Mr. Douglas E. Stites
Chief Operating Officer
and Vice President for Workforce Development
Michigan Jobs Commission
201 North Washington Square
Lansing, Michigan 48913
Dear Mr. Stites:
I am pleased to offer Michigan JTPA waiver approvals in response to Governor
Engler's April 29, 1997 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 July 1, 1997.
We applaud Michigan'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 Michigan 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 JTPA Grant Agreement between the Governor and the Department will be
modified upon the Governor (or his designee) signing the attached Modification. The granted
waivers are authorized for the period of Program Year 1997. In exchange for these waivers
Michigan is expected to meet the agreed upon performance improvements. Below is a
discussion, including the disposition, of all of the State's waiver requests.
Requests to waive program design components were honored except in the case where
the request conflicted with 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 Michigan. They do not necessarily
constitute an endorsement of the examples in Michigan'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. The State has requested that the provisions of JTPA §§ 141(c)(4)(A)&(B), 141(c)(5),
164(d), and 164(e)(1) be waived. These provisions impose the requirement for repayment of
amounts found to have been expended in violation of the Act, and are part of the very core of
the fiscal accountability expected by Congress. A waiver of these provisions and the related
regulations has not been granted.
However, the explanation provided by the State suggests that it is actually requesting
authority to use offset against its subrecipients as a method of repayment for misexpenditure by
those same subrecipients. The Secretary may use offset as a method of obtaining repayment
from recipients in accordance with § 164(d) of the Act, but the JTPA regulations at 20 CFR
627.708 restrict the amounts against which an offset may be applied to State level
adm>inistrative funds. Also, the regulation prohibits the State from reducing the allocations of
a subrecipient through the offset process.
Therefore, in response to the State's request for flexibility in the use of offset as a
repayment option, the Secretary has decided to waive the provision at 20 CFR 627.708(e) and
thereby permits the State to use offset against its subrecipient from funds to which the
subrecipient is entitled under a subsequent year's allocation with the following restrictions:
B. The State's request to waive the provisions of JTPA § 101 of the Act pertaining to the
designation of service delivery areas has not been granted. This is an area excepted from the
Secretary's waiver authority under the 1997 DOL Appropriations Act (Pub. L. 104-208.)
The Secretary does not have authority to waive statutory or regulatory requirements relating to
"the establishment and functions of service delivery areas and private industry councils."
C. The State's request to waive the provisions of JTPA § 102 of the Act pertaining to the
establishment (composition) of the private industry council has not been granted. This is an
area excepted from the Secretary's waiver authority under the 1997 DOL Appropriations Act
(Pub. L. 104-208). The Secretary does not have authority to waive statutory or regulatory
requirements relating to "the establishment and functions of service delivery areas and private
industry councils."
D. As requested, the Secretary waives JTPA §§ 108(b)(4)(B) and 315(a) and (b) and
20 CFR 627.445(a)(1)(i) and (a)(2)(i) and 631.14(a) and (b) eliminating the non-administration
cost limitations for titles II and III [except for national reserve account (NRA) grants]; the
20% administration limitation for titles II-A and II-C, at JTPA § 108(b)(4)(A), the 15%
limitation for title III, at JTPA § 315(c) of JTPA, and the 15% limitation for title II-B, at
JTPA § 253(a)(3), will remain in effect, but will be subject to an allowable 5% flexibility
from the stated limitations. The provisions at § 108(b)(1) and (c), and all references in the
JTPA regulations that address the cost limitations under titles II-A, II-B, II-C, and III [except
for national reserve account (NRA) grants] shall refer only to the administration cost
limitations including the 5% flexibility granted by this waiver. The Secretary will apply JTPA
§ 108(b)(2) and (3) and 20 CFR 627.440(b), (c)(1) 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.
In light of the above approved waiver, the State's request for a JTPA administrative
cost pool grant is considered to be unnecessary. In addition, to allow such a cost pool is
contrary to the prohibition on the commingling of funds. This determination was clearly stated
in Training and Employment Guidance Letter No. 6-96 which issued the guidelines for these
waivers, and which indicated that such waivers would not be granted. The State also requested
a waiver that would permit a combined JTPA and Wagner-Peyser administrative cost pool.
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 contrary to
generally accepted accounting principles (GAAP). GAAP is a requirement of § 164(a)(1) of
JTPA as well as a requirement of the OMB Circulars which are applicable to Wagner-Peyser
and outside of the scope of the waiver authority for Wagner-Peyser funds. In addition, the
waiver authority does not allow us to waive §§ 301 and 302 of the Social Security Act which
the State requests be waived for the joint cost pool. Therefore, these waivers have not been
granted.
