[Federal Register: April 9, 2004 (Volume 69, Number 69)]
[Rules and Regulations]
[Page 19013-19072]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09ap04-10]
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Part II
Department of Labor
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Employment and Training Administration
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20 CFR Part 641
Senior Community Service Employment Program; Final Rule
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DEPARTMENT OF LABOR
Employment and Training Administration
20 CFR Part 641
RIN 1205-AB28
Senior Community Service Employment Program
AGENCY: Employment and Training Administration (ETA), Labor.
ACTION: Final rule.
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SUMMARY: The Employment and Training Administration (ETA) of the
Department of Labor (the Department) rescinds the regulations for the
Senior Community Service Employment Program (SCSEP) and issues these
new regulations to implement the 2000 amendments to title V of the
Older Americans Act (OAA Amendments) (Pub. L. 106-501). These
regulations provide administrative and programmatic guidance and
requirements for the implementation of the SCSEP.
The Final Rule contains some modifications to the Proposed Rule in
response to public comments received during the comment period. The
comments were thoroughly evaluated and are discussed in the Preamble to
the Final Rule to clarify ETA's interpretation of the OAA Amendments
through these final regulations and their application to some of the
challenges that may arise during the OAA Amendments implementation.
This Final Rule applies to all grantees and local project operators,
including subgrantees that provide services under the SCSEP.
DATES: Effective dates: This Final Rule is effective May 10, 2004.
Compliance dates: Affected parties do not have to comply with the
information and recordkeeping requirements in Sec. 641.879 until the
Department publishes in the Federal Register the control numbers
assigned by the Office of Management and Budget (OMB) to these
information collection requirements. Publication of the control numbers
notifies the public that OMB has approved these information collection
requirements under the Paperwork Reduction Act of 1995.
FOR FURTHER INFORMATION CONTACT: Ms. Ria Moore Benedict, Chief,
Division of Older Worker Programs. Telephone: (202) 693-3198 (this is
not a toll-free number). E-mail: benedict.ria@dol.gov. Toll free to the
ETA Help Line: 1-877-US2-JOBS. TTY: 1-877-889-5627. Copies of the Final
Rule are available in the following formats: electronic file on
computer disk and audio tape. They may be obtained at the above office.
SUPPLEMENTARY INFORMATION: This document is divided into four sections.
Section I provides general background information. Section II discusses
the major changes implemented by the Older Americans Act Amendments of
2000. Section III summarizes and responds to the comments received in
response to the Notice of Proposed Rulemaking (NPRM) during the comment
period and provides the Final Rule. Section IV discusses miscellaneous
administrative requirements, such as Paperwork Reduction Act
requirements.
I. Background
The Senior Community Service Employment Program (SCSEP) was
originally authorized in 1965 by the Economic Opportunity Act (EOA),
Public Law 89-73. Under the EOA, the Department established the SCSEP
in 1973. As authorized by title V of the Older Americans Act Amendments
of 2000 (OAA Amendments or 2000 Amendments) (42 U.S.C. 3056, et. seq.),
the SCSEP fosters and promotes useful part-time opportunities in
community service activities for persons with low incomes who are 55
years of age or older and assists older workers in transitioning to
unsubsidized employment.
The OAA Amendments expand the program's purpose to include
increasing participants' economic self-sufficiency and increasing the
number of persons who may benefit from unsubsidized employment. The
Employment and Training Administration of the Department of Labor
administers the program by means of grant agreements with eligible
organizations, such as governmental entities, and public and private
agencies and organizations.
The SCSEP regulations were last revised in 1995 (20 CFR part 641,
60 FR 26574 (May 17, 1995)). The 2000 Amendments are the first major
legislative changes to the SCSEP since 1995.
On April 28, 2003, the Department published in the Federal Register
(68 FR 22520) an NPRM implementing the OAA Amendments and requested
comments. The comments submitted in response to the NPRM have been
fully considered in drafting this Final Rule. This document issues the
Final Rule to conform to the OAA Amendments and to make technical
changes based on the Department's experience in administering the
SCSEP.
II. Changes Implemented by the OAA Amendments of 2000
Congress amended the SCSEP to combine requirements that were
formerly in the SCSEP legislation as last amended in 1992 by Public Law
102-375, the accompanying regulations at 60 FR 26574 (May 17, 1995)
(codified at 20 CFR part 641), and SCSEP program administration
materials provided to the grantee community as bulletins, or training
and employment information notices. New provisions of the OAA include
requirements for: Greater coordination with the Workforce Investment
Act (WIA); a greater proportion of funds for States when appropriations
exceed current funding levels; the submission of State plans; grants
for a period up to 3 years; new performance measures; and corrective
action and sanctions for poor performance.
With the enactment of the Workforce Investment Act of 1998 (Public
Law 105-220), the SCSEP became a required partner in the workforce
investment system. As a result, Congress amended the SCSEP to require
greater coordination with the One-Stop Delivery System, including
reciprocal use of Individual Employment Plans and other assessment
mechanisms.
Under both WIA and the OAA, any grantee operating an SCSEP project
in a local area must now negotiate a Memorandum of Understanding (MOU)
with the Local Workforce Investment Board (Local Board), which details
the SCSEP's involvement in the One-Stop Delivery System. Further,
because of the SCSEP's closer coordination with the One-Stop Delivery
System, the ``joint program'' language contained in section 510 of the
1992 amendments to the OAA, Public Law 102-375 (1992), and section 203
of the Job Training Partnership Act, Public Law 97-300 (1982) (29
U.S.C. 1603 et seq.) for ``automatically'' qualifying participants for
training or intensive services has been replaced with language that
permits Local Boards to deem SCSEP participants eligible for those
services.
The 2000 Amendments require a different distribution of funding
between State and national SCSEP grantees if the SCSEP appropriation
increases. The legislation requires the Department to reserve amounts
for section 502(e) (authorizing second career training projects), the
territories, and the Indian and Asian Pacific aging organizations
before funds are distributed between the State and national SCSEP
grantees. From the amounts remaining after the reservation, the
legislation holds grantees harmless
[[Page 19015]]
at the 2000 level of activity, which requires the Department to
allocate 22 percent of funding to State grantees and 78 percent of
funding to national grantees. Funding in excess of the Fiscal Year 2000
level of activity distribution must be divided as follows: Up to $35
million will be divided to provide 75 percent to the States and 25
percent to the national grantees. Amounts over $35 million will be
divided 50 percent to the States and 50 percent to the national
grantees.
The 2000 Amendments require Governors to submit an annual plan that
discusses the number and distribution of eligible individuals in the
State, the employment opportunities, the skills of the local eligible
population, the locations and populations for which community service
projects are most needed, and plans for coordinating with WIA. As part
of the planning process, the legislation requires the Governor to
obtain the advice of title V stakeholders in developing a plan that
addresses the equitable distribution of positions in each State. The
legislation also allows the Governor to make recommendations on grant
proposals to the Department related to the proposed distribution of
positions within the State.
Another new provision of the legislation is the establishment of
performance measures. The performance measures are designed to monitor
the performance of each grantee and provide a mechanism to assist those
grantees that need technical assistance to perform better. The
performance measures are based on the required indicators listed in
section 513(b) of the OAA. For grantees that do not meet the
established performance measures, section 514 of the OAA provides for
corrective action and sanctions. Section 514 of the OAA also codifies
prior regulatory eligibility and responsibility criteria that grantees
must meet before receiving SCSEP funds. Finally, section 514 authorizes
the Department to fund grants for up to 3 years after the establishment
of the regulations and performance measures.
III. Summary and Explanation of the Final Rule
As this legislation has many new provisions, the Department has
drafted regulations that respond both to the SCSEP community's concerns
and to the Department's interpretation of the statute.
Developing the Final Rule was a multi-stage process that included
the creation of a Proposed Rule and a request for comments. To assist
in the development of the Proposed Rule, the Department obtained
viewpoints of the public, including individuals and members of the
grantee community, on the new SCSEP provisions, as well as existing
SCSEP provisions, regulations, or policies. Five work groups were
established that included representatives from the national grantee
organizations and several States. The work groups addressed the
following areas: Performance accountability; operational and policy
issues; grant and administrative issues; the State Senior Employment
Services Coordination Plan; and technical assistance and consultation.
These work groups provided the Department with issue papers and
recommendations. Further, the Department held a series of Town Hall
Meetings and requested comments through Federal Register notices to
ensure that the regulations take the ideas of interested individuals
into account.
During the public comment period for the Proposed Rule, the
Department received a number of suggestions. The comments were
thoroughly evaluated and are discussed below to clarify the
Department's interpretation of the OAA Amendments through this Final
Rule and to address some of the challenges that may arise during the
implementation of the OAA Amendments. Every effort was made to
incorporate these suggestions into the drafting of the Final Rule to
the greatest extent practicable and consistent with applicable
statutory requirements. The following discussion presents a section-by-
section summary of the comments and the Department's responses to them.
For those sections of the NPRM on which we received no comments and on
which we made no substantive changes, there is no commentary following
the listing of the section. We also have made some minor editorial
changes which are not intended to change the meaning of the regulations
and which are not discussed in the commentary below. WIA's
authorization expired on September 30, 2003 but continues to operate
through continuing appropriations. Since WIA may be reauthorized and
its regulations may change, citations to the WIA regulations may
change.
When publishing a Final Rule following a comment period it is
customary to publish only changes made to the rule. However, in order
to be more user friendly, we are publishing the entire rule, including
those parts that have not been changed. This means that you can consult
one document which contains all of the regulations and commentary,
rather than needing to compare various documents.
