost of
direct training services; and
(ii) Not more than 20 percent shall be expended for the cost of
administration.
(2) State education services. Of the funds allocated for any
program year for sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to
carry out activities pursuant to section 123(d)(2)(B) of the Act--
(i) Not less than 50 percent shall be expended for the cost of
direct training services; and
(ii) Not more than 20 percent shall be expended for the cost of
administration.
(3) The limitations specified in paragraph (a)(2) of this section
shall apply to the combined total of funds allocated for sections
202(c)(1)(C) and 262(c)(1)(C) of the Act.
(b) SDA allocations. (1) In applying the title II-A and II-C cost
limitations specified in section 108(b)(4) of the Act, the funds
allocated to a service delivery area shall be net of any:
(i) Transfers made in accordance with sections 206, 256, and 266 of
the Act; and
(ii) Reallocations made by the Governor in accordance with section
109(a) of the Act.
(2) The limitations specified in paragraph (b)(1) of this section
shall apply separately to the funds allocated for title II-A and title
II-C programs.
(3) The title II-B administrative cost limitation of 15 percent
shall be 15 percent of the funds allocated for any program year to a
service delivery area, excluding any funds transferred to title II-C in
accordance with section 256 of the Act (section 253(a)(3)).
(c)(1) The State shall establish a system to regularly assess
compliance with the cost limitations including periodic review and
corrective action, as necessary.
(2) States and service delivery areas shall have the 3-year period
of fund availability to comply with the cost limitations in section 108
of the Act and paragraphs (a) and (b) of this section (section 161(b)).
(d) Administrative costs incurred by a community-based organization
or non-profit service provider shall not be included in the limitation
described in section 108(b)(4)(A) of the Act if:
(1) Such costs are incurred under an agreement that meets the
requirements of section 141(d)(3)(C) (i) and (ii) of the Act;
(2) The total administrative expenditures of the service delivery
area, including the administrative expenditures of such community-based
organizations or non-profit service providers, do not exceed 25 percent
of the funds allocated to the service delivery area for the program
year of allocation; and
(3) The total direct training expenditures of the service delivery
area, including the direct training expenditures of such community-
based organizations or non-profit service providers, is equal to or
exceeds 50 percent of the funds allocated to the service delivery area
for the program year less one-half of the percentage by which the total
administrative expenditures of the service delivery area exceeds 20
percent. For example, if the total administrative expenditures of the
service delivery area is 24 percent, then the total direct training
expenditures of the service delivery area must be at least 48 percent.
(e) The provisions of this section do not apply to any title III
programs.
(f) The provisions of this section do not apply to any designated
SDA which served as a concentrated employment program grantee for a
rural area under the Comprehensive Employment and Training Act (section
108(d)).
Sec. 627.450 Program income.
(a) Definition of program income. (1) Program income means income
received by the recipient or subrecipient that is directly generated by
a grant or subgrant supported activity, or earned only as a result of
the grant or subgrant. Program income includes:
(i) Income from fees for services performed and from conferences;
(ii) Income from the use or rental of real or personal property
acquired with grant or subgrant funds;
(iii) Income from the sale of commodities or items fabricated under
a grant or subgrant;
(iv) Revenues earned by a governmental or non-profit service
provider under either a fixed-price or reimbursable award that are in
excess of the actual costs incurred in providing the services; and
(v) Interest income earned on advances of JTPA funds.
(2) Program income does not include:
(i) Rebates, credits, discounts, refunds, etc., or interest earned
on any of them, which shall be credited in accordance with
Sec. 627.435(d), Cost principles and allowable costs;
(ii) Taxes, special assessments, levies, fines, and other such
governmental revenues raised by a recipient or subrecipient; or
(iii) Income from royalties and license fees for copyrighted
material, patents, patent applications, trademarks, and inventions
developed by a recipient or subrecipient.
(3) Property. Proceeds from the sale of property shall be handled
in accordance with the requirements of Sec. 627.465 of this part,
Property management standards.
(b) Cost of generating program income. Costs incidental to the
generation of program income may be deducted, if not already charged to
the grant, from gross income to determine program income.
(c) Use of program income. (1)(i) A recipient or subrecipient may
retain any program income earned by the recipient or subrecipient only
if such income is added to the funds committed to the particular JTPA
grant or subgrant and title under which it was earned and such income
is used for that title's purposes and under the terms and conditions
applicable to the use of the grant funds.
(ii) A State may use interest it earns on JTPA funds, deposited by
the United States to the State's account, to satisfy the requirement at
31 U.S.C. 6503(c) that the State pay interest on such deposits.
(iii) The classification of costs in Secs. 627.440 and 631.13 shall
apply to the use of program income.
(iv) The administrative cost limitation in Secs. 627.445 and 631.14
shall apply to the use of program income, except that program income
used in accordance with paragraph (c)(1)(ii) of this section shall be
exempt from the administrative cost limitations.
(2) Program income generated under title II may also be used to
satisfy the matching requirement of section 123(b) of the Act.
(3) Program income shall be used prior to the submission of the
final report for the funding period of the program year of funds to
which the earnings are attributable.
(4) If the subrecipient that earned program income cannot use such
income for JTPA purposes, the recipient may permit another entity to
use the program income for JTPA purposes.
(5) Program income not used in accordance with the requirements of
this section shall be remitted to the Department of Labor.
(d) Program and other income after the funding period. Rental
income and user fees on real and personal property acquired with JTPA
funds shall continue to be JTPA program income in subsequent funding
periods. There are no Federal requirements governing the disposition of
all other income that is earned after the end of the funding period.
Sec. 627.455 Reports required.
(a) General. The Governor shall report to DOL pursuant to
instructions issued by DOL. Reports shall be submitted no more
frequently than quarterly, in accordance with section 165(f) of the
Act, and within 45 calendar days after the end of the report period.
Additional reporting requirements for title III are set forth at
Sec. 631.15 of this chapter.
(b) A recipient may impose different forms or formats, shorter due
dates, and more frequent reporting requirements on subrecipients,
however, the recipient is required to meet the reporting requirements
imposed on it by DOL.
(c) DOL may provide computer outputs to recipients to expedite or
contribute to the accuracy of reporting. DOL may accept the required
information from recipients in electronically reported format or
computer printouts instead of prescribed forms.
(d) Financial reports. (1) Financial reports for programs under
titles I, II, and III shall be submitted to DOL by each State quarterly
and by program year of appropriation.
(2) Each recipient shall report program outlays on an accrual
basis. If the recipient's accounting records are not normally kept on
the accrual basis, the recipient shall develop such accrual information
through an analysis of the documentation on hand.
(3) A final financial report is required 90 days after the
expiration of a funding period (see Sec. 627.485 of this part,
Closeout).
(4) Pursuant to section 104(b)(13) of the Act, the SDA shall
annually report to the Governor. Among other items, this report shall
include information on the extent to which the SDA has met the goals
for the training and training-related placement of women in
nontraditional employment.
Sec. 627.460 Requirements for records.
(a) Records, including the records identified in section 165(g) of
the Act, shall be retained in accordance with section 165(e) of the
Act. In establishing the time period of record retention requirements
for records of subrecipients, the State may either:
(1) Impose the time limitation requirement of section 165(e) of the
Act; or
(2) Require that subrecipient records for each funding period be
retained for 3 years after the subrecipient submits to the awarding
agency its final expenditure report for that funding period. Records
for nonexpendable property shall be retained for a period of three
years after final disposition of the property.
(b) The Governor shall ensure that the records under this section
shall be retained beyond the prescribed period if any litigation or
audit is begun or if a claim is instituted involving the grant or
agreement covered by the records. In these instances, the Governor
shall ensure that the records shall be retained until the litigation,
audit, or claim has been finally resolved.
(c) In the event of the termination of the relationship with a
subrecipient, the Governor or SDA or title III SSG shall be responsible
for the maintenance and retention of the records of any subrecipient
unable to retain them.
(d) Record storage. Records shall be retained and stored in a
manner which will preserve their integrity and admissibility as
evidence in any audit or other proceeding. The burden of production and
authentication of the records shall be on the custodian of the records.
(e) Federal and awarding agencies' access to records--(1) Records
of recipients and subrecipients. The awarding agency, the Department of
Labor (including the Department of Labor's Office of Inspector
General), and the Comptroller General of the United States, or any of
their authorized representatives, have the right of timely and
reasonable access to any books, documents, papers, computer records, or
other records of recipients and subrecipients that are pertinent to the
grant, in order to conduct audits and examinations, and to make
excerpts, transcripts, and photocopies of such documents. This right
also includes timely and reasonable access to recipient and
subrecipient personnel for the purpose of interview and discussion
related to such documents.
(2) Expiration of right of access. The right of access in this
section is not limited to the required retention period but shall last
as long as the records are retained.
Sec. 627.463 Public access to records.
(a) Public access. Except as provided in paragraph (b) of this
section, records maintained by recipients or subrecipients pursuant to
Sec. 627.460 shall be made available to the public upon request,
notwithstanding the provisions of State or local law.
(b) Exceptions. This requirement does not apply to:
(1) Information, the disclosure of which would constitute a clearly
unwarranted invasion of personal privacy; or
(2) Trade secrets, or commercial or financial information, obtained
from a person and privileged or confidential.
(c) Fees. For processing of a request for a record under this
section, a fee may be charged to the extent sufficient to recover the
cost applicable to processing such request (section 165(a)(4)).
Sec. 627.465 Property management standards.
(a) States and governmental subrecipients. Real property,
equipment, supplies, and intangible property acquired or produced after
July 1, 1993, by States and governmental subrecipients with JTPA funds
shall be governed by the definitions and property requirements in the
DOL regulations at 29 CFR part 97, except that prior approval by the
Department of Labor to acquire property is waived.
(b) Nongovernmental subrecipients. Except as provided in paragraph
(c) of this section, real and personal property, including intangible
property, acquired or produced after July 1, 1993, by nongovernmental
subrecipients with JTPA funds shall be governed by the definitions and
property management standards of OMB Circular A-110, as codified by
administrative regulations of the Department of Labor in 29 CFR Part
95, except that prior approval by the Department of Labor to acquire
property is waived.
(c) Special provisions for property acquired under subgrants to
commercial organizations.--(1) Scope. This paragraph (c) applies to
real and personal property other than supplies that are acquired or
produced after July 1, 1993, under a JTPA subgrant to a commercial
organization.
(2) Property acquired by commercial subrecipients. Title to
property acquired or produced by a subrecipient that is a commercial
organization shall vest in the awarding agency, provided such agency is
a governmental entity or nongovernmental organization that is not a
commercial organization. Property so acquired or produced shall be
considered to be acquired or produced by the awarding agency and
paragraph (a) or (b) of this section, as appropriate, shall apply to
that property. If the awarding agency is also a commercial
organization, title shall vest in the higher level, non-commercial
awarding agency that made the subaward to the commercial subrecipient.
(3) Approval for acquisition. A subrecipient that is a commercial
organization shall not acquire property subject to this section without
the prior approval of the awarding agency.
(d) Notification to the Secretary of real property acquisitions.
Recipients shall notify the Secretary immediately upon acquisition of
real property with JTPA funds, including acquisitions by subrecipients.
Such notification shall include the location of the real property and
the Federal share percentage.
(e) Property procured before July 1, 1993. (1) Personal or real
property procured with JTPA funds or transferred from programs under
the Comprehensive Employment and Training Act must be used for purposes
authorized by the Act. Subject to the Secretary's rights to such
property, the Governor shall maintain accountability for property in
accordance with State procedures and the records retention requirements
of Sec. 627.460 of this part.
(2) The JTPA program must be reimbursed the fair market value of
any unneeded property retained by the Governor for use in a non-JTPA
program. The proceeds from the sale of any property or transfer of
property to a non-JTPA program must be used for purposes authorized
under the Act.
Sec. 627.470 Performance standards.
(a) General. The Secretary shall prescribe performance standards
for adult programs under title II-A, for youth programs under title II-
C, for dislocated worker programs under title III, and for older worker
programs under section 204(d) of the Act. Any performance standards
developed for employment competencies shall be based on such factors as
entry level skills and other hiring requirements.
(b) Pursuant to instructions and time lines issued by the
Secretary, the Governor shall:
(1) Collect the data necessary to set performance standards
pursuant to section 106 of the Act; and
(2) Maintain records and submit reports required by sections
106(j)(3), 165(a)(3), (c)(1), and (d) and 121(b)(6) of the Act.
(c) Title II performance standards. (1) The Governor shall
establish SDA performance standards for title II within the parameters
set by the Secretary pursuant to sections 106(b) and (d) of the Act and
apply the standards in accordance with section 202(c)(1)(B) of the Act.
(2) The Governor shall establish incentive award policies pursuant
to section 106(b)(7) of the Act, except for programs operated under
section 204(d) of the Act. Pursuant to section 106(b)(8) of the Act,
Governors may not consider standards relating gross program
expenditures to performance measures in making such incentive awards.
(3) The Governor shall provide technical assistance to SDA's
failing to meet performance standards established by the Secretary for
a given program year (section 106(j)(2)).
(4)(i) If an SDA fails to meet a prescribed number of the
Secretary's performance standards for 2 consecutive years, the Governor
shall notify the Secretary and the service delivery area of the
continued failure and impose a reorganization plan (section 106(j)(4)).
(ii) The number of standards deemed to constitute failure shall be
specified by the Secretary biennially and shall be based on an
appropriate proportion of the total number established by the Secretary
for that performance cycle. In determining failure, the specified
proportion shall be applied separately to each year of the two year
cycle.
(iii) A reorganization plan shall not be imposed for a failure to
meet performance standards other than those established by the
Secretary.
(iv) A reorganization plan shall be considered to be imposed when,
at a minimum:
(A) The problem or deficiency is identified,
(B) The problem is communicated to the SDA, and
(C) The SDA is provided an initial statement of the actions or
steps required and the timeframe within which they are to be initiated.
A final statement of required steps and actions is to be issued within
30 days.
(d)(1) If the Governor does not impose a reorganization plan,
required by paragraph (c)(4) of this section, within 90 days of
notifying the Grant Officer of an SDA's continued failure to meet
performance standards, the Grant Officer shall develop and impose such
a plan (section 106(j)(5)).
(2) Before imposing a reorganization plan, the Grant Officer shall
notify the Governor and SDA in writing of the intent to impose the plan
and provide both parties the opportunity to submit comments within 30
days of receipt of the Grant Officer's notice.
(e) An SDA subject to a reorganization plan under paragraphs (c)(4)
or (d) of this section may, within 30 days of receiving notice of such
action, appeal to the Secretary to revise or rescind the reorganization
plan under the procedures set forth at Sec. 627.471 of this subpart,
Reorganization plan appeals (section 106(j)(6)(A)).
(f) Secretarial action to recapture or withhold funds. (1) The
Grant Officer shall recapture or withhold an amount not to exceed one-
fifth of the State administration set-aside allocated under sections
202(c)(1)(A) and 262(c)(1)(A) of the Act when:
(i) The Governor has failed to impose a reorganization plan under
paragraph (c)(4) of this section, for the purposes of providing
technical assistance under a reorganization plan imposed by the
Secretary (section 106(j)(5)(B)); or
(ii) The Secretary determines in an appeal provided for at
paragraph (e) of this section, and set forth at Sec. 627.471 of this
subpart, that the Governor has not provided appropriate technical
assistance as required at section 106(j)(2) (section 106(j)(6)(B)).
(2)(i) A Governor of a State that is subject to recapture or
withholding under paragraph (f)(1) of this section may, within 30 days
of receipt of such notice, appeal such recapture or withholding to the
Secretary.
(ii) The Secretary may consider any comments submitted by the
Governor and shall make a decision within 45 days after the appeal is
received.
(g) Title III performance standards. (1) The Governor shall
establish SSG performance standards for programs under title III within
the parameters set annually by the Secretary pursuant to section 106(c)
and (d) of the Act.
(2) Any performance standard for programs under title III shall
make appropriate allowances for the difference in cost resulting from
serving workers receiving needs-related payments authorized under
Sec. 631.20 of this chapter (section 106(c)(2)).
(3) The Secretary annually shall certify compliance, if the program
is in compliance, with the title III performance standards established
pursuant to paragraph (a) of section 322(a)(4) of the Act.
(4) The Governor shall not establish standards for the operation of
programs under title III that are inconsistent with the performance
standards established by the Secretary under provisions of section
106(c) of the Act (section 311(b)(8)).
(5) When an SSG fails to meet performance standards for 2
consecutive years, the Governor may institute procedures pursuant to
the Governor's by-pass authority in accordance with Sec. 631.38(b) of
this chapter or require redesignation of the substate grantee in
accordance with Sec. 631.35 of this chapter, as appropriate.
Sec. 627.471 Reorganization plan appeals.
(a) A reorganization plan imposed by the Governor, as provided for
at Secs. 627.470(c)(4) or 627.477(b)(2) of this part, or by the
Secretary, as provided for at Sec. 627.470(d) of this part, may be
appealed directly to the Secretary without prior exhaustion of local
remedies.
(b)(1) Appeals shall be submitted to the Secretary, U.S. Department
of Labor, Washington, DC 20210, ATTENTION: ASET. A copy of the appeal
shall be provided simultaneously to the Governor.
(2) The Secretary shall not accept an appeal dated later than 30
days after receipt of written notification from the Governor or the
Secretary.
(3) The appealing party shall explain why it believes the decision
to impose the reorganization plan is contrary to the provisions of
section 106 of the Act.
(4) The Secretary shall accept the appeal and make a decision only
with regard to determining whether or not the decision to impose the
reorganization plan is inconsistent with section 106 of the Act. The
Secretary may consider any comments submitted by the Governor or the
SDA, as appropriate. The Secretary shall make a final decision within
60 days after this appeal is received (section 106(j)).
Sec. 627.475 Oversight and monitoring.
(a) The Secretary may monitor all recipients and subrecipients of
financial assistance pursuant to section 163 of the Act.
(b) The Governor is responsible for oversight of all SDA and SSG
activities and State-supported programs. The Governor shall develop and
make available for review a State monitoring plan. The plan shall
specify the mechanism which:
(1) Ensures that established policies to achieve program quality
and outcomes meet the objectives of the Act and regulations promulgated
thereunder;
(2) Enables the Governor to determine if SDA's and SSG's have
demonstrated substantial compliance with the requirements for
oversight;
(3) Determines whether the Job Training Plan shall be disapproved
consistent with the criteria contained in section 105(b)(1) of the Act;
(4) Regularly examines expenditures against the cost categories and
cost limitations specified in the Act and these regulations;
(5) Ensures that all areas of SDA and SSG operations are monitored
onsite regularly, but not less than once annually; and
(6) Provides for corrective action to be imposed if conditions in
paragraphs (b)(1)-(4) of this section are not met.
(c) The Governor shall issue instructions to SDA's and title III
SSG's on the development of a substate monitoring plan. The
instructions for development of the monitoring plan, at a minimum,
shall address the monitoring scope and frequency, and the Secretary's
emphasis and direction. The substate monitoring plan shall be part of
the job training plan.
(d) The Governor shall establish general standards for PIC
oversight responsibilities. The required PIC standards shall be
included in the Governor's Coordination and Special Services Plan
(GCSSP).
(e)(1) The PIC, pursuant to standards established by the Governor,
shall establish specific policies for monitoring and oversight of SDA
performance which shall be described in the job training plan.
(2) The PIC shall exercise independent oversight over activities
under the job training plan which shall not be circumscribed by
agreements with the appropriate chief elected official(s) of the SDA.
(f) The PIC and chief elected official(s) may conduct such
oversight as they, individually or jointly, deem necessary or delegate
oversight responsibilities to an appropriate entity pursuant to their
mutual agreement.
Sec. 627.477 Governor's determination of substantial violation.
(a) Except as provided at paragraph (d) of this section, if, as a
result of financial and compliance audits or otherwise, the Governor
determines that there is a substantial violation of a specific
provision of this Act or the regulations under this Act, and corrective
action has not been taken, the Governor shall
(1) Issue a notice of intent to revoke approval of all or part of
the plan affected; or
(2) Impose a reorganization plan, which may include
(i) Restructuring the private industry council involved;
(ii) Prohibiting the use of designated service providers;
(iii) Selecting an alternative entity to administer the program for
the service delivery area involved;
(iv) Merging the service delivery area into 1 or more other
existing service delivery areas; or
(v) Other such changes as the Secretary or Governor determines
necessary to secure compliance (section 164(b)(1)).
(b)(1) The actions taken by the Governor pursuant to paragraph
(a)(1) of this section may be appealed to the Secretary as provided at
Sec. 628.426 of this chapter (section 164(b)(2)(A)).
(2) The actions taken by the Governor pursuant to paragraph (a)(2)
of this section may be appealed to the Secretary, as provided at
Sec. 627.471 of this part (section 164(b)(2)(B)).
(c) Allegations that the Governor failed to promptly take the
actions required under paragraph (a) of this section shall be handled
under Sec. 627.607 of this part (section 164(b)(3)).
(d) This section does not apply to remedial actions for SDA
failures to meet performance standards, which are provided for at
Sec. 627.470 of this part, and do not apply to remedial actions for the
failure to comply with procurement standards, which are provided for at
Sec. 627.703 of this part.
Sec. 627.480 Audits.
(a) Non-Federal Audits.--(1) Governments. Each recipient and
governmental subrecipient is responsible for complying with the Single
Audit Act of 1984 (31 U.S.C. 7501-7) and 29 CFR part 96, the Department
of Labor regulations which implement Office of Management and Budget
(OMB) Circular A-128, ``Audits of State and Local Governments''.
(2) Non-governmental organizations. Each non-governmental recipient
or subrecipient shall comply with OMB Circular A-133, ``Audits of
Institutions of Higher Education and Other Nonprofit Institutions'', as
implemented by the Department of Labor regulations at 29 CFR part 96.
The provisions of this paragraph (a)(2) do not apply to any non-
governmental organization that is:
(i) A commercial organization; or
(ii) A hospital or an institution of higher education for which
State or local governments choose to apply OMB Circular A-128.
(3) Commercial organizations. A commercial organization which is a
recipient or subrecipient and which receives $25,000 or more a year in
Federal financial assistance to operate a JTPA program shall have an
audit that:
(i) Is usually performed annually, but not less frequently than
every two years;
(ii) Is completed within one year after the end of the period
covered by the audit and submitted to the awarding agency within one
month after completion;
(iii) Is either:
(A) An independent financial and compliance audit of Federal funds
that includes coverage of the JTPA program within its scope, and is
conducted and prepared in accordance with generally accepted government
auditing standards; or
(B) An organization-wide audit that includes financial and
compliance coverage of the JTPA program within its scope.
(b) Federal audits. The notice of audits conducted or arranged by
the Office of Inspector General or the Comptroller General shall be
provided in advance, as required by section 165(b) of the Act.
(c) Audit reports. (1) Audit reports of recipient-level entities
and other organizations which receive JTPA funds directly from the U.S.
Department of Labor shall be submitted to the Office of Inspector
General.
(2) Audit reports of organizations other than those described in
paragraph (c)(1) of this section shall be submitted to the entity which
provided the JTPA funds.
(d) Each entity that receives JTPA program funds and awards a
portion of those funds to one or more subrecipients shall:
(1) Ensure that each subrecipient complies with the applicable
audit requirements;
(2) Resolve all audit findings that impact the JTPA program with
its subrecipient and ensure that corrective action for all such
findings is instituted within 6 months after receipt of the audit
report (where appropriate, corrective action shall include debt
collection action for all disallowed costs); and
(3) Maintain an audit resolution file documenting the disposition
of reported questioned costs and corrective actions taken for all
findings. The ETA Grant Officer may request that an audit resolution
report, as specified in paragraph (e)(2) of this section, be submitted
for such audits or may have the audit resolution reviewed through the
compliance review process.
(e)(1) Audits of recipient-level entities and other organizations
which receive JTPA funds directly from DOL and all audits conducted by
or under contract for the Office of Inspector General shall be issued
by the OIG to the Employment and Training Administration after
acceptance by OIG.
(2) After receipt of the audit report, the ETA Grant Officer shall
request that the State submit an audit resolution report documenting
the disposition of the reported questioned costs, i.e., whether allowed
or disallowed, the basis for allowing questioned costs, the method of
repayment planned or required, and corrective actions, including debt
collection efforts, taken or planned.
(f) If the recipient intends to propose the use of ``stand-in''
costs as substitutes for otherwise unallowable costs, the proposal
shall be included with the audit resolution report. To be considered,
the proposed ``stand-in'' costs shall have been reported as uncharged
JTPA program costs, included within the scope of the audit, and
accounted for in the auditee's financial system, as required by
Sec. 627.425 of this part, Standards for financial management and
participant data systems. To be accepted, stand-in costs shall be from
the same title, and program year as the costs which they are proposed
to replace, and shall not result in a violation of the applicable cost
limitations.
(g) After receiving the audit resolution report, the ETA Grant
Officer shall review the report, the recipient's disposition, and any
liability waiver request submitted in accordance with Sec. 627.704 of
this part. If the Grant Officer agrees with all aspects of the
recipient's disposition of the audit, the Grant Officer shall so notify
the recipient. If the Grant Officer disagrees with the recipient's
conclusion on specific points in the audit, the Grant Officer shall
resolve the audit through the initial and final determination process
described in Sec. 627.606 of this part.
Sec. 627.481 Audit resolution.