E. The Secretary accepts Michigan's request that the Governor be given the flexibility to
develop policies prescribing the content and format of plans for the State's workforce
development services. Such State policies must provide for:
ETA will work with the State to identify the specific contents of the State and local plans required for JTPA titles II and III, as well as the time lines for the publication and submission of the plans contained in JTPA §§ 104(b), 205(a), 121(b), 311(a) and (b) and 313(b) and 20 CFR 628.205(a)(2), 628.420(b), 631.36(b), 631.36 (b) and 20 CFR 631.50(b) and (c); and Training and Employment Guidance Letter No. 4-95, "Instructions for Submission of State Plans Under title II and III of the Job Training Partnership Act." Once this is accomplished, the Secretary will entertain a request for any waivers needed to implement the revised planning process.
F. The State's request to "eliminate subsets of programs (titles IIA, IIB, IIC, Older
Worker set-aside, title III Formula, Governor's Reserve, and Secretary's National Reserve) . .
." has not been granted because it is contrary to the prohibition on commingling of funds.
This request is tantamount to a request to commingle funds, e.g. eliminating the reporting of
services and expenditures based upon the purposes for which the funds were appropriated by
Congress. The Training and Employment Guidance Letter (TEGL) No. 6-96, dated April 1,
1997, clearly indicated that waiver requests for commingling of funds would not be granted.
G. The request to eliminate reporting of participants referred by the Worker Profiling and
Reemployment Services has not been granted. The definition of "participant" at JTPA § 4(37)
will not be altered; therefore, all individuals who receive services funded by JTPA are
considered participants, regardless of what outreach/referral mechanism was used to bring
them into the Title III system. Reporting of participants on whom JTPA program dollars are
spent for services will continue to be required so that the Department can fulfill its oversight
and accountability responsibilities. However, we note that, most probably, the data required
for JTPA participant reporting can be extracted by the State from a common database or MIS
used by multiple agencies.
H. As requested, the JTPA Standardized Program Information Report (SPIR) instructions
in Training and Employment Information Notice (TEIN) 5-93, Change 1 that require follow-up by participant contact for the 13th week after termination are waived on the condition that
Michigan adopt the provisions in the Department's "JTPA Statutory Waiver Guidelines:
Substitution of Wage Record Follow-Up for Survey Follow-Up in JTPA Performance
Standards" and future implementing guidance.
These provisions were developed to provide some uniformity in systemwide
measurement for the limited number of States that receive such waivers. The guidelines
contain provisions pertaining to: universal reporting; reporting elements, formats, and
electronic media; reporting deadline; out-of-state placements; required core performance
measures; adjustments to performance standards; alternative incentives and sanctions policy;
sampling or baseline data for national follow-up measures; performance improvement; and
other provisions deemed appropriate. As stated in the guidelines, the Department will provide
revised reporting instructions.
I. The State has requested a waiver of JTPA § 161(b) and the regulatory provisions at 20
CFR 627.405(d) and 627.485, to extend the period of fund availability beyond the three-year
period allowed by the Act. To allow such a waiver is contrary to our intention to assure that
funds are expended for the benefit of JTPA participants in a timely fashion. In addition, such
a waiver runs contrary to the concept of fiscal responsibility and accountability. Therefore,
the requested waiver has not been granted.
J. The State requested a waiver of the records retention period required at JTPA § 165(e)
and 20 CFR 627.460 of the JTPA regulations. These requirements are imposed to ensure
accountability but are for more than just financial and audit reasons. For example, applicant
and participant records also need to be retained for Civil Rights Act purposes. The record
retention period is not excessively long. The waiver has not been granted.
K. The State's request to waive the reporting requirements for Secretary's National
Reserve Account (NRA) Grants has not been granted. Requests for the application of
approved waivers to NRA grants will be reviewed as part of the NRA application/modification
process. The Department is currently revising the NRA reporting requirements to meet the
Secretary's responsibilities for discretionary grants and to take into account waivers that may
be granted when NRA funds are awarded or current grants are modified. Please refer to the
last page of this document for further information regarding the application of approved
waivers to NRA grants.
L. As requested, the Secretary waives JTPA § 106(b)(8) to permit the use of "Cost per
Placement" as a performance measure in calculation of no more than 13 percent of each
incentive award.
M. As requested, the Secretary will apply the definition of "family income" in 20 CFR
626.5 such that ". . . such income shall also exclude Social Security Disability Income for an
individual with a disability,. . . ." This administrative regulatory waiver is being granted for a
period of four years from the effective date of this Grant Modification.
