Ms. Kathy Sweeney
Assistant Commissioner
Workforce Preparation Branch
Minnesota Department
of Economic Security
390 North Robert Street, First Floor
St. Paul, Minnesota 55101
Dear Ms. Sweeney:
I am pleased to offer JTPA waiver approvals to the State of Minnesota in response to
Governor Carlson's request. This could not have been done without the vision, strategy and
planning that was produced by the local, State, and Federal (national and regional staff)
partnership, of which it has been our pleasure to be a part. I thank you for your and your
staff's hard work and patience.
The State's request was considered under the special appropriations act provision
granting the Secretary of Labor authority to waive certain requirements of Titles I-III of JTPA,
and Sections 8-10 of the Wagner-Peyser Act. This authority was granted to the Secretary in
the Department of Labor's (DOL) Appropriation Act for 1997 (Pub. L. 104-208, section
101(e)).
This is a one-year authority and applies only to JTPA funds available for expenditure
during the period July 1, 1997 through June 30, 1998, and, therefore, could affect the JTPA
Grant Agreements for Program Year (PY) 1997, 1996 and 1995 funds, depending on fund
availability during the waiver period. Enclosed you will find an overview and our disposition
with regard to each of your requests, as well as copies of our formal response to the Governor.
Enclosed also is a grant modification (3 copies) that will require signature by the Governor or
the State's JTPA signatory official. Please check off the applicable JTPA grant agreements
(PY 97, 96, 95) that the statutory waiver modification will affect. We ask that the documents
be signed by the appropriate official and returned to the Grant Officer at the address indicated
below:
Mr. James C. De Luca
U.S. Department of Labor - ETA
Office of Grants and Contract
Management - DAA
200 Constitution Avenue, N.W.
Room - South 4203
Washington, D.C. 20210
Upon execution by the appropriate USDOL grant officer, we will return an executed copy for the State's official files. This modification is effective September 30, 1997.
We applaud Minnesota's efforts to focus on a workforce vision and the development of
a strategy to meet that vision. Waivers, of course, are only a small part of this strategy. We
will continue to work with Minnesota to reach these goals. We expect that these reforms will
continue to reflect the Department of Labor's guiding principles: individual opportunity and
customer choice; leaner government; greater accountability; State and local flexibility; and
strong private sector roles.
This is a living document. As we continue our partnership be sure to let us know if
additional waivers or other action would be beneficial.
Sincerely,
Melvin J. Howard
Acting Regional Administrator
Enclosures
OVERVIEW
The applicable JTPA Grant Agreements between the State and the Department will be
modified upon execution of the enclosed Modification. Unless specified otherwise these
waivers are authorized for the period beginning July 1, 1997 and ending June 30, 1998. In
exchange for these waivers the State is expected to meet the agreed upon performance
improvements.
Requests to waive program design components were honored except in the case where
the request conflicted with the Secretary's statutory waiver authority, the Department's guiding
principles for waivers and the One-Stop Career Centers and School-to-Work Systems
principles. Administrative waivers were granted in such a manner as to maintain fiscal
responsibility and accountability.
These waivers are based upon the Governor's request, meetings and discussions among
staff, and the Department's familiarity with the program in Minnesota. They do not
necessarily constitute an endorsement of the examples in Minnesota's waiver request. In
several instances, the Department would recommend against the interventions proposed. For
example, most research would caution against general use of stand-alone work experience, job
search or on-the job training interventions, particularly for youth without a high school
diploma or its equivalent. The Department continues to strongly encourage educational
components for youth participants.
WAIVERS
A. As requested, the Secretary waives the Adult Follow-Up Employment Rate and the
Adult Follow-Up Weekly Earnings performance standards in cases where all of an SDAs'
terminees in the follow-up year are welfare recipients included in the performance standards
for Welfare Follow-Up Employment Rate and Welfare Follow-Up Weekly Earnings. This is a
modification of the Department's performance standards policy announced in Training and
Employment Guidance Letter (TEGL) 4-95, Change 1, dated May 3, 1996. As the State has
stipulated, the Governor will revise the incentives and sanctions policy to accommodate these
changes.
