WIOA/FINAL RULE EXPENDITURE REQUIREMENT DEFINITIONS AND FUNDING RESTRICTIONS

Transcription

1 WIOA/FINAL RULE EXPENDITURE REQUIREMENT DEFINITIONS AND FUNDING RESTRICTIONS Purpose. To inform LWDAs of updates to the Financial Status Report (FSR) as it relates to the Employment and Training Administration s (ETA s) 9130 Financial Report and Instructions, and to provide information and additional guidance regarding new and revised federal reporting requirements. The appropriate program rules, regulations, and terms and conditions of the grant award may also contain specific reporting guidelines. Therefore, this guidance does not contain information about all sections or line items; rather it only covers areas where additional clarification or guidance will help ensure consistent and accurate financial reporting. References. 20 CFR Parts ; ; ; ; ; TEGL 23-14; 8-15 WIOA 129; 134 Disclaimer. Pay-for-Performance, Incumbent Worker Training, Transitional Jobs and Youth Work Experience should be included in the admin/program reporting, as applicable, but must also be reported independently on the specified line on the FSR. For categories that do not explicitly state that staff and development costs are allowable, WFD is interpreting these sections to only allow for the reporting of direct outlays on these programs. 1). Pay-For-Performance Adult/Dislocated Worker/Youth Definition: What is a Workforce Innovation and Opportunity Act Pay-for- Performance contract strategy? (a) A WIOA Pay-for-Performance contract strategy is a specific type of performancebased contract strategy that has four distinct characteristics: (1) It is a strategy to use WIOA Pay-for-Performance contracts as they are described in ; (2) It must include the identification of the workforce development problem and target populations for which a local area will pursue a WIOA Pay-for-Performance contract strategy;

2 the outcomes the local area would hope to achieve through a Pay-for-Performance contract relative to baseline performance; and the acceptable cost to government associated with achieving these outcomes; (3) It must include a strategy for independently validating the performance outcomes achieved under each contract within the strategy prior to payment occurring; (4) It must include a description of how the State or local area will reallocate funds to other activities under the contract strategy in the event a service provider does not achieve performance benchmarks under a WIOA Pay-for-Performance contract. (b) Prior to the implementation of a WIOA Pay-for-Performance contract strategy, a local area must conduct a feasibility study to determine whether the intervention is suitable for a WIOA Pay-for-Performance contract strategy. (c) The WIOA Pay-for-Performance contract strategy must be developed in accordance with guidance issued by the Secretary What is a Workforce Innovation and Opportunity Act Pay-for- Performance contract? (a) Pay-for-Performance contract. A WIOA Pay-for-Performance contract is a type of Performance-Based contract. (b) Applicability. WIOA Pay-for-Performance contracts may only be entered into when they are a part of a WIOA Pay-for-Performance contract strategy described in (c) Cost-plus a percentage of cost contracts. Use of cost plus a percentage of cost contracts is prohibited. (2 CFR ). (d) Services provided. WIOA Pay-for-Performance contracts must be used to provide adult training services described in sec. 134(c)(3) of WIOA or youth activities described in sec. 129(c)(2) of WIOA. (e) Structure of payment. WIOA Pay-for-Performance contracts must specify a fixed amount that will be paid to the service provider based on the achievement of specified levels of performance on the performance outcomes in sec. 116(b)(2)(A) of WIOA for target populations within a defined timetable. Outcomes must be independently validated, as described in and (j), prior to disbursement of funds. (f) Eligible service providers. WIOA Pay-for-Performance contracts may be entered into with eligible service providers, which may include local or national community-based organizations or intermediaries, community colleges, or other training providers that are eligible under sec. 122 or 123 of WIOA (as appropriate). (g) Target populations. WIOA Pay-for-Performance contracts must identify target populations as specified by the Local WDB, which may include individuals with barriers to employment. (h) Bonus payments. WIOA Pay-for-Performance contracts may include bonus payments for the contractor based on achievement of specified levels of performance. Bonus payments for achieving outcomes above and beyond those specified in the contract must be used by the service provider to expand capacity to provide effective training. (i) Performance reporting. Performance outcomes achieved under the WIOA Pay-for Performance contract, measured against the levels of performance specified in the contract,