(a) Federal audit resolution. When the OIG issues an audit report
to the Employment and Training Administration for resolution, the ETA
Grant Officer shall provide a copy of the report to the recipient (if
it does not already have the report), along with a request that the
recipient submit its audit resolution report as specified in
Sec. 627.480(e)(2) of this part, unless the Grant Officer chooses to
proceed directly against the recipient pursuant to Sec. 627.601 of this
part.
(1) For audits of recipient-level entities and other organizations
which receive JTPA funds directly from DOL, the Grant Officer shall
request that the audit resolution report be submitted within 60 days
from the date that the audit report is issued by the OIG.
(2) For audits of subrecipient organizations, the Grant Officer
shall provide the recipient with a 180-day period within which to
resolve the audit with its subrecipient(s), and shall request that the
audit resolution report be submitted at the end of that 180-day period.
(b) After receiving the audit resolution report, the ETA Grant
Officer shall review the report, the recipient's disposition, any
liability waiver request, and any proposed ``stand-in'' costs. If the
Grant Officer agrees with all aspects of the recipient's disposition of
the audit, the Grant Officer shall so notify the recipient,
constituting final agency action on the audit. If the Grant Officer
disagrees with the recipient's conclusion on specific points in the
audit, or if the recipient fails to submit its audit resolution report,
the Grant Officer shall resolve the audit through the initial and final
determination process described in Sec. 627.606 of this part. Normally,
the Grant Officer's notification of agreement (a concurrence letter) or
disagreement (an initial determination) with the recipient's audit
resolution report will be provided within 180 days of the Grant
Officer's receipt of the report.
(c) Non-Federal audit resolution. (1) To ensure timely and
appropriate resolution for audits of all subrecipients, including SDA
grant recipients and title III SSG's, and to ensure recipient-wide
consistency, the Governor shall prescribe standards for audit
resolution and debt collection policies and procedures that shall be
included in each job training plan in accordance with section
104(b)(12) of the Act.
(2) The Governor shall prescribe an appeals procedure for audit
resolution disputes which, at a minimum, provides for:
(i) The period of time, not less than 15 days nor more than 30
days, after the issuance of the final determination in which an appeal
may be filed;
(ii) The rules of procedure;
(iii) Timely submission of evidence;
(iv) The timing of decisions; and
(v) Further appeal rights, if any.
Sec. 627.485 Closeout.
(a) General. The Grant Officer shall close out each annual JTPA
grant agreement within a timely period after the funding period covered
by the award has expired.
(b) Revisions to the reported expenditures for a program year of
funds may be made until 90 days after the time limitation for
expenditure of JTPA funds, as set forth in section 161(b) of the Act,
has expired. The Grant Officer may extend this deadline if the
recipient submits a written request with justification. After that
time, the Grant Officer shall consider all reports received as final
and no additional revisions may be made.
(c) When closing out a JTPA grant, the Grant Officer shall notify
the recipient, by certified mail, that, since the time limitation for
expenditure of funds covered by the grant award has expired, it is the
Department of Labor's intent to close the annual grant as follows:
(1) Cost adjustment. Based on receipt of reports in paragraph (b)
of this section, the Grant Officer shall make upward or downward
adjustments to the allowable costs; and
(2) Cash adjustment. DOL shall make prompt payment to the recipient
for allowable reimbursable costs; the recipient shall promptly refund
to DOL any balance of cash advanced that is in excess of allowable
costs for the grant award being closed.
(d) The recipient shall have an additional 60 days after the date
of the notice described in paragraph (c) of this section in which to
provide the Grant Officer with information as to the reason(s) why
closeout should not occur.
(e) At the end of the 60-day period described in paragraph (d) of
this section, the Grant Officer shall notify the recipient that
closeout has occurred, unless information provided by the recipient,
pursuant to paragraph (d) of this section, indicates otherwise.
Sec. 627.490 Later disallowances and adjustments after closeout.
The closeout of a grant does not affect:
(a) The Grant Officer's right to disallow costs and recover funds
on the basis of a later audit or other review;
(b) The recipient's obligation to return any funds due as a result
of later refunds, corrections, subrecipient audit disallowances, or
other transactions;
(c) Records retention requirements in Sec. 627.460 of this part,
Requirements for records, and Sec. 627.463 of this part, Public access
to records;
(d) Property management requirements in Sec. 627.465 of this part,
Property management standards; and
(e) Audit and audit resolution requirements in Sec. 627.480 of this
part, Audits and Sec. 627.481 of this part, Audit resolution.
Sec. 627.495 Collection of amounts due.
(a) Any funds paid to a recipient in excess of the amount to which
the recipient is finally determined to be entitled under the terms of
the grant constitute a debt to the Federal Government. If not paid
within a reasonable period after demand, the Secretary may take any
actions permitted by law to recover the funds.
(b) The Secretary shall charge interest on an overdue debt in
accordance with the Federal Claims Collection Standards (4 CFR ch. II).
Subpart E--Grievances Procedures at the State and Local Level
Sec. 627.500 Scope and purpose.
(a) General. This subpart establishes the procedures which apply to
the handling of noncriminal complaints under the Act at the Governor,
the SDA, and the SSG levels. Nothing contained in this subpart shall be
deemed to prejudice the separate exercise of other legal rights in
pursuit of remedies and sanctions available outside the Act.
(b) Handling of discrimination complaints. Complaints of
discrimination pursuant to section 167(a) of the Act shall be handled
under 29 CFR part 34.
(c) Complaints and reports of criminal fraud, waste, and abuse.
Information and complaints involving criminal fraud, waste, abuse or
other criminal activity shall be reported through the Department's
Incident Reporting System, directly and immediately to the DOL Office
of Inspector General, Office of Investigations, 200 Constitution Avenue
NW., Room S5514, Washington, DC 20210, or to the corresponding Regional
Inspector General for Investigations, with a copy simultaneously
provided to the Employment and Training Administration. The Hotline
number is 1-800-347-3756. Other complaints of a noncriminal nature will
continue to be handled under the procedures set forth in this part,
subparts E and F, and through the Department's Incident Reporting
System.
(d) Non-JTPA remedies. Whenever any person, organization, or agency
believes that a recipient, an SDA, an SSG, or other subrecipient has
engaged in conduct that violates the Act and that such conduct also
violates a Federal statute other than JTPA, or a State or local law,
that person, organization, or agency may, with respect to the non-JTPA
cause of action, institute a civil action or pursue other remedies
authorized under such other Federal, State, or local law against the
recipient, the SDA, the SSG, or other subrecipient, without first
exhausting the remedies in this subpart. Nothing in the Act or this
chapter shall:
(1) Allow any person or organization to file a suit which alleges a
violation of JTPA or regulations promulgated thereunder without first
exhausting the administrative remedies described in this subpart; or
(2) Be construed to create a private right of action with respect
to alleged violations of JTPA or the regulations promulgated
thereunder.
Sec. 627.501 State grievance and hearing procedures for noncriminal
complaints at the recipient level.
(a)(1) Each recipient shall maintain a recipient-level grievance
procedure and shall ensure the establishment of procedures at the SDA
level and the SSG level for resolving any complaint alleging a
violation of the Act, regulations promulgated thereunder, grants, or
other agreements under the Act. The procedures shall include procedures
for handling complaints and grievances arising in connection with JTPA
programs operated by each SDA, SSG, and subrecipient under the Act
(section 144(a)).
(2) The procedures described in paragraph (a)(1) of this section
shall also provide for resolution of complaints arising from actions
taken by the recipient with respect to investigations or monitoring
reports.
(b) The recipient's grievance hearing procedure shall require
written notice to interested parties of the date, time, and place of
the hearing; an opportunity to present evidence; and a written
decision. For matters under paragraph (a)(2) of this section, the
notice of hearing shall indicate the nature of the violation(s) which
the hearing covers.
Sec. 627.502 Grievance and hearing procedures for noncriminal
complaints at the SDA and SSG levels.
(a) Each SDA and SSG, pursuant to guidelines established by the
recipient, shall establish procedures for resolving complaints and
grievances arising in connection with JTPA programs operated by the
SDA, the SSG, and other subrecipients under the Act. The procedures
also shall provide for resolution of complaints arising from actions
taken by the SDA or the SSG with respect to investigations or
monitoring reports of their subgrantees, contractors, and other
subrecipients (section 144(a)).
(b) Each SDA and SSG grievance hearing procedure shall include
written notice of the date, time, and place of the hearing; an
opportunity to present evidence; a written decision; and a notice of
appeal rights.
(c) The SDA and SSG procedures shall provide for a decision within
60 days of the filing of the complaint.
Sec. 627.503 Recipient-level review.
(a) If a complainant does not receive a decision at the SDA or the
SSG level within 60 days of filing the complaint or receives a decision
unsatisfactory to the complainant, the complainant shall have the right
to request a review of the complaint by the recipient. The recipient
shall issue a decision within 30 days of receipt of the complaint.
(b) The recipient shall also provide for an independent review, by
a reviewer who is independent of the JTPA program, of a complaint
initially filed at the recipient level on which a decision was not
issued within 60 days of receipt of a complaint or on which the
complainant has received an adverse decision. A decision shall be made
within 30 days of receipt by the recipient.
(c) A request for review under the provisions of paragraphs (a) or
(b) of this section shall be filed within 10 days of receipt of the
adverse decision or, if no timely decision is rendered, within 15 days
from the date on which the complainant should have received a timely
decision.
(d) With the exception of complaints alleging violations of the
labor standards under section 143 of the Act, the recipient's decision
is final unless the Secretary exercises the authority for Federal-level
review in accordance with the provisions at Sec. 627.601 of this part,
Complaints and grievances at the Federal level. Complaints alleging
violations of section 143 of the Act shall be handled under the
procedures set forth at Sec. 627.603 of this part, special handling of
labor standards violations under section 143.
Sec. 627.504 Noncriminal grievance procedure at employer level.
(a) Recipients, SDA's, SSG's, and other subrecipients shall assure
that other employers, including private-for-profit employers of
participants under the Act, have a grievance procedure relating to the
terms and conditions of employment available to their participants
(section 144(b)).
(b)(1) Employers under paragraph (a) of this section may operate
their own grievance system or may utilize the grievance system
established by the recipient, the SDA, or the SSG under this subpart,
except as provided for in paragraph (b)(2) of this section. Employers
shall inform participants of the grievance procedures they are to
follow when the participant begins employment.
(2) If an employer is required to use a certain grievance procedure
under a covered collective bargaining agreement, then those procedures
should be followed for the handling of JTPA complaints under this
section.
(c) An employer grievance system shall provide for, upon request by
the complainant, a review of an employer's decision by the SDA, or the
SSG and the recipient if necessary, in accordance with Secs. 627.501
and 627.502 of this part.
Subpart F--Federal handling of noncriminal complaints and other
allegations.
Sec. 627.600 Scope and purpose.
(a) This subpart establishes the procedures which apply to the
filing, handling, and reviewing of complaints at the Federal level.
Nothing in the Act or this chapter shall be construed to allow any
person or organization to join or sue the Secretary with respect to the
Secretary's responsibilities under JTPA except after exhausting the
remedies in subpart E of this part and this subpart F.
(b) Complaints of discrimination pursuant to section 167(a) of the
Act shall be handled under 29 CFR part 34.
Sec. 627.601 Complaints and allegations at the Federal level.
(a) The types of complaints and allegations that may be received at
the Federal level for review include:
(1) Complaints for which the recipient has failed to issue a timely
decision as required by Sec. 627.503 of this part;
(2) Alleged violations of the Act and/or the regulations
promulgated thereunder resulting from Federal, State, and/or SDA and
SSG monitoring and oversight reviews;
(3) Alleged violations of the labor standards provisions at section
143 of the Act;
(4) Alleged violations of the relocation provisions in section
141(c) of the Act; and
(5) Other allegations of violations of the Act or the regulations
promulgated thereunder.
(b) Upon receipt of a complaint or allegation alleging any of the
violations listed in paragraph (a) of this section, the Secretary may:
(1) Direct the recipient to handle a complaint through local
grievance procedures established under Sec. 627.502 of this part; or
(2) Investigate and determine whether the recipient or
subrecipient(s) are in compliance with the Act and regulations
promulgated thereunder (section 163(b) and (c)).
(3) Allegations of violations of sections 141(c) or 143 of the Act
and Sec. 627.503 of this part shall be handled under paragraph (b)(2)
of this section.
Sec. 627.602 Resolution of investigative findings.
(a)(1) As a result of an investigation or monitoring by the
Department, or of the actions specified in paragraph (b)(2) of
Sec. 627.601 of this part, the Grant Officer shall notify the recipient
of the findings of the investigation and shall give the recipient a
period of time, not to exceed 60 days, depending on the nature of the
findings, to comment and to take appropriate corrective actions.
(2) The Grant Officer shall review the complete file of the
investigation and the recipient's actions. The Grant Officer's review
shall take into account the sanction provisions of subpart G of this
part. If the Grant Officer agrees with the recipient's handling of the
situation, the Grant Officer shall so notify the recipient. This
notification shall constitute final agency action.
(3) If the Grant Officer disagrees with the recipient's handling of
the matter, the Grant Officer shall proceed pursuant to Sec. 627.606 of
this part, Grant officer resolution.
Sec. 627.603 Special handling of labor standards violations under
Section 143 of the Act.
(a) A complaint alleging JTPA section 143 violations may be
submitted to the Secretary by either party to the complaint when:
(1) The complainant has exhausted the grievance procedures set
forth at subpart E of this part, or
(2) The 60-day time period specified for reaching a decision under
a procedure set forth at subpart E of this part has elapsed without a
decision (section 144(a) and (d)(1)).
(b)(1) The Secretary shall investigate the allegations contained in
a complaint alleging violations of JTPA section 143, make a
determination whether a violation has occurred, and issue a decision
within 120 days of receipt by the Secretary of the complaint (section
144(c) and (d)).
(2) If the results of the Secretary's investigation indicate that a
decision by a recipient under a procedure set forth at subpart E of
this part requires modification or reversal, or that the 60-day time
period for decision under section 144(a) has elapsed, the Secretary
shall modify, reverse, or issue such decision.
(3) If the Secretary modifies or reverses a decision made under a
procedure set forth at subpart E of this part, or issues a decision
where the 60-day time period has elapsed without a decision, the
Secretary shall offer an opportunity for a hearing, in accordance with
the procedures under section 166 of the Act and subpart H of this part
(sections 144(d)(2) and 166(a)).
(4) If the Secretary upholds a recipient's decision, the
determination is the final decision of the Secretary (section
144(d)(3)). This decision is not appealable to the Office of
Administrative Law Judges.
(c) Except as provided in paragraph (d) of this section, remedies
available under this section to a grievant for violations of section
143 of the Act shall be limited to:
(1) Suspension or termination of payments under the Act;
(2) Prohibition of placement of a participant, for an appropriate
period of time, in a program under the Act with an employer that has
violated section 143 of the Act, as determined under section 144(d) or
(e) of the Act; and/or
(3) Appropriate equitable relief (other than back pay) (section
144(f)(1)).
(d) Available remedies for violations of section 143(a)(4), (b)(1),
(b)(3), and (d) of the Act include the remedies listed in paragraph (c)
of this section, and may include the following:
(1) Reinstatement of the grievant to the position held prior to
displacement;
(2) Payment of lost wages and benefits; and/or
(3) Reestablishment of other relevant terms, conditions, and
privileges of employment.
(e) Nothing in this section shall be construed to prohibit a
grievant from pursuing a remedy authorized under another Federal,
State, or local law for a violation of section 143 of the Act (section
144(g)).
Sec. 627.604 Alternative procedure for handling labor standards
violations under section 143 of the Act--binding arbitration.
(a) A person alleging a violation of section 143 of the Act, as an
alternative to processing the grievance under a procedure described at
section 144 of the Act, may submit the grievance to a binding
arbitration procedure, if a collective bargaining agreement covering
the parties to the grievance so provides (section 144(e)(1)).
(b) A person electing to have her/his complaint on JTPA section 143
labor standard violations processed under binding arbitration
provisions--
(1) Shall choose binding arbitration before, and in lieu of,
initiating a complaint under other grievance procedures established
pursuant to section 144 of the Act, and
(2) May not elect binding arbitration for a complaint that
previously has been or is subject to any other grievance procedure
established under the Act.
(c) Binding arbitration decisions under the provisions of section
144(e) of the Act are not reviewable by the Secretary.
(d) The remedies available to a grievant under binding arbitration
are limited to those set forth at section 144(f)(1)(C) and (f)(2) of
the Act (section 144(e)(2)).
(e) Nothing in this section shall be construed to prohibit a
grievant from pursuing a remedy authorized under another Federal,
State, or local law for a violation of section 143 of the Act (section
144(g)).
Sec. 627.605 Special Federal review of SDA- and SSG-level complaints
without decision.
(a) Should the recipient fail to provide a decision as required in
Sec. 627.503 of this part, the complainant may then request from the
Secretary a determination whether reasonable cause exists to believe
that the Act or regulations promulgated thereunder have been violated.
(b) The Secretary shall act within 90 days of receipt of a request
made pursuant to paragraph (a) of this section. Where there is
reasonable cause to believe the Act or regulations promulgated
thereunder have been violated, the Secretary shall direct the recipient
to issue a decision adjudicating the dispute pursuant to recipient and
local procedures. The Secretary's action does not constitute final
agency action and is not appealable under the Act (sections 166(a) and
144(c)). If the recipient does not comply with the Secretary's order
within 60 days, the Secretary may impose a sanction upon the recipient
for failing to issue a decision.
(c) A request pursuant to paragraph (a) of this section shall be
filed no later than 15 days from the date on which the complainant
should have received a decision as required in Sec. 627.503 of this
part. The complaint shall contain the following:
(1) The full name, telephone number (if any), and address (if any)
of the person making the complaint;
(2) The full name and address of the respondent against whom the
complaint is made;
(3) A clear and concise statement of the facts, including pertinent
dates, constituting the alleged violation;
(4) The provisions of the Act, regulations promulgated thereunder,
grant, or other agreement under the Act believed to have been violated;
(5) A statement disclosing whether proceedings involving the
subject of the request have been commenced or concluded before any
Federal, State, or local authority, and, if so, the date of such
commencement or conclusion, the name and address of the authority, and
the style of the case; and
(6) A statement of the date the complaint was filed with the
recipient, the date on which the recipient should have issued decision,
and an attestation that no decision was issued.
(d)(1) A request pursuant to paragraph (a) of this section will be
considered to have been filed when the Secretary receives from the
complainant a written statement sufficiently precise to evaluate the
complaint and the grievance procedure used by the recipient, the SDA,
or the SSG.
(2) When an imprecise request is received within the 15-day period
prescribed in paragraph (a) of this section, the Secretary may extend
the period for submission.
Sec. 627.606 Grant Officer resolution.
(a) When the Grant Officer is dissatisfied with the State's
disposition of an audit, as specified in Sec. 627.481 of this part, or
other resolution of violations (including those arising out of incident
reports or compliance reviews), with the recipient's response to
findings resulting from investigations pursuant to Sec. 627.503 of this
part, or if the recipient fails to comply with the Secretary's decision
pursuant to Sec. 627.605(b) of this part, the initial and final
determination process shall be used to resolve the matter.
(b) Initial determination. The Grant Officer shall make an initial
determination on the findings for both those matters where there is
agreement and those where there is disagreement with the recipient's
resolution, including the allowability of questioned costs or
activities. Such initial determination shall be based upon the
requirements of the Act, regulations promulgated thereunder, grants,
contracts, or other agreements under the Act.
(c) Informal resolution. The Grant Officer shall not revoke a
recipient's grant in whole or in part, nor institute corrective actions
or sanctions, without first providing the recipient with an opportunity
to present documentation or arguments to resolve informally those
matters in controversy contained in the initial determination. The
initial determination shall provide for an informal resolution period
which shall be at least 60 days from issuance of the initial
determination. If the matters are resolved informally, the Grant
Officer shall issue a final determination pursuant to paragraph (d) of
this section which notifies the parties in writing of the nature of the
resolution and may close the file.
(d) Grant Officer's final determination. (1) If the matter is not
fully resolved informally, the Grant Officer shall provide each party
with a written final determination by certified mail, return receipt
requested. For audits of recipient-level entities and other recipients
which receive JTPA funds directly from DOL, ordinarily the final
determination will be issued not later than 180 days from the date that
the OIG issues the final approved audit report to the Employment and
Training Administration. For audits of subrecipients conducted by the
OIG, ordinarily the final determination will be issued not later than
360 days from the date the OIG issues the final approved audit report
to ETA.
(2) A final determination under this paragraph (d) shall:
(i) Indicate that efforts to informally resolve matters contained
in the initial determination have been unsuccessful;
(ii) List those matters upon which the parties continue to
disagree;
(iii) List any modifications to the factual findings and
conclusions set forth in the initial determination;
(iv) Establish a debt, if appropriate;
(v) Require corrective action when needed;
(vi) Determine liability, method of restitution of funds and
sanctions; and
(vii) Offer an opportunity for a hearing in accordance with subpart
H of this part.
(3) Unless a hearing is requested, a final determination under this
paragraph (d) constitutes final agency action and is not subject to
further review.
(e) Nothing in this section shall preclude the Grant Officer from
issuing an initial determination and/or final determination directly to
a subrecipient, in accordance with section 164(e)(3) of the Act. In
such a case, the Grant Officer shall inform the recipient of such
action.
627.607 Grant Officer resolution of Governor's failure to promptly
take action.
(a) An allegation, whether arising from a complaint, from
monitoring or other information available to the Department, that a
Governor failed to promptly take remedial action of a substantial
violation of the Act or the regulations under this Act, as required by
Sec. 627.477 of this part, shall be promptly investigated by the
Department.
(b) The Grant Officer shall notify the Governor of the findings of
the investigation or monitoring and shall give the Governor a period of
time, not to exceed 30 days, to comment on the nature of the findings
and to take appropriate corrective actions.
(c) The Grant Officer shall review the complete file of the
investigation, monitoring, and the Governor's actions.
(d) If the Grant Officer determines that, (1) as a result financial
and compliance audits or otherwise, the Governor determined that there
was a substantial violation of a specific provision of the Act or the
regulations under this Act, and corrective action had not been taken
and, (2) the Grant Officer determines that the Governor has not taken
the actions required by Sec. 627.477(a), the Grant Officer shall take
such actions required by Sec. 627.477(a).
(e) The Grant Officer's determination, unless a hearing is
requested, constitutes final agency action and is not subject to
further review. (Section 164(b)(3)).
Subpart G--Sanctions for Violations of the Act.
Sec. 627.700 Purpose and scope.
This subpart describes the sanctions and appropriate corrective
actions that may be imposed by the Secretary for violations of the Act,
regulations promulgated thereunder, or grant terms and conditions
(sections 106(j)(5), 164 (b), (d), (e), (f), (g), and (h)).
Sec. 627.702 Sanctions and corrective actions.
(a) Except for actions under sections 106(j), 164 (b) and (f), and
167 of the Act and the funding restrictions specified at Sec. 627.423
of this part, Funding restrictions for ``high-risk'' recipients and
subrecipients, the Grant Officer shall utilize initial and final
determination procedures outlined in Sec. 627.606, Grant Officer
resolution, of this part to impose a sanction or corrective action.
(b) To impose a sanction or corrective action regarding a violation
of section 167 of the Act, the Department shall utilize the procedures
of 29 CFR part 34.
(c) To impose a sanction or corrective action for failure to meet
performance standards, where the recipient has not acted as required at
section 106(j)(4), the Grant Officer shall utilize the procedures set
forth at Sec. 627.470 (d) and (f).
(d) To impose a sanction or corrective action for noncompliance
with the procurement standards provisions set forth at Secs. 627.420
and 627.703 of this part, where the recipient has not acted, the Grant
Officer may utilize the procedures set forth at section 164(b) of the
Act.
(e) To impose a sanction or corrective action for the Governor's
failure to promptly take remedial action of a substantial violation as
required by Sec. 627.477 of this part, the Grant Officer shall utilize
the procedure set forth in Sec. 627.607 of this part.
(f) The recipient shall be held responsible for all funds under its
grant(s). The recipient shall hold subrecipients, including SDA's and
SSG's, responsible for JTPA funds received through the grant, and may
ultimately hold the units of local government which constitute the SDA
or the SSG responsible for such funds.
(g) Nothing in this section shall preclude the Grant Officer from
imposing a sanction directly against a subrecipient, as authorized in
section 164(e)(3) of the Act. In such a case, the Grant Officer shall
inform the recipient of such action.
Sec. 627.703 Failure to comply with procurement provisions.
(a) If, as part of the recipient's annual on-site monitoring of its
SDA's/SSG's, the recipient determines that an SDA/SSG is not in
compliance with the procurement requirements established in accordance
with the provisions at section 164(a)(3) of the Act and Sec. 627.420,
of this part, Procurement, and Sec. 627.422 of this part, Selection of
service providers, the recipient shall:
(1) Require corrective action to secure prompt compliance; and
(2) Impose the sanctions provided for under the provisions at
section 164(b) if the recipient finds that the SDA/SSG has failed to
take timely corrective action under paragraph (a)(1) of this section
(section 164(a) (4) and (5)).
(b) An action by the recipient to impose a sanction against either
an SDA or SSG, in accordance with this section, may be appealed to the
Secretary under the same terms and conditions as the disapproval of the
respective plan, or plan modification, as set forth at Sec. 628.426(e),
Review and approval (section 164(b)(2)).
(c) If, upon a determination under paragraph (a)(2) of this section
to impose a sanction under section 164(b) of the Act, the recipient
fails to promptly take the actions required under paragraph (a)(2) of
this section, the Secretary shall take such actions against the
recipient or the SDA/SSG as appropriate (section 164(b)(3)).