B. As requested, the Secretary waives JTPA § 108(b)(4)(B) and 20 CFR 627.445(a)(1)(i),
and (a)(2)(i) eliminating the non-administration cost limitations for titles II. The 20%
administration limitation for titles II-A and II-C, at JTPA § 108(b)(4)(A), and the 15%
limitation for title II-B, at JTPA § 253(a)(3) and 20 CFR 627.445(b)(3), will remain in effect.
The provisions at JTPA § 108(b)(1) and (c), and all references in the JTPA regulations that
address the cost limitations under titles II-A, II-B, and II-C shall refer only to the
administration cost limitations. The Secretary will apply JTPA § 108(b)(2) and (3) and 20
CFR 627.440(b), (c)(1) and (d) to reduce the number of cost categories to two:
Administration and Program Costs. The costs of Administration shall be those defined at 20
CFR 627.440(d)(5) for title II. Program Costs will consist of all other costs including those
defined at 20 CFR 627.440(d)(1), (2), (3), and (4). Reporting instructions for the two cost
category reporting method have been developed and are attached for use by the State.
C. The State's request for waiver of the provisions at JTPA §§ 107 and 164,
and the JTPA regulations at 20 CFR 627.420 and 627.422 has not been granted. Where we
have agreed to a waiver of procurement requirements, we have required states to abide by the
provisions found in the Office of Management and Budget (OMB) Circular A-102 as codified
in the DOL regulations at 29 CFR, Part 97, to ensure financial accountability. The JTPA
requirement to minimize the use of sole source procurement to the extent practicable has a
comparable provisions in OMB Circular A-102. The State has not indicated an intention to
follow the OMB Circular 102 requirements.
Although the citations identified by the State imply a request for waiver of entire
sections of the Act, the text of the request suggests that the State wants to eliminate
competitive procurement and to rely to the greatest extent possible on sole source procurement.
Waiver of the provision at JTPA § 107(e), which requires that selections be made on a
competitive basis to the extent practicable, has not been granted. Competition has a positive
impact on the services provided with JTPA monies, by leading to the selection of service
providers with the capabilities to provide the services and by resulting in competitive pricing
for the purchased services.
The State's request suggests that its system envisions that all willing local service
providers with whom a one-stop workforce center wants to contract will be invited to become
community partners, and that the participation of these partners will enhance service
coordination and collaboration. We believe that collaboration is bringing various organizations
to the table who bring with them more than minimal funding or other tangible resources to the
collaborative effort. Where JTPA, the Employment Service, the Unemployment Insurance
system, the Vocational-Educational system, and others collaborate and bring monies to the
table, these entities (whose legislative mandate is to provide specific types of
services/programs) can provide those legislatively mandated services/programs in an integrated
or cooperative setting. We do not believe that collaboration is bringing various organizations
to the table in order to divide the available JTPA funds among themselves. The JTPA
procurement rules do not preclude the former type of collaborative effort.
The Department also wants to emphasize that the provisions at JTPA § 107(a), which require that demonstrated performance be a primary consideration in the selection of service providers and that community based organizations (CBOs) be given proper consideration in the selection process, are not being waived. In the case of demonstrated performance, ETA considers this to be an important component in the selection of service providers. In the
case of CBOs, historically they have provided integral employment and training services, and their exclusion would be intuitively contrary to the vision that the State has presented. The
State is expected to not only take into consideration the demonstrated performance of entities
being considered for funding, but also to include CBOs in the pool of entities being considered
for funding.
D. As requested, the Secretary waives the prohibition on stand-alone job search assistance
for both youth and adults, in instances when an individual service strategy substantiates its use
as appropriate, by waiving JTPA § 204(c)(2)(B)(ii) and 20 CFR 628.535(b)(2) and (c)(1)(ii) to
the extent that they apply to job search assistance (but not to any other activity listed therein as
prohibited for stand-alone use) and applying JTPA § 264(d)(3)(A) and (B) as if they read ". . .
shall be accompanied by . . . additional services . . . unless the individual service strategy
demonstrates such additional services are not warranted." (JTPA § 204(c)(2)(A) was not
waived as it was unnecessary to do so since (B)(i) already provides an exception.)
E. As requested, the Secretary waives the youth OJT wage requirement at JTPA 264
(d)(3)(C)(i)(I) and 20 CFR 628.804(j)(1)(i) on condition that the State assure that OJT
positions for youth have substantial training content, that the training time is correctly
determined, and that the OJT opportunities reflect positions with career potential.