Subpart A--Purpose and Definitions
What Part Does This Cover? (Sec. 641.100)
What Is the SCSEP? (Sec. 641.110)
What Are the Purposes of the SCSEP? (Sec. 641.120)
This section listed the SCSEP's purpose, including providing
employment and self-sufficiency for older Americans.
The Department received numerous comments on this section. Most of
them requested that the term ``underemployment'' either be added or
substituted for the term ``unemployment.'' Additionally, another
comment noted that ``persons `who have poor employment prospects' were
excluded.'' One commenter simply disliked any references to
unemployment or underemployment because they indicate a shift in the
SCSEP program away from community service and toward unsubsidized
employment. Another commenter echoed this concern and asserted that
unsubsidized employment is counterproductive to State agencies that
rely on community service programs for participants in rural areas. One
commenter supported the statutory language, and requested that this
definition be cross-referenced in Sec. Sec. 641.400 and 641.500.
The Department has no authority to expand the statutory SCSEP
purpose to include underemployed persons. The commenters were correct,
however, in pointing out that the statutory statement of purpose, in
section 502(a)(1), does include persons who have poor employment
prospects. We have revised the rule accordingly. We note, however, that
having poor employment prospects is not an alternative criterion to
being unemployed and low income; rather, it is an additional condition.
Thus, revised Sec. 641.120 tracks the language of section 502(a)(1) of
the OAA Amendments. Even with the more narrow statutory purpose, the
number of persons eligible for the program far exceeds the number of
available positions. (See subpart G).
As for the comments that indicate a shift away from community
service towards the unsubsidized goal, the Department recognizes that
the 2000 Amendments do, in fact, represent a shift in emphasis for the
SCSEP. In the 2000 Amendments, Congress has significantly increased the
program's emphasis on placements into unsubsidized employment
recognizing that more individuals age 55 and over are seeking
employment opportunities. Rather than viewing this new focus as
counterproductive, the Department encourages grantees to view the focus
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on unsubsidized employment as a means to assist individuals age 55 and
over in their pursuit of self-sufficiency. Encouraging unsubsidized
placements also increases the number of individuals the program is able
to serve. While this change in emphasis may require some grantees to
change the way they administer the program, the Department believes
that ultimately these changes will provide for better service to older
workers.
What Is the Scope of This Part? (Sec. 641.130)
What Definitions Apply to This Part? (Sec. 641.140)
This section provided specific or contextual definitions for the
terms used in this part.
The Department received numerous comments on this section with
suggestions on how to better define, amend, or clarify twelve (12)
definitions. They were the definitions of community service,
comprehensive One-Stop, equitable distribution report, greatest social
need, host agency, other participant (enrollee) cost, participant,
placement into public or private unsubsidized employment, poor
employment prospects, retention in public or private unsubsidized
employment, subgrantee, and training services.
Generally, commenters were concerned about whether community
service is considered employment. Commenters discussed whether:
SCSEP mandatory partners need to maintain a
physical presence at comprehensive One-Stops;
Equitable distribution reports address
underserved counties or States;
The term greatest social need includes isolation
caused by racial or ethnic status;
Host agencies can include faith-based
organizations and SCSEP grantees;
Other participant (enrollee) costs include costs
associated with a community service assignment;
Participants are those who receive only services
as opposed to services and wages;
The phrase ``placement into public or private
unsubsidized employment'' should consider certain wage rates;
Poor employment prospects includes limited or a
lack of transportation; whether the phrase ``retention in public or
private unsubsidized employment'' is calculated more in accord with the
Workforce Investment Act or the Older Americans Act;
The definition of subgrantee should include
technical changes; and
Training services should be limited to the
Workforce Investment Act parameters or expanded.
Regarding the definition of ``Community service,'' the Department
has decided not to add a statement here on participant employment
status. The definition indicates the kinds of activities that are
considered community services and thus, is not the proper place to
address other issues.
Regarding the definition of ``Comprehensive One-Stop Center,''
because the regulation does not use the term ``Comprehensive One-Stop
Center,'' the Department agrees that the defined term should be changed
to ``One-Stop Center.'' Under WIA's program design, One-Stop Centers
may be organized in a variety of different ways. All One-Stop systems
must, however, have at least one comprehensive One-Stop Center through
which all One-Stop partners must provide applicable core services. We
have revised the definition to read, ``One-Stop Center means the One-
Stop center system in a WIA Local Area that must include a
comprehensive One-Stop Center through which One-Stop partners provide
applicable core services and which provides access to other programs
and services carried out by the One-Stop partners.''
Additionally, any SCSEP required One-Stop partner need not maintain
a physical presence at a comprehensive One-Stop Center. Under WIA, all
required partners must provide WIA core services, use a portion of
their funds (not inconsistent with Federal law) to help maintain the
One-Stop Delivery System, enter into the appropriate MOU, and
participate in the One-Stop system consistent with the MOU. However,
these services may be made available by the provision of appropriate
technology, by collocating personnel, through cross-training staff, or
other arrangements, as described in the MOU. See WIA Final Rule at 20
CFR 662.200 through 662.310 for the specific partner requirements.
Regarding the definition of ``Equitable distribution report,'' the
Department accepts the commenters' suggestion and clarifies that the
definition applies to underserved counties.
Regarding the definition of ``Greatest social need,'' the
Department will retain the definition as it is based on section 101(28)
of the OAA. As the use of the word ``include'' in the definition makes
clear, the factors listed in the definition are not exclusive. Grantees
may use other reasonable factors in determining if an individual meets
this criterion. The Department realizes that it is difficult to
quantify ``greatest social need'' as defined for reporting purposes.
The Department plans to provide further clarification on how to capture
these individuals through reporting instructions.
Regarding the definition of ``Host agency,'' the Department agrees
that, in appropriate circumstances, SCSEP grantees may serve as host
agencies. SCSEP grantees may be host agencies as long as they meet the
criteria (i.e., public agency or private non-profit organization exempt
from taxation under the provisions of section 501(c)(3) of the Internal
Revenue Code of 1986) already established in the definition. Therefore,
the Department sees no need to amend the definition to specifically
include SCSEP grantees as host agencies. Due to the wording in the
Proposed Rule some commenters were confused about whether faith-based
organizations could be host agencies. Faith-based organizations may be
host agencies, as long as the work of the participant does not involve
the construction, operation, or maintenance of any facility used or to
be used as a place for religious worship (OAA section 502(b)(1)(C) .
The regulation has been amended to more closely track the statutory
language in order to clear up the confusion. Following the phrase
``political party'' we have added the phrase: ``and projects involving
the construction, operation, or maintenance of any facility used or to
be used as a place for sectarian religious instruction or worship.''
Regarding the definition of ``Other participant (enrollee) cost,''
the Department agrees with the comments. The phrase ``or in conjunction
with a community service assignment'' is added after ``and which may be
provided on the job'' and the phrase ``the cost of '' is inserted after
the word ``means.''
Regarding the definition of ``Participant,'' the Department
disagrees with those commenters who suggested that a participant should
be defined as an individual who receives any services. The Department
believes that an SCSEP participant is an individual who receives
services as outlined in subpart E. Thus, a participant may only be an
individual who is enrolled in the program under subpart E (i.e., has
been assessed and has been assigned to a community service position,
etc.) and is legally filling an authorized position. This definition is
consistent with previous regulations and program policy that require an
individual to be enrolled in a community service position to be
considered a participant.
Regarding the definition of ``Placement into public or private
unsubsidized employment,'' one
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commenter asked for clarification about whether an individual who
worked 20 days at a certain wage rate that would exceed $5.15 per hour
for 20 hours per week would be considered an unsubsidized placement.
The Department emphasizes that such a situation would not be an
unsubsidized placement. The 2000 Amendments clearly require employment
for ``30 days within a 90 day period'' to qualify as a placement in
public or private unsubsidized employment. (OAA section 513(c)(2)(A))
A commenter also asked whether participants should be able to
accept private sector employment for less than 20 hours if they are
economically better off and the hours fit their individual needs.
Grantees are permitted to place participants in unsubsidized positions
for less than 20 hours per week. The figure of 20 hours is only used at
OAA sec. 515(a)(2) for budgeting purposes. The Department will make
this position clear in the administrative guidance on performance
measures.
Regarding the definition of ``Poor employment prospects,'' the
Department notes that this definition uses the language ``include, but
are not limited to.'' This means that the list in the definition is not
exclusive and that grantees may use other relevant factors in
determining whether an individual meets this criterion. The Department
will provide further guidance on this issue in performance reporting
instructions. We see no need to revise the definition to include other
suggested factors.
Regarding the definition of ``Retention in public or private
unsubsidized employment,'' the regulatory definition mirrors the
statutory definition (OAA section 513(c)(2)(B)). The Department
interprets this definition to allow for brief periods of inactivity or
unemployment. The Department will provide further guidance on this
issue in performance reporting instructions.
Regarding the definition of ``Subgrantee,'' the Department deletes
the word ``which'' after the term ``subcontract.''
Regarding the definition of ``Training services,'' the Department's
definition reflects those services authorized by section 134(d)(4) of
the Workforce Investment Act. This WIA definition, however, is very
broad. The list of services referenced at section 134(d)(4) of the WIA
is not intended to be exhaustive. Rather, it only enumerates examples
of authorized training services. Therefore, SCSEP community service
assignments and those available through work experience at host
agencies, are included in the definition and as discussed in subpart E.