Sec. 627.704 Process for waiver of State liability.
(a) A recipient may request a waiver of liability as described in
section 164(e)(2) of the Act.
(b)(1) When the debt for which a waiver of liability is desired was
established in a non-Federal resolution, such requests shall be
accompanied by a resolution report.
(2) When the ETA Grant Officer is resolving the finding(s) for
which a waiver of liability is desired, such request shall be made no
later than the informal resolution period described in Sec. 627.606(c)
of this part.
(c) A waiver of the recipient's liability can only be considered by
the Grant Officer when the misexpenditure of JTPA funds:
(1) Occurred at a subrecipient level;
(2) Was not a violation of section 164(e)(1) of the Act, or did not
constitute fraud; or
(3) If fraud did exist, it was perpetrated against the recipient/
subrecipient; and:
(i) The recipient/subrecipient discovered, investigated, reported,
and prosecuted the perpetrator of said fraud; and
(ii) After aggressive debt collection action, it can be documented
that there is no likelihood of collection from the perpetrator of the
fraud.
(4) The recipient has issued a final determination which disallows
the misexpenditure, the recipient's appeal process has been exhausted,
and a debt has been established; and
(5) The recipient requests such a waiver and provides documentation
to demonstrate that it has substantially complied with the requirements
of section 164(e)(2)(A), (B), (C), and (D) of the Act.
(d) The recipient shall not be released from liability for misspent
funds under the determination required by section 164(e) of the Act
unless the Grant Officer determines that further collection action,
either by the recipient or subrecipient, would be inappropriate or
would prove futile.
Sec. 627.706 Process for advance approval of a recipient's
contemplated corrective actions.
(a) The recipient may request advance approval from the Grant
Officer for contemplated corrective actions, including debt collection
actions, which the recipient plans to initiate or to forego. The
recipient's request shall include a description and an assessment of
all actions taken by the subrecipient to collect the misspent funds.
(b) Based on the recipient's request, the Grant Officer may
determine that the recipient may forego certain collection actions
against a subrecipient where:
(1) The subrecipient was not at fault with respect to the liability
criteria set forth in section 164(e)(2)(A), (B), (C), and (D) of the
Act;
(2) The misexpenditure of funds:
(i) Was not made by that subrecipient but by an entity that
received JTPA funds from that subrecipient;
(ii) Was not a violation of section 164(e)(1) of the Act, or did
not constitute fraud; or
(iii) If fraud did exist, it was perpetrated against the
subrecipient, and:
(A) The subrecipient discovered, investigated, reported, and
prosecuted the perpetrator of said fraud; and
(B) After aggressive debt collection action, it can be documented
that there is no likelihood of collection from the perpetrator of the
fraud.
(3) A final determination which disallows the misexpenditure and
establishes a debt has been issued at the appropriate level;
(4) Final action within the recipient's appeal system has been
completed; and
(5) Further debt collection action by that subrecipient or the
recipient would be either inappropriate or futile.
Sec. 627.708 Offset process.
(a) In accordance with section 164(d) of the Act, the primary
sanction for misexpenditure of JTPA funds is repayment.
(b) A recipient may request that a debt, or a portion thereof, be
offset against amounts allotted to the recipient, and retained at the
recipient level for administrative costs, under the current or a future
JTPA entitlement.
(1) For title II grants, any offset shall be applied against the
recipient level 5 percent administrative cost set-aside only and may
not be distributed by the recipient among its subrecipients.
(2) For title III grants, any such offset must be applied against
that portion of funds reserved by the recipient for recipient level
administration only and may not be distributed by the recipient among
its subrecipients.
(c) The Grant Officer may approve an offset request, under section
164(d) of the Act, if the misexpenditures were not in violation of
section 164(e)(1) of the Act.
(d) If offset is granted, the debt shall not be fully satisfied
until the Grant Officer reduces amounts allotted to the State by the
amount of the misexpenditure.
(e) The recipient shall not have the authority to reduce
allocations to an SDA or SSG for misexpenditure of JTPA funds under
section 164(d) of the Act.
Subpart H--Hearings by the Office of Administrative Law Judges
Sec. 627.800 Scope and Purpose.
(a) The jurisdiction of the Office of the Administrative Law Judges
(OALJ) extends only to those complainants identified in sections
141(c), 144(d), 164(f), and 166(a) of the Act.
(b) Actions arising under section 167 of the Act shall be handled
under 29 CFR part 34.
(c) All other disputes arising under the Act shall be adjudicated
under the appropriate recipient or subrecipient grievance procedures or
other applicable law.
Sec. 627.801 Procedures for filing request for hearing.
(a) Within 21 days of receipt of a final determination imposing a
sanction or corrective action or denying financial assistance, the
applicant, the recipient, the SDA, the SSG, or other subrecipient, or a
vendor against which the Grant Officer has imposed a sanction or
corrective action may appeal the Grant Officer's determination to the
OALJ. A request for a hearing shall be transmitted by certified mail,
return receipt requested, to the Chief Administrative Law Judge, U.S.
Department of Labor, 800 K Street, NW., Suite 400, Washington, DC
20001, with one copy to the departmental official who issued the
determination.
(b) The 21-day filing requirement in paragraph (a) of this section
is jurisdictional. Failure to timely request a hearing acts as a waiver
of the right to hearing.
(c) A request for a hearing under this section shall state
specifically those issues of the final determination upon which review
is requested. Those provisions of the final determination not specified
for review, or the entire final determination when no hearing has been
requested within the 21 days, shall be considered resolved and not
subject to further review. Only alleged violations of the Act,
regulations promulgated thereunder, grant or other agreement under the
Act fairly raised in the determination and the request for hearing are
subject to review.
(d) The procedures set forth in this subpart apply in the case of a
complainant who has not had a dispute adjudicated under the alternative
dispute resolution process set forth in Sec. 627.805 of this part
within 60 days, except that the request for hearing before the OALJ
must be filed within 15 days of the conclusion of the 60-day period. In
addition to including the final determination upon which review is
requested, the complainant shall include a copy of any Stipulation of
Facts and a brief summary of proceedings.
Sec. 627.802 Rules of procedure.
(a) The rules of practice and procedure promulgated by the OALJ, at
subpart A of 29 CFR part 18, shall govern the conduct of hearings under
this section, except that a request for hearing under this section
shall not be considered a complaint to which the filing of an answer by
DOL or a DOL agency or official is required. Technical rules of
evidence shall not apply to hearings conducted pursuant to this part;
however, rules or principles designed to assure production of the most
credible evidence available and to subject testimony to cross-
examination shall apply.
(b) Prehearing procedures. In all cases, the ALJ should encourage
the use of prehearing procedures to simplify and to clarify facts and
issues.
(c) Subpoenas. Subpoenas necessary to secure the attendance of
witnesses and the production of documents or things at hearings shall
be obtained from the ALJ and shall be issued pursuant to the authority
contained in section 163(b) of the Act, incorporating 15 U.S.C. 49.
(d) Timely submission of evidence. The ALJ shall not permit the
introduction at the hearing of any documentation if such documentation
has not been made available for review by the other parties to the
proceeding either at the time ordered for any prehearing conference,
or, in the absence of such an order, at least 3 weeks prior to the
hearing date.
(e) Burden of production. The Grant Officer shall have the burden
of production to support her or his decision. To this end, the Grant
Officer shall prepare and file an administrative file in support of the
decision which shall be made part of the record. Thereafter, the party
or parties seeking to overturn the Grant Officer's decision shall have
the burden of persuasion.
Sec. 627.803 Relief.
In ordering relief, the ALJ shall have the full authority of the
Secretary under section 164 of the Act.
Sec. 627.804 Timing of decisions.
The ALJ should render a written decision not later than 90 days
after the closing of the record.
Sec. 627.805 Alternative dispute resolution.
(a) Parties to a complaint under Sec. 627.801 of this part,
Procedures for filing a request for hearing, may choose to waive their
rights to an administrative hearing before the OALJ by choosing to
transfer the settlement of their dispute to an individual acceptable to
all parties for the purpose of conducting an informal review of the
stipulated facts and rendering a decision in accordance with applicable
law. A written decision will be issued within 60 days after the matter
is submitted for informal review.
(b) The waiver of the right to request a hearing before the OALJ
may be revoked if a settlement has not been reached or a decision has
not been issued within the 60 days provided in paragraph (a) of this
section.
(c) The decision rendered under this informal review process shall
be treated as a final decision of an Administrative Law Judge pursuant
to section 166(b) of the Act.
Sec. 627.806 Other authority.
Nothing contained in this subpart shall be deemed to prejudice the
separate exercise of other legal rights in pursuit of remedies and
sanctions available outside the Act.
Subpart I--Transition Provisions
Sec. 627.900 Scope and purpose.
(a) Regulations set forth at parts 626, 627, 628, 629, 630, 631,
and 637 of 20 CFR chapter V (1993) were amended, effective December 29,
1992, and were published as an interim final rule to provide planning
guidance for States and SDA's on the changes made to the JTPA program
as a result of the 1992 JTPA amendments (See 57 FR 62004 (December 29,
1992)). The transition provisions of the regulations were amended on
June 3, 1992 (see 58 FR 31472, June 3, 1993). Those regulations and the
statutory amendments were effective for the program year beginning July
1, 1993 (PY 1993), and succeeding program years. For PY 1992, JTPA
programs and activities shall continue under the regulations set forth
at 20 CFR parts 626, 627, 628, 629, 630, 631, and 637 (1992).
(b) In order to provide for the orderly transition to and
implementation of the provisions of JTPA, as amended by the 1992
amendments, this subpart I applies to the use of JTPA title II and
title III funds allotted by formula to the States. Additional guidance
on transition matters may be provided in administrative issuances. The
provisions in this subpart are operational during the transition period
for implementing the 1992 JTPA amendments.
Sec. 627.901 Transition period.
The transition period ended June 30, 1993 unless otherwise stated.
The intent of the transition period is to complete, to the extent
possible, activity begun on or before June 30, 1993 under current
policy and regulations and to ensure that all requirements mandated by
the 1992 JTPA amendments have been implemented.
Sec. 627.902 Governor's actions.
The following are actions required to be taken prior to July 1,
1993:
(a) Review current policies, practices, procedures, and delivery
systems to ensure that they conform to the requirements of the
amendments;
(b) Modify the Governor's coordination and special services plan in
accordance with instructions issued by the Secretary;
(c) Ensure that SDAs modify job training plans as necessary;
(d) Execute a new Governor/Secretary agreement and a new grant
agreement;
(e) Issue procurement standards that comply with the Act and these
regulations, as described in Sec. 627.420 of this part, Procurement;
(f) Issue instructions necessary to implement program year 1993
cost categories pursuant to Sec. 627.440 of this part, Classification
of costs;
(g) Issue instructions necessary for SDAs to report program
expenditures by year of appropriation pursuant to Sec. 627.455 of this
part, Reports required;
(h) Certify private industry councils pursuant to Sec. 628.410 of
this chapter, Private Industry Council.
Sec. 627.903 Actions which are at the discretion of the Governor.
(a) Establish a State Human Resource Investment Council (HRIC);
(b) Issue instructions to ``grandparent'' participants in JTPA
programs as of June 30, 1993 for purposes of completing training;
(c) Issue instructions for use of PY 1992 and prior year 6 percent
performance standards incentive funds to further develop and implement
data collection and management information systems to track the program
experience of participants. PY 1993 and subsequent performance
standards incentive funds may not to be used for this purpose;
(d) Of the Title II and Title III unobligated balance of funds
available as of June 30, 1993, any amount may be reprogrammed into PY
1993 activity. The Department believes these amounts will be minimal
and not represent a significant proportion of the funds available. Such
reprogrammed funds will be subject to requirements contained in JTPA
regulations effective July 1, 1993.
Sec. 627.904 Transition and implementation.
(a) Review. The Governor shall conduct a comprehensive review of
the current policies, procedures, and delivery systems relating to
programs authorized under the Job Training Partnership Act for the
purpose of ensuring the effective implementation of the amendments.
Such a review shall include consideration of the appropriateness of
current SDA designations, the representation on current State and local
councils, the adequacy of current administrative systems, the
effectiveness of current outreach, service delivery, and coordination
activities, and other relevant matters.
(b) Governor's Coordination and Special Services Plan (GCSSP). The
GCSSP requires modification to assure conformance to the requirements
of the amendments. The plan was to be modified pursuant to instructions
issued by the Secretary and shall be submitted to the Secretary for
review by May 15, 1993.
(c) Job training plans. Service delivery area job training plans
will require modification to comply with Sec. 628.420 of this chapter,
Job training plan.
(d) Governor/Secretary agreement and grant agreement. A new
Governor/Secretary agreement is required to assure that the State shall
comply with JTPA, as amended, and the applicable rules and regulations;
the Wagner-Peyser Act, as amended, and the applicable rules and
regulations. A new grant agreement is needed to provide the basis for
Federal obligation of funds for programs authorized by Titles I, II,
and III, and such other funds as the Secretary may award under the
grant.
(e) Procurement standards. In order to ensure fiscal accountability
and prevent waste, fraud, and abuse in programs administered under
JTPA, as amended, the Governor shall prescribe and implement
procurement standards meeting the requirements of Sec. 627.420 of this
part, Procurement. All procurements initiated on or after July 1, 1993
shall be governed by and follow the requirements in Sec. 627.420 of
this part. Initiation of procurement means any sole source or small
purchase awarded on or after July 1, 1993 and any Invitation for Bid or
Request for Proposal issued on or after July 1, 1993.
(f) Participants. In order to have the least possible disruption to
program participants, during PY 1993, Governors and SDAs have the
flexibility to grandfather participants already enrolled in JTPA
programs up to and including June 30, 1993 under existing rules and
regulations. All participants in programs on June 30, 1993, will be
eligible for transfer to programs operated under the new provisions at
any time beginning on July 1, 1993. ``Hard to serve'' barriers to
participation, assessment and Individual Service Strategy provisions of
the amendments will not apply to participants enrolled prior to July 1,
1993 or to 1993 Title II-B participants.
(g) Cost categories. (1) Cost categories applicable to PY 1992 and
earlier funds will be subject to prior regulations either until the
funds have been exhausted or program activity has been completed. In
order to assist the orderly transition to and implementation of the new
requirements of the 1992 JTPA amendments, an increase is allowed in the
administrative cost limitation for PY 1992 funds from 15 percent to 20
percent, with a corresponding adjustment to cost limitations for
training and participant support. Specifically, not less than 80
percent of the title II-A funds shall be expended for training and
participant support, and not less than 65 percent shall be expended for
training.
(2) Any prior year's carryover funds made available for use in PY
1993 will be subject to the reporting requirements and cost categories
applicable to PY 1993 funds.
(3) In determining compliance with the JTPA cost limitations for PY
1992, Governors may either:
(i) Determine cost limitation compliance separately for funds
expended in accordance with paragraphs (g)(1) and (g)(2) of this
section; or
(ii) Determine compliance for each cost category against the total
PY 1992 funds, whether expended in accordance with the Act and
regulations in effect prior to the 1992 amendments to JTPA or in
accordance with the amended Act and these regulations. Using this
option, the total combined funds expended for training and direct
training should be at least 65 percent of PY 1992 SDA allocations.
(4) In addition to the institutions specified in
Sec. 627.440(d)(1)(vi)(B), the costs of tuition and entrance fees of a
postsecondary vocational institution specified at section 481(c) of the
Higher Education Act (20 U.S.C. 1088(c)) may be charged to direct
training services through June 30, 1995, when such tuition charges or
entrance fees are not more than the educational institution's catalog
price, are necessary to receive specific training, are charged to the
general public to receive such training, and are for the training of
participants.
(h) Financial reporting. Notwithstanding reprogramming,
expenditures must be recorded separately by year of appropriation.
(i) Private Industry Council. The private industry councils shall
be certified pursuant to Sec. 628.410 of this chapter, Private Industry
Council.
(j) Grievances, investigations, and hearings. Generally, all
grievances, investigations and hearings pending on or before June 30,
1993 should be resolved and settled under prior rules and procedures.
Grievances, investigations, and hearings occurring on or after July 1,
1993 will be governed by the procedures described in subparts E, F, and
H of this part 627.
(k) Summer program. (1) The Title II-B Summer Youth Employment
Program for 1993 shall be governed by the Act and regulations in effect
prior to the Amendments (prior to September 7, 1992).
(2) Up to 10 percent of the 1993 title II-B funds available may be
transferred to the title II-C program.
(l) SDA designation. At the Governor's discretion, SDA's designated
prior to July 1, 1992 need not be subject to the provisions of
Sec. 628.405, Service delivery areas.
(m) Program implementation. The implementation by the States and
SDA's of certain new program design requirements, particularly
objective assessment and development of individual service strategies
(ISS), may require additional time to fully implement beyond July 1,
1993. Reasonable efforts to implement the provisions of Secs. 628.515,
628.520, and 628.530. as soon as possible after July 1, 1993, are
expected to be made. However, it is not expected that every new
participant will initially receive objective assessment, ISS, and
referral to non-title II services for a period of 6 months, or until
January 1, 1994.
(n) Out-of-school youth ratio. The 50-percent out-of-school
participants requirement for title II-C will be phased in during PY
1993 and will not be the subject of compliance review until PY 1994,
beginning July 1, 1994. During PY 1993, however, SDA's must show
significant improvement in the proportion of out-of-school youth being
served and performance in increasing the service ratio will be
monitored by the States and DOL during this implementation period.
(o) Administrative issuances. Other implementation issues may be
handled by administrative issuance. ETA will transmit such guidance
directly to all Governors via a Training and Employment Guidance Letter
(TEGL). Such TEGL's will be published as Notices in the Federal
Register (section 701(i)).
Sec. 627.905 Guidance on contracts and other agreements.
The Department does not intend for contracts, agreements, inter-
agency agreements, retainers, and similar arrangements to be negotiated
and/or entered into for the sole purpose of applying previously
existing rules and regulations. The 1992 JTPA amendments were effective
July 1, 1993. The Department intends that contracts, awards and
agreements entered into on or before June 30, 1993 are to be used to
serve and/or train participants enrolled on or before June 30, 1993,
unless the contracts and agreements are modified to comply with the new
amendments and regulations.
Sec. 627.906 Determinations on State and SDA implementation.
(a) The Department expects that the States and SDA's will fully
implement the provisions of the Act and these regulations regarding
procurement, cost principles, cost categories, cost limitations,
participant service requirements and eligibility beginning July 1,
1993.
(b) The Department expects that the implementation by the States
and SDA's of the program design features in these regulations,
particularly objective assessment and development of the ISS, may
require additional time beyond July 1, 1993 to fully implement.
(c) In deciding to allow or disallow questioned costs related to
the implementation of the provisions described in paragraph (b) of this
section, the Grant Officer will consider the extent to which the
State's and SDA's have made good faith efforts in properly implementing
such provisions in the period July 1, 1993 through June 30, 1994.
2. Part 628 is revised to read as follows:
PART 628--PROGRAMS UNDER TITLE II OF THE JOB TRAINING PARTNERSHIP
ACT
Subpart A--Scope and Purpose
Sec.
628.100 Scope and purpose of part 628.
Subpart B--State Planning
628.200 Scope and purpose.
628.205 Governor's coordination and special services plan.
628.210 State Job Training Coordinating Council.
628.215 State Human Resource Investment Council.
Subpart C--State Programs
628.300 Scope and purpose.
628.305 State distribution of funds.
628.310 Administration.
628.315 Education coordination and grants.
628.320 Services for older individuals.
628.325 Incentive grants, capacity building and technical
assistance.
Subpart D--Local Service Delivery System
628.400 Scope and purpose.
628.405 Service delivery areas.
628.410 Private Industry Council.
628.415 Selection of SDA grant recipient and administrative entity.
628.420 Job training plan.
628.425 Review and approval.
628.426 Disapproval or revocation of the plan.
628.430 State SDA submission.
Subpart E--Program Design Requirements for Programs Under Title II of
the Job Training Partnership Act
628.500 Scope and purpose.
628.505 Eligibility.
628.510 Intake, referrals, and targeting.
628.515 Objective assessment.
628.520 Individual service strategy.
628.525 Limitations.
628.530 Referrals of participants to non-title II programs.
628.535 Limitations on job search assistance.
628.540 Volunteer program.
628.545 Linkages and coordination.
628.550 Transfer of funds.
Subpart F--The Adult Program
628.600 Scope and purpose.
628.605 Eligibility.
628.610 Authorized services.
Subpart G--The Summer Youth Employment and Training Program
628.700 Scope and purpose.
628.701 Program goals and objectives.
628.702 Enriched Educational Component.
628.703 Private Sector Summer Jobs.
628.704 Eligibility.
628.705 SYETP authorized services.
628.710 Period of program operation.
Subpart H--Youth Training Program
628.800 Scope and purpose.
628.803 Eligibility.
628.804 Authorized services.
Authority: 29 U.S.C. 1579(a).
Subpart A--Scope and Purpose
Sec. 628.100 Scope and purpose of part 628.
(a) This part sets forth requirements for implementation of
programs under title II of the Job Training Partnership Act, and
includes the councils described in subpart B that have responsibilities
under titles I, II, and III. In this part, the provisions generally
pertaining to title II are covered in subparts B, C, D, and E. Matters
specific to titles IIA, II-B, or II-C are addressed in subparts F, G,
or H, respectively.
(b) Title II-A Adult Training programs are to prepare adults for
participation in the labor force by providing job training and other
services that will result in increased employment and earnings,
increased occupational and educational skills, reduced welfare
dependency, and result in improved long-term employability.
(c) Title II-B Summer Youth Employment and Training programs are to
provide eligible youth with exposure to the world of work, to enhance
the basic education skills of youth, to encourage school completion or
enrollment in supplemental or alternative school programs and to
enhance the citizenship skills of youth.
(d) Title II-C Youth Training programs are to improve the long-term
employability of youth; to enhance the educational, occupational and
citizenship skills of youth; to encourage school completion or
enrollment in alternative school programs; to increase the employment
and earnings of youth; to reduce welfare dependency; and to assist
youth in addressing problems that impair their ability to make
successful transition from school to work, to apprenticeship, to the
military or to postsecondary education and training.
Subpart B--State Planning
Sec. 628.200 Scope and Purpose.
This subpart provides requirements for the submission of the
Governor's Coordination and Special Services Plan, as well as the
procedures for plan review. This subpart also contains requirements for
the composition and responsibilities of the State Job Training
Coordinating Council and the State Human Resource Investment Council.
Sec. 628.205 Governor's coordination and special services plan.
(a)(1) Submittal. By a date established by the Secretary, each
State seeking financial assistance under the Act shall submit to the
Secretary, biennially, the Governor's coordination and special services
plan (GCSSP) encompassing two program years (section 121(a)).
(2) The GCSSP shall address the requirements of section 121(b) of
the Act, including a description of the Governor's coordination
criteria; the measures taken by the State to ensure coordination and
prevent duplication with the Job Opportunities and Basic Skills (JOBS)
program; the certification of the implementation of the procurement
system, as required at section 164(a)(6) of the Act; the technical
assistance and training plan; goals, and the efforts to accomplish such
goals, for the training and placement of women in nontraditional
employment and apprenticeship; the projected use of resources,
including oversight of program performance; program administration;
program financial management and audit resolution procedures; capacity
building; priorities and criteria for State incentive grants; and
performance goals for State supported programs (section 121(b)).
(b) GCSSP review. The Secretary shall review the GCSSP for overall
compliance with the provisions of the Act. If the GCSSP is disapproved,
the Secretary shall notify the Governor, in writing, within 45 days of
submission of the reasons for disapproval so that the Governor may
modify the plan to bring it into compliance with the Act (section
121(d)).
(c) Information to SDA's. (1) In the year preceding the program
years for which the plan is developed, the State shall make available
to the SDA's in the State information on its plans to undertake State
activities in program areas including education coordination grants,
services to older workers, and capacity building.
(2) The information described in paragraph (c)(1) of this section
shall be provided to SDA's in sufficient time for SDA's to take it into
consideration in developing local job training plans.
Sec. 628.210 State Job Training Coordinating Council.
(a) The Governor shall appoint a State Job Training Coordinating
Council (SJTCC) pursuant to section 122 of the Act. In lieu of a SJTCC,
the Governor may establish and utilize a State Human Resource
Investment Council (HRIC) pursuant to section 701 of the Act and in
accordance with Sec. 628.215 of this part.
(b) Consistent with section 122(a)(3) of the Act, the SJTCC shall
be composed as follows: 30 percent, business and industry
representatives; 30 percent, State and local government and local
education agency representatives; 30 percent, organized labor and
community-based organization representatives; and 10 percent,
representatives from the general public. The SJTCC shall have the
specific functions and responsibilities outlined in sections 122, 317,
and 501 of the Act.
(c) Funding for the SJTCC shall be provided pursuant to sections
202(c)(1)(A) and 262(c)(1)(A) of the Act.
(d) The SJTCC shall:
(1) Analyze the SDAs' reports made pursuant to section 104(b)(13)
of the Act and make recommendations for technical assistance and
corrective action, and
(2) Prepare a summary of such reports and disseminate them to SDA's
and service providers in the State and to the Secretary (section
122(a)(5) and (6)).
Sec. 628.215 State Human Resource Investment Council.