3 must be tracked by the local area and reported to the State pursuant to WIOA sec. 116(d)(2)(K) and of this chapter. (j) Validation. WIOA Pay-for-Performance contracts must include independent validation of the contractor s achievement of the performance benchmarks specified in the contract. This validation must be based on high-quality, reliable, and verified data. (k) Guidance. The Secretary may issue additional guidance related to use of WIOA Payfor-Performance contracts. Allowable / Reportable Expenditures: What funds can be used to support Workforce Innovation and Opportunity Act Pay-for-Performance contract strategies? (a) For WIOA Pay-for-Performance contract strategies providing adult and dislocated worker training services, funds allocated under secs. 133(b)(2)(3) of WIOA can be used. For WIOA Pay-for-Performance contract strategies providing youth activities, funds allocated under WIOA sec. 128(b) can be used. (b) No more than 10 percent of the total local adult and dislocated worker allocations can be reserved and used on the implementation of WIOA Pay-for-Performance contract strategies for adult training services described in sec. 134(c)(3) of WIOA. No more than 10 percent of the local youth allocation can be reserved and used on the implementation of WIOA Pay-for Performance contract strategies for youth training services and other activities described in secs. 129(c)(2) of WIOA. 2). Incumbent Worker Definition: What is incumbent worker training? Incumbent worker training must satisfy the requirements in WIOA sec. 134(d)(4) and increase the competitiveness of the employee or employer. For purposes of WIOA sec. 134(d)(4)(B), incumbent worker training is training: (a) Designed to meet the special requirements of an employer (including a group of employers) to retain a skilled workforce or avert the need to lay off employees by assisting the workers in obtaining the skills necessary to retain employment. (b) Conducted with a commitment by the employer to retain or avert the layoffs of the incumbent worker(s) trained. Allowable / Reportable Expenditures: What funds may be used for incumbent worker training? (a) The local area may reserve up to 20 percent of their combined total of adult and dislocated worker allocations for incumbent worker training as described in

4 3). Transitional Jobs Definition: What is a Transitional Job? A transitional job is one that provides a time-limited work experience, that is wage-paid and subsidized, and is in the public, private, or non-profit sectors for those individuals with barriers to employment who are chronically unemployed or have inconsistent work history, as determined by the Local WDB. These jobs are designed to enable an individual to establish a 1055 work history, demonstrate work success in an employee-employer relationship, and develop the skills that lead to unsubsidized employment. Work experiences may be paid or unpaid, consistent with the Fair Labor Standards Act and other applicable laws. Transitional jobs are a type of paid work experience described in and A Local WDB may use up to 10 percent of funds allocated to the local area under section 133(b) of WIOA to provide transitional jobs. (Sec. 134(d)(5) of WIOA.) Transitional jobs also are subject to certain eligibility criteria along with comprehensive career and supportive services requirements. In addition to transitional jobs, other work experiences may be paid; to be eligible for these work experiences an individual must meet adult and dislocated worker program eligibility and there is no requirement for comprehensive career and supportive services. These other types of paid work experiences are not subject to a statutory funding cap. Allowable / Reportable Expenditures: What funds may be used for transitional jobs? The local area may use up to 10 percent of their combined total of adult and dislocated worker allocations for transitional jobs as described in Transitional jobs must be combined with comprehensive career services (see ) and supportive services (see ). Non-transitional job work experiences are not required to be either paid or unpaid, and they do not have the same requirements for comprehensive career and supportive services. They also are not subject to the 10 percent funding cap to which transitional jobs are subject. Comprehensive career services may include both basic and individualized career services and are based on the needs of the participant. Comprehensive career services and supportive services, which are required to be provided as part of any transitional jobs strategy, are not subject to the 10 percent cap described at However, the DOL is providing flexibility to allow for these services to be provided with the funds set aside for transitional jobs. Local areas