The Department also received several suggestions to add definitions
of certain terms. These terms included Disability, Dual eligibility,
Residence, Pre-registration (as it appears in Sec. 641.710(9)),
Permissible information collection methods, and Part-time.
The Department agrees that it is appropriate to add some
definitions that were not included in the Proposed Rule. Consequently,
we have added certain definitions in the Final Rule, namely Co-
enrollment, Disability, and Residence.
The term ``Disability'' is defined at section 101(8) of the OAA as
follows: a disability attributable to mental or physical impairment, or
a combination of mental and physical impairments, that results in
substantial functional limitations in one or more of the following
areas of major life activity: (A) Self-care, (B) receptive and
expressive language, (C) learning, (D) mobility, (E) self-direction,
(F) capacity for independent living, (G) economic self-sufficiency, (H)
cognitive functioning, and (I) emotional adjustment.
The Department has decided not to define Dual eligibility. However,
we have added a roughly synonymous term, Co-enrollment. Co-enrollment
applies to any individual who meets the qualifications for SCSEP
participation as well as the qualifications for any other relevant
program as defined in the Individual Employment Plan. The Department
will provide guidance on reporting for dual enrolled participants in
performance reporting instructions.
As used in Sec. 641.710(b)(9), the term ``Pre-registration,'' is
intended to refer to the value of a participant's earnings before his/
her enrollment in the SCSEP. We did not add this definition to the
Final Rule because the subject will be covered in performance reporting
instructions.
The Department has decided not to define Part-time in this rule;
however, grantees should note that ``Part-time'' is defined at section
515(a)(2) of the OAA as a work week of at least 20 hours. We suggest
that grantees use this statutory definition for budgeting purposes when
assigning individuals to community service, which is consistent with
its use in the statute.
We decided not to include a definition of the term ``Permissible
information collection methods'' in the Final Rule because the
Department will provide guidance through performance reporting
instructions.
The term ``Residence'' is defined as an individual's declared
dwelling place or address, as demonstrated by appropriate
documentation. No requirement for length of residence prior to
enrollment is imposed. (See also subpart E, Sec. 641.500 and
discussion of State agreements pertaining to ``cross-border
registrations.'')
Subpart B--Coordination With the Workforce Investment Act
What Is the Relationship Between the SCSEP and WIA? (Sec. 641.200)
This section specified that SCSEP grantees are required to follow
all applicable rules under WIA and its regulations and must ensure that
they are familiar with the WIA statutory and regulatory provisions,
especially WIA section 121(b)(1)(B)(vi) (29 U.S.C. 2841(b)(1)(B)(vi)
and 29 CFR part 662 subpart B (Sec. Sec. 662.200 through 662.280). The
WIA operational requirements generally do not apply to SCSEP
operations. As required partners under WIA, grantees are obligated to
be familiar with the WIA requirements when they are acting as a WIA/
One-Stop partner.
Several commenters stated that One-Stop Centers are not equipped
for or interested in meeting the needs of older job seekers,
particularly those 60 and over. For example, a commenter noted that
One-Stop Centers are not equipped to address issues such as care
giving, medication needs, and other health issues often faced by older
adults. Commenters noted that older individuals often seek part-time
employment, which would negatively affect One-Stop performance
measures. One commenter noted the differences between the SCSEP and WIA
programs, stating that the SCSEP requires a close working relationship
with the individual, while WIA relies more on the initiative of the job
seeker. Similarly, a commenter stated that Area Agencies on Aging
operate on a more encompassing philosophy that meets all the needs of
the person. Another commenter stated that the title V program must
maintain individuality in order to best serve older workers and should
be a part of a focused network of social and community support. One
commenter noted the importance of educating Local Boards to the needs
of older populations.
A few commenters discussed reciprocity between the SCSEP and WIA,
asking that the Department make WIA aware of the provisions of the
SCSEP. One commenter specifically discussed the eligibility reciprocity
between the two programs, noting that the workers in the Dislocated
Worker Program were not eligible for the SCSEP because of the six-month
and 12-month
[[Page 19018]]
look back periods for determining income eligibility. Another requested
that a mechanism be developed to resolve conflicts between the SCSEP
and WIA regulations. One commenter noted that this section does not
properly distinguish the SCSEP mission and participants from those of
WIA and urged the Department to specify which WIA rules apply to the
SCSEP. Two commenters stated that the expectation of familiarity with
WIA statutory and regulatory requirements is excessive.
One commenter suggested that we specify that a One-Stop's failure
to negotiate MOUs must be presented to the Department for appropriate
action. Another stated that a title V grantee has no authority to
require cooperation of the One-Stop system to provide appropriate
services, to serve the title V priority groups, or to work with
community service programs. The commenter argued that title V cannot be
held accountable if the One-Stop system fails to meet expectations for
older workers.
The SCSEP is a required WIA partner, as provided in 20 CFR 662.200
of the WIA regulations. Partner coordination requirements for One-Stops
are articulated at 20 CFR 662.310(b)-(c) of the WIA regulations. The
Department acknowledges that there have been substantial differences in
the degree to which such partnerships have been established in the
past, and is actively exploring strategies to have One-Stops form more
inclusive relationships with SCSEP grantees. Failure to coordinate with
One-Stops may lead to a finding of ineligibility (OAA section
514(c)(5)). Other consequences for failure to coordinate are
established at 20 CFR 662.310(b)-(c).
The comments appear to reflect a concern that the coordination
requirements of the 2000 Amendments will have the effect of diluting or
undercutting the focus and mission of the SCSEP. The Department does
not believe this is true and does not intend the regulations to convey
this message. WIA envisions a coordinated workforce development system
in which a variety of programs work more closely together to make
access to workforce development services easier and more efficient. WIA
includes as required partners a number of programs that serve special
populations and is very careful to assure that program boundaries are
respected. The Department intends that these regulations will enable
grantees and subgrantees to concentrate better on the core missions of
the SCSEP, providing community service assignments and unsubsidized
placements to hard to serve older individuals. The Department intends
that the One-Stop system be used to provide services both to older
individuals who are not eligible for the SCSEP and to those who are
eligible but need the intensive services that the SCSEP is unable to
provide. The kinds of partnerships that the regulations envision will
enable SCSEP grantees and subgrantees to focus more of their efforts on
the core population that the SCSEP is intended to serve.
As discussed in more detail elsewhere, nothing in WIA or the OAA
precludes grantees from negotiating MOUs that recognize and use their
expertise in serving older workers as part of the One-Stop system.
Thus, grantees are encouraged to negotiate such arrangements in their
MOU with the One-Stops so that it counts toward their contribution to
the One-Stop.
Required partnerships with the One-Stop Delivery System do not
preclude voluntary relationships with other partners such as Area
Agencies on Aging. The Department actively encourages such additional
partnerships.
The Department does not think that the requirement that SCSEP
grantees follow applicable WIA rules is excessive. In order to
effectively play their role as required partners and participants in
the One-Stop system, SCSEP grantees will have to operate under those
WIA rules which apply to those WIA partners and to the operation of the
One-Stops. In order to be able to fully use the WIA system as a source
for additional services, grantees will have to know how the system
works. The comments appear to reflect a desire for a more productive
relationship between the SCSEP and WIA and a desire to make the WIA
system more responsive to the needs of older workers. The Department
believes that this goal can best be accomplished if SCSEP grantees
become knowledgeable about how the WIA system operates.
There were several funding-related comments. Some questioned
whether SCSEP funds could be used to support One-Stop operations. One
commenter stated that the SCSEP should provide for essential
contributions to WIA, suggesting that the Department make SCSEP funds
specifically available for WIA through the regular funding process or
allow the match that grantees provide to be used to support WIA
activities.
SCSEP grantees are required One-Stop partners and therefore have
certain responsibilities as One-Stop Partners. As explained in the WIA
regulations, at 29 CFR 662.230, SCSEP grantees must assist in creating
and maintaining the One-Stop Delivery System. This requires negotiating
financial arrangements, including in-kind contributions when possible,
in the MOU with their WIA Local Board. Because coordination with the
WIA system is an SCSEP requirement, grantees are authorized to use
grant funds for that purpose. However, grantees also may use their non-
Federal resources or cash to support WIA activities as well as a
portion of their grant funds. The WIA regulations, at 29 CFR 662.230,
explain these and other responsibilities of required One-Stop partners.
The extent to which grant funds or in-kind contributions are needed to
fund the SCSEP partner's share of One-Stop support will depend on the
MOU and the services that each party provides in the One-Stop setting.
With regard to the development of MOUs, the Department will follow the
larger WIA system which makes the development of MOUs a local decision.
One commenter requested that the Department specify that title V
host agencies do not need to be co-located to meet the definition of a
One-Stop partner.
There is no requirement that grantees, subgrantees or host agencies
be co-located in the One-Stop. That is a matter to be negotiated in the
MOU, although the Department believes it is a good practice. SCSEP
grantees are required to do no more and no less than other required
One-Stop partners. Section 134(c) of WIA requires that core services be
provided, at a minimum, at one comprehensive physical One-Stop Center.
The WIA regulations at Sec. 662.250 require that core services
applicable to a partner's program must be made available by each
partner at that comprehensive One-Stop Center. As explained in the
Preamble to the WIA regulations, at 65 FR 49309 (August 11, 2000), in
order to avoid duplication of services traditionally provided under the
Wagner-Peyser Act, this requirement is limited to those applicable core
services that are in addition to the basic labor exchange services
traditionally provided in the local area under the Wagner-Peyser
program. Furthermore, 29 CFR 662.250(c) also provides significant
flexibility about how the core services are made available at the One-
Stop Center by allowing for services to be provided through appropriate
technology at the center, through co-location of personnel, cross-
training of staff, or through contractual or other arrangements between
the partner and the service providers at the center.