(a) Establishment and responsibilities. The State may, in
accordance with sections 701, 702, and 703 of the Act, establish a
State Human Resource Investment Council (HRIC). The HRIC's
responsibilities are described at section 701(a) of the Act. The HRIC
shall carry out the following responsibilities:
(1) Review the provision of services and the use of funds and
resources under applicable Federal human resource programs and advise
the Governor on methods of coordinating such provision of services and
use of funds and resources consistent with the laws and regulations
governing such programs;
(2) Advise the Governor on the development and implementation of
State and local standards and measures relating to applicable Federal
human resource programs and coordination of such standards and
measures; and
(3) Carry out the duties and functions prescribed for existing
State councils described under the laws relating to the applicable
Federal human resource programs, including the responsibilities of the
State Council on Vocational Education (SCOVE) under Section 112 of the
Carl D. Perkins Vocational and Applied Technology Education Act.
(4) Perform other functions as specified by the Governor (section
701).
(b) Applicable Programs. For the purposes of this section, the
programs included are those listed at section 701(b)(2) of the Act. A
program shall be included only if the Governor and the head of the
State agency responsible for the administration of the program jointly
agree to include such program. In addition, programs under the Carl
Perkins Vocational and Applied Technology Act shall require the
agreement of the State council on vocational education (section
701(b)(1)(B)).
(c) Composition. (1) The Governor shall establish procedures to
ensure appropriate representation on the HRIC from among the categories
of representation specified in section 702 of the Act.
(2) In addition, when the functions and responsibilities of the
SCOVE are included on the HRIC, the Governor is encouraged to consider
appointing the State Director for Vocational Education as a
representative on the HRIC.
(d) Funding. (1) Funding to carry out the functions of the HRIC
shall be available pursuant to section 703(a) of the Act.
(i) The costs associated with the operation of the HRIC should be
allocated among the various funding sources based on the relationship
of each funding source or program to total spending of all applicable
funding sources and programs (section 703(d)).
(ii) Costs of the HRIC that are in excess of costs paid by funds
from participating State agencies are, subject to the availability of
funds from applicable JTPA sources, allowable JTPA costs (section
703(a) and (d)).
(2) A HRIC which meets the requirements of title VII and includes
each of the programs listed at section 701(b)(2)(A) of the Act shall be
authorized to use JTPA State Education Coordination and Grants funds
(section 123(a)(2)(D)(ii)).
(e) Replacement of other councils. A HRIC meeting the requirements
of title VII of the Act shall replace the councils of the participating
programs listed at section 701(b)(2)(A) of the Act.
(f) Expertise. The Governor shall ensure that in the composition of
the HRIC and the staff of the HRIC there exists the proper expertise to
carry out the functions of the HRIC and the council(s) it replaces
(sections 702(c)(2) and 703(b)).
(g) Certification. Each State, as part of the certification process
to the Secretary, shall ensure that the council meets the requirements
of sections 701, 702, and 703. This certification shall be made in
writing and submitted to the Secretary, with a copy provided to the
Secretary of Education, at least 90 days before the beginning of each
period of 2 program years for which a job training plan is submitted
under the Act.
Subpart C--State Programs
Sec. 628.300 Scope and purpose.
This subpart provides requirements for the State-operated programs
including the education coordination and grants, services to older
workers, and incentive grants to SDA's and grants to SDA's for capacity
building and technical assistance.
Sec. 628.305 State distribution of funds.
(a) The funds made available to the Governor under sections 202(c)
and 262(c) of the Act shall be used to carry out activities and
services under this subpart.
Sec. 628.310 Administration.
Funds provided to the Governor under sections 202(c)(1)(A) and
262(c)(1)(A) of the Act may be used for overall administration,
management, oversight of program performance; technical assistance to
SDA's failing to meet performance standards, as described in section
106(j)(1) of the Act; auditing; and activities under sections 121 and
122 of the Act.
Sec. 628.315 Education coordination and grants.
(a) Governor's responsibilities. The Governor shall allocate funds
available pursuant to sections 202(c)(1)(C) and 262(c)(1)(C) of the Act
to any State education agency. For the purposes of this section,
``State education agency'' shall not include the State agency which
administers the JTPA program within the State or other agencies which
do not have education as a primary and operational function, such as
correctional agencies, although this limitation shall not preclude such
an agency from being an ultimate subrecipient of funds (section
123(a)(1)).
(b) Agreements. (1) The State education agency to be allocated
funds under section 123(a)(1) of the Act shall participate in joint
planning activities with the Governor in order to develop a plan which
shall be submitted in the GCSSP (section 123(c)).
(2) The Governor and the State education agency shall jointly agree
on the plan required in paragraph (b)(1) of this section, which shall
include a description of the agreements described in paragraph (b)(3)
of this section (section 123(c)).
(3) Projects to undertake the activities set forth in section
123(a)(2) shall be conducted in accordance with agreements between the
State education agency(ies) and administrative entities in service
delivery areas in the State. The agreements may include other entities
such as State agencies, local education agencies and alternative
service providers (section 123(b)(1)(B)).
(4)(i) When there is a failure by the State education agency and
the Governor to develop the joint plan described in paragraph (b)(2) of
this section, the Governor shall not allocate funds under section
123(a)(1) to such education agency nor shall such funds be available
for expenditure by the Governor (section 123(c)).
(ii) When no State education agency accepts the allocation of funds
under section 123(a)(1), or when there is a failure to reach the
agreement(s) specified in paragraph (b)(3) of this section, the funds
may only be used by the Governor pursuant to section 123(e) and in
accordance with the GCSSP (section 123(e)).
(c) Allowable activities. (1) Funds made available for education
coordination and grants under section 123 of the Act shall be used to
pay the Federal share of education coordination and grants projects
(section 123(a)(2)).
(2) Projects, as defined at section 123(a)(2)(A), (B), and (C) of
the Act shall be conducted for eligible individuals and should include
those which:
(i) Provide school-to-work services of demonstrated effectiveness,
including youth apprenticeship programs;
(ii) Provide literacy and lifelong learning opportunities and
services of demonstrated effectiveness, including basic education and
occupational skills training; and
(iii) Provide statewide coordinated approaches to education and
training services, including model programs, designed to train, place,
and retain women in nontraditional employment (section 123(a)).
(3) Projects for coordination of education and training may also be
conducted which may include support activities pertaining to the HRIC
which meets the requirements of title VII.
(d) Expenditure requirements. (1)(i) At least 80 percent of the
funds allocated under section 202(c)(1)(C) and section 262(c)(1)(C) of
the Act shall be expended to pay for the Federal share of projects
described in paragraph (c)(2) of this section (section 123(d)(2)(B)).
(ii) The Governor shall assure that not less than 75 percent of the
funds expended for such projects are expended for projects for eligible
economically disadvantaged participants who experience barriers to
employment. For purposes of meeting this requirement, participants
meeting the conditions of section 263(a)(2)(B) and (C) and (g) of the
Act may be considered economically disadvantaged (section
123(d)(2)(C)).
(iii) Priority for funds not expended for the economically
disadvantaged shall be given to title III participants and persons with
barriers to employment.
(iv) The Governor may assure compliance with the requirement to
serve participants with barriers to employment by targeting projects to
particular barrier groups (e.g., school dropouts).
(2) Not more than 20 percent of funds allocated under section
202(c)(1)(C) of the Act may be expended to:
(i) Facilitate coordination of education and training services for
participants in the projects described in section 123(a)(2)(A), (B) and
(C), or
(ii)(A) Support activities pertaining to a HRIC that meets the
requirements of Sec. 628.215 of this part, or
(B) Support activities pertaining to a State council which carries
out functions similar to those of a HRIC if such council was
established prior to July 1, 1992.
(e) Contribution. (1) Except as provided in paragraph (e)(3) of
this section, the State shall provide for the contribution of funds,
other than the funds made available under this Act, of a total amount
equal to the amounts allotted under Section 123;
(2) The Governor shall define and assure the provision of adequate
resources by the State to meet the requirements of paragraph (e)(1) of
this section. Such amount may include the direct cost of employment and
training services provided by other Federal programs or agencies if
such use for matching is in accordance with the applicable Federal law
governing the use of such funds.
(3) When there is a failure to reach agreement between the State
education agency and the administrative entity in the service delivery
area, as set forth in paragraph (b)(3) of this section, the requirement
for the contribution of funds shall not apply.
(f) Eligible youth, age 14 through 15, may be served in the program
under this section to the extent set forth in the agreements under
paragraph (b)(3) of this section.
Sec. 628.320 Services for older individuals.
(a) Consultation. (1) The Governor shall consult with the
appropriate PIC's and chief elected official(s) prior to entering into
agreements to provide services under section 204(d) and to assure that
services provided to participants under section 204(d) are consistent
with the programs and activities provided in the SDA to eligible older
participants.
(2) The GCSSP shall specify the process for accomplishing the
consultation required by paragraph (a)(2) of this section.
(b) Funds available under section 204(d) shall be used by the
Governor to provide services on an equitable basis throughout the
State, taking into account the relative share of the population of
eligible older individuals residing in each SDA and the participation
of such older individuals in the labor force.
(c) Delivery of services. (1) Services to participants eligible
under section 204(d) shall be delivered through agreements with SDA's,
private industry councils, public agencies, private nonprofit
organizations (including veterans organizations) and private-for-profit
organizations.
(2) Priority for delivery of services under this section shall be
given to agencies and organizations which have a demonstrated
effectiveness in providing training and employment services to such
older individuals.
(d) Eligibility. (1) Individuals provided services under section
204(d) of the Act shall be economically disadvantaged, based on
criteria applicable in the SDA in which they reside, and shall be age
55 or older. However, each program year not more than 10 percent of
participants enrolled under section 204(d) may be individuals who are
not economically disadvantaged but have serious barriers to employment
as identified by the Governor and have been determined within the last
12 months to meet the income eligibility requirements for title V of
the Older Americans Act of 1965 (section 204(d)(5)(B)(i)).
(2) The following criteria shall apply to joint programs for older
workers.
(i) In order to carry out a joint program with operators of
programs under title V of the Older Americans Act, there shall be a
written financial or non-financial agreement, or written joint program
description when the entity which operates the JTPA and title V program
are the same.
(ii) Joint programs under this paragraph (d)(2) may include
referrals between programs, co-enrollment and provision of services.
(iii) Under agreements pursuant to this paragraph (d)(2),
individuals eligible under title V of the Older Americans Act shall be
deemed to satisfy the requirements of section 203(a)(2) of the Act
(Older Americans Act, Pub. L. 103-171, section 510).
(e) Applicable requirements. Except as provided in the Act, the
provisions of title II-A shall apply to programs conducted under
section 204(d) (section 204(d)(6)).
(f) The Governor shall make efforts to coordinate the delivery of
services under section 204(d) with the delivery of services under title
V of the Older Americans Act of 1965. Such coordination may include
coenrollment, coordination of a continuum of services between this
section and title V of the Older Americans Act and other appropriate
linkages.
(g) The Governor shall give consideration to assisting programs
involving training for jobs in growth industries and jobs reflecting
the use of new technological skills (section 204(d)(3)).
Sec. 628.325 Incentive grants, capacity building, and technical
assistance.
(a) Funds available to the Governor under sections 202(c)(1)(B) and
262(c)(1)(B) of the Act shall be used to provide incentive grants to
SDA's and for capacity building and technical assistance.
(b) Incentive grants. (1) Not less than 67 percent of the funds
available under sections 202(c)(1)(B) and 262(c)(1)(B) of the Act shall
be used by the Governor to provide incentive grants for programs,
except programs under section 204(d) of the Act, exceeding title II
performance standards (section 106(b)(7)).
(2) Incentive grant funds under this section shall be distributed
by the Governor among SDA's within the State pursuant to section
106(b)(7) of the Act.
(3) The Governor shall, as part of the annual statement of goals
and objectives required by section 121(a)(1) of the Act, provide SDA's
with the specific policies and procedures to implement section
106(b)(7) of the Act.
(4) In a State which is the service delivery area, incentive grant
funds shall be distributed in a manner determined by the Governor and
described in the GCSSP. The Governor shall give consideration to
recognizing the performance of service providers within the State.
(5) SDA's should use incentive grant funds for capacity building
and technical assistance activities and/or for the conduct of allowable
Title II activities for eligible youth, eligible adults, or both, at
the discretion of the SDA.
(c) Capacity building and technical assistance. (1) Up to 33
percent of the funds available under sections 202(c)(1)(B) and
262(c)(1)(B) of the Act may be used by the Governor to provide capacity
building and technical assistance efforts aimed at improving the
competencies of the personnel who staff and administer JTPA including
SDA's, service providers, State staff, private industry councils, other
job training councils and related human service systems provided for in
section 205(a) of the Act.
(2) In providing capacity building and technical assistance
activities, the Governor shall:
(i) Consult with SDA's concerning capacity building and technical
assistance activities consistent with the process specified in the
GCSSP;
(ii) Ensure that the use of funds will assist front line staff
providing services to participants by directing resources to SDA and
service provider staff for capacity building efforts, building a
statewide capacity building strategy based on an assessment of local
capacity building needs developed in cooperation with the SDA's, and/or
delivering training and technical assistance directly to the local
level;
(iii) Ensure that expenditures for the purchase of hardware/
software are only for the development of Statewide communications and
training mechanisms involving computer-based communication technologies
that directly facilitate interaction with the National Capacity
Building and Information Dissemination Network (National Network)
described in section 453 of the Act and that facilitate the use of
computer-based training techniques in capacity building and technical
assistance activities;
(iv) Ensure that State and local capacity building efforts are
coordinated and integrated with the National Network, pursuant to
sections 202(c)(3)(B) and 262(c)(3)(B) of the Act, and that materials
developed with funds under this section are made available to be shared
with other States, SDA's and the National Network. States and SDA's
retain the flexibility to tailor Network products to their own needs
and/or to produce and train on similar or related products when local
circumstances so dictate and;
(v) Provide technical assistance to service delivery areas failing
to meet performance standards pursuant to section 106(j)(2) of the Act.
(d) Cost sharing. (1) Cost sharing approaches are encouraged among
States, SDA's and/or among other Federal, State, and local human
service programs, including those listed in section 205(a) of the Act,
in developing electronic communications, training mechanisms and/or
contributing to the National Network.
(2) All shared costs shall be allocated among the contributing
funding sources on the basis of benefits received.
Subpart D--Local Service Delivery System
Sec. 628.400 Scope and purpose.
This subpart sets forth requirements for the selection of service
delivery areas, the establishment and responsibilities of the private
industry council, and the selection of the SDA grant recipient and
administrative entity. This subpart also contains the requirements for
the local job training plan as well as the procedures for its review
and approval by the State.
Sec. 628.405 Service delivery areas.
(a)(1) The Governor, after receiving recommendations from the
SJTCC, shall designate SDA's within the State in accordance with the
provisions of section 101 of the Act.
(2) SDA's may not be designated by the Governor more frequently
than once every two years, and such designations shall be made to
coincide with the two-year plan cycle for the GCSSP and local job
training plans (i.e., the designation cannot be made for an off-year in
this cycle).
(3) Each request for designation as an SDA shall be submitted in a
form and by a date established by the Governor. The procedures
established by the Governor shall provide for the treatment of existing
SDA's for the purposes of submitting SDA designation requests.
(b)(1) The Governor shall approve SDA designation requests from
entities with a population of 200,000 or more that satisfy the criteria
specified in section 101(a)(4)(A) of the Act.
(2) When there are competing applications under paragraph (b)(1) of
this section for the same geographic area, the Governor shall designate
the entity with the population closest to 200,000, if the remaining
reduced area also continues to satisfy the criteria specified in
section 101(a)(4)(A) of the Act. The Governor shall offer to designate
the remaining reduced area as an SDA as well.
(3) When there are competing applications under paragraph (b)(1) of
this section for the same geographic area and the designation of the
entity with the population closest to 200,000 would have the effect of
reducing the population of the competing entity to below a population
of 200,000, the Governor has the discretion to determine which request
to honor.
(d) The Governor may, in accordance with section 101(a)(4)(B) of
the Act, approve a request to be a SDA from any unit, or contiguous
units, of general local government, without regard to population, which
serves a substantial portion of a labor market area. In making such
designations, the Governor shall evaluate the degree to which a
proposed service delivery area meets criteria established by the
Governor which, at a minimum, shall include:
(1) The capability to effectively deliver job training services;
(2) The capacity to administer the job training program in
accordance with the Act, applicable rules and regulations and State
standards; and
(3) The portion of a labor market to be served.
(e) For the purposes of SDA designations under section 101(a)(4)(A)
and (B) of the Act, the term ``substantial part'' and ``substantial
portion'' of a labor market area shall be defined by the Governor, but
shall not be less than 10% of the population of a labor market area.
(f) All areas within the State shall be covered by designated
SDA's. After honoring all requests for designation from eligible
entities under section 101(a)(4)(A) of the Act, and making any
qualified discretionary designations under section 101(a)(4)(B) of the
Act, the Governor shall include uncovered areas in the State within
other designated SDA's willing to accept them or within a State
administered SDA.
(g) Appeals. (1) Only an entity which meets the requirements of
section 101(a)(4)(A) of the Act for designation as a service delivery
area, but which has had its request to be an SDA denied, may appeal the
Governor's denial of service delivery area designation to the Secretary
of Labor.
(2) Appeals made pursuant to paragraph (g)(1) of this section shall
be submitted by certified mail, return receipt requested, to the
Secretary, U.S. Department of Labor, Washington, DC 20210, Attention:
ASET. A copy of the appeal shall simultaneously be provided to the
Governor.
(3) The Secretary shall not accept an appeal dated later than 30
days after receipt of written notification of the denial from the
Governor.
(4) The appealing party shall explain why it believes the denial is
contrary to the provisions of section 101 of the Act.
(5) The Secretary shall accept the appeal and make a decision only
with regard to whether or not the denial is inconsistent with section
101 of the Act. The Secretary may consider any comments submitted by
the Governor. The Secretary shall make a final decision within 30 days
after receipt of the appeal (section 101(a)(4)(C)).
(6) The Secretary shall notify the Governor and the appellant in
writing of the Secretary's decision.
Sec. 628.410 Private Industry Council.
(a) Certification of the PIC. (1) The chief elected official(s) of
the SDA shall establish and the Governor shall certify the private
industry council (PIC) pursuant to section 102 of the Act.
(2) The Governor shall review the certification of the PIC
biennially, one year prior to the effective date of the 2-year SDA job
training plan to the Governor. The Governor's review shall include:
(i) The PIC composition, which shall be consistent with section
102(a), (b), (c), and (d) of the Act and shall include the names of
individuals nominated and their qualifications;
(ii) The nomination process;
(iii) The written agreement(s) among the appropriate chief elected
official(s) and the PIC, including procedures for the development of
the SDA job training plan and the selection of the grant recipient and
administrative entity.
(3) The chief elected official shall select labor representatives
for the PIC from individuals recommended by recognized State and local
labor federations. For purposes of this section, a labor federation is
an alliance of two or more organized labor unions for the purpose of
mutual support and action. An example of a recognized labor federation
is the AFL-CIO.
(b) Responsibilities of the PIC. Pursuant to section 103 of the
Act, the PIC shall:
(1) Provide policy and program guidance for all activities under
the job training plan for the SDA;
(2) In accordance with agreements negotiated with the appropriate
chief elected official(s), determine the procedures for development of
the job training plan and select the grant recipient and administrative
entity for the SDA;
(3) Independent oversight. As specified in subpart D of part 627 of
this chapter, the PIC shall exercise independent oversight over
programs and activities under the job training plan, which oversight
shall not be circumscribed by agreements with the appropriate chief
elected official(s) of the SDA;
(4) Be a party to the designation of substate grantees under title
III, as set forth in Sec. 631.35 of this chapter;
(5) Establish guidelines for the level of skills to be provided in
occupational skills training programs funded by the administrative
entity;
(6) Consult with the Governor on agreements to provide services for
older individuals under section 204(d) of the Act;
(7) Establish youth and adult competency levels consistent with
performance standards established by the Secretary, based on such
factors as entry level skills and other hiring requirements, in
consultation with educational agencies and, where appropriate, with
representatives of business, organized labor and community-based
organizations pursuant to section 106(b)(5) and 107(d); and
(8) Identify occupations for which there is a demand in the area
served.
(c) Substate plan. The PIC shall be provided the opportunity to
review and comment on a substate grantee plan under title III of the
Act prior to the submission of such plan to the Governor (section
313(a)).
(e) The State Employment Service agency shall develop jointly with
each appropriate PIC and chief elected official(s) for the SDA those
components of the plans required under the Wagner-Peyser Act which are
applicable to the SDA. (See part 652 of this chapter).
(f) Single SDA States. (1) In any case in which the service
delivery area is a State, the SJTCC or a portion of the SJTCC may be
reconstituted as a PIC if the PIC meets the requirements of section
102(a) of the Act.
(2) When the service delivery area is a State and the functions of
the SJTCC are embodied in the HRIC, the HRIC or a portion of the HRIC
may be reconstituted as a PIC if the requirements for private sector
business representation at section 102(a)(1) of the Act are met
(section 102(h)).
Sec. 628.415 Selection of SDA grant recipient and administrative
entity.
(a) Selection of SDA grant recipient. (1) The SDA grant recipient
and the entity to administer the SDA's job training plan for title II,
developed pursuant to section 104 of the Act, shall be selected by
agreement of the PIC and chief elected official(s) of the SDA. These
may be the same or different entities.
(2) The specific functions and responsibilities of the entities
described in paragraph (a)(1) of this section shall be spelled out in
the agreement between the PIC and the chief elected official(s), and
shall specifically address the provisions of section 141(i) of the Act
(section 103(b)(1)).
(b) Subrecipient requirements. (1) The Governor may establish
requirements pertaining to subrecipient, including SDA grant recipient,
responsibility for JTPA funds.
(2) The requirements of paragraph (b)(1) of this section shall not
preclude the selection of any entity identified in section 103(b) of
the Act as SDA grant recipient.
Sec. 628.420 Job training plan.
(a) The Governor shall issue instructions and schedules to assure
that job training plans and plan modifications for SDA's within the
State conform to all requirements of the Act.
(b) The Governor's instructions for development of the SDA's job
training plan shall require that the plan contain the following
information:
(1) A complete and detailed discussion of the elements found in
section 104(b) of the Act, including goals for the training and
training related placement of women in nontraditional employment and
apprenticeships;
(2) A discussion of the SDA's compliance with the Secretary's
program goals, as outlined in the planning guidance provided to the
Governor; and
(3) An oversight plan for the SDA which includes: (i) A description
of the oversight activities of the PIC and the chief elected
official(s), and (ii) the SDA administrative entity's monitoring plan
which includes the Governor's monitoring requirements for service
providers.
(c) The Governor may also require that the SDA job training plan
contain a capacity building and technical assistance strategy that
includes plans for designating capacity building as a staff function,
assessing local capacity building needs, and developing and
participating in computerized communication mechanisms.
(d) The SDA job training plan shall be jointly approved and jointly
submitted to the Governor by the PIC and the chief elected official(s)
(section 103(d)).
(e) Modifications. (1) Any major modification to the SDA job
training plan shall be jointly approved and jointly submitted by the
PIC and chief elected official(s) of the SDA to the Governor for
approval.
(2) For the purposes of this section, the circumstances which
constitute a ``major'' modification shall be specified by the Governor.
Sec. 628.425 Review and approval.
(a) Standards and procedures. The Governor shall establish
standards and procedures for the review and approval or disapproval of
the SDA job training plan and plan modifications that shall be provided
to the SDA's at the same time as the instructions and schedules for
preparation of the plans are provided.
(b) Plan approval. Except when the Governor makes a finding under
the provisions of section 105(b)(1) of the Act, the Governor shall
approve the SDA job training plan or plan modification. The notice of
approval shall be provided in writing to the chief elected official(s)
and to the private industry council.
Sec. 628.426 Disapproval or revocation of the plan.
(a) If the Governor disapproves the SDA job training plan or plan
modification for any reason, the Governor shall notify the PIC and
chief elected official(s) for the SDA in writing as provided in section
105(b)(2) of the Act.
(b) If the Governor disapproves the SDA job training plan or plan
modification, the Governor shall provide the PIC and the chief elected
official(s) for the SDA 30 days to correct the deficiencies and
resubmit the plan or plan modification. Within 15 days after the plan
or plan modification is resubmitted, the Governor shall make a final
decision and shall notify the PIC and the appropriate chief elected
official(s) of the SDA in writing of the final disapproval or approval.
(c) Governor mediation. If the PIC and the appropriate chief
elected official(s) of an SDA are unable to reach an agreement under
the provisions of section 103 (b)(1) or (d) of the Act, any such party
may request the Governor to mediate.
(d) Failure to reach agreement. If the PIC and the chief elected
official(s) fail to reach the required agreements in section 103 (b)(1)
or (d) of the Act, funds may not be made available to an SDA under
section 104 of the Act and the Governor shall merge the affected area
into one or more other existing service delivery areas (section
105(c)(1)).
(e) Appeals. (1) In accordance with section 105(b)(2) of the Act,
any final disapproval by the Governor of the SDA job training plan or
modification may be appealed by the PIC and chief elected official(s)
of the SDA to the Secretary.
(2) The Secretary shall not accept an appeal dated later than 30
days after receipt by the PIC and chief elected official(s) of the
final disapproval of the SDA job training plan or modification from the
Governor.
(3) The Secretary shall accept an appeal under paragraph (e)(1) of
this section and shall determine only whether the disapproval is
clearly erroneous under section 105(b)(1) of the Act. The Secretary may
consider any comments submitted by the Governor. In accordance with
section 105(b)(2) of the Act, the Secretary shall make a final decision
within 45 days after the appeal is received by the Secretary.