N. 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.
O. As requested, the Secretary waives the prohibition on stand-alone work experience, job
search assistance, job search skills training, and job club, 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) 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." Additionally, the title III prohibition on work experience at 20 CFR 627.245(e),
where such strategy is supported by an individual assessment, and the combination
requirements at 20 CFR 627.245(d) and 628.804(e) and (f) are waived. (JTPA § 204(c)(2)(A)
was not waived as it was unnecessary to do so since (B)(i) already provides an exception.) We
wish to point out to the State that there is research suggesting that work experience provided in
a stand-alone mode is not as effective as when combined with other needed services and that,
as suggested in the request, this authority will be used sparingly.
P. 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. We note that the State has neither asked for nor
received a waiver of the definition of the Youth Employability Enhancement performance
standard, which requires as one of five options that two out of three youth employment
competencies (pre-employment/ work maturity, basic skills, and occupational skills) be
obtained. (A waiver of 20 CFR 628.520(e) is unnecessary since this requirement applies only
if the assessment indicates that a service is needed. This provision is also applied as non-binding guidance pursuant to waiver Q.)
Q. The Governor agrees to continue to require an objective assessment and individualized
service strategy at entry and on an on-going basis for all participants under titles I, II and III
that is tailored to the background and needs of the participant and ensures that services
identified in the individual service strategy will be secured for the individual. The Secretary
waives 20 CFR 628.515(a) and 628.520(a) and will apply JTPA §§ 204(a)(1) and 264(b)(1),
and remaining sections of 20 CFR 628.515 and 628.520 as providing non-binding guidance for
the alternative State policy that the Governor shall implement.
Until such time as the alternate policy for title II adults and youth is in place, the
requirements specified in the preceding sentence will continue to apply to any decision to
provide the stand-alone activities permitted in paragraphs O. and P. above (i.e., work
experience, job search assistance, job search skills training, job club for both youth and adults,
and pre-employment and work maturity skills training for youth) which relies on the objective
assessment and ISS.
R. The State's request to waive the 30-day inactive status is already allowable under
current policy and a waiver is not necessary. Training and Employment information Notice
(TEIN) 5-93, Change 2, revised the guidance on periods of inactive status. Under the revised
guidance, multiple periods of inactive status are allowable as long as substantial and frequent
services are provided. Substantial services are those cited in the Act, and frequent is defined
as no less often than every 90 days, and all services should be planned for in the ISS or
individual readjustment plan.
S. The Secretary waives JTPA § 314(c)(15) and the last sentence at 20 CFR 627.310(e) to
permit dislocated workers to receive authorized post-termination services, except for training
and financial assistance, for up to one year when such services are supported by an individual
assessment. This will permit the availability of post-termination services to be consistent with
those currently available for disadvantaged adults and youth under title II. 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 title II and III.
T. The State has the flexibility to identify alternate documentation sources to establish
citizenship for JTPA eligibility purposes, and a waiver is not necessary. The JTPA Title II
Eligibility Documentation Technical Assistance Guide (TAG) is intended to be a guide for the
State on the types of suitable documentation for establishing eligibility for JTPA services,
including citizenship. The examples included in the TAG are not intended to be an all-inclusive list, and the State may identify other sources if it is satisfied that such documentation
is sufficient to establish eligibility or, in the case of the State's request, citizenship. The State
is reminded, however, of recent legislation which prohibits the use of a voter registration card
(or other related document) as proof of citizenship (see Training and Employment Information
Notice No. 22-92, Change 5, dated December 10, 1996).
U. The State's request to waive the provisions at JTPA § 264(d)(2) and 20 CFR
628.804(b) requiring that title II-C out-of-school participants under the age of 18 who have not
obtained a high school diploma enroll in and attend school prior to receiving other services has
not been granted. The State's request fails to show that such a waiver would either improve
program performance or the provision of services to out-of-school youth. Since both the Act
and regulations currently provide considerable flexibility in what constitutes school attendance
(e.g., school, course or program including those provided by CBOs), the problems described
by the State may be related to program design problems which the State has the ability to
address under the existing requirements.
V. The State's request to waive the Ratio of Out-of-School to In-School Youth service requirements at JTPA § 263(f)(1) and 20 CFR 628.803(h)(1) has not been granted. It appears that this may be an eligibility requirement and, as such, excepted under the Secretary's waiver authority granted in the 1997 DOL Appropriations Act. In any event, the Department believes that it is important to provide services to out-of-school youth, and the ratio requirement is the only statutory provision that guarantees services to this target population. Since funding for title II-C youth services has decreased in recent years, the Secretary is not prepared to permit further reduction of services to out-of-school youth by waiving the ratio requirement.
W. In consideration of the waivers contained in the grant modification, the State agrees to
a performance improvement of at least five percent at the State and local levels 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. States will take into
account the SDAs' performance improvement targets in determining the receipt of Title II
incentive grant awards for PY 1997. In considering whether the State and the SDAs have
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 Participant 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.