However, the provision within 20 CFR 627.310(e) which prohibits the use of financial assistance as a post-termination service is not waived. Therefore, needs-based and needs-related payments are not post-termination options under this waiver for both titles II and III.

E. As requested, the Secretary will apply the provisions of needs-based payments at JTPA § 204(b)(2)(I) and (c)(3) and 20 CFR 627.305(b)(1) to title III participants. However, in order to preserve the principle that training is most effective if individuals are enrolled in training early in the adjustment process and pursuant to the eligibility requirement exclusion contained in the Appropriations Act of 1997, JTPA § 314(e)(1) and 20 CFR 631.20(b)(1) are not waived, and shall apply to dislocated workers in order to receive needs-based payments as well as needs-related payments. Therefore, in order to be eligible for needs-related payments or needs-based payments, a dislocated worker must be enrolled in training by the end of the 13th week of the worker's initial unemployment compensation benefit period (following qualifying layoff), or if later, the end of the 8th week after an employee is informed that a short-term layoff will in fact exceed six months. This also means that JTPA § 314(e)(2) and 20 CFR 631.20(c) and (d) are not waived.

The Secretary will, however, consider an alternative to the definition of "enrolled in training or education" at 20 CFR 631.20(b)(2) to be utilized in extraordinary circumstances if Louisiana wishes to propose such a policy. Any alternative policy should preserve the principle that training is most effective if individuals are enrolled in training early in the adjustment process.

F. The State's request to exclude from title II-A performance standards calculations individuals enrolled in basic skills activities has not been granted. Under current policy, individuals whose objective assessment indicates a need for basic skills activities can receive them under JTPA (or other funding), but they should also be placed in jobs, which is the goal of the Act. Individuals whose objective does not include employment should not be served in title II-A. Because the Secretary's core performance standards help ensure that the basic purposes of the Act are maintained as the focus of JTPA activities, they must be maintained in a uniform manner throughout the system. Therefore, the method of calculating employment retention outcomes for title II-A will not be changed, and individuals receiving basic skills training will not be excluded from those outcomes. We wish to note that under current title II performance standards policy, the Governor is free to adopt adult competency attainments as additional State performance standards. We wish also to note that JTPA participants referred to other agencies for services, such as basic skills training, should still be included in JTPA performance standards outcomes (see Training and Employment Information Notice (TEIN) 5-93, Change 1, dated June 23, 1994, pp. 20-21, "[Report] those activities partially or completely funded by non-JTPA sources that were included in the participant's JTPA service strategy" (emphasis supplied).

G. The Secretary waives the youth OJT wage requirement at JTPA § 264(d)(3)(C)(i)(I) and the related regulations at 20 CFR 628.804(j)(1)(i) and the participation requirement at JTPA § 264(d)(3)(C)(iii) and the related regulation at 20 CFR 628.804(j)(2), when indicated as appropriate in the objective assessment and individual service strategy for youth on-the-job training. The State shall assure that the OJT positions for youth have substantial training content and that the training time is correctly determined. In addition, the State should issue policies to assure that youth OJT opportunities reflect positions with career potential and avoid the introduction of the abuses in the development of youth OJT slots in low wage, low skill positions which precipitated the enactment of the provisions for which this waiver is requested.

H. As requested, the Secretary waives the requirements at JTPA § 264(d)(3)(A) and 20 CFR 628.804(d) and (f) that prohibit pre-employment and work maturity skills training as a stand-alone activity in cases where the objective assessment and individual service strategy indicate it is the appropriate intervention. (A waiver of 20 CFR 628.520(e) is unnecessary since this requirement applies only if the assessment indicates that a service is needed.

I. As requested, the Secretary waives the requirements in TEIN No. 5-93, Change 1, dated June 23, 1994, that to obtain the Youth Employability Enhancement outcome for either "Returned to Full-Time School" or "Remained in School" definitions, the Youth Employment Competency that is also required is age-specific. The State may allow attainment of any recognized Youth Employment Competency by any age youth to meet the required Youth Employment Competency under the "Returned to Full-Time School" or "Remained in School" definitions for the Youth Employability Enhancement outcome.