(4) The Secretary shall notify the Governor and the appellant in
writing of the Secretary's decision.
(f) Appeals of plan revocations. Pursuant to section 164(b)(1) of
the Act, a notice of intent to revoke approval of all or part of a plan
may be appealed to the Secretary. Such appeals shall be treated as a
disapproval under paragraphs (c) and (e) of this section, except that
the revocation shall not become effective until the later of:
(1) The time for appeal under paragraph (e) of this section has
expired; or
(2) The date on which the Secretary issues a decision affirming the
revocation.
(g) In the event that a plan is disapproved and the Governor's
decision is upheld upon appeal, the Governor shall merge the affected
area into other designated SDA's willing to accept it or include it in
another SDA within the State.
Sec. 628.430 State SDA Submission.
(a) Pursuant to section 105(d) of the Act, when the SDA is the
State, the Governor shall submit to the Secretary, not less that 60
days before the beginning of the first of the two program years covered
by the job training plan and in accordance with instructions issued by
the Secretary, an SDA job training plan covering two program years.
When the SDA is the State, modifications to the plan shall be submitted
to the Secretary for approval.
(b) When a State submits an SDA job training plan or plan
modification pursuant to paragraph (a) of this section, the Secretary
shall review the plan or plan modification for overall compliance with
the provisions of the Act. The State's plan shall be considered
approved unless, within 45 days of receipt of the submission described
in paragraph (a) of this section, the Secretary notifies the Governor
in writing of inconsistencies between the submission and requirements
of specific provisions of the Act. If the plan or plan modification is
disapproved, the Governor may appeal the decision by requesting a
hearing before an administrative law judge pursuant to subpart H of
part 627 of this chapter.
Subpart E--Program Design Requirements for Programs Under Title II
of the Job Training Partnership Act
Sec. 628.500 Scope and purpose.
This subpart contains the regulations pertaining to the program
design requirements common to all programs conducted under titles I
(i.e., sections 121 and 123) and II of the Act. Regulations
specifically pertaining to the Adult Program can be found in subpart F
of this part. Regulations pertaining to the Summer Youth Employment and
Training Program can be found in subpart G of this part. Regulations
pertaining to the Youth Training Program can be found in subpart H of
this part.
Sec. 628.505 Eligibility.
(a) Eligibility criteria. (1) Individuals who apply to participate
in a program under title II shall be evaluated for eligibility based on
age and economic disadvantage. Specific eligibility criteria for
programs under title II, parts A, B, and C are described in this part.
(2) Individuals served under title II shall be residents of the
SDA, as determined by local government policy, except for the limited
exceptions described in the job training plan, including joint programs
operated by SDA's (section 141(e)).
(b) Eligibility documentation. (1) In order to promote the uniform
and standard application of eligibility criteria for participation in
the JTPA program, the Department has issued an Eligibility
Documentation TAG that provides guidance on acceptable documentation.
(2) SDA utilization of eligibility guidance. When it is determined
that the SDA or service provider has followed the guidance contained in
the Eligibility Documentation TAG, the Grant Officer will not disallow
questioned costs related to the required documentation concerning an
individual's eligibility.
Sec. 628.510 Intake, referrals and targeting.
(a) Collection of personal data. In addition to determining an
applicant's eligibility, the intake process shall include a preliminary
review of information relating to whether an applicant is included in
one or more of the categories listed in section 203(b) of the Act.
(b) Information on services. Upon application, an eligible
individual shall be provided information by the SDA or its service
providers on the full array of services available through the SDA and
its service providers, including information for women about the
opportunities for nontraditional training and employment.
(c) Assessment during intake. Some limited assessment activities
may be conducted during the intake process in order to determine an
eligible applicant's suitability for title II program services. This
assessment should be a method, in difficult cases, to finalize
determinations for enrollment. The amount of assessment provided during
intake is not restricted, however, assessment during intake shall be
charged in accordance with Sec. 627.440(d)(3).
(d) Referral of eligible applicants. During the intake process,
determinations may be made prior to enrollment to refer an eligible
applicant to another human service, training or education program
deemed more suitable for the individual, including the Job Corps
program. In these cases, information on the full array of services
available in the SDA may be provided in written form with
recommendations and written referrals to other appropriate programs.
Copies of or notations of referrals will be maintained as documentation
and may be recorded in an incomplete ISS. Further tracking or follow-up
of referrals out of title II is not required.
(e) Referrals from service providers to service delivery areas for
additional assessment. (1) Each service provider shall ensure that an
eligible applicant who cannot be served by its particular program shall
be referred to the SDA for assessment, as necessary, and suitable
referral to other appropriate programs. Each service provider shall
also ensure that a participant who cannot be served by its particular
program shall be referred to the SDA for further assessment, as
necessary, and suitable referral to other appropriate programs,
consistent with Sec. 628.515.
(2) Each SDA shall take the appropriate steps (e.g., contract
provisions, local administrative issuances, and/or PIC policies) to
ensure that its service providers adhere to the provisions of this
section and that they maintain documentation of referrals.
(3) Each SDA shall develop an appropriate mechanism to ensure
suitability screening for eligible applicants or to apply the
provisions of Sec. 628.530 for participants referred by service
providers and describe such mechanism in its SDA job training plan.
(f)(1) ``Most in need.'' SDA's that satisfy the requirements of
sections 203(b) and 263 (b) and (d) pertaining to hard to serve
individuals shall be deemed to meet the ``most in need'' criteria at
section 141(a) of the Act.
(2) The requirements referred to in paragraph (h)(1) of this
section shall be calculated on the basis of new participants for whom
services or training have been provided subsequent to the objective
assessment.
(g) The SDA's method of meeting the requirements of sections 203(b)
and 263(b) pertaining to hard to serve individuals shall be implemented
consistent with the equal opportunity provisions of 29 CFR part 34.
Sec. 628.515 Objective assessment.
(a) General. The requirements of this section shall apply to
programs conducted under title I (i.e., sections 121 and 123) and title
II, parts A, B, and C.
(b) Definition. (1) For purposes of this part, an objective
assessment means an examination of the capabilities, needs, and
vocational potential of a participant and is to be used to develop an
individual service strategy and employment goal. Such assessment is
customer-centered and a diagnostic evaluation of a participant's
employment barriers taking into account the participant's family
situation, work history, education, basic and occupational skills,
interests, aptitudes (including interests and aptitudes for
nontraditional occupations), attitude towards work, motivation,
behavior patterns affecting employment potential, financial resources
and needs, supportive service needs, and personal employment
information as it relates to the local labor market.
(2) For the program under title II-B, the objective assessment
shall include an examination of the basic skills and supportive service
needs of each participant and may include the other areas listed in
paragraph (b)(1) of this section (sections 204(a)(1)(A), 253(c)(1) and
264(b)(1)(A)).
(c) Methods of objective assessment. (1) The SDA shall choose the
most appropriate means to measure skills, abilities, attitudes, and
interests of the participants. The methods used in conducting the
objective assessment may include, but are not limited to, structured
interviews, paper and pencil tests, performance tests (e.g., skills,
and/or work samples, including those that measure interest and
capability to train in nontraditional employment), behavioral
observations, interest and/or attitude inventories, career guidance
instruments, aptitude tests, and basic skills tests.
(2) Instruments used for objective assessment may be developed at
the local level; however, any formalized instruments nationally
available should be used only for the specific populations for which
they are normed.
(d) Updating of assessments. Objective assessment should be treated
as an ongoing process. As additional relevant information relating to a
participant becomes available, it should be reviewed and considered for
inclusion in the individual service strategy.
(e) Other sources of objective assessment. Other non-JTPA
assessments (e.g., through the Job Opportunities and Basic Skills
(JOBS) program under title IV of the Social Security Act, or through
schools) which have been completed within one year of application for
services, and which meet the requirements of this section, may be used
to comply with the requirement to assess each participant.
Sec. 628.520 Individual service strategy.
(a) General. The requirements of this section shall apply to
programs conducted under title I (i.e., sections 121 and 123) and title
II, parts A, B and C.
(b) Definition.--(1) Individual service strategy (ISS) means an
individual plan for a participant, which shall include an employment
goal (including, for women, consideration of nontraditional
employment), appropriate achievement objectives, and the appropriate
combination of services for the participant based on the objective
assessment conducted pursuant to Sec. 628.515 of this part, Objective
assessment. In developing the ISS, the participant shall be counseled
regarding required loan repayments if the participant chooses to incur
personal indebtedness to participate in an education program. The
participant shall also be apprised of the requirements for self-
sufficiency and the occupational demands within the labor market.
(2) Decisions concerning appropriate services shall be customer-
centered, and ensure that the participant is not excluded from training
or career options consistent with the provisions of 29 CFR part 34
concerning nondiscrimination and equal opportunity.
(3) For the title II-B program, the ISS may include the components
specified in paragraph (b)(1) of this section (sections 204(a)(1)(B),
253(c)(2) and 264(b)(1)(B)). For purposes of titles II-B and II-C, the
employment goal may be interpreted broadly and based on long-term
career guidance.
(c) Joint Development of ISS. The ISS shall be developed in
partnership with the participant and reflect the needs indicated by the
objective assessment and the expressed interests and desires of the
participant. It is not a formal contract and signatures are not a
requirement.
(d) Review of ISS. The ISS shall be reviewed periodically to
evaluate the progress of each participant in meeting the objectives of
the service strategy, including an evaluation of the participant's
progress in acquiring basic skills, and occupational skills, as
appropriate, and the adequacy of the supportive services provided.
(e) Provision of services. If JTPA resources are not sufficient to
provide the full range of training or supportive services which might
be identified in the ISS, the SDA shall make every reasonable effort to
arrange for, through other community resources, basic and occupational
skills training and supportive services identified as needed in the ISS
for participants under titles II-A and II-C and, in addition,
preemployment and work maturity skills training and work experience
combined with skills training for participants under title II-C
(sections 204(a)(1)(D) and 264(b)(1)(D).
(f) SDA review of objective assessment and ISS. (1) The objective
assessment and development of the ISS may be conducted by service
providers.
(2) The SDA administrative entity shall ensure that development of
the ISS and the services provided, respond to the individual needs of
the participant and that the combination of services to the participant
is indicated by the results of the objective assessment.
(g) ISS record of decisions. The ISS shall be used as the basic
instrument for the SDA to record the results of decisions made about
the combination and sequence of services for the participant based on
the objective assessment. Justification for decisions may be referenced
but need not be recorded in the ISS. These decisions shall include, but
are not limited to, the employment goal and/or career cluster;
referrals to other programs for specified activities; the provision and
amount of supportive services; and the delivery agents and schedules
for training and supportive services activities. The decisions for time
and duration of OJT (Sec. 627.240 of this chapter) shall be briefly
recorded in the ISS and may not reference other documents.
(h) The ISS is a customer-centered case management tool and shall
not be used as a compliance document.
Sec. 628.525 Limitations.
Neither eligibility for nor participation in a JTPA program creates
an entitlement to services, and nothing in the Act or this part shall
be construed to establish a private right of action for a participant
to obtain services described in the objective assessment or ISS.
Sec. 628.530 Referrals of participants to non-title II programs.
(a) When it is determined, through the objective assessment and the
ISS, that a participant would be better served by a program other than
one under title II (e.g., Job Corps, Vocational Rehabilitation, State
or local education, substance abuse treatment center, and/or dislocated
worker programs), the participant shall be referred to the appropriate
program. Such referral shall be recorded in the ISS.
(b) In cases where there will be a continuing relationship with a
participant, a referral to another program(s) for specific services
will be part of the participant's title II program strategy and will be
recorded in the ISS.
(c) When there will not be a continuing relationship with a
participant as the result of a referral to a program other than title
II, and an assessment but no training component has been provided, the
referral should be recorded in a partial ISS and the individual shall
not be counted for purposes of calculating performance against the
SDA's performance standards. Further tracking or follow-up of referrals
out of title II is not required.
Sec. 628.535 Limitations on job search assistance.
(a) General. Job search assistance is designed to give a
participant skills in acquiring full time employment. (See Sec. 626.5
of this chapter, Definitions.)
(b) Conditions. Job search activities may be conducted only:
(1) For participants when specified as appropriate in the ISS; and
(2) When delivered in conjunction with other training or
educational services designed to increase the participant's ability to
acquire employment. Additional services which may be provided in
conjunction with job search include the direct training services listed
in JTPA section 204(b)(1) of the Act, excluding standalone skill
assessment, counseling, work experience and case management and the
direct training services listed in 264(b) of the Act excluding
tutoring, standalone skill assessment, counseling, work experience and
case management. (See Sec. 627.245 of this chapter, ``Work
Experience,'' especially Sec. 627.245(d) regarding combination of other
services.)
(c) Exceptions. (1) Job search assistance activities, including job
search skills, training, and job clubs may be provided without the
accompanying services specified in paragraph (b) of this section only
when:
(i) The objective assessment and the ISS indicate that the
additional services are not appropriate; and
(ii) The activities are not available or accessible through other
public agencies, including the Employment Service.
(2) The exceptions in paragraph (c)(1) of this section apply to
Title II-A and II-B and are not applicable to Title II-C programs (see
Sec. 628.804 (d) and (e)).
(d) Determination of job search availability. For purposes of this
section, a determination of the availability of the job search
assistance activity will be made by the SDA, in consultation with the
employment service and documented in the local job training plan.
(e) Older individuals. For purposes of this section, when an
individual aged 55 or older indicates in the assessment a preference
for immediate job placement, job search assistance may be provided on a
stand-alone basis. The individual's preference shall be recorded in the
ISS.
Sec. 628.540 Volunteer program.
Pursuant to sections 204(c)(6) and 264(d)(7) of the Act, the SDA
shall make opportunities available for individuals who have
successfully participated in programs under this part to volunteer
assistance, in the form of mentoring, tutoring, and other activities.
Sec. 628.545 Linkages and coordination.
(a) General requirements. (1) To the extent practicable, and as
permitted by law and regulations, the Governor shall, at the State
level, facilitate coordination among the programs set forth at section
205(a) and 265(b) of the Act, including, but not limited to, the
establishment of State-level coordination agreements. The Governor may
focus coordination through the SJTCC or the HRIC.
(2) The SDA, in conducting programs under this part, shall
establish appropriate linkages and coordination procedures with other
Federal programs and appropriate State and local educational, social
service, and public housing agencies, including with CBO's, business
and labor organizations, volunteer groups and others, such as women and
older worker organizations, and with appropriate education and training
agencies, such as local JOBS programs, Employment Service offices which
provide services for JTPA participants, and the local agencies on
aging, to avoid duplication and to enhance the delivery of services,
which shall be described in the SDA job training plan. Where a local
agency declines to complete such a linkage with an SDA, the SDA shall
reflect this information in its job training plan (section 104(b)).
(b) SDA's are encouraged to facilitate effective ``one stop shop
career centers'' and ``single point of contact'' delivery systems which
may include:
(1) The development of individual service strategy plans and of a
common program application; and
(2) A unified job development effort and comprehensive programmatic
design (sections 104(b) (3) and (4), 205 (a) and (b) and 265).
(c) Requirements for youth. For the youth programs under this part,
formal agreements shall be established with appropriate local
educational agencies which participate in JTPA programs which, at a
minimum, shall specify:
(1) The procedures for referring and serving in-school youth;
(2) The methods of assessment of in-school youth; and
(3) Procedures for notifying the SDA when a youth drops out of the
school system.
(d) Schoolwide projects. (1) In conducting a schoolwide project for
low income individuals under sections 263(g) and 265(d) of the Act, the
SDA shall establish a cooperative agreement with the appropriate local
educational agency.
(2) In addition to the requirements listed in paragraphs (a) and
(b) of this section, the cooperative agreement shall include:
(i) A description of the ways in which the JTPA schoolwide project
will supplement the educational program of the school;
(ii) Identification of measurable goals to be achieved by the
schoolwide project and a provision for assessing the extent to which
such goals are met;
(iii) A description of the ways in which the program will use
available JTPA and other education program resources;
(iv) A description of the number of individuals to be served by the
schoolwide project; and
(v) Assurances that JTPA resources shall be used in coordination
with existing sources of funds to supplement and not supplant them
(section 107(b)).
(3) In areas where there is more than one local educational agency,
cooperative agreements for schoolwide projects are required only with
those local education agencies that will participate in programs under
schoolwide projects (section 263(g)).
Sec. 628.550 Transfer of funds.
If described in the job training plan and approved by the Governor:
(a) An amount up to 10 percent of the funds allocated to the SDA
under section 202(b) of the Act for title II-A may be transferred to
the program under title II-C of the Act;
(b) An amount up to 20 percent of the funds allocated to the SDA
under section 252(b) of the Act for title II-B may be transferred to
the program under title II-C of the Act; and
(c) An amount up to 10 percent of the funds allocated to the SDA
under section 262(b) of the Act for title II-C may be transferred to
the program under title II-A of the Act.
Subpart F--The Adult Program
Sec. 628.600 Scope and purpose.
This subpart contains the regulations for the Adult Program under
part A of Title II of the Act. The regulations in part 627 of this
chapter and subpart E of this part apply to the Adult Program to the
extent that they do not conflict with the provisions of this subpart.
Sec. 628.605 Eligibility.
(a) Age and economic disadvantage. Except as provided in paragraph
(b) of this section, an individual shall be eligible to participate
under this part only if he or she is economically disadvantaged and 22
years of age or older. There is no maximum age for eligibility.
(b) Non-economically disadvantaged individuals. Up to 10 percent of
the individuals served under this subpart in each SDA may be
individuals who are not economically disadvantaged, if such individuals
face serious barriers to employment in accordance with section 203(c)
of the Act.
(c) Requirement to assist hard-to-serve individuals. (1) Not less
than 65 percent of adults who participate in the program under this
subpart, including those who are not economically disadvantaged, shall
have one or more of the additional barriers to employment as described
in section 203(b) of the Act.
(2) The 65 percent barrier requirement in paragraph (c)(1) of this
section shall be calculated on the basis of participants for whom
services or training have been provided subsequent to an objective
assessment on July 1, 1993 or later.
(d) Addition of barrier. An SDA may identify and add one additional
serious barrier to employment to the categories listed at section
203(b) of the Act, in accordance with the specific procedures and
requirements in section 203(d) of the Act.
(e) Criteria for older workers under joint programs. (1) The SDA
may establish written financial or non-financial agreements with
sponsors of programs under title V of the Older Americans Act to carry
out joint programs.
(2) Joint programs under this paragraph (e) may include referrals
between programs, co-enrollment and provision of services.
(3) Under agreements entered into pursuant to this paragraph (e),
individuals eligible under title V of the Older Americans Act shall be
deemed to satisfy the requirements of section 203(a)(2) of the JTPA
(Older Americans Act, Pub. L. 102-375, section 510).
Sec. 628.610 Authorized services.
(a) The services that may be provided under this subpart are those
described at section 204(b) of the Act.
(b) Counseling and supportive services. Counseling and supportive
services provided under this subpart may be provided to a participant
for a period of up to 1 year after the date on which the participant
completes the program.
Subpart G--The Summer Youth Employment and Training Program
Sec. 628.700 Scope and purpose.
This subpart contains the regulations for the Summer Youth
Employment and Training Program (SYETP) under part B of title II of the
Act. The regulations in part 627 of this chapter and subpart E of this
part apply to the SYETP to the extent that they do not conflict with
the provisions of this subpart.
Sec. 628.701 Program Goals and Objectives.
(a) Each SDA shall establish written goals and objectives that
shall be used in evaluating the effectiveness of its SYETP activities.
Such goals and objectives may include enhancement of basic educational
skills through improvement in school retention or academic performance
(including mathematics and reading comprehension); encouragement of
school completion or enrollment in supplementary or alternative school
programs; improvement of employability skills, including provision of
vocational exploration opportunities and exposure to the world of work;
enhancement of youth citizenship skills; and demonstrated coordination
with other appropriate community organizations.
(b) Each SDA shall ensure that the activities and services offered
under the SYETP are consistent with and will contribute to the
achievement of the goals and objectives developed pursuant to paragraph
(a) of this section.
Sec. 628.702 Eligibility.
(a) Age and economic disadvantage. An individual is eligible to
participate in programs funded under title II-B of the Act, if such
individual is
(1) Age 14 through 21; and
(2)(i) Economically disadvantaged; or
(ii) Has been determined to meet the eligibility requirements for
free meals under the National School Lunch Act during the most recent
school year. Most recent school year means the current school year
unless the eligibility determination is made during an interim period
between school terms, in which case the term means the preceding school
year; or
(iii) Is participating in a compensatory education program under
Chapter I of title I of the Elementary and Secondary Education Act of
1965; or
(iv) Is participating in a schoolwide project as set forth at
section 263(g) of the Act.
(b) Eligibility determination verification. The SDA may accept the
same documentation utilized by the local educational agency for
approving free lunch meals or an assurance by school officials
concerning the students' participation in the free school lunch program
under the National School Lunch Act.
Sec. 628.705 SYETP Authorized services.
(a) The services that may be provided under this subpart are those
described at section 253 of the Act.
(b) Basic and remedial education and preemployment and work
maturity skills training. The SDA shall ensure the availability of
basic or remedial education and preemployment and work maturity skills
training for SYETP participants pursuant to the assessment process
described in Sec. 628.515 of this part from funds available to the SDA
or by other education and training programs, including, but not limited
to, the Job Corps, the JOBS program, youth corps programs or
alternative or secondary schools.
(c) Work experience. (1) Work experience shall be conducted
consistent with the provisions of Sec. 627.245 of this chapter.
(2) Work experience provided under this subpart, to the extent
feasible, shall include contextual learning opportunities which
integrate the development of general competencies with the development
of academic skills.
(d) Concurrent enrollment. (1) Youth being served under the SYETP
or the Youth Training Program authorized under title II-C of the Act
(see subpart H of this part) are not required to be terminated from
participation in one program to enroll in the other. The SDA may enroll
such youth concurrently in programs under this subpart and subpart H of
this part, pursuant to guidance to be issued by the Secretary, in order
to promote continuity and coordination of services.
(2) The requirement that not less than 65 percent of the total
number of title II-C participants shall have one or more barriers to
employment pursuant to section 263(c) and (d) of the Act shall apply to
youth who are concurrently enrolled and will participate in the program
under title II-C.
(e) Followup services. (1) The SDA shall make followup services
available for participants if the ISS indicates that such services are
appropriate (section 253(d)).
(2) Title II-B funds may be used for such followup services for one
year after program participation, which may be concurrent with a period
of any subsequent participation in the Title II-C program.
(3) Followup services include the full array of supportive services
described in section 4(24) of the Act, except for financial assistance,
and may include such followup services as counseling, mentoring, or
tutoring.
(f) Classroom training. Classroom training provided under this
subpart shall, to the extent feasible, include opportunities to apply
knowledge and skills relating to academic subjects to the world of
work.
(g) Educational linkages. (1) In conducting the program assisted
under this subpart, service delivery areas shall establish linkages
with the appropriate educational agencies responsible for service to
participants.
(2) Such linkages shall include arrangements to ensure that there
is a regular exchange of information relating to the progress, problems
and needs of participants, including the results of assessments of the
skill levels of participants.
Sec. 628.710 Period of program operation.
(a) Except as provided under paragraph (b) of this section, the
SYETP shall be conducted during the school vacation period occurring
during the summer months.
(b) An SDA operating within the jurisdiction of one or more local
educational agencies that operate schools on a year-round full-time
basis may offer SYETP activities to participants in such a jurisdiction
during the school vacation period(s) treated as the period(s)
equivalent to a school summer vacation.
Subpart H--Youth Training Program
Sec. 628.800 Scope and purpose.
This subpart contains the regulations for the Year-round Youth
Program under part C of title II of the Act. The regulations in part
627 of this chapter and subpart E of this part apply to the Year-round
Youth program to the extent that they do not conflict with the
provisions of this subpart.
Sec. 628.803 Eligibility.
(a) Out-of-school youth. An out of school youth is a youth who does
not meet the definition of in-school youth as set forth in paragraph
(b) of this section. An out-of-school youth shall be eligible to
participate in programs under this subpart, if such individual is:
(1) Age 16 through 21, and
(2) Economically disadvantaged.
(b) In-school youth. Definition. In-school youth means a youth who
has not yet attained a high school diploma and is attending school full
time. An in-school youth shall be eligible to participate in programs
under this subpart, if such individual is:
(1)(i) Age 16 through 21, or
(ii) If provided in the job training plan, age 14 through 21
inclusive; and
(2)(i) Economically disadvantaged; or
(ii) Participating in a compensatory education program under
Chapter I of title I of the Elementary and Secondary Education Act of
1965; or
(iii) Has been determined to meet the eligibility requirements for
free meals under the National School Lunch Act during the most recent
school year. Most recent school year means the current school year
unless the eligibility determination is made during an interim period
between school terms, in which case the term means the preceding school
year.
(c) Eligibility determination verification. The SDA may accept the
same documentation utilized by the local educational agency for
approving free lunch meals or an assurance by school officials
concerning the students' participation in the free school lunch program
under the National School Lunch Act. The Department shall provide
guidance on this verification separate from these regulations.
(d) Requirement to serve hard-to-serve individuals. (1) Not less
than 65 percent of the in-school youth who participate in the program
under this subpart, including those who are not economically
disadvantaged, shall have one or more additional barriers to
employment, as described in section 263(b) of the Act.
(2)(i) Not less than 65 percent of the out-of-school youth who
participate in the program under this subpart, including those who are
not economically disadvantaged, shall have one or more barriers to
employment, as described in section 263(d) of the Act, in addition to
any criterion listed in paragraph (b)(2) of this section.