5 determine which comprehensive and supportive services are appropriate for each individual. There is no sequence of service required. 4). Youth Work Experience Definition: What are Work Experiences? (a) Work experiences are a planned, structured learning experience that takes place in a workplace for a limited period of time. Work experience may be paid or unpaid, as appropriate. A work experience may take place in the private for-profit sector, the non-profit sector, or the public sector. Labor standards apply in any work experience where an employee/employer relationship, as defined by the Fair Labor Standards Act or applicable State law, exists. Consistent with of this chapter, funds provided for work experiences may not be used to directly or indirectly aid in the filling of a job opening that is vacant because the former occupant is on strike, or is being locked out in the course of a labor dispute, or the filling of which is otherwise an issue in a labor dispute involving a work stoppage. Work experiences provide the youth participant with opportunities for career exploration and skill development. (b) Work experiences must include academic and occupational education. The educational component may occur concurrently or sequentially with the work experience. Further academic and occupational education may occur inside or outside the work site. (c) The types of work experiences include the following categories: (1) Summer employment opportunities and other employment opportunities available throughout the school year; (2) Pre-apprenticeship programs; (3) Internships and job shadowing; and (4) On-the-job training (OJT) opportunities as defined in WIOA sec. 3(44) and in Allowable / Reportable Expenditures: What is the work experience priority and how will local youth programs track the work experience priority? (a) Local youth programs must expend not less than 20 percent of the funds allocated to them to provide ISY and OSY with paid and unpaid work experiences that fall under the categories listed in (a)(3) and further defined in (b) Local WIOA youth programs must track program funds spent on paid and unpaid work experiences, including wages and staff costs for the development and management of work experiences, and report such expenditures as part of the local WIOA youth financial reporting. The percentage of funds spent on work experience is calculated based on the total local area youth funds expended for work experience rather than calculated separately for ISY and OSY. Local area administrative costs are not subject to the 20 percent minimum work experience expenditure requirement.

6 5). Out of School Youth (OSY) Expenditures and TEGL OSY Expenditure Requirement. WIOA increases the minimum OSY expenditure rate for the youth formula-funded program from 30 percent, the rate under WIA, to 75 percent. Under WIOA, an out-of-school youth is an individual who is: (a) Not attending any school (as defined under State law); (b) Not younger than 16 or older than 24 at time of enrollment. Because age eligibility is based on age at enrollment, participants may continue to receive services beyond the age of 24 once they are enrolled in the program; and (c) One or more of the following: (1) A school dropout; (2) A youth who is within the age of compulsory school attendance, but has not attended school for at least the most recent complete school year calendar quarter. School year calendar quarter is based on how a local school district defines its school year quarters; (3) A recipient of a secondary school diploma or its recognized equivalent who is a low-income individual and is either basic skills deficient or an English language learner; (4) An individual who is subject to the juvenile or adult justice system; (5) A homeless individual, a runaway, an individual who is in foster care or has aged out of the foster care system, a child eligible for assistance under section 477 of the Social Security Act, or an individual who is in an out of home placement; (6) An individual who is pregnant or parenting; (7) An individual with a disability; (8) A low-income individual who requires additional assistance to enter or complete an educational program or to secure or hold employment. (WIOA sections 3(46) and 129(a)(1)(B).) The minimum 75 percent OSY expenditure applies to local workforce development area funds and funds reserved by the Governor. In addition, state and local area administrative expenditures are not a part of the 75-percent-OSY-minimum-expenditure calculation. Further, the 75 percent expenditure rate is a minimum requirement; therefore, states and local areas may spend up to 100 percent of their local area youth funds on OSY if they so choose.

7 6). Admin Costs What Workforce Innovation and Opportunity Act title I functions and activities constitute the costs of administration subject to the administrative cost limitation? (a) The costs of administration are expenditures incurred by State and Local WDBs, Regions, direct grant recipients, including State grant recipients under subtitle B of Title I of WIOA, and recipients of awards under subtitle D of Title I, as well as local grant recipients, local grant sub-recipients, local fiscal agents and one-stop operators that are associated with those specific functions identified in paragraph (b) of this section and which are not related to the direct provision of workforce investment services, including services to participants and employers. These costs can be both personnel and non-personnel and both direct and indirect. (b) The costs of administration are the costs associated with performing the following functions: (1) Performing the following overall general administrative functions and coordination of those functions under Title I of WIOA: (i) Accounting, budgeting, financial and cash management functions; (ii) Procurement and purchasing functions; (iii) Property management functions; (iv) Personnel management functions; (v) Payroll functions; (vi) Coordinating the resolution of findings arising from audits, reviews, investigations and incident reports; (vii) Audit functions; (viii) General legal services functions; (ix) Developing systems and procedures, including information systems, required for these administrative functions; and (x) Fiscal agent responsibilities; (2) Performing oversight and monitoring responsibilities related to WIOA administrative functions; (3) Costs of goods and services required for administrative functions of the program, including goods and services such as rental or purchase of equipment, utilities, office supplies, postage, and rental and maintenance of office space; (4) Travel costs incurred for official business in carrying out administrative activities; and (5) Costs of information systems related to administrative functions (for example, personnel, procurement, purchasing, property management, accounting, and payroll systems) including the purchase, systems development and operating costs of such systems. (c)(1) Awards to sub-recipients or contractors that are solely for the performance of administrative functions are classified as administrative costs. (2) Personnel and related non-personnel costs of staff that perform both administrative functions specified in paragraph (b) of this section and programmatic services or activities must