However, with respect to the competency specific requirements, the Secretary has not waived the basic requirements for the Youth Employability Enhancement termination: to meet the definition of "Attained PIC-Recognized Youth Employment Competencies", the youth's proficiency in two or more skill areas must be demonstrated. Therefore, attainment of just one Youth Employment Competency, even if it is through participation in a School-to-Work or other activity, is not sufficient. However, the Secretary has granted a waiver--and hereby offers the same to Louisiana--that modified the criteria regarding Youth Employability Enhancement termination set forth in Training and Employment Guidance Letter (TEGL) No. 4-95, Change 1, "Job Training Partnership Act (JTPA) Title II and Title III Performance Standards for PY's 1996 and 1997" and in TEIN 5-93, Change 1, "Standardized Program Information Report Instructions". Provided that 1) the SDA/State demonstrates that the youth did not need training in all competencies (for example, pretests indicate no need for basic skills or pre-employment/work maturity or training in one of the two required competencies was provided by a funding source other than JTPA); and 2) in cases where a youth participant needs only one additional competency to qualify for the YEEN, training for that competency must be provided (not necessarily funded) by JTPA, the "Attained PIC-Recognized Youth Employment Competencies" will be sufficient for the Youth Employability Enhancement outcome. SPIR reporting requirements will continue, and ETA will issue revised reporting instructions to accommodate this waiver.

J. The State's request to exclude youth who obtain competencies from the entered employment rate calculation for title II-C has not been granted, but may not be necessary. First, we wish to point out that performance standards policy for Program Years 1996 and 1997 requires only that to meet performance standards overall by the Secretary's definition, four of the six core performance standards be met. Under this policy (see TEG No. 4-95, Change 1, dated May 3, 1996), it is not required that an SDA meet either youth standard, as long as all other standards are met. Further, youth who obtain competencies are excluded from the calculation of the entered employment rate if they also meet the definition of "Returned to Full-Time School" or "Remained in School". Therefore, those youth for whom it is appropriate (those in school) are already excluded from the entered employment rate. Under current policy, out-of-school youths whose objective assessment indicates a need for competency training can and should receive it under JTPA (whether funded by JTPA or not), but they also should be placed in education or jobs, which are the goals of title II-C. Out-of-school youth whose objective does not include employment or education should not be served in title II-C. Because the Secretary's core performance standards help ensure that the basic purposes of the Act are maintained as the focus of JTPA activities, they will be maintained in a uniform manner throughout the system. Therefore, the method of calculating the youth entered employment rate for title II-C will not be changed, and out-of-school youth receiving training will not be excluded from that outcome.

K. As requested, the Secretary waives the JTPA procurement requirements and the implementing regulations at §164(a)(3) and 20 CFR 627.420(a)(1), (2), (3) and (4), (b), (d)(1), (e)(1), (2), (3) and (5), (g) and (h). The Governor agrees to use State and local procurement procedures consistent with Office of Management and Budget (OMB) Circular A-102, as codified in the DOL regulations at 29 CFR 97.36 (The Common Rule). References elsewhere in JTPA to § 164(a)(3) will be understood to apply to State and local procurement provisions. The Circular/Common Rule requires the State to follow the same policies and procedures it uses for procurements from its non-Federal funds when procuring property and services under a grant.

Section 627.420 of the JTPA regulations includes rules implementing statutory provisions other than JTPA § 164(a)(3). As a result, the waiver of this section is not all encompassing. Section 627.420 subsections which are not being waived follow (the sections of JTPA which they implement, where applicable, are listed in brackets): (a)(5) [§141(h)], (a)(6) [§107(a)], (c), (d)(2), (e)(4), (f) [§163], (i) [§144] and (j) [§107(e)(2)].

Subsection 627.420(c) of the regulations deals with conflict of interest. Even though OMB Circular A-102 also has a section that deals with conflict of interest, it is a generic requirement. Section 627.420(c) of the regulations was written specifically to cover the unique relationships that JTPA created with the formation of Private Industry Councils. Therefore, this subsection is not being waived.