(ii) All Job Corps participants shall be considered out-of-school
and as having a barrier to employment.
(3) The requirement of paragraphs (d)(1) and (2) of this section
shall be calculated on the basis of participants for whom services or
training have been provided subsequent to the objective assessment on
July 1, 1993 or later.
(e) Addition of barrier. An SDA may identify and add one additional
serious barrier to employment to the categories listed at sections
263(b) and (d) of the Act in accordance with the specific procedures
and requirements in section 263(h) of the Act.
(f) Services to non-economically disadvantaged individuals. Up to
10 percent of the youth served by an SDA under this subpart may be
individuals who are not economically disadvantaged, but such
individuals shall face one or more serious barriers to employment in
accordance with section 263(e) of the Act.
(g) Eligibility based on schoolwide project participation. (1) In
addition to the individuals who meet the conditions described in
Sec. 628.803 of this part, individuals who are not economically
disadvantaged may participate in programs under this subpart if they
are enrolled in a schoolwide project pursuant to section 263(g) of the
Act.
(2) For purposes of paragraph (g)(1) of this section, the term
school means an individual building, facility, campus or a portion of
the school such as the 11th or 12th grade.
(3) A schoolwide project may be operated in a public school located
in an urban census tract or non-metropolitan county with a poverty rate
of 30 percent or above, and in which 70 percent or more of the students
have at least one barrier to employment. The school shall make the
determination on whether its students meet the barrier requirements.
(4) The SDA shall determine which will be its schoolwide projects.
Examples of schoolwide projects include, but are not limited to,
school-to-work programs; college awareness and application assistance
programs; school restructuring to make the schools career academies or
magnet schools; mentoring programs; business-education compacts;
integration of work and learning; year-round extensions of summer STEP
programs; community service programs, including linkages with youth
service corps; programs to encourage teen parents to stay in school,
including establishing child care centers; and work experience slots
provided as incentives to stay in school.
(h)(1) Out-of-school ratio. Not less than 50 percent of the total
title II-C participants in each SDA shall be out-of-school youth
(section 263(f)(1) of the Act). The Governor shall be responsible for
determining the period for which the 50 percent requirement will be
calculated based either on the period covered by the job training plan
or on a program year basis.
(2) For purposes of paragraph (h)(1) of this section, a youth who
has attained a high school diploma or an equivalency, is habitually
truant, as defined by State law, or is attending an alternative school
program may be considered out of school. An alternative school program
includes an alternative high school, an alternative course of study
approved by the local educational agency, or a high school equivalency
program. Such programs may be operated either within or outside of the
local public school system, and can offer either a high school diploma
or equivalency.
(3) Schoolwide project ratios. Those in-school participants who are
served under a schoolwide project shall not be counted in determining
the ratio of in-school to out-of-school youth in paragraph (h)(1) of
this section.
Sec. 628.804 Authorized services.
(a) The SDA and the PIC shall take into consideration exemplary
program strategies and services, including those selected for
replication pursuant to section 453(c) of the Act concerning capacity
building, in the development of services for programs under this
subpart.
(b) Except as provided in paragraph (c) of this section, in order
to participate in programs under this part an individual who is under
the age of 18 and a school dropout, as defined in section 4(38) of the
Act, shall enroll in and attend a school, course or program described
in section 264(d)(2)(B)(ii) and (iii). An alternative course of study
shall be approved by the LEA and may include educational programs
provided by community-based organizations.
(c) An individual who is a school dropout, as defined in section
4(38) of the Act, and under the age of 18 may participate in programs
under this part without meeting the requirements of paragraph (b) of
this section for a limited interim period which may be during the
summer months, during periods between school terms, or when a course of
study is not immediately available.
(d) The provision of preemployment and work maturity skills
training shall be accompanied either by work experience or by other
additional services which are designed to increase the basic education
or occupational skills of the participant (section 264(d)(3)(A)).
(e) The provision of work experience, job search assistance, job
search skills training, and job club activities under programs
conducted under this subpart shall be accompanied by other additional
services which are designed to increase the basic education or
occupational skills of the participant (section 264(d)(3)(B)).
(f) The additional services offered pursuant to paragraphs (d) and
(e) of this section may be provided concurrently or sequentially with
services provided under other education and training programs (e.g.,
Job Opportunities and Basic Skills programs under title IV of the
Social Security Act, Job Corps (see part 638 of this chapter), or
schools).
(g) Schoolwide projects for low-income schools shall meet the
conditions in sections 263(g)(1) and (2) of the Act.
(h) Entry employment experience is a training activity which may be
conducted in public or private agencies. In all cases, this training
activity shall increase or develop the long term employability of
eligible in-school and out-of-school youth. Entry employment
experiences may include, but are not limited to:
(1) Work experience as described in Sec. 627.245 of this chapter;
and
(2) Cooperative education programs that coordinate educational
programs with work in the private sector. Subsidized wages are not
permitted in cooperative education programs.
(i) Limited internships in the private sector under this subpart
shall be designed to enhance the long-term employability of youth.
(1) A limited internship shall be conducted pursuant to an
agreement with an employer to provide structured on-site private sector
exposure to work and the requirements for successful job retention.
(2) A limited internship should be combined with classroom
instruction relating to a particular position, occupation, industry or
the basic skills and abilities to successfully compete in the local
labor market.
(j)(1) On-the-job (OJT) training activities approved under this
subpart shall be consistent with the provisions of subpart B of part
627 of this chapter and shall:
(i) Be for positions that pay the participant a wage that equals or
exceeds on the average wage at placement based on the most recent
available data in the SDA for participants under title II-A;
(ii) Be for positions that have career advancement potential; and
(iii) Include a formal, written program of structured job training
that will provide the participant with an orderly combination of
instruction in work maturity skills, general employment competencies,
and occupational specific skills.
(2) In those cases where the OJT participant is a school dropout,
the participant shall participate in an education program in accordance
with paragraph (b) of this section.
(k) Counseling and supportive services provided under this subpart
may be provided to a participant for a period of up to 1 year after the
date on which the participant completes the program. These include the
full array of supportive services described in section 4(24) of the Act
except for financial assistance.
(l) Year-round operations. Programs for youth under this subpart
shall:
(1) Provide for a year-round education and training program that is
coordinated with the appropriate local educational agencies, service
providers, and other programs; and
(2) As appropriate, ensure services for youth are available on a
multiyear basis, consistent with the determined needs and goals of the
youth served.
(3) The year-round program delivery requirement of this paragraph
does not prohibit schools on a 9-month operations schedule from
providing services for programs under this part.
PART 629--[REMOVED AND RESERVED]
4. Part 629 is removed and reserved.
PART 630--[REMOVED AND RESERVED]
5. Part 630 is removed and reserved.
6. Part 631 is revised to read as follows:
PART 631--PROGRAMS UNDER TITLE III OF THE JOB TRAINING PARTNERSHIP
ACT
Subpart A--General Provisions
Sec.
631.1 Scope and purpose.
631.2 Definitions.
631.3 Participant eligibility.
631.4 Approved training rule.
Subpart B--Additional Title III Administrative Standards and Procedures
631.11 Allotment and obligation of funds by the Secretary.
631.12 Reallotment of funds by the Secretary.
631.13 Classification of costs at State and substate levels.
631.14 Limitations on certain costs.
631.15 Federal reporting requirements.
631.16 Complaints, investigations, and penalties.
631.17 Federal monitoring and oversight.
631.18 Federal by-pass authority.
631.19 Appeals.
Subpart C--Needs-Related Payments
631.20 Needs-related payments.
Subpart D--State Administration
631.30 Designation or creation and functions of a State dislocated
worker unit or office and rapid response assistance.
631.31 Monitoring and oversight.
631.32 Allocation of funds by the Governor.
631.33 State procedures for identifying funds subject to mandatory
Federal reallotment.
631.34 Designation of substate areas.
631.35 Designation of substate grantees.
631.36 Biennial State plan.
631.37 Coordination activities.
631.38 State by-pass authority.
Subpart E--State Programs
631.40 State program operational plan.
631.41 Allowable State activities.
Subpart F--Substate Programs
631.50 Substate plan.
631.51 Allowable substate program activities.
361.52 Selection of service providers.
631.53 Certificate of continuing eligibility.
Subpart G--Federal Delivery of Dislocated Worker Services through
National Reserve Account Fund
631.60 General.
631.61 Application for funding and selection criteria.
631.62 Cost limitations.
631.63 Reporting.
631.64 General administrative requirements.
631.65 Special Provisions for CAETA and DDP.
Subpart H--[Reserved]
Subpart I--Disaster Relief Employment Assistance
631.80 Scope and purpose.
631.81 Availability of funds.
631.82 Substate allocation.
631.83 Coordination.
631.84 Allowable projects.
631.85 Participant eligibility.
631.86 Limitations on disaster relief employment.
631.87 Definitions.
Authority: 29 U.S.C. 1579(a); Sec. 6305(f), Pub. L. 100-418, 102
Stat 1107; Sec. 631.30(d)(7) also issued under 29 U.S.C. 2107(a);
Sec. 631.37(e) also issued under Sec. 402, Pub. L. 100-689, 102
Stat. 4178-4179 (29 U.S.C. 1751 note).
Subpart A--General Provisions
Sec. 631.1 Scope and purpose.
This part implements Title III of the Act. Title III programs seek
to establish an early readjustment capacity for workers and firms in
each State; to provide comprehensive coverage to workers regardless of
the cause of dislocation; to provide early referral from the
unemployment insurance system to adjustment services as an integral
part of the adjustment process; to foster labor, management and
community partnerships with government in addressing worker
dislocation; to emphasize retraining and reemployment services rather
than income support; to create an on-going substate capacity to deliver
adjustment services; to tailor services to meet the needs of
individuals; to improve accountability by establishing a system of
mandated performance standards; to improve financial management by
monitoring expenditures and reallotting available funds; and to provide
the flexibility to target funds to the most critical dislocation
problems.
Sec. 631.2 Definitions.
In addition to the definitions contained in sections 4, 301, and
303(e) of the Act and Part 626 of this chapter, the following
definitions apply to programs under Title III of the Act and this part:
Substantial layoff (for participant eligibility) means any
reduction-in-force which is not the result of a plant closing and which
results in an employment loss at a single site of employment during any
30 day period for:
(a)(1) At least 33 percent of the employees (excluding employees
regularly working less than 20 hours per week); and
(2) At least 50 employees (excluding employees regularly working
less than 20 hours per week); or
(b) At least 500 employees (excluding employees regularly working
less than 20 hours per week).
Substantial layoff (for rapid response assistance) means any
reduction-in-force which is not the result of a plant closing and which
results in an employment loss at a single site of employment during any
30 day period for at least 50 employees (excluding employees regularly
working less than 20 hours per week) (section 314(b)(4)).
Sec. 631.3 Participant eligibility.
(a) Eligible dislocated workers, as defined in section 301 of the
Act, may participate in programs under this part. For the purposes of
determining eligibility under section 301(a)(1)(A) of the Act, the term
``eligible for'' unemployment compensation includes any individual
whose wages from employment would be considered in determining
eligibility for unemployment compensation under Federal or State
unemployment compensation laws.
(b)(1) Except as provided in paragraph (b)(3) of this section,
workers who have not received an individual notice of termination but
who are employed at a facility for which the employer has made a public
announcement of planned closure shall be considered eligible dislocated
workers with respect to the provision of basic readjustment services
specifically identified in section 314(c) of the Act with the exception
of supportive services and relocation assistance.
(2) Individuals identified in paragraph (b)(1) of this section
shall be eligible to receive all services authorized in sections 314 of
the Act after a date which is 180 days prior to the scheduled closure
date of the facility, subject to the provisions of Sec. 631.20 of this
part and other applicable provisions regarding receipt of supportive
services.
(3) Paragraphs (b)(1) and (b)(2) of this section shall not apply to
individuals who are likely to remain employed with the employer or to
retire instead of seeking new employment.
(4) For the purposes of paragraph (b)(1) of this section, the
Governor shall establish criteria for defining public announcement.
Such criteria shall include provisions that the public announcement
shall be made by the employer and shall indicate a planned closure date
for the facility (section 314(h)).
(c) Eligible dislocated workers include individuals who were self-
employed (including farmers and ranchers) and are unemployed:
(1) Because of natural disasters, subject to the provisions of
paragraph (e) of this section; or
(2) As a result of general economic conditions in the community in
which they reside.
(d) For the purposes of paragraph (c) of this section, categories
of economic conditions resulting in the dislocation of a self-employed
individual may include, but are not limited to:
(1) Failure of one or more businesses to which the self-employed
individual supplied a substantial proportion of products or services;
(2) Failure of one or more businesses from which the self-employed
individual obtained a substantial proportion of products or services;
(3) Substantial layoff(s) from, or permanent closure(s) of, one or
more plants or facilities that support a significant portion of the
State or local economy.
(e) The Governor is authorized to establish procedures to determine
the eligibility to participate in programs under this part of the
following categories of individuals:
(1) Self-employed farmers, ranchers, professionals, independent
tradespeople and other business persons formerly self-employed but
presently unemployed.
(2) Self-employed individuals designated in paragraph (d)(1) of
this section who are in the process of going out of business, if the
Governor determines that the farm, ranch, or business operations are
likely to terminate.
(3) Family members and farm or ranch hands of individuals
identified under paragraphs (d)(1) and (2) of this section, to the
extent that their contribution to the farm, ranch, or business meets
minimum requirements as established by the Governor.
(f) The Governor is authorized to establish procedures to identify
individuals permanently dislocated from their occupations or fields of
work, including self-employment, because of natural disasters. For the
purposes of this paragraph (f), categories of natural disasters
include, but are not limited to, any hurricane, tornado, storm, flood,
high water, wind-driven water, tidal wave, tsunami, earthquake,
volcanic eruption, landslide, mudslide, drought, fire, or explosion.
(g) The State may provide services to displaced homemakers (as
defined in section 4 of the Act) under this part only if the Governor
determines that such services may be provided without adversely
affecting the delivery of such services to eligible dislocated workers
(section 311(b)(4)).
(h) An eligible dislocated worker issued a certificate of
continuing eligibility, as provided in Sec. 631.53 of this part, shall
remain eligible for assistance under this part for the period specified
in the certificate, not to exceed 104 weeks. The 45-day enrollment
provisions described in subpart B of part 627 of this chapter shall be
waived for eligible individuals who possess a valid certificate under
this paragraph and it is not required that a new application be taken
prior to participation.
(i) An eligible dislocated worker who does not possess a valid
certificate shall remain eligible if such individual:
(1) Remains unemployed, or
(2) Accepts temporary employment for the purpose of income
maintenance prior to and/or during participation in a training program
under this part with the intention of ending such temporary employment
at the completion of the training and entry into permanent unsubsidized
employment as a result of the training. Such temporary employment must
be with an employer other than that from which the individual was
dislocated. This provision applies to eligible individuals both prior
to and subsequent to enrollment.
(j) The Governor shall ensure that rapid response and basic
readjustment services under Title III of JTPA are made available to
workers who, under the NAFTA Worker Security Act (Pub. L. 103-182), are
members of a group of workers (including workers in any agricultural
firm or subdivision of an agricultural firm) for which the Governor has
made a finding that (1) the sales or production, or both, of such firm
or subdivision have decreased absolutely, and (2) imports from Mexico
or Canada of articles like or directly competitive with articles
produced by such firm or subdivision have increased; or (3) there has
been a shift in production by such workers' firm or subdivision to
Mexico or Canada of articles which are produced by the firm or
subdivision.
Sec. 631.4 Approved training rule.
An eligible dislocated worker who is participating in any
retraining activity, except on-the-job training, under Title III of the
Act or this part shall be deemed to be in training with the approval of
the State agency for purposes of section 3304(a)(8) of the Internal
Revenue Code of 1986. Participation in the approved training shall not
disqualify the individual from receipt of unemployment benefits to
which the individual is otherwise entitled (section 314(f)(2)).
Subpart B--Additional Title III Administrative Standards and
Procedures
Sec. 631.11 Allotment and obligation of funds by the Secretary.
(a) Funds shall be allotted among the various States in accordance
with section 302(b)(1) of the Act, subject to paragraph (b) of this
section.
(b) Funds shall be allotted among the various States in accordance
with section 302(b)(2)(A) and (B) of the Act as soon as satisfactory
data are available under section 462(e) of the Act.
(c) Allotments for the Commonwealth of the Northern Mariana Islands
and other territories and possessions of the United States shall be
made by the Secretary in accordance with the provisions of section
302(e) of the Act.
Sec. 631.12 Reallotment of funds by the Secretary.
(a) Based upon reports submitted by States pursuant to Sec. 631.15
of this part, the Secretary shall make determinations regarding total
expenditures of funds within the State with reference to the amount
required to be reallotted pursuant to section 303(b) of the Act. For
purposes of this paragraph (a)--
(1) The funds to be reallotted will be an amount equal to the sum
of:
(i) Unexpended funds in excess of 20 percent of the prior program
year's formula allotment to the State, and
(ii) All unexpended funds from the formula allotment for the
program year preceding the prior program year.
(2)(i) The current program year is the year in which the
determination is made; and
(ii) The prior program year is the year immediately preceding the
current program year.
(3) Unexpended funds shall mean the remainder of the total funds
made available by formula that were available to the State for the
prior program year minus total accrued expenditures at the end of the
prior program year.
(4) Reallotted funds will be made available from current year
allotments made available by formula.
(b) Based upon the most current and satisfactory data available,
the Secretary shall identify eligible States, pursuant to the
definitions in section 303(e) of the Act.
(c) The Secretary shall recapture funds from States identified in
paragraph (a) of this section and reallot and reobligate such funds by
a Notice of Obligation (NOO) adjustment to current year funds to
eligible States as identified in paragraph (b) of this section, as set
forth in section 303(a), (b), and (c) of the Act.
(d) Reallotted funds shall be subject to allocation pursuant to
Sec. 631.32 of this part, and to the cost limitations at Sec. 631.14 of
this part.
Sec. 631.13 Classification of costs at State and substate levels.
(a)(1) Allowable costs under Title III shall be planned,
controlled, and charged by either the State or the substate grantee
against the following cost categories: rapid response services, basic
readjustment services, retraining services, needs-related payments and
supportive services, and administration. Costs shall be reported to the
Secretary of Labor in accordance with the reporting requirements
established pursuant to Sec. 631.15 of this part.
(2) All costs shall be allocable to a particular cost category to
the extent that benefits are received by such category; and no costs
shall be chargeable to a cost category except to the extent that
benefits are received by such category.
(b) Rapid response services shall include the cost of rapid
response activities identified at section 314(b) of the Act.
(1) Staff salary and benefit costs are chargeable to the rapid
response services cost category only for that portion of staff time
actually spent on rapid response activities.
(2) All other costs are chargeable to the rapid response services
cost category only to the extent that they are for rapid response
purposes.
(c) Basic readjustment services shall include the cost of basic
readjustment services identified at section 314(c) of the Act, except
that the cost of supportive services under section 314(c)(15) of the
Act shall be charged to the needs-related payments and supportive
services cost category, as provided in paragraph (e) of this section.
(d) Retraining services shall include the cost of retraining
services identified at section 314(d) of the Act.
(e) Needs-related payments and supportive services shall include
the cost of needs-related payments identified in section 314(e) of the
Act, and supportive services identified in section 4(24) of the Act and
provided for in section 314(c)(15) of the Act.
(f)(1) Administration shall include the costs incurred by
recipients and subrecipients in the administration of programs under
Title III of the Act, and shall be that portion of necessary and
allowable costs which is not directly related to the provision of
services and otherwise allocable to the cost categories in paragraphs
(b) through (e) of this section. The description of administrative
costs in subpart D of part 627 of this chapter shall be used by States
and substate grantees as guidance in charging administration costs to
Title III programs.
(2) Administration does not include the costs of activities under
section 314(b) of the Act and which are provided for in paragraph (b)
of this section.
(3) Administration shall include Title III funds used for
coordination of worker adjustment programs with the Federal-State
unemployment compensation system and with Chapter 2 of Title II of the
Trade Act of 1974 (19 U.S.C. 2271, et seq.) and part 617 of this
chapter (sections 311(b)(10) and 314(f)).
Sec. 631.14 Limitations on certain costs.
(a) Retraining services. Of the funds allocated to a substate
grantee under part A of Title III for any program year, not less than
50 percent shall be expended for retraining services specified under
section 314(d) of the Act, unless a waiver of this requirement is
granted by the Governor. The Governor shall prescribe criteria that
will allow substate grantees to apply in advance for a waiver of this
requirement, pursuant to section 315(a)(2) of the Act. The Governor
shall prescribe the time and form for the submission of an application
for such a waiver, as provided for at section 315(a)(3) of the Act. The
Governor shall not grant a waiver that allows less than 30 percent of
the funds expended by a substate grantee to be expended for retraining
activities.
(b) Needs-related payments and supportive services. Of the funds
allocated to the Governor, or allocated to any substate grantee, under
part A of Title III for any program year, not more than 25 percent may
be expended to provide needs-related payments and other supportive
services.
(c) Administrative cost. Of the funds allocated to the Governor, or
allocated to any substate grantee, under part A of Title III for any
program year, not more than 15 percent may be expended to cover the
administrative cost of programs.
(d) Reallotted funds are subject to the cost limitations in
paragraphs (a), (b) and (c) of this section.
(e) Funds allocated (or distributed) to substate areas under the
provisions of section 302(c)(1)(E) of the Act shall be considered funds
allocated to a substate grantee for the program year of the funds'
initial allotment to the State, and included in the cost limitations in
paragraphs (a), (b) and (c) of this section.
(f) Funds reserved by the Governor under the provisions of Section
302(c)(1) of the Act, other than funds distributed to substate grantees
under the provisions of JTPA section 302(c)(1)(E), shall be considered
funds allocated to the Governor for the program year of the funds'
initial allotment to the State and included in the cost limitations
applicable to the Governor.
(g) States and substate grantees shall have the full period of time
that the funds are available to them to comply with the cost
limitations described in JTPA section 315 and paragraphs (a), (b), and
(c) of this section.
(h) Combination of funds. (1) Substate grantees within a State may
combine funds allocated under part A of Title III for provision of
services to eligible dislocated workers from two or more substate
areas. Funds contributed by the substate grantees under this section
remain subject to the cost limitations which apply to each substate
grantee's total allocation (section 315(d)).
(2) To combine funds under this provision, substate grantees must
be in contiguous substate areas or part of the same labor market area.
(i) For the purposes of this section:
(1) Allotment to the State means allotted by the formula described
in section 302(b) of the Act, as adjusted by reallotments among the
States, in accordance with section 303 of the Act. For purposes of
determining availability and of applying cost limitations, funds will
retain the identity of the program year in which they were initially
allotted to a State, irrespective of subsequent reallotments.
(2) Allocated to the substate grantee means allocated by the
formula prescribed by the Governor under section 302(b) of the Act, and
allocated (or distributed) under the provisions of section
302(c)(1)(E), as adjusted by within State reallocations implemented by
the Governor through procedures established pursuant to section 303(d)
of the Act. For purposes of determining availability and of applying
cost limitations, funds will retain the identity of the program year in
which they were initially allotted to the State.
(3) Allocated to the Governor refers to funds reserved by the
Governor for use in accordance with the provisions of section 302(c)(1)
of the Act, exclusive of any such funds which are distributed or
allocated to substate grantees pursuant to section 302(c)(1)(E).
(j) The cost limitations described in this section do not apply to
any designated substate grantee which served as a concentrated
employment program grantee for a rural area under the Comprehensive
Employment and Training Act (section 108(d)).
Sec. 631.15 Federal reporting requirements.
Notwithstanding the requirements in subpart D of part 627 of this
chapter, the Governor shall report to the Secretary pursuant to
instructions issued by the Secretary for programs and activities funded
under this part. Such reports shall include a cost breakdown of all
funds made available under this part used by the State Dislocated
Worker Unit for administrative expenditures. Reports shall be provided
to the Secretary within 45 calendar days after the end of the report
period (sections 165(a)(2) and 311(b)(11)).
Sec. 631.16 Complaints, investigations, and penalties.
The provisions of this section apply in addition to the sanctions
provisions in subpart G of part 627 of this chapter.
(a) The Secretary shall investigate a complaint or report received
from an aggrieved party or a public official which alleges that a State
is not complying with the provisions of the State plan required under
section 311(a) of the Act (section 311(e)(1)).
(b) Where the Secretary determines that a State has failed to
comply with its State plan, and that other remedies under the Act and
part 627 of this chapter are not available or are not adequate to
achieve compliance, the Secretary may withhold an amount not to exceed
10 percent of the allotment to the State for the program year in which
the determination is made for each such violation (section
311(e)(2)(A)).
(c) The Secretary will not impose the penalty provided for under
paragraph (b) of this section until all other remedies under the Act
and part 627 of this chapter for achieving compliance have been
exhausted or are determined to be unavailable or inadequate to achieve
State compliance with the terms of the State plan.
(d) The Secretary will make no determination under this section
until the affected State has been afforded adequate written notice and
an opportunity to request and to receive a hearing before an
administrative law judge pursuant to the provisions of subpart H of
part 627 of this chapter (section 311(e)(2)(B)).
Sec. 631.17 Federal monitoring and oversight.
The Secretary shall conduct oversight of State administration of
programs under this part, including the administration by each State of
the rapid response assistance services provided in such State. The
Secretary shall take the appropriate actions to ensure the
effectiveness, efficiency and timeliness of services conducted by the
State in accordance with Sec. 631.30(b) of this part (section
314(b)(3)).