[[Page 19019]]
What Services, in Addition to the Applicable Core Services, Must SCSEP
Grantees Provide Through the One-Stop Delivery System? (Sec. 641.210)
Section 641.210 provided that SCSEP grantees must provide their
participants, eligible individuals the grantees are unable to serve,
and other SCSEP ineligible individuals, with access to services,
activities, and programs carried out by other One-Stop partners.
Several commenters stated that it is not practical to make such
arrangements because One-Stop services are not accessible for all
individuals in all locations, particularly those in rural areas.
Another commenter asked that the Department clarify to what extent such
arrangements need to be made. One commenter asked that the language be
changed to state ``a referral to access other activities and programs *
* *.'' Another commenter argued that the Department should promote
coordination between the SCSEP and local community-based and faith-
based organizations, not only with the One-Stop Centers.
The Department acknowledges that rural locations may present
particular challenges and encourages coordination with other
organizations in addition to One-Stops that may be more accessible and/
or appropriate. Coordination with One-Stops is essential to ensuring a
seamless, comprehensive workforce development system that identifies
the service options available to individuals and takes the critical
next step of facilitating access to these services.
This provision is simply a reminder of a basic premise of the WIA
One-Stop system: the broadening of customers' access to a wide variety
of services. The regulation implements the ``no wrong door'' approach
of the One-Stop system by reminding grantees and subgrantees that they
must be part of the One-Stop system and must participate in providing
access to the other services that the One-Stop partners offer. The
regulation requires that grantees make arrangements to provide
``access'' to services; it does not require that the person referred be
able in every case to use the services. To make it clear that the
regulation imposes no more than the obligation to be a part of the One-
Stop system and to participate in its efforts to make services more
widely accessible to customers, we have added the words ``through the
One-Stop Delivery System'' to the regulation. Of course, the regulation
does not preclude grantees and subgrantees from establishing other
partnerships, which will help eligible and ineligible individuals
access needed services.
Two commenters questioned the manner in which entities receive
credit for job placement services. One suggested that referrals be
tracked so agencies may receive appropriate recognition.
The allocation of placement credit will be addressed in
administrative guidance as the performance accountability system is
further refined.
One commenter recommended that title V programs be encouraged to
offer core services through the One-Stop.
SCSEP grantees are free to negotiate the services to be provided by
and through the One-Stop Delivery System in their MOU, as described at
29 CFR 662.300 of the WIA regulations. The Department agrees that
grantees are required to offer core services applicable to SCSEP
through the One-Stop; but grantees also may decide whether to offer
core services in other ways. As to other services, grantees must decide
which of the One-Stop's services to use and how to use them. The
Department believes that the One-Stop system can provide additional
services not otherwise available to the SCSEP because of funding
constraints and agrees that grantees should be encouraged to make use
of the One-Stop system and other available sources of services.
Does Title I of WIA Require the SCSEP To Use OAA Funds for Individuals
Who Are Not Eligible for SCSEP Services or for Services That Are Not
Authorized Under the OAA? (Sec. 641.220)
Section 641.220 provided that grantees should refer individuals who
are ineligible for the SCSEP to the One-Stop system and to the WIA
partner programs for services, as agreed to in the MOU.
Several commenters addressed perceived problems associated with the
inability of title V to provide funds for ineligible individuals. One
commenter noted that WIA does not provide services for older workers
and that only limited WIA funds are available. The commenter also
stated that the section does not address how ineligible individuals
will receive services from WIA, if the SCSEP cannot use its resources
as a full partner. Another commenter recommended that all grantees
operating in a One-Stop share the responsibility of meeting core
services, as well as providing for any cash contribution to the One-
Stop system. Another commenter asked whether SCSEP funds will be
allocated for the cost of providing ineligible individuals with access
to other activities and programs.
Title V resources may only be used to provide title V services to
title V-eligible individuals. Although not considered a ``service,''
title V resources may also be used to determine if an individual is
eligible to participate in the SCSEP program and to a limited extent,
to provide the individual with referrals or access to other services.
Such expenditures are considered allowable costs. SCSEP grantees are
responsible for negotiating services to be provided by the One Stop
Delivery System to both SCSEP-eligible and SCSEP-ineligible individuals
in their MOU, as described at 20 CFR 662.300 of the WIA regulations.
The underlying notion of the One-Stop is the coordination of programs,
services and governance structures so that the customer has access to a
seamless system of workforce investment services. The success of the
reformed workforce investment system is dependent on the development of
true partnerships and honest collaboration at all levels and among all
stakeholders.
One commenter recommended that the SCSEP serve all older job
seekers, stating that many Area Agencies on Aging have established the
necessary local infrastructure to place SCSEP-ineligible older job
seekers in unsubsidized jobs.
The regulation is not intended to govern any services that Area
Agencies on Aging or similar multi-function groups may provide other
than SCSEP-funded activities. Area Agencies on Aging remain free to
provide other services to the elderly and to refer SCSEP-ineligible
individuals to those services. It would be most beneficial to these
agencies and to the One-Stop system if this referral system were
included in the MOU.
Some commenters suggested that the Department clarify that SCSEP
participants assigned to work in a One-Stop are not prohibited from
serving non-SCSEP eligible individuals who are seeking appropriate One-
Stop services.
Naturally, SCSEP participants assigned to work in a One-Stop are
allowed to serve non-SCSEP eligible individuals who are seeking
appropriate One-Stop services. In such an instance, the One-Stop simply
acts as a host agency and the participants simply provide the services
ordinarily provided by the host agency.
[[Page 19020]]
Must the Individual Assessment Conducted by the SCSEP Grantee and the
Assessment Performed by the One-Stop Delivery System Be Accepted for
Use By Either Entity To Determine the Individual's Need for Services in
the SCSEP and Adult Programs Under Title IB of WIA? (Sec. 641.230)
This section required that an assessment or Individual Employment
Plan (IEP) completed by the SCSEP satisfies any condition for an
assessment, service strategy, or IEP completed at the One-Stop and
vice-versa (OAA sec. 502(b)(4)(A)). These reciprocal arrangements and
contents of the SCSEP IEP and WIA IEP should be negotiated in the MOU.
One commenter suggested that the section state that both entities
must coordinate on the IEP, not that one must be accepted by the other
entity. Another commenter recommended that the Department clarify that
we expect One-Stop operators to accept SCSEP IEPs and SCSEP grantees to
accept One-Stop-originated IEPs.
Under section 502(b)(4) of the OAA and Sec. 641.230 of the SCSEP
regulations, SCSEP assessments and service strategies satisfy any
condition for an assessment and service strategy or IEP for an adult
participant under title IB of WIA, in order to determine whether such
individual qualifies for intensive or training services. Similarly, WIA
assessments must be accepted by SCSEP grantees. As noted in the
Preamble to the SCSEP Proposed Rule, as a practical matter, this means
that the SCSEP IEP and the WIA IEP must be sufficiently comprehensive
to provide the information needed to place a participant who is
eligible for both programs in the correct service mix. This may well
require modifying existing SCSEP IEP and WIA IEP information collection
practices, which should be negotiated during the development of the
local MOU. For a more in-depth discussion of this issue, see the
Preamble to the proposed SCSEP regulations at 65 FR 22522 (April 28,
2003).
Are SCSEP Participants Eligible for Intensive and Training Services
Under Title I of WIA? (Sec. 641.240)
Section 641.240 provided that, although SCSEP participants are not
automatically eligible for intensive and training services under title
I of WIA, Local Boards may deem them as satisfying the requirements for
receiving adult intensive and training services under title I of WIA.
It also provided that an SCSEP assessment and IEP qualify as an
intensive service under WIA and that SCSEP participants seeking
unsubsidized employment may require training to meet their objective
and may obtain such training through the SCSEP, the WIA program or a
WIA partner, as negotiated in the MOU. Finally, the regulation provided
that an SCSEP community service assignment is analogous to work
experience assignments under WIA. The Preamble to the NPRM suggested
that SCSEP stipends should not be considered income for WIA income
eligibility purposes.
A few commenters recommended that a reciprocal arrangement be
established between the SCSEP and title I of WIA. The commenters
suggested that SCSEP-eligible participants who receive intensive and
training services under title I of WIA, who are placed in unsubsidized
employment, be counted as placements by the SCSEP.
The Department agrees that reciprocal arrangements for determining
eligibility, as well as for establishing how services to older workers
will be provided, is a good idea and encourages grantees and
subgrantees to negotiate such arrangements in their MOUs. The
Department is aware that there have been problems in some areas in
providing services to older workers and recommends that grantees and
subgrantees use the negotiation of MOUs to address those problems,
either by negotiating for additional services through the One-Stop or
by negotiating a greater role in providing services to older workers as
a One-Stop partner.
Two commenters suggested that WIA performance measures be modified
to address the special needs of older workers. Another commenter stated
that the Department wrongly assumes that greater coordination with WIA
One-Stop Centers will result in SCSEP participants being deemed
eligible for service and having access to a broad range of intensive
and training opportunities because of performance measures
disincentives under WIA. We cannot address WIA performance measures in
this rule, but the Department is aware of these concerns and is
reviewing this issue.
One commenter stated that it is unreasonable that most low-income
older job seekers with poor employment prospects are not automatically
eligible for WIA intensive and training services.