F. As requested, the Secretary waives the requirements at JTPA § 141(k) that prohibit
subsidized employment with private for-profit employers, to permit limited internships with
private for-profit employers, in cases where the objective assessment and individual service
strategy indicate it is the appropriate intervention, and when:
This may be an effective strategy for welfare-to-work (TANF) participants as well as
for some of the disadvantaged population. However, its appropriateness for most eligible
dislocated workers would appear to be extremely limited. Therefore, we recommend the State
implement a State-wide policy which addresses the target populations, including dislocated
workers, for which this strategy will be used. The policy for dislocated workers should
contain a requirement that the worker's individual assessment must justify such a placement
over OJT.
G. The State's request to waive the definition of "out-of-school youth" at JTPA § 263(c),
which establishes the eligibility requirement for services to such youth has not been granted.
This is an eligibility requirement which is excepted from the Secretary's waiver authority
under the 1997 DOL Appropriations Act and may not be waived.
H. The State's request to waive the provisions at JTPA § 263, which establishes the
eligibility criteria for services to youth under title II-C, to permit services to economically
disadvantaged individuals under the age of 14 has not been granted. This is an eligibility
requirement which is excepted from the Secretary's waiver authority under the 1997 DOL
Appropriations Act and may not be waived.
I. The State has requested a waiver which would allow it to establish an administrative
cost pool for a workforce center and identifies the JTPA regulation at 20 CFR 627.440(a) as
the provision that needs to be waived. In fact, the cited regulation permits the establishment of
cost pools to which joint and similar types of costs may be charged initially pending
distribution to the ultimate benefitting cost objective. The regulation requires that the costs be
charged to a particular cost objective to the extent that benefits are received by such cost
category.
The text of the State's request suggests that it wants to establish a JTPA administrative
cost pool based on a contribution methodology with no allocation back to the benefitting grant
title or program. To allow such a cost pool amounts to a commingling of appropriated funds
and is contrary to the prohibition on the commingling of funds included in the TEGL
guidelines for these waivers. Moreover, the pooling of administrative costs without the
separate tracking, reporting, and allocating to the various grant programs in accordance with
the benefit received by each is a violation of generally accepted accounting principles (GAAP).
GAAP is a requirement of JTPA § 164(a)(1) which is not being waived. However, ETA is
willing to provide whatever technical assistance and guidance that the State requires to assist it
in the development of an appropriate methodology for allocating costs accumulated in a cost
pool to the benefitting cost objectives.
J. In consideration of the waivers contained in this grant modification, the State agrees to
a performance improvement of four percent (4%) at the State level measured at the conclusion
of Program Year 1997 using actual performance in PY 1996 as the baseline for improvement.
Performance improvements will apply to all the Secretary's performance measures or to their
approved equivalents, for titles II-A and II-C. In order to meet this performance
improvement, the State is expected to require that each SDA make some improvement in
performance and that those SDAs which demonstrate comparatively lower levels of
performance be required to make greater performance improvements. States will take into
account the SDA's performance improvement targets in determining the receipt of title II
incentive grant awards for PY 1997. In considering whether the State has attained the agreed
upon performance improvement for PY 1997, the Department will apply the Secretary's
Adjustment Models, exclusive of Governor's Adjustments, to the performance improvement
goals. Program Year 1996 and Program Year 1997 performance will be calculated in the
same way for both years.
The Standardized Program Information Report (SPIR) instructions in Training and
Employment Information Notice 5-93, Change 1 (dated June 23, 1994), as modified by
Training and Employment Information Notice 5-93, Change 2 (dated January 24, 1997),
remain in effect where not specifically waived or modified in this Agreement. Also in effect
unless specifically waived are the Performance Standards Status Summary Report requirements
put forth in Training and Employment Guidance Letter 2-95 (dated August 10, 1995). This
requires Governors to report each SDA's final standard and actual performance for each of the
Secretary's title II core standards, with required technical assistance plans and reorganization
plans attached.
These waivers are open for modification and the Department will also entertain
additional requests for waivers during this program year. These waivers apply to the title II
and the title III formula programs. However, ETA will consider requests to apply specific
waivers to individual title III Secretary's National Reserve Account (NRA) grants which are
active during Program Year 1997. In addition, ETA will consider requests to incorporate
specific waivers into new individual NRA grants, as appropriate.