Subsection 627.420(d)(2) provides the State and its SDAs/SSGs with pass through authority to any unit of State or local government. This requirement is being retained for the State, since the circular does not provide this authority.

Section 627.420(e)(4) is based on financial requirements contained in the Act and requires that costs be charged according to the allowable cost provisions at 20 CFR 627.435.

Although §164(a)(3)(I) has been waived, the requirements contained in §627.450, Program Income, still apply. The section being waived requires that procurement transactions between units of State or local government, SDAs/SSGs, et. al., be conducted on a cost reimbursement basis. The Program Income section of the regulations, in summary, requires that program income earned be used for purposes of the program.

In addition, the State has requested a waiver of JTPA § 107(a) and (e) and suggests that the primary focus of the procurement process should be collaboration. As indicated below, waiver of these provisions has not been granted. 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.

We would like to note that §107(a) of the law, which requires the consideration of demonstrated performance in selecting entities to deliver services, and which calls for giving proper consideration to community-based organizations (CBOs), is 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. 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.

Although the JTPA procurement requirements, as cited above, are being waived, this does not relieve the State from awarding JTPA monies through competitive processes as required by § 107(e) which is not being waived. 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.

L. As requested, the Secretary waives JTPA § 108(b)(1), (4) and (c); the 15% administration cost limitation under JTPA §§ 253(a)(3) and 315(a), (b) and (c) and 20 CFR 627.445(a), (b)(3) and (d); 631.14(a), (b), (c), (d), (f), and (g), eliminating all cost limitations for titles II and III [except for title III national reserve account (NRA) grants]; and will apply JTPA § 108(b)(2) and (3) and 20 CFR 627.440(c) and (d) and 631.13(a)(1) 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 and 631.13(f) for title III. Program Costs will consist of all other costs including those defined at 20 CFR 627.440(d)(1), (2), (3), and (4) for title II and at 631.13(c), (d), and (e) for title III. The costs of Rapid Response activities identified at JTPA § 314(b) and 20 CFR 631.13(b) shall continue to be separately reported. Reporting instructions for the two cost category reporting method have been developed and are attached for use by the State.

M. As requested, the Secretary shall apply the requirements in TEIN No. 26-96, dated April 22, 1997, transmitting the "Guide to JTPA Performance Standards for Program Years 1996 and 1997," such that title III performance standards calculations exclude participants terminating after receiving objective assessment only, consistent with title II. ETA will provide revised SPIR title III reporting instructions to separately identify those receiving objective assessment only from those receiving other Basic Readjustment Services.

N. The State's request to waive the limitation on the transfer of funds between titles II-A and II-C has not been granted. The Secretary does not have authority to increase the amount of money that may be transferred beyond that already provided in JTPA. Congress appropriates to DOL a specific amount of funding to be spent on each year-round program, while the statute gives the states and SDAs limited spending flexibility. If we permit the states to transfer more than the percentage allowed by JTPA, then that portion of money, appropriated for a specific purpose (II-C for example), will be improperly expended for other than that purpose.

Additionally, the Department believes that it is important to maintain services to youth, including out-of-school youth. As funding for title II-C youth services has decreased in recent years, the Secretary is not prepared to permit further reduction of services to youth, including out-of-school youth, by waiving the funds transfer requirement.

O. As requested, the Secretary waives the requirements at JTPA § 264(d)(3)(A) and 20 CFR 628.804(d) and (f) that prohibit pre-employment and work maturity skills training as a stand-alone activity in cases where the objective assessment and individual service strategy indicate it is the appropriate intervention. (A waiver of 20 CFR 628.520(e) is unnecessary since this requirement applies only if the assessment indicates that a service is needed.)

P. 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, II-C, and III. In order to meet this performance improvement, the State is expected to require that each SDA/SSG make some improvement in performance and that those SDAs/SSGs 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 No. 5-93, Change 1 (dated June 23, 1994), as modified by Training and Employment Information Notice No. 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 No. 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.