The Department is constrained by the language of the statute, which
provides that SCSEP participants ``may be deemed'' eligible for WIA
title I services. This is a change from the prior version of the
statute, which required that SCSEP participants be deemed eligible.
This change gives the discretion to the Local Board and emphasizes the
importance of negotiating the MOU with the Local Board.
One commenter recommended that the Department clarify that title V
funds can be used to pay wages during participant training. Another
noted that wages paid to participants are included in their initial
income if they later seek to enroll in WIA. The commenter argued that
this makes it more difficult for WIA to meet performance goals.
The Department agrees that title V funds can be used to pay wages
to SCSEP participants receiving intensive and training services under
title I of WIA, provided that SCSEP participants are assigned to a
community service assignment. The Department has amended Sec. 641.240
accordingly. Training may be provided as part of the community service
assignment or in addition to a community service assignment. A
participant need not be performing the community service assignment
when the training is provided, i.e., the training may occur before the
participant begins the community service assignment or the participant
may take the training while assigned to a community service assignment.
The Department's intent is to assure that SCSEP funds spent for
participant training are spent on those participants who most need the
services available through the SCSEP.
Finally, because the OAA statute only provides authority for
regulations governing the SCSEP program, these regulations cannot speak
to whether SCSEP community service wages will be considered income for
eligibility purposes in other programs. The Department will only
address income in Sec. 641.507.
Subpart C--The State Senior Employment Services Coordination Plan
This entire subpart represents a change from the current
regulations, as the 2000 Amendments established a new, more thorough
planning process for the SCSEP in each State.
What Is the State Plan? (Sec. 641.300)
Who Is Responsible for Developing and Submitting the State Plan? (Sec.
641.305)
In Sec. Sec. 641.300 and 641.305, the Department reiterated the
statutory requirement that the Governor is responsible for developing
and submitting a State Plan to the Department.
One commenter noted that there is no discussion on what will happen
to the Governor's recommendations and expressed particular concern that
the
[[Page 19021]]
distribution of slots be balanced so as not to disadvantage rural
areas. Another commenter asked who will be responsible for developing
the State Plan and whether a forum or other method of development will
be specified.
The concerns about review of the Governor's recommendations and
allocation of slots are addressed in the 2000 Amendments, at section
503(a)(7), which notes that ``each State shall make available for
public comment its senior employment services coordination plan'' and
that the Secretary may review ``the distribution of projects and
services * * * including the distribution between urban and rural areas
within the State.''
The State Plan is to be developed by the Governor or his/her
designee, in consultation with national grantees, State and Local
Workforce Investment Boards, and the State and Area Agencies on Aging,
as specified in Sec. 641.315 and in the 2000 Amendments, at section
503(a)(2), in a manner specified by the Governor. The Department is not
inclined to set rules to constrain the Governor's discretion in setting
the procedures for this consultation. The Department may provide
guidelines for the planning process in an administrative issuance. As
noted in Sec. 641.300, the purpose of the State Plan is to encourage
coordination among SCSEP grantees and assist stakeholders to work
together in furtherance of the SCSEP program's goals.
May the Governor Delegate Responsibility for Developing and Submitting
the State Plan? (Sec. 641.310)
Section 641.310 specified that the Governor may delegate
preparation of the State Plan and also described how this will be done.
A commenter thought that the Department should define the time period
during which the Governor should submit a signed statement indicating
who will submit the State Plan on the Governor's behalf.
The Department will be issuing instructions about State Plans,
which will address their administrative requirements, including time
frames. Any State Plan submitted by a designee for whom a signed
designation statement has not previously or simultaneously been
submitted will be considered a non-submission.
Who Participates in Developing the State Plan? (Sec. 641.315)
Section 641.315 listed the parties from whom the Governor must seek
advice on the State Plan. One commenter stated that national grantees
should be required to designate a person to participate in the planning
process of each State where they have slots, while another commenter
suggested that the Department include all One-Stop partners in
developing the State Plan to foster collaboration once the State Plan
is implemented.
It is not clear whether the first commenter is suggesting that each
national grantee designate one person to participate in the planning
efforts of all States where that national grantee operates an SCSEP
project or designate one particular person to participate in each
State's planning process. However, without describing the individual
who will take this role, section 503(a)(2)(B) of the 2000 Amendments
requires ``each grantee operating * * * in the State'' to be consulted
as part of the planning process. Section 641.320 addresses the
importance of national grantee participation in the planning process,
and the Department anticipates that grantees will honor both the letter
and the spirit of the law with respect to collaboration. The precise
details of how each national grantee will fulfill this role are best
left to the national grantee and the Governor involved.
One-Stop partners are included in the planning process through the
required consultation with the State and Local Workforce Investment
Boards (also known simply as State and Local Boards), which operate
under the WIA. To make this relationship clearer, Sec. 641.315(a)(2)
has been amended to read ``State and Local Boards under the Workforce
Investment Act (WIA)'' to make this relationship clear.
Although the Department wishes to allow Governors wide latitude in
designing the State's planning process, the Department agrees that the
Governor must provide a reasonable time for consultation and comments.
Must All National Grantees Operating Within a State Participate in the
State Planning Process? (Sec. 641.320)
Section 641.320 required all national grantees (except for those
serving older American Indians) to participate in the planning process.
One commenter commended this requirement, while another outlined how
her agency would implement it. Two commenters addressed whether the
participants need be physically present for these discussions, rather
than communicate by correspondence or phone, and another commenter
recommended that the Department require each Governor to provide
``sufficient written notice of the state planning process to all
national grantees operating in the state.''
Each Governor is responsible for setting the parameters of the
planning process for his or her State, including time frames and
methods of consultation. Nothing in the law or regulations states,
however, that participants in this process must be physically present
for these discussions.
As noted in the Preamble to the Proposed Rule, the Department
believes that a coordinated planning process will benefit national
grantees both in terms of the services they provide to older workers
and in terms of the grantees' continuing eligibility to provide those
services. Although the statute does not require grantees serving older
American Indians to participate in the planning process, they are
encouraged to do so. (See also Sec. 641.315.)
What Information Must Be Provided in the State Plan? (Sec. 641.325)
Section 641.325 detailed the information that must be contained in
the State Plan. Most of the commenters felt that the proposed
requirements ``entail a huge data collection effort and a significant
administrative burden for SCSEP grantees' and requested that these
requirements be simplified. Most of these commenters argued that the
resources needed to collect this information would negatively impact
their ability to provide services the to SCSEP participants.
Section 641.325 listed the minimum requirements of the State Plan
consistent with section 503(a)(4) of the 2000 Amendments. This
information includes data on the number and distribution of eligible
individuals, as well as their employment situations and the locations
and populations for which community service projects are needed. The
State Plan also is to define how the activities of SCSEP grantees will
be coordinated and how and when the planning process will proceed.
Finally, the State Plan is to explain how disruptions to participants
will be avoided.
Depending on the amount of information already available for
preparation of the respective State Plans, some grantees may be asked
to supply some of the data required by the statute. While such data
collection may prove to be challenging, it will benefit the program as
a whole through more equitable distribution of slots and greater
coordination among the various parties providing services to older
workers. The Department believes that most of the data required for the
State Plan are available from generally available data sources, e.g.,
census data. We anticipate that, to the extent the Governor will seek
data from national grantees, the grantees will primarily be required to
provide data on their actual
[[Page 19022]]
activities: Data that the grantees already possess and/or report.
How Should the State Plan Reflect Community Service Needs? (Sec.
641.330)
Section 641.330 described the requirements of the State Plans with
respect to community services: What services are needed, and where they
are most needed.
Some commenters thought the State Plan should reflect community
service needs only in a very general way because specific needs often
change and thus are best determined locally. The commenters pointed out
that the SCSEP requires that community service opportunities be
developed based upon participants' Individual Employment Plans, and the
training and employment needs of the participants should come first.
These commenters also noted that there is no established, uniform
process for identifying and collecting information on community service
needs, and they believe such effort would require substantial work and
diminish staff time needed to implement the program. They also believe
the law does not require collection of information on community service
needs, but only the documentation of the locations and populations for
which community service projects are most needed. Other commenters
stated that local entities such as subgrantees are in a better position
than the Governor to determine local needs.
The Department agrees that the needs of the participants must be
fully considered in developing community service opportunities, and the
inclusion of these factors in the State Plan is addressed in section
503(a)(4)(D). However, the OAA also specifically calls for
identification of community service needs, as described in section
503(a)(4)(E). The Department anticipates that the State Plans will
reflect a balance between these complementary factors. Identification
of community service needs ultimately helps individual older workers
target the specific skills needed for employment in their particular
communities, thus affording them greater employability in the future.
With respect to the documentation issue, the Department does not
believe that a separate data-collection effort will be necessary to
obtain information about community service needs. As part of the
application process, each national grantee will have identified these
needs in the areas to be served and, through administering services,
this information will be refined and modified over time. Also, given
the variety of organizations involved in the SCSEP program, including
State and Local Boards and Area Agencies on Aging as well as grantees
and subgrantees, information should be available from a variety of
sources. For example, national grantees will be able to use the
experience of local subgrantees with respect to local needs as the
grantees formulate their contributions to the State Plans. The
Department believes that this kind of collaboration will lead to a
better program, one that can address the specific needs of each State
and locality.
How Should the Governor Address the Coordination of SCSEP Services With
Activities Funded Under Title I of WIA? (Sec. 641.335)
Section 641.335 addressed the ways in which the Governor, the
SCSEP, and WIA must work together. One commenter noted that
collaborative efforts would foster best practices. Another suggested
that obtaining this information may be difficult in States that have
numerous national sponsors.