8 be allocated as administrative or program costs to the benefitting cost objectives/categories. (3) Specific costs charged to an overhead or indirect cost pool that can be identified directly as a program cost are to be charged as a program cost. Documentation of such charges must be maintained. (4) Except as provided at paragraph (c)(1) of this section, all costs incurred for functions and activities of sub-recipients, other than those sub-recipients listed in paragraph (a) of this section, and contractors are program costs. (5) Continuous improvement activities are charged to administration or program category based on the purpose or nature of the activity to be improved. Documentation of such charges must be maintained. (6) Costs of the following information systems including the purchase, systems development, and operational costs (for example, data entry) are charged to the program category: (i) Tracking or monitoring of participant and performance information; (ii) Employment statistics information, including job listing information, job skills information, and demand occupation information; (iii) Performance and program cost information on eligible training providers, youth activities, and appropriate education activities; (iv) Local area performance information; and (v) Information relating to supportive services and unemployment insurance claims for program participants. (d) Where possible, entities identified in paragraph (a) of this section must make efforts to streamline the services in paragraphs (b)(1) through (5) of this section to reduce administrative costs by minimizing duplication and effectively using information technology to improve services.

9 Quick Reference. Category Allowable / Unallowable What should be reported? Pay-for-Performance Adult Pay-for-Performance Youth 10 % of combined Adult/DW Allocations; admin expenditures do not count. Funds available until expended 10% of Youth Allocations: admin expenditures do not count towards 10% PfP Limitations. Funds available until expended Expenditures used to establish and operate one-stop delivery systems designed to provide core, intensive training services to adults and dislocated workers Expenditures related to (A)assessment prep, supportive service and development needs, tutoring, study skills training, instruction leading to completion of secondary school, including dropout prevention strategies (B) alternative secondary school services (C) summer employment opportunities that are directly linked to academic and occupational learning; (D) paid and unpaid work experiences, including internships and job shadowing; (E) occupational skill training (F) leadership development opportunities, which may include community service and peer-centered activities encouraging responsibility and other positive social behaviors during non-school hours (G) supportive services (H) adult mentoring for the period of participation and a subsequent period, for a total of not less than 12 months (I) follow-up services for not less than 12 months after the completion of participation, as appropriate (J) comprehensive guidance and counseling, which may include drug and alcohol abuse counseling and referral Incumbent Worker Training Transitional Jobs Youth Work Experience OSY Expenditures 20% of combined Adult/DW Allocations; admin expenditures do not count towards 20% IWT limitation 10 % of combined Adult/ DW allocations; Must be provided in concert with comprehensive career services & supportive services. Admin expenditures do not count towards 10% transitional jobs limitation. Comments for sections cited at right indicate that only wages and supportive services count towards the 10 % cap 20% of allocated youth program funds - no distinction for ISY & OSY. 75% of youth allocation not expended on administrative activities Expenditures related to basic readjustment services such as (A) assessment of educational attainment and interests and aptitudes. Job development and placement activities are prohibited, as they are the responsibility of the employer in incumbent worker training situations. (B) training for workers may include basic education such as basic math, grammar, and English as a Second Language training, and skill training to upgrade existing skills, or to provide new skills. (C) supportive services based upon the needs of the workers, for example, they are necessary to enable the individual who is eligible for training, but cannot afford to pay for such supportive services to participate in the training program Expenditures related to transitioning adults into the workforce Expenditures used to (A) provide eligible youth seeking assistance in achieving academic and employment success (B) on-going mentoring opportunities for eligible youth (C) training to eligible youth (D) supportive services (D) incentives for recognition and achievement (E) opportunities for eligible youth in activities related to leadership, development, decision making, citizenship, and community service. Expenditures used to develop or implement educational curricula for school systems in the State. Admin Costs 10% per funding stream See above