2 Effective March 1, 1996, the
Texas Workforce Commission replaced the Texas Department of Commerce as the recipient of
JTPA funds. Tex. Lab. Code Ann. § 302.021(8) (West 1996).
8 29 U.S.C. § 1604(19)
repealed Pub. L. 102-367 (Sept. 7, 1992). Now, service delivery areas are not authorized
to spend funds on employment generating activities. 20 C.F.R. §§ 627.225 &
627.435(e)(8) (1997).
10 The combined limitation
for administrative and participant support expenditures was no obstacle to the Middle Rio Grande
Development Council because that limit was waived.
11 Texas has not petitioned
for review of the DOL's second finding that disallowed $10,944 in expenditures.
12Louisiana v. Dept.
of Labor, 108 F.3d 614, 617 (5th Cir. 1997).
21SeeLouisiana v. Dept. of Labor, 108 F.3d 614, 617-18 (5th Cir. 1997); Montgomery County
v. Dept. of Labor, 757 F.2d 1510, 1513 (4th Cir. 1985). The DOL argues that, as a matter of
policy, the burden of showing the adequacy of the records should fall upon the state as the party in
possession of the records. We disagree. The DOL is already under an obligation to audit the state's
JTPA records. If the records prove to be inadequate to show that JTPA funds are spent lawfully, the
DOL can obtain copies of the inadequate records or could offer testimony before the ALJ that, after
a reasonable investigation, no adequate records could be found. The DOL did neither in this case.
22 29 U.S.C. §§
1503 (24), 1518(b)(2)(A). In this case, we address a particular subset of participant support
characterized as "supportive services". In addition to this category, participant support
includes work experience expenditures and need-based payments to pay for food and housing while
a participant undergoes training. 29 U.S.C. § 1519(b)(2)(A); 20 C.F.R. § 629.21(a)
(1989-1991).
24SeeLouisiana v. Dept. of Labor, 108 F.3d 614, 617 (5th Cir. 1997).
25 At first, the DOL denied
reimbursement for the expenditures, arguing that employment generating activities could never be
charged to participant support. Later, the DOL admitted that employment generating activities could
be charged to participant support. The DOL denied reimbursement, however, arguing that Texas
failed to trace the expenditures to specific individuals.