The Governor is responsible for consulting each national grantee
that operates in the State, and all national grantees except those
serving older American Indians are required to participate in this
process. Such consultation is necessary to administer an effective
program, provide services that are most needed and of the best possible
quality, and avoid duplication of services. Moreover, the OAA
Amendments, at section 503(a)(2), require the Governor to obtain advice
and recommendations from a variety of parties, including the Area
Agencies on Aging, in developing the State Plan. While obtaining
information on coordination may be a bit more complicated where there
are several national grantees in a State, we believe that if the
Governor has set up a good consultation process, obtaining the
information should not be difficult.
Must the Governor Submit a State Plan Each Year? (Sec. 641.340)
Proposed Sec. 641.340 provided that the Governor need not submit a
full Plan each year. However, at a minimum, the Governor must seek
advice and recommendations about any needed changes from the
individuals and organizations identified both at OAA Amendments section
503(a)(2) and Sec. 641.315. The Governor must then publish the changes
for comment and submit a Plan modification to the Department.
Two commenters agreed with this interpretation of the statute,
stating that it allows the Governor to consult with interested parties
and annually update the Plan as needed, and at the same time provides
relief from unnecessary burdens.
What Are the Requirements for Modifying the State Plan? (Sec. 641.345)
How Should Public Comments Be Solicited and Collected? (Sec. 641.350)
Who May Comment on the State Plan? (Sec. 641.355)
How Does the State Plan Relate to the Equitable Distribution (ED)
Report? (Sec. 641.360)
Section 641.360 addressed how the State Plan will use information
provided in the equitable distribution (ED) report and how, in turn,
the ED report will reflect the State Plan. One commenter observed that
the States do not have enough authority under current legislation to
truly modify the distribution of slots within the State. Another
commenter stated that these documents are valuable planning tools that
foster collaboration among the State and national grantees, but that
they are not intended as mandates on either grantees or the Department
regarding the ultimate allocation of positions.
The OAA Amendments strengthen the role of the Governors in the
planning process. OAA Amendments section 503(a)(5)(B) and Sec. 641.365
of this subpart specifically address inclusion of recommendations for
redistribution of slots in State Plans, while OAA Amendments section
503(a)(7)(A) describes the process by which the Secretary of Labor will
review and make decisions about the State Plan. The Department believes
that this process will allow the States to modify distributions of
slots as necessary, and that, given its oversight authority, the
Department must in fact ensure that equitable distribution is
occurring. As stated in Sec. 641.365, the Department does not intend
that slots be redistributed while they are encumbered because to do so
would cause disruption. As slots become unencumbered, however, it is
appropriate to redistribute them to provide equitable distribution.
Also, in accordance with its intent that the ED report and the
State Plan work together to ensure that services are fairly distributed
in the State, the Department agrees that these documents are valuable
tools that foster collaboration among the State and national grantees.
The process is an iterative one in that it allows for transfer of
authorized positions from overserved to underserved areas over a period
of time. These documents thus pave the way for efficient transition to
the most effective use of resources. The Department will issue
administrative guidance to clarify the relationship
[[Page 19023]]
between the ED report and the State Plan.
How Must the Equitable Distribution Provisions Be Reconciled With the
Provision That Disruptions to Current Participants Should Be Avoided?
(Sec. 641.365)
In Sec. 641.365, the Department discussed how positions should be
moved due to shifts in populations of eligible individuals. Two
commenters stated that grantees should not trade or move slots without
first consulting with the State agency responsible for preparing the
State Plan and ED report. To do otherwise would undermine the purpose
of those reports.
A third commenter stated that the Department, or the State, should
ensure smooth transitions for participants where slots available from
previous grantees decrease as new national grantees provide services
for the program. Another commenter supported the statement that
participants cannot choose to remain in the program indefinitely and
recommended that this concept be reiterated in Sec. 641.570 or some
other appropriate section.
With respect to the first concern, language has been added to this
section stating: ``Grantees must submit, in writing, any proposed
changes in distribution that occur after submissions of the equitable
distribution report to the Federal Project Officer for approval. All
grantees are strongly encouraged to coordinate any proposed changes in
position distribution with the other grantees servicing in the State,
including the State project director, prior to submitting the proposed
changes to their Federal Project Officer for approval.''
With respect to the second concern, the Department has sponsored
training sessions for new national grantees and consultations with
grantees that are relinquishing slots in specific locations, to ensure
smooth transitions for program participants. The Department will
continue to provide technical assistance to grantees to ensure the
smoothest transitions possible.
With respect to the third concern, the Department believes that
Sec. 641.570 sufficiently addresses the concept of time limitations
for participants and we will not address it in this section. In
addition, the Preamble to the Proposed Rule stated that although there
is no time limit on participation in the SCSEP, most participants will
receive services for no more than 24 to 36 months, and that a grantee
may be authorized to set a maximum duration if it specifies how it will
move participants into unsubsidized employment or other assistance
before the time limit expires. We reiterate that position here.
Subpart D--Grant Application, Eligibility, and Award Requirements
What Entities Are Eligible To Apply to the Department for Funds To
Administer SCSEP Community Service Projects? (Sec. 641.400)
Section 641.400 introduced a new eligibility requirement for
national grantees that an entity must have the capacity to administer a
multi-State program. The Department interprets this requirement to mean
that the organization must have the capacity to operate in more than
one State even if it only operates within one State. Eligible entities
that may serve as national grantees are limited to nonprofit
organizations, Federal public agencies, and Tribal organizations.
States and political subdivisions are not eligible to apply. However,
in addition to receiving their SCSEP funding through the formula
process States are eligible to compete for funds forfeited by a poor
performing national grantee in a State. (See subpart G.)
Several commenters expressed concern that allowing States to
receive the funding of a poor performing national grantee within a
State would disrupt the established 78/22 percent balance of funds
between national grantees and States. Other commenters suggested that
to alleviate this potential imbalance the Department should require the
successful State grantee to redirect the funds to national grantees.
Several commenters requested clarification as to whether a poor
performing entity losing its funds would be allowed to compete for the
funds it is losing. Another commenter supported the changes to the
definitions. One commenter supported the requirement that an entity
must have the capacity to administer a multi-state program even if it
only operates within one State, but suggested adding the requirement of
demonstrated effectiveness in serving the employment and training needs
of SCSEP eligible adults.
Because the authorization for a State to compete for national grant
funding when a national grantee has failed its performance standards in
a State is statutory, the Department can neither forbid a State from
competing nor require the state to subgrant with a national grantee.
The Department believes that allowing a State to compete for and
receive a poor performing national grantee's funding does not change
the character of the source of the funding. The funding allocations
will continue to be made based on the 78/22 percent split of Federal
funds to the national grantees and the State grantees respectively.
Thus, the State grantee that receives national grantee funding will
continue to receive its formula allocation and will also receive a
share of the national funding that is competed.
Regarding the suggestion to augment the requirement of eligible
entities to administer multi-State programs with the additional
requirement of ``demonstrated effectiveness,'' the Department believes
that this additional requirement is already addressed by the
eligibility requirements under section 514 of the OAA. Further, Sec.
641.420, discusses factors considered in full and open grantee
competitions and specifically mentions ``past performance in any prior
Federal grants or contract for the past three years.'' The Department
will list other factors that it deems appropriate in the Solicitation
for Grant Application or similar instrument.
Although the regulation is clear that a poor performing national
grantee in a State would not be permitted to compete for the funds it
is losing, the Department believes that should be the extent of the
penalty and that the national grantee in a State may still be allowed
to compete for other available SCSEP funds. There are two reasons for
this determination. First, poor performers within a State are not
necessarily poor performers nationwide. Therefore, precluding such a
poor performer from competing for other national grant Federal funds
may be a disservice to the SCSEP. Second, poor performing national
grantees in a State may be able to cure their shortcomings in time for
any subsequent competitions.
With regard to State grantees, the agency that performed poorly
would be excluded from the competition. As noted in the Preamble to the
Proposed Rule, the State remains responsible for receiving the grant
and for selecting an agent or subgrantee to operate the grant in
accordance with its own procedures.
A commenter requested several language clarifications, including a
clarification of the Preamble discussion of ``positions that did not
receive a proposal.'' The commenter noted that the reference in the
same Preamble paragraph to ``national in scope'' is a difficult
concept. Finally, regarding the use of the phrase ``subject of the
competition,'' in Sec. 641.400(b), the commenter observed that there
is no previous mention of this concept and suggested that the
regulation explain the context of this phrase as being a national
competition for replacing the
[[Page 19024]]
original grantee, in whole or in part and replace the phrase ``If the
State's funds are competed'' with something else.
The use of the phrase ``positions that did not receive a proposal''
in the Preamble to the Proposed Rule was intended to acknowledge the
possibility that situations could arise in which applicants for
national grants did not apply for all the existing positions that are
available. Because the statute enjoins the Department to minimize
disruption, the Department would have to negotiate with successful
grantees to ``take'' those slots. Similarly, the phrase ``national in
scope'' simply recognizes that a number of current national grantees
are organizations that provide services to older individuals
nationwide. The Department has revised the second sentence of Sec.
641.400(b) to make clear that the poor performing grantee whose funds
are competed is not eligible to compete for those funds.
