OLDER WORKER BULLETIN 01-10
DATE |
August 14, 2001 |
DIRECTIVE |
OLDER WORKER BULLETIN 01-10 |
TO |
ALL SENIOR COMMUNITY SERVICE EMPLOYMENT
PROGRAM (SCSEP) GRANTEES |
SUBJECT |
Program Year 2001
Implementation of Older Americans Act
(OAA) Amendments (Administrative Costs) |
1. PURPOSE:
To inform SCSEP grantees of changes in grant financial management cost
classification procedures that will take place on July 1, 2001.
2. REFERENCES: Title V of the Older Americans Act as amended by PL 106-501;
Older Worker (OW) Bulletin 97-26: SCSEP Cost Classification and Cost Categories.
3. BACKGROUND: ETA is working to develop and publish regulations incorporating the
changes made in the SCSEP program by the OAA amendments of November 2000. The current
schedule calls for publishing proposed draft regulations in September, 2001, and final regulations
in February 2002. A number of provisions of the OAA amendments can be implemented
beginning July 1, 2002, in the absence of final regulations, however. One of these provisions
concerns changes in cost categories and cost accounting procedures that are followed by SCSEP
grantees. ETA feels that grantees should be permitted to take immediate advantage of the
liberalized provisions concerning administrative expenses found in the OAA amendments.
Therefore, grantees should begin to implement the new cost classification procedures outlined
below as of July 1, 2001.
4. CHANGES IN SCSEP COST CATEGORIES:
a. Prior to the OAA Amendments of 2000, costs incurred by grantees under the SCSEP program
were classified into three categories:
- •Administration included the direct and indirect costs of program management,
oversight, audits, information systems, monitoring and reporting, and staff
training and technical assistance. Administrative costs could be no more than
13.5 percent of the total Federal grant unless ETA approved a waiver raising the
ceiling to no more than 15.0 percent.
- • Enrollee Wages and Fringe Benefits paid to enrollees while working in
community service jobs or receiving training. Not less than 75 percent of total
Federal grant funds must be used to pay EWFB.
- •Other Enrollee Costs included the costs of such activities as enrollee recruitment,
assessment, orientation, training, supportive services like transportation, job
development and placement. Between 10.0 and 11.5 percent of Federal grant
funds could be allocated to this cost category.
SCSEP grantees have been required to budget and report their expenditures in these three cost
categories.
b. The recent OAA amendments seek to align SCSEP's cost management system with that used
by programs administered under the Workforce Investment Act (WIA) of 1998. In doing so, the
amendments have changed SCSEP cost accounting procedures in several ways:
- •Certain types of expenses were removed from the "Administration" cost category.
For example, the costs of (1) developing and operating management information
systems (MIS) that involve program participants and activities, and (2) planning,
developing, monitoring and oversight of program activities need no longer be
charged to the "Administration" cost category. Note, however, that the costs of
MIS and monitoring of administrative functions and activities must still be
charged to the "Administration" cost category. The cost ceiling for
Administrative costs remains at 13.5 percent of the total grant unless ETA
approves a waiver raising it to 15 percent.
- •The cost categories of Enrollee Wages and Fringe Benefits (EWFB) and Other
Enrollee Costs (OEC) have been combined into a new category called Program
Costs. All expenses not specifically classified as Administrative Costs may be
charged to this new category. This includes (a) Enrollee Wages and Fringe
Benefits; (b) enrollee assessment, training, placement, supportive services and
other costs formerly charged to the Other Enrollee Cost category; and (c) certain
other costs, such as those mentioned above, formerly charged to the
Administration cost category. Note, however, that the Title V program still
retains the requirement that 75 percent of total grant funds must be spent on
Enrollee Wages and Fringe Benefits.
- •For financial budgeting and reporting purposes, grantees should now assign
expenses to the following categories: Administration, Program/EWFB, and
Program/Other. Existing forms may still be used; re-title the "OEC" expenses
column as "Program/Other" expenses.
c. The cost allocation principles in OW Bulletin 97-26 should be applied to the new cost
categorization. Staff of SCSEP projects, especially small ones, regularly perform activities that
can be categorized as both "Administrative" and "Programmatic" (which now include activities
formerly categorized as OEC). Staff should be careful to correctly record their time and other
expenses in the proper category. Grantees should have in place a system to facilitate this record
keeping.
5. ACTION REQUIRED: Please circulate this information to subgrantees, program operators
and others involved in the Title V SCSEP program.
6. INQUIRIES: Questions should be directed to your Federal Representative at
(202) 693-3842.
ERICH W. ("RIC") LARISCH Chief Division of Older
Worker Programs |
SHIRLEY M. SMITH
Administrator Office of Adult Services |
TDNO:RLarisch/MJ/6-26-01/7-11-01/RmN4644/33842
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