Sec. 631.18 Federal by-pass authority.
(a) In the event that a State fails to submit a biennial State plan
that is approved under Sec. 631.36 of this part, the Secretary shall
make arrangements to use the amount that would be allotted to that
State for the delivery in that State of the programs, activities, and
services authorized under Title III of the Act and this part.
(b) No determination may be made by the Secretary under this
section until the affected State is afforded written notification of
the Secretary's intent to exercise by-pass authority and an opportunity
to request and to receive a hearing before an administrative law judge
pursuant to the provisions of subpart H of part 627 of this chapter.
(c) The Secretary will exercise by-pass authority only until such
time as the affected State has an approved plan under the provisions of
Sec. 631.36 of this part (section 321(b)).
Sec. 631.19 Appeals.
Except as provided in this part, disputes arising in programs under
this part shall be adjudicated under the appropriate State or local
grievance procedures required by subpart E of part 627 of this chapter
or other applicable law. Complaints alleging violations of the Act or
this part may be filed with the Secretary, pursuant to subpart F of
part 627 of this chapter. Paragraphs (a) through (e) of this section
refer to appeal rights set forth in this part.
(a) Section 628.405(g) of this chapter (appeals of denial of SDA
designation) shall apply to denial of substate area designations under
Sec. 631.34(c)(1) and (3) of this part.
(b) Section 628.426(e) of this chapter (appeals of final
disapproval of SDA job training plans or modifications) shall apply to
final disapproval of substate plans under Sec. 631.50(f) of this part.
(c) Section 628.426(f) of this chapter (appeals of a Governor's
notice of intent to revoke approval of all or part of a plan) shall
apply to a Governor's notice of intent to exercise by-pass authority
under Sec. 631.38 of this part.
(d) Section 628.430(b) of this chapter (appeals of the Secretary's
disapproval of a plan when the SDA is the State) shall apply to plan
disapproval when the substate area is the State, as set forth in
Sec. 631.50(g) and (h) of this part.
(e) Decisions pertaining to designations of substate grantees under
Sec. 631.35 of this part are not appealable to the Secretary.
Subpart C--Needs-related payments
Sec. 631.20 Needs-related payments.
(a) Title III funds available to States and substate grantees may
be used to provide needs-related payments to participants in accordance
with the approved State or substate plan, as appropriate.
(b) In accordance with the approved substate plan, needs-related
payments shall be provided to an eligible dislocated worker only in
order to enable such worker to participate in training or education
programs under this part. To be eligible for needs-related payments:
(1) An eligible worker who has ceased to qualify for unemployment
compensation must have been enrolled in a training or education program
by the end of the thirteenth week of the worker's initial unemployment
compensation benefit period, or, if later, by the end of the eighth
week after an employee is informed that a short-term layoff will in
fact exceed 6 months.
(2) For purposes of paragraph (b)(1) of this section, the term
enrolled in a training or education program means that the worker's
application for training has been approved and the training institution
has furnished written notice that the worker has been accepted in the
approved training program beginning within 30 calendar days.
(3) An eligible worker who does not qualify for unemployment
compensation must be participating in a training or education program
(section 314(e)(1)).
(c) Needs-related payments shall not be provided to any participant
for the period that such individual is employed, enrolled in, or
receiving on-the-job training, out-of-area job search, or basic
readjustment services in programs under the Act, nor to any participant
receiving trade readjustment allowances, on-the-job training, out-of-
area job search allowances, or relocation allowances under Chapter 2 of
Title II of the Trade Act of 1974 (19 U.S.C. 2271, et seq.) or part 617
of this chapter (section 314(e)(1)).
(d) The level of needs-related payments to an eligible dislocated
worker in programs under this part shall not exceed the higher of:
(1) The applicable level of unemployment compensation; or
(2) The poverty level (as by the published by the Secretary of
Health and Human Services) (section 314(e)(2)).
Subpart D--State Administration
Sec. 631.30 Designation or creation and functions of a State
dislocated worker unit or office, and rapid response assistance.
(a) Designation or creation of State dislocated worker unit or
office. The State shall designate or create an identifiable State
dislocated worker unit or office with the capabilities and functions
identified in paragraph (b) of this section. Such unit or office may be
an existing organization or new organization formed for this purpose
(section 311(b)(2)). The State dislocated worker unit or office shall:
(1) Make appropriate retraining and basic adjustment services
available to eligible dislocated workers through substate grantees, and
in statewide, regional or industrywide projects;
(2) Work with employers and labor organizations in promoting labor-
management cooperation to achieve the goals of this part;
(3) Operate a monitoring, reporting, and management system to
provide adequate information for effective program management, review,
and evaluation;
(4) Provide technical assistance and advice to substate grantees;
(5) Exchange information and coordinate programs with the
appropriate economic development agency, State education and training
and social services programs;
(6) Coordinate with the unemployment insurance system, the Federal-
State Employment Service system, the Trade Adjustment Assistance
program and other programs under this chapter;
(7) Receive advance notice of plant closings and mass layoffs as
provided at section 3(a)(2) of the Worker Adjustment and Retraining
Notification Act (29 U.S.C. 2102(a)(2) and part 639 of this chapter);
(8) Immediately notify (within 48 hours) the appropriate substate
grantees following receipt of an employer notice of layoff or plant
closing or of any other information that indicates a projected layoff
or plant closing by an employer in the grantee's substate area, in
order to continue and expand the services initiated by the rapid
response team (section 311(b)(3)(D));
(9) Fully consult with labor organizations where substantial
numbers of their members are to be served; and
(10) Disseminate throughout the State information on the
availability of services and activities under Title III of the Act and
this part.
(b) Rapid response capability. The dislocated worker unit shall
have one or more rapid response specialists, and the capability to
provide rapid response assistance, on-site, for dislocation events such
as permanent closures and substantial layoffs throughout the State. The
State shall not transfer the responsibility for the rapid response
assistance functions of the State dislocated worker unit to another
entity, but the State may contract with another entity to perform rapid
response assistance services. Nothing in this paragraph shall remove or
diminish the dislocated worker unit's accountability for ensuring the
effective delivery of rapid response assistance services throughout the
State (section 311(b)(12)).
(1) State rapid response specialists should be knowledgeable about
the resources available through programs under this part and all other
appropriate resources available through public and private sources to
assist dislocated workers. The expertise required by this part includes
knowledge of the Federal, State, and local training and employment
systems; labor-management relations and collective bargaining
activities; private industry and labor market trends; programs and
services available to veterans; and other fields necessary to carry out
the rapid response requirements of the Act.
(2) The rapid response specialists should have:
(i) The ability to organize a broad-based response to a dislocation
event, including the ability to coordinate services provided under this
part with other State-administered programs available to assist
dislocated workers, and the ability to involve the substate grantee and
local service providers in the assistance effort;
(ii) The authority to provide limited amounts of immediate
financial assistance for rapid response activities, including, where
appropriate, financial assistance to labor-management committees formed
under paragraph (c)(2) of this section;
(iii) Credibility among employers and in the employer community in
order to effectively work with employers in difficult situations; and
(iv) Credibility among employee groups and in the labor community,
including organized labor, in order to effectively work with employees
in difficult situations.
(3) The dissemination of information on the State dislocated worker
unit's services and activities should include efforts to ensure that
major employers, organized labor, and groups of employees not
represented by organized labor, are aware of the availability of rapid
response assistance. The State dislocated worker unit should make equal
effort in responding to dislocation events without regard to whether
the affected workers are represented by a union.
(4) In a situation involving an impending permanent closure or
substantial layoff, a State may provide funds, where other public or
private resources are not expeditiously available, for a preliminary
assessment of the advisability of conducting a comprehensive study
exploring the feasibility of having a company or group, including the
workers, purchase the plant and continue it in operation.
(5) Rapid response specialists may use funds available under this
part:
(i) To establish on-site contact with employer and employee
representatives within a short period of time (preferably 48 hours or
less) after becoming aware of a current or projected permanent closure
or substantial layoff in order to--
(A) Provide information on and facilitate access to available
public programs and services; and
(B) Provide emergency assistance adapted to the particular
permanent closure or substantial layoff; such emergency assistance may
include financial assistance for appropriate rapid response activities,
such as arranging for the provision of early intervention services and
other appropriate forms of immediate assistance in response to the
dislocation event;
(ii) To promote the formation of labor-management committees as
provided for in paragraph (c) of this section, by providing:
(A) Immediate assistance in the establishment of the labor-
management committee, including providing immediate financial
assistance to cover the start-up costs of the committee;
(B) A list of individuals from which the chairperson of the
committee may be selected;
(C) Technical advice as well as information on sources of
assistance, and liaison with other public and private services and
programs; and
(D) Assistance in the selection of worker representatives in the
event no union is present;
(iii) To provide ongoing assistance to labor-management committees
described in paragraph (c) of this section by:
(A) Maintaining ongoing contact with such committees, either
directly or through the committee chairperson;
(B) Attending meetings of such committees on an ex officio basis;
and
(C) Ensuring ongoing liaison between the committee and locally
available resources for addressing the dislocation, including the
establishment of linkages with the substate grantee or with the service
provider designated by the substate grantee to act in such capacity;
(iv) To collect information related to:
(A) Economic dislocation (including potential closings or layoffs);
and
(B) All available resources within the State for serving displaced
workers, which information shall be made available on a regular basis
to the Governor and the State Council to assist in providing an
adequate information base for effective program management, review, and
evaluation;
(v) To provide or obtain appropriate financial and technical advice
and liaison with economic development agencies and other organizations
to assist in efforts to avert worker dislocations;
(vi) To disseminate information throughout the State on the
availability of services and activities carried out by the dislocated
worker unit or office; and
(vii) To assist the local community in developing its own
coordinated response and in obtaining access to State economic
development assistance.
(6) Notwithstanding the definition of ``substantial layoff (for
rapid response assistance)'' at Sec. 631.2 of this part;
(i) The Governor shall provide rapid response and basic
readjustment services to members of a group of workers under the NAFTA
Worker Security Act for which the Governor has made a finding under
Sec. 631.3(j); and
(ii) The Governor may, under exceptional circumstances, authorize
rapid response assistance provided by a State dislocated worker unit
when the layoff is less than 50 or more individuals, is not at a single
site of employment, or does not take place during a single 30 day
period. For purposes of this provision, exceptional circumstances
include those situations which would have a major impact upon the
community(ies) in which they occur (section 314(b)).
(c) Labor-management committees. As provided in sections 301(b)(1)
and 314(b)(1)(B) of the Act, labor-management committees are a form of
rapid response assistance which may be voluntarily established to
respond to actual or prospective worker dislocation.
(1) Labor management committees ordinarily include (but are not
limited to) the following:
(i) Shared and equal participation by workers and management, with
members often selected in an informal fashion;
(ii) Shared financial participation between the company and the
State, using funds provided under Title III of the Act, in paying for
the operating expenses of the committee; in some instances, labor union
funds may help to pay committee expenses;
(iii) A chairperson, to oversee and guide the activities of the
committee who--
(A) Shall be jointly selected by the labor and management members
of the committee;
(B) Is not employed by or under contract with labor or management
at the site; and
(C) Shall provide advice and leadership to the committee and
prepare a report on its activities;
(iv) The ability to respond flexibly to the needs of affected
workers by devising and implementing a strategy for assessing the
employment and training needs of each dislocated worker and for
obtaining the services and assistance necessary to meet those needs;
(v) A formal agreement, terminable at will by the workers or the
company management, and terminable for cause by the Governor; and
(vi) Local job identification activities by the chairperson and
members of the committee on behalf of the affected workers.
(2) Because they include employee representatives, labor-management
committees typically provide a channel whereby the needs of eligible
dislocated workers can be assessed, and programs of assistance
developed and implemented, in an atmosphere supportive to each affected
worker. As such, committees must be perceived to be representative and
fair in order to be most effective.
Sec. 631.31 Monitoring and oversight.
The Governor is responsible for monitoring and oversight of all
State and substate grantee activities under this part. In such
monitoring and oversight of substate grantees, the Governor shall
ensure that expenditures and activities are in accordance with the
substate plan or modification thereof, and with the cost limitations
described in Sec. 631.14 of this part.
Sec. 631.32 Allocation of funds by the Governor.
Of the funds allotted to the Governor by the Secretary under
Sec. Sec. 631.11 and 631.12 of this part:
(a) The Governor shall issue allocations to substate grantees, the
sum of which shall be no less than 50 percent of the State's allotment
(section 302(d)).
(b)(1) The Governor shall prescribe the formula to be used in
issuing substate allocations required under paragraph (a) of this
section to substate grantees.
(2) The formula prescribed pursuant to paragraph (b)(1) of this
section shall utilize the most appropriate information available to the
Governor. In prescribing the formula, the Governor shall include (but
need not be limited to) the following information:
(i) Insured unemployment data;
(ii) Unemployment concentrations;
(iii) Plant closing and mass layoff data;
(iv) Declining industries data;
(v) Farmer-rancher economic hardship data; and
(vi) Long-term unemployment data.
(3) The Governor may allow for an appropriate weight for each of
the formula factors set forth in paragraph (b)(2) of this section. A
weight of zero for any of the factors required in section 302(d) of the
Act and identified in paragraph (b)(2) of this section shall only be
made when a review of available data indicates that the factor is not
relevant to determining the incidence of need for worker dislocation
assistance within the State. The formula may be amended no more
frequently than once each program year (section 302(d)).
(c) The Governor may reserve an amount equal to not more than 40
percent of the funds allotted to the State under Sec. 631.11 and
Sec. 631.12 of this part for State activities and for discretionary
allocations to substate grantees (section 302(c)(1)).
(d) The Governor may reserve an additional amount equal to not more
than 10 percent of the funds allotted to the State under Sec. 631.11 of
this part. The Governor shall allocate such funds, subject to the SJTCC
or HRIC review and comment, during the first three quarters of the
program year among substate grantees on the basis of need. Such funds
shall be allocated to substate grantees and shall not be used for
statewide activities. Such funds shall be included in each substate
grantee's allocation for purposes of cost limitations, as described in
Sec. 631.14 of this part (sections 302(c)(2) and 317(1)(B)).
Sec. 631.33 State procedures for identifying funds subject to
mandatory Federal reallotment.
The Governor shall establish procedures to assure the equitable
identification of funds required to be reallotted pursuant to section
303(b) of the Act. Funds so identified may be funds reserved by the
State pursuant to section 302(c)(1)(A) through (D) of the Act and/or
allocated to substate grantees pursuant to section 302(c)(1)(E), (c)(2)
and/or (d) of the Act (section 303(d)). Such procedures may not exempt
either State or substate funds from reallotment.
Sec. 631.34 Designation of substate areas.
(a) The Governor, after receiving recommendations from the SJTCC or
HRIC, shall designate substate areas for the State (section 312(a)).
(b) In designating substate areas, the Governor shall:
(1) Ensure that each service delivery area within the State is
included within a substate area and that no SDA is divided among two or
more substate areas; and
(2) Consider the availability of services throughout the State, the
capability to coordinate the delivery of services with other human
services and economic development programs, and the geographic
boundaries of labor market areas within the State.
(c) Subject to paragraph (b) of this section, the Governor shall
designate as a substate area:
(1) Any single SDA that has a population of 200,000 or more;
(2) Any two or more contiguous SDA's that:
(i) In the aggregate have a population of 200,000 or more; and
(ii) Request such designation; and
(3) Any concentrated employment program grantee for a rural area as
described in section 101(a)(4)(A)(iii) of the Act.
(d) In addition to the entities identified in paragraph (c) of this
section, the Governor may, without regard to the 200,000 population
requirement, designate SDAs with smaller populations as substate areas.
(e) The Governor may deny a request for substate area designation
from a consortium of two or more SDAs that meets the requirements of
paragraph (c)(2) of this section only upon a determination that the
request is not consistent with the effective delivery of services to
eligible dislocated workers in the relevant labor market area, or would
otherwise not be appropriate to carry out the purposes of title III.
The Governor will give good faith consideration to all such requests by
a consortium of SDAs to be a substate area. In denying a consortium's
request for substate area designation, the Governor shall set forth the
basis and rationale for the denial (section 312(a)(5)).
(f) In the case where the service delivery area is the State, the
entire State shall be designated as a single substate area.
(g)(1) Entities described in paragraphs (c)(1) and (3) of this
section may appeal the Governor's denial of substate area designation
to the Secretary of Labor. The procedures that apply to such appeals
shall be those set forth at Sec. 628.405(g) for appeals of the
Governor's denial of SDA designation.
(2) An entity described in paragraph (c)(2) of this section that
has been denied substate area designation may utilize the State-level
grievance procedures required by section 144(a) of the Act and subpart
E of part 627 of this chapter for the resolution of disputes arising
from such a denial.
(h) Designation of substate areas shall not be revised more
frequently than once every two years. All such designations must be
completed no later than four months prior to the beginning of any
program year (section 312(a)(6)).
Sec. 631.35 Designation of substate grantees.
The Governor may establish procedures for the designation of
substate grantees.
(a) Designation of the substate grantee for each substate area
shall be made on a biennial basis.
(b) Entities eligible for designation as substate grantees include:
(1) Private industry councils in the substate area;
(2) Service delivery area grant recipients or administrative
entities designated under Title II of the Act;
(3) Private non-profit organizations;
(4) Units of general local government in the substate area, or
agencies thereof;
(5) Local offices of State agencies; and
(6) Other public agencies, such as community colleges and area
vocational schools.
(c) Substate grantees shall be designated in accordance with an
agreement among the Governor, the local elected official or officials
of such area, and the private industry council or councils of such
area. Whenever a substate area is represented by more than one such
official or council, the respective officials and councils shall each
designate representatives, in accordance with procedures established by
the Governor (after consultation with the SJTCC or HRIC), to negotiate
such agreement.
(d) The agreement specified in paragraph (c) of this section shall
set forth the conditions, considerations, and other factors related to
the selection of substate grantees in accordance with section 312(b) of
the Act.
(e) The Governor shall negotiate in good faith with the parties
identified in paragraph (c) of this section and shall make a good faith
effort to reach agreement. In the event agreement cannot be reached on
the selection of a substate grantee, the Governor shall select the
substate grantee.
(f) Decisions under paragraphs (c), (d), and (e) of this section
are not appealable to the Secretary (section 312(b) and (c)).
Sec. 631.36 Biennial State plan.
(a) In order to receive an allotment of funds under Secs. 631.11
and 631.12 of this part, the State shall submit to the Secretary, in
accordance with instructions issued by the Secretary, on a biennial
basis, a biennial State plan (section 311). Such plan shall include:
(1) Assurances that--
(i) The State will comply with the requirements of Title III of the
Act and this part;
(ii) Services will be provided only to eligible displaced workers,
except as provided in paragraph (a)(2) of this section;
(iii) Services will not be denied on the basis of State of
residence to eligible dislocated workers displaced by a permanent
closure or substantial layoff within the State; and may be provided to
other eligible dislocated workers regardless of the State of residence
of such workers;
(2) Provision that the State will provide services under this part
to displaced homemakers only if the Governor determines that the
services may be provided to such workers without adversely affecting
the delivery of services to eligible dislocated workers;
(3) A description of the substate allotment and reallotment
procedures and assurance that they meet the requirements of the Act and
this part;
(4) A description of the State procurement system and procedures to
be used under Title III of the Act and this part which are consistent
with the provisions in subpart D of part 627 of this chapter; and
(5) Assurance that the State will not prescribe any performance
standard which is inconsistent with Sec. 627.470 of this chapter.
(b) The State biennial plan shall be submitted to the Secretary on
or before the May 1 immediately preceding the first of the two program
years for which the funds are to be made available.
(c) Any plan submitted under paragraph (a) of this section may be
modified to describe changes in or additions to the programs and
activities set forth in the plan. No plan modification shall be
effective unless reviewed pursuant to paragraph (d) of this section and
approved pursuant to paragraph (e) of this section.
(d) The Secretary shall review State biennial plans and plan
modifications, including any comments thereon submitted by the SJTCC or
HRIC, for overall compliance with the provisions of the Act, this part,
and the instructions issued by the Secretary.
(e) A State biennial plan or plan modification is submitted on the
date of its receipt by the Secretary. The Secretary shall approve a
plan or plan modification within 45 days of submission unless, within
30 days of submission, the Secretary notifies the Governor in writing
of any deficiencies in such plan or plan modification.
(f) The Secretary shall not finally disapprove the State biennial
plan or plan modification of any State except after written notice and
an opportunity to request and to receive a hearing before an
administrative law judge pursuant to the provisions of subpart H of
part 627 of this chapter.
Sec. 631.37 Coordination activities.
(a) Services under this part shall be integrated or coordinated
with services and payments made available under Chapter 2 of Title II
of the Trade Act of 1974 (19 U.S.C. 2271, et seq.) and part 617 of this
chapter and programs provided by any State or local agencies designated
under section 239 of the Trade Act of 1974 (19 U.S.C. 2311) or part 617
of this chapter (section 311(b)(10)). Such coordination shall be
effected under provisions of an interagency agreement when the State
agency responsible for administering programs under this part is
different from the State agency administering Trade Act programs.
(b) States may use funds allotted under Secs. 631.11 and 631.12 of
this part for coordination of worker readjustment programs, (i.e.,
programs under this part and trade adjustment assistance under part 617
of this chapter) and the unemployment compensation system consistent
with the limitation on administrative expenses (see Sec. 631.14(a)(1)
of this part). Each State shall be responsible for coordinating the
unemployment compensation system and worker readjustment programs
(section 314(f)).
(c) Services under this part shall be coordinated with dislocated
worker services under Title III of the Carl D. Perkins Vocational
Education Act (20 U.S.C. 2351, et seq.) (section 311(b)(5)).
(d) In promoting labor management cooperation, including the
formation of labor-management committees under this part, the
dislocated worker unit shall consider cooperation and coordination with
labor-management committees established under other authorities
(section 311(b)(3)(B)).
(e) In accordance with section 402 of the Veterans' Benefits and
Programs Improvement Act of 1988 (29 U.S.C. 1751 note) services under
this part shall be coordinated with programs administered by the
Department of Veterans Affairs and with other veterans' programs such
as the Veterans' Job Training Act (29 U.S.C. 1721 note), title IV-C of
the Job Training Partnership Act (29 U.S.C. 1721, et seq.), part 635 of
this chapter, and the Transition Assistance Program.
Sec. 631.38 State by-pass authority.
(a)(1) In the event that a substate grantee fails to submit a plan,
or submits a plan which is not approved by the Governor (see
Sec. 631.50(f) of this part), the Governor may direct the expenditure
of funds allocated to the substate area.
(2) The Governor's authority under this paragraph (a) to direct the
expenditure of funds remains in effect only until such time as a plan
is submitted and approved, or a new substate grantee is designated
(section 313(c)).
(3) The Governor shall not direct the expenditure of funds under
this paragraph (a) until after the affected substate grantee has been
afforded advance written notice of the Governor's intent to exercise
such authority and an opportunity to appeal to the Secretary pursuant
to the provisions of Sec. 628.426(e) of this chapter.
(b)(1) If a substate grantee fails to expend funds allocated to it
in accordance with its plan, the Governor, subject to appropriate
notice and opportunity for comment in the manner required by section
105(b)(1), (2), and (3) of the Act, may direct the expenditure of funds
only in accordance with the substate plan.
(2) The Governor's authority under this paragraph (b) to direct the
expenditure of funds shall remain in effect only until:
(i) The substate grantee corrects the failure;
(ii) The substate grantee submits an acceptable modification; or
(iii) A new substate grantee is designated (section 313(a) and
(d)).
(3) The Governor shall not direct the expenditure of funds under
this paragraph (b) until after the affected substate grantee has been
afforded advance written notice of the Governor's intent to exercise
such authority and an opportunity to appeal to the Secretary pursuant
to the provisions of Sec. 628.426(e) of this chapter.
(c) When the substate area is the State, the Secretary shall have
the same authority as the Governor under paragraphs (a) and (b) of this
section.
Subpart E--State Programs
Sec. 631.40 State program operational plan.
(a) The Governor shall submit to the Secretary biennially, in
accordance with instructions issued by the Secretary, a State program
operational plan describing the specific activities, programs and
projects to be undertaken with the funds reserved by the Governor under
Sec. 631.32(c) of this part.
(b) The State program operational plan shall include a description
of the mechanisms established between the Federal-State Unemployment
Compensation System, the Trade Adjustment Assistance Program, the State
Employment service and programs authorized under title III of the Act
and this part to coordinate the identification and referral of
dislocated workers and the exchange of information.
Sec. 631.41 Allowable State activities.
(a) States may use funds reserved under Sec. 631.32(c) of this
part, subject to the provisions of the State biennial and program
operational plans, for:
(1) Rapid response assistance;
(2) Basic readjustment services when undertaken in Statewide,
regional or industrywide projects, or, initially, as part of rapid
response assistance;
(3) Retraining services, including (but not limited to) those in
section 314(d) of the Act when undertaken in Statewide, industrywide
and regional programs;
(4) Coordination with the unemployment compensation system, in
accordance with Sec. 631.37(b) of this part;
(5) Discretionary allocation for basic readjustment and retraining
services to provide additional assistance to substate areas that
experience substantial increases in the number of dislocated workers,
to be expended in accordance with the substate plan or a modification
thereof;
(6) Incentives to provide training of greater duration for those
who require it; and
(7) Needs-related payments in accordance with section 315(b) of the
Act.
(b) Activities shall be coordinated with other programs serving
dislocated workers, including training under Chapter 2 of Title II of
the Trade Act of 1974 (19 U.S.C. 2271, et seq.) and part 617 of this
chapter.