How Does an Eligible Entity Apply? (Sec. 641.410)
Section 641.410 provided that the Department will provide
application guidelines and instructions which all applicants must
follow. Additionally, before submitting an application to the
Department, national grant applicants also must submit their
applications to the Governors of the States in which they intend to
operate (except for those grantees serving older American Indians). The
Preamble to the Proposed Rule encouraged grant applicants intending to
serve older American Indians to consult with the Secretary of Labor in
establishing service areas under Sec. 641.320. States that submit an
SCSEP grant application as part of its WIA Unified Plan must also
address all of the application requirements published by the
Department.
The Department received few comments on this section. One commenter
disagreed that a national grantee should be required to submit its
entire application to the Governor(s) of the State(s) in which the
national grantee will operate when each Governor will only be able to
comment on a limited portion of the entire application that relates to
the slots in his/her State. The commenter asserted that the definition
of ``application'' should be restricted for purposes of a Governor's
review and suggested that the Department provide any additional
information to a Governor upon request. Another commenter indicated
that the application should be limited to the SF-424 and slot
allocation listing with a brief executive summary in order to limit the
cost and time involved in providing these applications. Another
commenter requested that the regulations mention that grantees serving
older Indians must consult with the Secretary to establish service
areas. Finally, one commenter suggested adding a statutory or
regulatory reference to the specific WIA Unified Plan provision that
applies to State applicants.
This section is consistent with the requirements of section
503(a)(5) of the OAA Amendments and accordingly requires grant
applications be submitted to the Governor of each State in which a
national grantee intends to operate. The Department is not convinced
that there is any great benefit to be gained from submitting partial
applications in various States, which may involve more work than simply
copying the application several times.
Regarding the suggestion to mention grantees serving American
Indians consulting with the Secretary to establish service areas, the
Department believes that the requirement that Indian-serving grantees
submit their application to the Department adequately resolves the
issue.
The Department agrees that a reference to the specific WIA Unified
Plan provision would be useful. Therefore we have added a reference to
WIA section 501. Grantees should note, however, that the Department has
other guidance on the WIA Unified Plan that is not referenced here.
What Factors Will the Department Consider in Selecting Grantees? (Sec.
641.420)
Section 641.420 stated that the factors for selecting grantees are:
(1) The criteria listed in the OAA at section 514(c)(1)-(7); (2) the
responsibility tests addressed in OAA at section 514(d); (3) the rating
criteria in any Solicitation for Grant Application or other instrument;
and (4) an applicant's past performance in any prior Federal grants or
contracts for the past 3 years.
Several commenters agreed with the Department's use of past
performance as a consideration in a full and open competition. Two
commenters indicated that past performance should be a heavily weighted
factor.
The Department agrees that past performance is necessary to
determine a potential grantee's ability to administer an SCSEP grant.
The Department does not, however, believe that past performance should
be given so much weight that it gives incumbent grantees an unfair
competitive advantage.
One commenter suggested that past performance language in Sec.
641.420 be amended to comport with or refer to Sec. 641.400 which
speaks to competitions for Federal SCSEP funds ``when a national
grantee in a State fails to meet its performance measures in the second
and third year of failure.'' Another commenter suggested a technical
change to move the first word ``criteria'' from after the word
``eligibility'' to after the word ``review.''
The Department does not believe that a reference to Sec. 641.400
is necessary for two reasons. First, under OAA section 514(e)(3), a
poor performing national grantee in a State may, in the second year of
failure, have its funding transferred to another organization. Second,
the Department does not believe that further reference is necessary.
The Department agrees with the technical suggestion and modifies the
section accordingly.
What Are the Eligibility Criteria That Each Applicant Must Meet? (Sec.
641.430)
In Sec. 641.430, the Department described what each applicant must
demonstrate in order to be eligible to receive SCSEP funds. The
requirements generally mirror the requirements established in the OAA
Amendments at section 514(c). They are the ability to administer a
program that: (1) Serves the greatest number of eligible individuals
with an emphasis on those with the greatest economic need; (2) provides
employment in communities in which eligible individuals reside or in
nearby communities that contribute to the welfare of the community; (3)
moves eligible individuals into unsubsidized employment; (4) moves
individuals with multiple barriers to employment into unsubsidized
employment; (5) coordinates with other organizations at the State and
local levels; (6) effectively plans for the fiscal management of the
Federal funds received; and (7) any additional criteria the Secretary
deems appropriate to minimize disruption for current participants.
Section 641.430(g) added a separate requirement that each applicant
must demonstrate an ability to ``minimize program disruption for
current participants if there is a change in project sponsor and/or
location'' as well as its plan for minimizing disruptions.
The Department received few comments on this section. Regarding the
criteria that grant applicants coordinate ``with other organizations at
the State and local levels,'' one commenter questioned how a grantee
can effectively coordinate with a One-Stop if the grantee was not
geographically near a One-Stop. Other commenters suggested that the
Proposed Rule provides no indication that a grantee operating a program
that is part of a One-Stop
[[Page 19025]]
should comply with the requirements in 29 CFR part 37.
This regulation reflects the requirements of OAA section 512. The
Department requires grantees located great distances from any One-Stop
or One-Stop Delivery System to, at least, establish some sort of
relationship or routine communication with the nearest One-Stop. That
relation will usually be detailed in the MOU. Such activity may include
the creation of a satellite One-Stop office in the grantee's office or
linking of the grantee's office and the One-Stop through appropriate
technology. Despite distances, such coordination can foster positive
results on behalf of older workers.
The Department agrees that as partners in the One-Stop system, OAA
grantees must adhere to the WIA regulations implementing the
nondiscrimination and equal opportunity provisions of the Workforce
Investment Act. The Final Rule specifically requires adherence to these
requirements in Sec. 641.827(b).
What Are the Responsibility Conditions That an Applicant Must Meet?
(Sec. 641.440)
Section 641.440 addressed the 14 responsibility tests, such as
exercising fiscal responsibility, that are found in section 514(d) of
the OAA Amendments. SCSEP grant applicants must meet these tests in
order to avoid being disqualified for Federal funds.
The Department received two comments on this section. The first
comment suggested that the section was drafted poorly and appeared to
require each applicant to engage in the listed wrongdoings to meet the
responsibility conditions. Specifically, the comment referred to Sec.
641.440(m) as making ``no sense.'' The second comment requested that
the lead sentence be changed to read ``Each applicant must be able to
meet the applicable responsibility tests by not having had any of the
following apply to its operations.'' The second commenter also
suggested, that in Sec. 641.440(a) the ``whether'' clause be replaced
with ``whether incurred by the applicant or one of its subgrantees or
subcontractors.''
The Department acknowledges that the section does not read well and
therefore accepts the recommendations to clarify the wording, namely
the redrafting of the opening sentence. The opening sentence to the
regulation is revised to read, ``Each applicant must meet each of the
listed responsibility `tests' by not having committed any of the acts
of misfeasance or malfeasance described in Sec. 641.440(a)-(n) of this
section.'' The Department has also revised Sec. 641.440(a) as
suggested. Otherwise, this section is consistent with the OAA
Amendments and tracks the statutory language.
Are There Responsibility Conditions That Alone Will Disqualify an
Applicant? (Sec. 641.450)
Section 641.450 provided that an applicant may be disqualified
based solely on either of the first two responsibility conditions
listed in Sec. 641.440. Those conditions are: (1) The Department's
inability to recover a debt from the applicant or an applicant's
failure to comply with a debt repayment plan; and (2) significant fraud
or criminal activity. The regulation explained that disqualification
based on the other responsibility conditions listed in Sec. 641.440
require persistent failure for two or more consecutive years.
The Department received several comments on this section. Four
commenters expressed approval and commendation for the implementation
of these responsibility tests and the increased accountability they
will bring to the SCSEP program. These commenters also suggested,
however, that failure to meet the fraud and criminal activity
responsibility test should not be absolute (automatic disqualification)
when an applicant has developed appropriate safeguards against fraud or
criminal activity and ``promptly reports an occurrence that does not
indicate a significant weakness in internal controls.'' Other
commenters suggested that the section is unclear; that it can be read
to say that an applicant may be disqualified if it fails to have an
unrecoverable debt or engage in fraud or criminal activity.
This section is clear and consistent with the requirements of
section 514(d)(3) of the OAA. The purpose of this section is not to
encourage grantees to report their own fiduciary or other
responsibility failures, but to assure that grantees will be vigilant
in keeping them from happening in the first place. The Department
intends to take a much stricter approach than it has in the past in
enforcing this provision. Therefore, the section has not been amended
except to clarify that the Department will determine the existence of
significant fraud or criminal activity and that typically such
activities will include willful or grossly negligent disregard for the
use, handling, or other fiduciary duties of Federal funding where a
grantee has no effective systems, checks, or safeguards to detect or
prevent fraud or criminal activity. Additionally, significant fraud or
criminal activity will typically include coordinated patterns or
behaviors that pervade a grantee's administration or are focused at the
higher levels of a grantee's management and authority. To be consistent
with the OAA section 514(d)(4)(B), this determination will be made on a
case-by-case basis regardless of what party identifies the alleged
fraud or criminal activity.
How Will the Department Examine the Responsibility of Eligible
Entities? (Sec. 641.460)
In Sec. 641.460, the Department described the general process for
examining eligible entities' responsibility and listed some of the
materials it will take into consideration.
The Department received one comment on this section. The commenter
agreed with the assessment of applicants' responsibility and the use of
various related records. The commenter also suggested, however, that
the Department should specify what is intended by its possible use of
any other relevant information and indicate whether that information
may be reviewed by the applicant and whether ``due process'' would
allow the applicant to ``challenge the information'' and if so, ``by
what rule.''