(c) Where appropriate, State-level activities should be coordinated
with activities and services provided by substate grantees.
(d) Retraining services provided to individuals with funds
available to a State should be limited to those individuals who can
most benefit from and are in need of such services.
(e) Other than basic and remedial education, literacy and English
for non-English speakers training, retraining services provided with
funds available to a State shall be limited to those for occupations in
demand in the area or another area to which the participant is willing
to relocate, or in sectors of the economy with a high potential for
sustained demand or growth.
(f) Services provided to displaced homemakers should be part of
ongoing programs and activities under Title III and this part and not
separate and discrete programs.
(g) Basic readjustment services described in Sec. 631.3(b)(1),
provided to individuals who have not received a specific notice of
termination or layoff and who work at a facility at which the employer
has made a public announcement that such facility will close shall, to
the extent practicable be funded by the State with funds reserved under
Sec. 631.32(c) (section 314(h)).
(h) The provisions of section 107(a), (b) and (e) of the Act (but
not subsections (c) and (d) of section 107) and Sec. 627.422 of this
chapter apply to State selection of service providers for funded
activities authorized in Sec. 631.32(c) of this part.
Subpart F--Substate Programs
Sec. 631.50 Substate plan.
(a) In order to receive an allocation of funds under Sec. 631.32
of this part, the substate grantee shall submit to the Governor a
substate plan, in accordance with instructions issued by the Governor.
Such plan shall meet the requirements of this section and shall be
approved by the Governor prior to funds being allocated to a substate
grantee.
(b) The Governor shall issue instructions and schedules that assure
that substate plans and plan modifications conform to all requirements
of the Act and this part and contain the statement required by section
313(b) of the Act.
(c) Substate plans shall provide for compliance with the cost
limitation provisions of Sec. 631.14 of this part.
(d) The SJTCC or HRIC shall review and submit to the Governor
written comments on substate plans.
(e) Prior to the submission of the substate plan to the Governor,
the substate grantee shall submit the plan to the parties to the
agreement described in Sec. 631.35(c) of this part for review and
comment (section 313(a)).
(f) The Governor's review and approval (or disapproval) of a
substate plan or plan modification, and appeals to the Secretary from
disapprovals thereof, shall be conducted according to the provisions of
section 105 of the Act and Sec. 628.426 of this chapter (section
313(c)).
(g) If a substate grantee fails to meet the requirements for plan
submission and approval found in this section, the Governor may
exercise the by-pass authority set forth at Sec. 631.38 of this part.
(h) When the substate area is the State, the substate plan (and
plan modification(s)) shall be submitted by the Governor to the
Secretary. The dates for submission and consideration and the
Secretary's review and approval (or disapproval) of the plan or plan
modification, and appeals to administrative law judges from disapproval
thereof, shall be conducted according to the provisions of Sec. 628.430
of this chapter.
Sec. 631.51 Allowable substate program activities.
(a) The substate grantee may use JTPA section 302(c)(1), (c)(2),
and (d) funds allocated by the Governor under Sec. 631.32 of this part
for basic readjustment services, retraining services, supportive
services and needs-related payments.
(b) The provisions of Secs. 627.420 and 627.435 of this chapter
(Procurement, Cost principles and allowable costs) apply to funds
allocated to substate grantees under this part unless otherwise
specifically provided for.
(c) Other than basic and remedial education, literacy and English
for non-English speakers training, retraining services provided with
funds available to a substate area shall be limited to those for
occupations in demand in the area or another area to which the
participant is willing to relocate, or in sectors of the economy with a
high potential for sustained demand or growth.
(d) Retraining services provided to individuals with funds
available to a substate area should be limited to those individuals who
can most benefit from and are in need of such services (sections 312(e)
and 141(a)).
Sec. 631.52 Selection of service providers.
(a) The substate grantee shall provide authorized JTPA Title III
services within the substate area, pursuant to an agreement with the
Governor and in accordance with the approved State plan and substate
plan, including the selection of service providers.
(b) The substate grantee may provide authorized JTPA Title III
services directly or through contract, grant, or agreement with service
providers (section 312(d)).
(c) Services provided to displaced homemakers should be part of
ongoing programs and activities under Title III of the Act and this
part and not separate and discrete programs.
(d) The provisions of section 107(a), (b), (c) and (e) of the Act
and Sec. 627.422 of this chapter apply to substate grantee selection of
service providers as specified in this section.
Sec. 631.53 Certificates of continuing eligibility.
(a) A substate grantee may issue to any eligible dislocated worker
who has applied for the program authorized in this part a certificate
of continuing eligibility. Such a certificate of continuing
eligibility:
(1) May be effective for periods not to exceed 104 weeks;
(2) Shall not include any reference to any specific amount of
funds;
(3) Shall state that it is subject to the availability of funds at
the time any such training services are to be provided; and
(4) Shall be non-transferable.
(b) Acceptance of a certificate of continuing eligibility shall not
be deemed to be enrollment in training.
(c) Certificates of continuing eligibility may be used, subject to
the conditions included on the face of the certificate, in two distinct
ways:
(1) To defer the beginning of retraining: any individual to whom a
certificate of continuing eligibility has been issued under paragraph
(a) of this section shall remain eligible for retraining and education
services authorized under this part for the period specified in the
certificate, notwithstanding the definition of ``eligible dislocated
worker'' in section 301(a) of the Act or the participant eligibility
provisions in Sec. 631.3 of this part, and may use the certificate in
order to receive retraining services, subject to the limitations
contained in the certificate; or
(2) To permit eligible dislocated workers to seek out and arrange
their own retraining with service providers approved by the substate
grantee; retraining provided pursuant to the certificate shall be in
accord with requirements and procedures established by the substate
grantee and shall be conducted under a grant, contract, or other
arrangement between the substate grantee and the service provider.
(d) Substate grantees shall ensure that records are maintained
showing to whom such certificates of continuing eligibility have been
issued, the dates of issuance, and the number redeemed by substate
grantees.
Subpart G--Federal Delivery of Dislocated Worker Services Through
National Reserve Account Funds
Sec. 631.60 General.
This subpart provides for the use of funds reserved to the
Secretary for use under part B of title III of the Act. These funds may
be used for the allowable activities, described in section 323 of the
Act; demonstration programs, described in section 324 of the Act; the
Defense Conversion Adjustment Program (DCAP), described in section 325
of the Act; the Defense Diversification Program (DDP), described in
section 325A of the Act; Clean Air Employment Transition Assistance
(CAETA), described in section 326 of the Act; and similar uses and
programs which may be added to part B of title III of the Act.
Sec. 631.61 Application for funding and selection criteria.
To qualify for consideration for funds reserved by the Secretary
for activities under section 323 of the Act, applications shall be
submitted to the Secretary pursuant to instructions issued by the
Secretary specifying application procedures, selection criteria, and
approval process. Separate instructions will be issued for each
category of grant awards, as determined by the Secretary.
Sec. 631.62 Cost limitations.
The expenditure of funds provided to grantees under this subpart
shall be consistent with the cost limitations specified in the grant.
Applicants for grants under this subpart may propose, in their grant
applications, reasonable costs to be incorporated into the grant. The
Grant Officer may accept or modify such proposals at his/her
discretion. Where proposals do not adequately justify to the Grant
Officer's satisfaction the costs to be incorporated into the grant, the
cost limitations that shall be applied shall be those specified in
section 315 of the Act and described in paragraphs (a), (b) and (c) of
Sec. 631.14 of this part.
Sec. 631.63 Reporting.
(a) Grantees under part B of title III of the Act shall submit
reports as prescribed by the Secretary.
(b) Significant developments. Grantees shall notify the Secretary
of developments that have a significant impact on the grant or subgrant
supported activities, including problems, delays, or adverse conditions
which may materially impair the ability to meet the objectives of the
project. This notification shall include a statement of the action
taken, or contemplated, and any assistance needed to resolve the
situation.
Sec. 631.64 General administrative requirements.
(a) Activities under this subpart may be carried out and funding
provided directly to grantees other than States.
(b) All grantees and subgrantees under this subpart that are
States or substate grantees are subject to the provisions in part 627
of this chapter.
(c) For grantees other than States and substate grantees, the
following provisions shall apply to grants under this subpart.
(1) Grievance procedures. (i) Each grantee shall establish and
maintain a grievance procedure for grievances or complaints about its
programs and activities from participants, subgrantees, subcontractors,
and other interested persons. Hearings on any grievance shall be
conducted within 30 days of filing of a grievance and decisions shall
be made not later than 60 days after the filing of a grievance. Except
for complaints alleging fraud or criminal activity, complaints shall be
made within one year of the alleged occurrence.
(ii) Grantees shall be subject to the provisions of section 144 of
the Act, and 29 CFR part 95 or 97, as appropriate.
(iii) If the grantee is already subject to the grievance procedure
process and requirements established by the Governor (i.e., through
another JTPA grant, subgrant, or contract), its adherence to that
procedure shall meet the requirements of this paragraph (c)(1).
(2) Uniform Administrative Standards. Grantees shall be subject to
the standards and requirements described in 29 CFR part 95 or 97, as
appropriate, as well as any additional standards prescribed in grant
documents or Secretarial guidelines. If the grantee/ subgrantee is
already subject to additional standards established by the Governor
(i.e., through another JTPA grant, subgrant, or contract), its
adherence to those standards shall meet the requirements of this
paragraph (c)(2).
Sec. 631.65 Special provisions for CAETA and DDP.
(a) Allowances for Job Search Outside the Commuting Area under
CAETA. Allowances for job search outside the commuting area shall be an
allowable activity under CAETA, only where it has been determined that
the dislocated worker cannot reasonably be expected to secure suitable
employment within the commuting area in which the worker resides.
Procedures for determining whether a dislocated worker cannot
reasonably be expected to secure suitable employment within the
commuting area in which the dislocated worker resides shall be
described in the grant application and shall be subject to approval by
the Grant Officer. The cost of job search outside the commuting area
shall be an allowable cost, but shall not provide for more than 90
percent of the cost of necessary job search expenses, and may not
exceed a total of $800, unless the need for a greater amount is
justified in the grant application and approved by the Grant Officer.
(b) Relocation Allowances under CAETA. Relocation allowances under
CAETA shall be allowable only where the eligible dislocated worker
cannot reasonably be expected to secure suitable employment in the
commuting area in which the worker resides and has obtained suitable
employment affording a reasonable expectation of long-term duration in
the area in which the worker wishes to relocate, or has obtained a bona
fide offer of such employment, provided that the worker is totally
separated from employment at the time relocation commences. The cost of
relocation for an eligible dislocated worker shall not exceed an amount
which is equal to the sum of the reasonable and necessary expenses
incurred in transporting the dislocated worker and the dislocated
worker's family, if any, and household effects, and a lump sum
relocation allowance, equivalent to three times such worker's average
weekly wage. The maximum relocation allowance, however, shall not
exceed $800, unless a greater amount is justified in the grant
application and approved by the Grant Officer. Necessary expenses shall
be travel expenses for the dislocated worker and the dislocated
worker's family and for the transfer of household effects. Reasonable
costs for such travel and transfer expenses shall be by the least
expensive, most reasonable form of transportation.
(c) Needs-related payments under CAETA and DDP. Funds from grants
for CAETA and DDP shall be available for needs-related payments to
enable participants to participate in and complete training or
education programs under those grants, subject to the following:
(1) Needs-related payments shall be provided to the participant
only if the participant:
(i) Does not qualify or has ceased to qualify for unemployment
compensation;
(ii) Has been enrolled in training programs by the end of the 13th
week of an individual's initial unemployment benefit period following
the layoff or termination, or, if later, the end of the 8th week after
an individual is informed that a short-term layoff will exceed six
months;
(iii) Is making satisfactory progress in training or education
programs under this section, except that an individual shall not be
disqualified pursuant to this clause for a failure to participate that
is not the fault of the individual; and
(iv) Currently receives, or is a member of a family which currently
receives, a total family income (exclusive of unemployment
compensation, child support payments, and welfare payments) which, in
relation to family size, is not in excess of the lower living standard
income level.
(2) Needs-related payments shall be equal to the higher of:
(i) The applicable level of unemployment compensation; or
(ii) The poverty level determined in accordance with the criteria
established by the Director of the Office of Management and Budget.
(3) Total family income shall be reviewed periodically, based upon
information obtained from participants with respect to such income and
changes therein, to determine continued eligibility, or to begin
payments to individuals previously found ineligible for needs-related
payments under this section.
Subpart H--[Reserved]
Subpart I--Disaster Relief Employment Assistance
Sec. 631.80 Scope and purpose.
This subpart establishes a Disaster Relief Employment Assistance
program under title IV, part J of JTPA which shall be administered in
conjunction with the title III National Reserve Grants Programs.
Sec. 631.81 Availability of funds.
Funds appropriated to carry out this subpart may be made available
by grant to the Governor of any State within which is located an area
that has suffered an emergency or a major disaster as defined in
paragraphs (1) and (2), respectively, of section 102 of the Disaster
Relief Act of 1974 (42 U.S.C. 5122(1) and (2)) (referred to in this
subpart as the ``disaster area''). The Secretary shall prescribe
procedures for applying for funds.
Sec. 631.82 Substate allocation.
(a) Not less than 80 percent of the grant funds available to any
Governor under Sec. 631.81 of this part shall be allocated by the
Governor to units of general local government located, in whole or in
part, within such disaster areas. The remainder of such funds may be
reserved by the Governor for use, in concert with State agencies, in
cleanup, rescue, repair, renovation, and rebuilding activities
associated with such major disaster.
(b) The JTPA title III program substate grantee for the disaster
area shall be the designated local entity for administration of the
grant funds under this subpart.
Sec. 631.83 Coordination.
Funds made available under this subpart to Governors and units of
general local government shall be expended in consultation with--
(a) Agencies administering programs for disaster relief provided
under the Disaster Relief Act of 1974; and
(b) The JTPA title II administrative entity and the private
industry council in each service delivery area within which disaster
employment programs will be conducted under this subpart.
Sec. 631.84 Allowable projects.
Funds made available under this subpart to any unit of general
local government in a disaster area--
(a) Shall be used exclusively to provide employment on projects
that provide food, clothing, shelter and other humanitarian assistance
for disaster victims; and on projects involving demolition, cleanup,
repair, renovation, and reconstruction of damaged and destroyed
structures, facilities, and lands located within the disaster area; and
(b) May be expended through public and private non-profit agencies
and organizations engaged in such projects.
Sec. 631.85 Participant eligibility.
An individual shall be eligible for disaster employment under this
subpart if such individual is--
(a)(1) Eligible to participate or enroll, or is a participant or
enrolled, under Title III of the Act, other than an individual who is
actively engaged in a training program; or
(2) Eligible to participate in programs or activities assisted
under Native American and Migrant Programs; and
(3) Unemployed as a consequence of the disaster.
(b) [Reserved].
Sec. 631.86 Limitations on disaster relief employment.
No individual shall be employed under this subpart for more than 6
months for work related to recovery from a single natural disaster
(described in Sec. 631.3(f) of this part).
Sec. 631.87 Definitions.
As used in this subpart, the term unit of general local government
includes:
(a) In the case of a community conducting a project in an Indian
reservation or Alaska Native village, the grantee designated under the
JTPA section 401 Indian and Native American Program (see part 632 of
this chapter), or a consortium of such grantees and the State; and
(b) In the case of a community conducting a project in a migrant or
seasonal farmworker community, the grantee designated under the JTPA
section 402 Migrant and Seasonal Farmworker Program (see part 633 of
this chapter), or a consortium of such grantees and the State.
7. Part 637 is revised to read as follows:
PART 637--PROGRAMS UNDER TITLE V OF THE JOB TRAINING PARTNERSHIP
ACT
Subpart A--General Provisions
637.100 Scope and purpose.
637.105 Definitions.
Subpart B--Program Planning and Operation
637.200 Allotments to States.
637.205 Notice of intent to participate.
637.210 Incentive bonus program applications.
637.215 Review and approval of applications for incentive bonus
payments.
637.220 Eligibility criteria for individuals to be counted in
determining incentive bonuses.
637.225 Determination of incentive bonus.
637.230 Use of incentive bonuses.
Subpart C--Additional Title V Administrative Standards and Procedures
637.300 Management systems, reporting and recordkeeping.
637.305 Federal monitoring and oversight.
637.310 Audits.
Subpart D--Data Collection [Reserved]
Authority: 29 U.S.C 1579(a); 29 U.S.C. 1791i(e).
Subpart A--General Provisions
Sec. 637.100 Scope and purpose.
(a) This part implements Title V of the Act which creates a
program to provide incentive bonuses to States for providing certain
employable dependent individuals with job training to reduce welfare
dependency, to promote self-sufficiency, to increase child support
payments, and to increase employment and earnings (section 501).
(b) This part applies to programs operated with funds under Title
V of the Job Training Partnership Act.
Sec. 637.105 Definitions.
In addition to the definitions contained in sections 4, 301,
303(e), and in Sec. 626.4 of this chapter, the following definitions
apply to the administration of Title V of the Act and this part:
Absent parent means an individual who is continuously absent from
the household and who is a non-custodial parent of a dependent child
receiving aid to families with dependent children (AFDC) under part A
of title IV of the Social Security Act (42 U.S.C. 601, et seq.).
Disability assistance means benefits offered pursuant to Title XVI
of the Social Security Act, relating to the supplemental security
income program.
Federal contribution means the amount of the Federal component of
cash payments to individuals within the participating State under
welfare and/or disability assistance programs, including Part A of
Title IV of the Social Security Act.
Subpart B--Program Planning and Operation
Sec. 637.200 Allotments to States.
(a) For each program year for which funds are appropriated to carry
out programs under this part, the Secretary shall pay to each
participating State the amount the State is eligible to receive in
accordance with this part. No payments shall be made for any years for
which funds are not appropriated and/or not available (section 502(a)).
(b) If the appropriation is not sufficient to pay to each State the
amount it is eligible to receive in accordance with this part, the
State shall receive a percentage of the total available funds equal to
the percentage of its bonus compared to the national total of bonuses
(section 502(b)).
(c) If an additional amount is made available after the application
of paragraph (b) of this section, such additional amount shall be
allocated among the States by increasing payment in the same manner as
was used to reduce payment, except that no State shall be paid an
amount which exceeds the amount to which it is eligible (section
502(c)).
Sec. 637.205 Notice of intent to participate.
(a) Any State seeking to participate in the incentive bonus program
shall notify the Secretary of its intent to do so no later than 30 days
before the beginning of its first program year of participation (i.e.,
June 1) (section 505(a)).
(b) Pursuant to instructions issued by the Secretary, the
notification referenced in paragraph (a) of this section shall be in
the form of a letter from the Governor to the Secretary advising the
Secretary of the State's intention to apply for, receive and expend
bonuses under this program in a manner consistent with this part
(section 505(b)).
(c) After the State's submission of a notice of intent to
participate, incentive bonuses may be claimed by a State for any
individual who:
(1)(i) Was an absent parent of any child receiving AFDC at the time
such individual was determined to be eligible for participation in
programs under the Act;
(ii) Has participated in education, training, or other activities
(including the Job Corps) funded under the Act; and
(iii) Pays child support for a child specified in paragraph (c)(1)
of this section following termination from activities funded under the
Act; or
(2)(i) Is blind or disabled;
(ii) Was receiving disability assistance at the time such
individual was determined to be eligible for participation in programs
under the Act;
(iii) Has participated in education, training, or other activities
(including the Job Corps) funded under the Act; and
(iv) Earns from employment a wage or an income (section 506).
(d) A Governor may withdraw the State's participation in the
incentive bonus program in any program year by submitting a written
notice of withdrawal.
Sec. 637.210 Incentive bonus program applications.
(a) Any State seeking to receive an incentive bonus under this
title shall submit an Incentive Bonus Program application pursuant to
instructions issued by the Secretary that will contain the criteria for
approval of such application. Each application shall contain, at a
minimum, the following information:
(1) A list of eligible individuals who met the requirements of
Sec. 637.220 of this part during the program year;
(2) The amount of the incentive bonus attributable to each eligible
individual who is claimed by the State; and
(3) A statement certifying the availability of documentation to
verify the eligibility of participants and the amount of the incentive
bonus claimed by the State (section 505(b)).
(b) The application for any program year shall be submitted by the
State to the Secretary no later than August 31 following the end of the
program year for which the bonus is being claimed. A copy of such
application shall also be submitted at the same time to the appropriate
DOL Employment and Training Administration Regional Office.
Sec. 637.215 Review and approval of applications for incentive bonus
payments.
(a) The Secretary shall review all applications for overall
compliance with JTPA, the requirements of this part, and the
instructions issued by the Secretary.
(b) The Secretary shall inform a State within 30 days after receipt
of the application whether or not its application has been approved.
(c) If the application is not approved, the Department shall issue
an initial notice of denial of payment indicating the reasons for such
denial. The Governor will then have 30 days to respond to the reasons
for the denial before a final decision is made.
(d) If the Department determines that the additional information
provided does not adequately respond to the questions raised in the
initial review process, a final denial of payment shall be issued. The
Governor may then appeal the decision in accordance with the procedures
at subpart H of part 627 of this chapter (sections 504(c) and 505(c)).
Sec. 637.220 Eligibility criteria for individuals to be counted in
determining incentive bonuses.
An individual shall be eligible to be counted as part of the
State's request for an incentive bonus payment under this part if the
individual:
(a)(1) Was an absent parent of any child receiving AFDC at the time
such individual was determined to be eligible for participation in
programs under the Act;
(2) Has participated in education, training, or other activities
(including the Job Corps) funded under the Act; and
(3) Pays child support for a child specified in paragraph (a)(1) of
this section following termination from activities funded under the
Act; or
(b)(1) Is blind or disabled;
(2) Was receiving disability assistance at the time such individual
was determined to be eligible for participation in programs under the
Act;
(3) Has participated in education, training, or other activities
(including the Job Corps) funded under the Act; and
(4) Earns a wage or an income from employment (section 506).
Sec. 637.225 Determination of incentive bonus.
The amount of the incentive bonus to be paid to each State shall be
the total of the incentive bonuses claimed for each eligible individual
within the State. The amount of the incentive bonus to be paid each
State shall be determined by the sum of:
(a) An amount equal to the total of the amounts of child support
paid by each individual who is eligible under Sec. 637.220(a) of this
part, for up to 2 years after such individual's termination from JTPA;
and
(b) An amount equal to the total reduction in the Federal
contribution to the amounts received under title XVI of the Social
Security Act (42 U.S.C. 1381, et seq.) by each individual who is
eligible under Sec. 637.220(b) of this part, for up to 2 years after
such individual's termination from JTPA (section 503).
Sec. 637.230 Use of incentive bonuses.
(a) During any program year, the Governor may use an amount not to
exceed 5 percent of the State's total bonus payment for the
administrative costs incurred under this program, including data and
information collection and compilation, recordkeeping, or the
preparation of applications for incentive bonuses (section
504(a)(1)(A)).
(b) The remainder, not less than 95 percent of the incentive
bonuses received, shall be distributed to SDAs and Job Corps Centers
within the State in a manner consistent with an agreement between the
Governor and these SDA's and centers. This agreement shall reflect an
equitable method of distribution which is based on the degree to which
the effort of the SDA and/or Center contributed to the State's
qualification for incentive bonus funds under title V (section
504(a)(1)(B)).
(c) Not more than 10 percent of the incentive bonus received in any
program year by each SDA and/or Job Corps Center may be used for the
administrative costs of establishing and maintaining systems necessary
for operation of programs under title V, including the costs of
providing incentive payments described in paragraph (d) of this
section, technical assistance, data and information collection and
compilation, management information systems, post-program followup
activities, and research and evaluation activities (section 504(a)(2)).
(d) Each SDA and/or Job Corps Center may make incentive payments to
service providers, including participating State and local agencies,
and community-based organizations, that demonstrate effectiveness in
delivering employment and training services to eligible individuals
under this title (section 504(b)).
(e) All remaining funds received by each SDA shall be used for
activities described in sections 204 and 264 of JTPA and shall be
subject to the regulations governing the operation of programs under
titles II-A and II-C of JTPA. All remaining funds received by each Job
Corps Center shall be used for activities authorized under part B of
title IV (section 504(a)(2).
Subpart C--Additional Title V Administrative Standards and
Procedures
Sec. 637.300 Management systems, reporting and recordkeeping.
(a) The Governor shall ensure that the State's financial management
system and recordkeeping system comply with subpart D of part 627 of
this chapter.
(b) Notwithstanding the provisions of Sec. 629.455 of this chapter,
the Governor shall report to the Secretary pursuant to instructions
issued by the Secretary regarding activities funded under this part.
Reports shall be required semi-annually and annually. Reports shall be
provided to the Secretary within 45 calendar days after the end of the
report period.
(c) The Governor shall assure that appropriate and adequate records
are maintained for the required time period to support all incentive
bonus payment applications. Such records shall include documentation to
support individuals' eligibility under this part.
Sec. 637.305 Federal monitoring and oversight.
The Secretary shall conduct oversight of the programs and
activities conducted in accordance with this part.
Sec. 637.310 Audits.
The Governor shall ensure that the State complies with the audit
provisions at Sec. 629.480 of this chapter.
Subpart D--Data Collection [Reserved]
Signed at Washington, DC, this 18th day of August, 1994.
Robert B. Reich,
Secretary of Labor.
[FR Doc. 94-20871 Filed 9-1-94; 8:45 am]
BILLING CODE 4510-30-P