In examining an eligible entity's responsibility, the Department's
use of ``any other relevant information'' will vary on a case-by-case
basis. Specifically, the OAA Amendments, at section 514(d)(2), allow
the Department to consider any other information relevant to
responsibility, including the applicant's history with managing other
grant funds. In order to retain its discretion, the Department will not
exactly define what these materials may be or how the Department may
use them. To the extent these materials are of a confidential nature or
proprietary to some other entity, such materials may not be available
to the entity to which they pertain. In any event, an entity will be
able to appropriately challenge the Department's actions through the
grievance procedures in subpart I if the use of the information leads
to any adverse action.
Under What Circumstances May the Department Reject an Application?
(Sec. 641.465)
What Happens if an Applicant's Application Is Rejected? (Sec. 641.470)
The Department reserved Sec. 641.470 to provide a rule and asked
for comments on the remedies that should be available to a nonselected
applicant that succeeds on appeal.
The Department received very few comments on this section. The
[[Page 19026]]
commenters suggested that if a grant applicant successfully appealed a
Department decision to deny SCSEP funds, the applicant should be
notified promptly, in writing, with an explanation of the basis of the
decision. Further, the commenters suggested that the Department offer
information as to what action the entity may take to correct
deficiencies and improve its position for future competitions. Another
commenter suggested that when an incumbent grantee loses its funding
that it should be given notice of the deficiencies in its application
and an opportunity to cure.
The Department agrees that any entity whose application is rejected
should be provided appropriate and timely notice as well as an
explanation of the Department's basis for the rejection. An explanation
for the Department's rejection is consistent with current procedures,
known as debriefings, which have been the Department's practice for
many years. Incumbent grantees, however, will not be given an
opportunity to cure in an open competition because that would defeat
the purpose of the competitive process. An opportunity to cure would
create an inequity in favor of incumbents, which may already have had
opportunities to correct deficiencies through technical assistance
provided by the Department. Consequently, in accordance with the OAA
Amendments at section 514(d)(3) and 514(d)(5), entities whose
applications are rejected will not be selected as grantees but will be
offered an opportunity for a debriefing which will include an
explanation of the Department's decision and suggestions as to how to
improve the applicant's position for future competitions.
Under an SCSEP competition, grant applicants are not competing for
a grant with which they will serve Older Americans nationwide or in
defined areas. Instead, their proposals are specific and seek to
provide services to Older Americans only in certain areas of the
country that the applicant has chosen to serve and in some
circumstances applicants seek to serve certain populations of Older
Americans, such as Asian and Pacific Islanders or Indians. In order for
SCSEP grant applicants to provide services where they are most able to
provide quality services or to serve their target populations, their
grant awards are tailored to reflect their specific proposals.
Because this system of awarding grants with disparate service areas
tailored to the grantee's organization and abilities results in a
patchwork of projects scattered widely across the country, the
resulting competition is not for a single defined service area as it is
in some other Department of Labor programs. An applicant usually
competes against different applicants in different areas. The result of
a protest or appeal that results in an Administrative Law Judge's (ALJ)
decision to award funds to the appellant is that a number of different
grantees in different areas might be displaced. Depending on the timing
of the appeal decision, this may have a disruptive effect on current
participants and more importantly on current grantees, which could lose
so many slots that they cease to be able to operate a viable program.
Both because of the nature of the population that the SCSEP serves and
because of the services it provides, changing grantees must be handled
carefully to minimize disruption to participants. The SCSEP competition
is thus unlike the WIA Indian and Native American or Migrant and
Seasonal Farmworker (MSFW) programs in which grantees compete for
defined service areas and in which the replacement of one grantee with
another is less likely to be disruptive because of the nature of the
services offered. Because of these differences and the complexities
involved, the Department has decided to provide a remedy that reflects
the differences in the operations of SCSEP grants. If the Grant Officer
decides not to make an award, in whole or in part, because of
feasibility, the successful appellant may recover its bid preparation
costs, either entirely, if there is no award or proportionately, if the
decision not to award only involves a portion of the contested slots.
Section 641.470(c) provides that when an ALJ decides that an
appellant should have been selected, in whole or in part, the matter
must be remanded to the Grant Officer to decide, within 10 days,
whether to award the contested slots to the successful appellant and
the timing of the transition, if the Grant Officer decides to make an
award. In making this decision, the Grant Officer must take into
account the factors of disruption to participants, disruption to
grantees, particularly whether the award will leave another grantee
with so few slots that it becomes non-viable, and must balance these
against the Department's intent to select the best available grantees.
The Department has determined that a minimum of approximately 800 slots
is necessary for viability; that is, the 800-slot level is necessary to
have funding sufficient to properly perform the administrative
functions of the grant. Thus, if the effect to an ALJ's decision would
be to reduce a continuing grantee's award below the 800-slot level, the
Grant Officer may refuse to award those slots to the successful
appellant. This situation can occur because of the patchwork nature of
the grants, discussed above, so that an appeal may only involve a
portion of the slots awarded to a number of different grantees. The
Grant Officer must also take into consideration the timing of the
decision and assure that any transition minimizes disruption. The Grant
Officer's decision will be immediately reviewable by the ALJ. In the
event of an award after a successful appeal, the successful appellant
is entitled only to the unspent funds remaining in the grant after
operational and closeout costs of the prior grantee.
The Department has also added a new paragraph (d), similar to 20
CFR 667.825(c), that puts grantees on notice that the possibility of a
successful appeal and a new award is a condition of the grant and that
in case of a new award, the Grant Officer will issue transition and
closeout instructions.
May the Governor Make Recommendations to the Department on Grant
Applications? (Sec. 641.480)
Section 641.480 provided that each Governor must have a reasonable
opportunity to provide comments on the anticipated effect of each grant
applicant's proposal on the distribution of positions within the State
and provide recommendations regarding the distribution of positions. A
Governor's comments should be consistent with the State Plan. Further,
the Governor may comment on all the proposals in noncompetitive
conditions and may choose whether to comment on certain aspects of all
the proposals in competitive conditions before the Department's rating
process or afterward only on those proposals that have completed the
Department's rating process.
The Department received a few comments on this section. The
commenters suggested that the Department should create a clearly
defined process for Governors to review and make recommendations on
grant applications. Other comments echoed this suggestion by requesting
a definition of the term ``reasonable opportunity'' and wanted it made
clear that the Governor's review of an application or proposal is
limited to commenting on the proposal's distribution of positions
within the State.
The OAA Amendments, at section 503(a)(5), afford Governors who will
have SCSEP national grants operating in their States a reasonable
opportunity to submit recommendations to the
[[Page 19027]]
Secretary. This section is consistent with the statutory requirement
and appropriately limits the scope of the Governor's recommendations.
The Department sees no need to create a formalized process in this
Final Rule for the Governor to develop and submit recommendations. The
process will be limited by the Department's timeline in reviewing
applications and awarding grants in any given Program Year. The
Department may, however, provide additional details in an
administrative issuance at the time of any Solicitation for Grant
Applications (SGA).
When May SCSEP Grants Be Awarded Competitively? (Sec. 641.490)
Section 641.490 provided that the Department must hold a
competition, as required by OAA section 514, when a grantee fails to
meet its performance measures, eligibility requirements, or
responsibility tests. Other full and open competitions may occur before
the beginning of a new grant period or if additional grantees are
funded. The details of the competition will be provided in the
Solicitation for Grant Applications announcing the competition.
The Department received many comments on this section. Several
commenters disagreed with this section and asserted that, according to
the OAA Amendments, the only times an incumbent grantee can lose its
SCSEP funding is when it fails to meet the OAA Amendments'
responsibility test or fails to meet specified performance goals after
implementation of a corrective action plan and technical assistance
from the Department. Another commenter indicated that the second
portion of this section sounded too much like a policy statement rather
than a regulation and suggested that it be eliminated.
The OAA Amendments prescribe a competition when a grantee fails to
meet performance measures, but does not limit competitions to that
case. The Department is also reserving its right to provide for a
competition generally before the beginning of the grant period, and it
is not prohibited under the statute from doing so. The Department
appreciates the commenter that noted that this section sounded like a
policy statement and suggested its elimination, but the Department
believes that it is appropriate to discuss the extent of the
Department's discretion to provide for competition. The Department
favors full and open competition because it provides the Department
with an opportunity to ensure that the best applicants are awarded
grants and the program is administered to its full potential. It also
allows new and different entities to become part of the grantee
community and results in better services to the participants.
Another commenter recommended replacing the word ``organization''
with the word ``grantee'' in the Preamble and replacing the term ``full
and open competition'' with the term ``competitive selection of
(national) grantees.''
The Department disagrees that the term ``full and open
competition'' should be replaced with the term ``competitive selection
of (national) grantees.'' The Department retains this language because
it is standard language to describe the competitive process. It is too
late to amend the Preamble to the NPRM.
A commenter noted that ``[a]lthough the Proposed Rule makes several
references to a three-year grant, no information is provided in the
Proposed Rule as to how, and under what circumstances, a three-year
grant would be awarded'' and requested more information in this regard.
The Department does not believe that it is appropriate to have a
regulation on when it will award grants for 3 year periods since the
decision on the length of the grant is discretionary. Section 514(a) of
the OAA provides that the Department may award grants not to exceed
three years once regulations have been promulgated and performance
measures are established. The Department reserves the right to
determine whether it will award grants in excess of one Program Year
and will make grantees aware of its decision at the appropriate time.
Subpart E--Services to Participants
Who Is Eligible To Participate in the SCSEP? (Sec. 641.500)
In Sec. 641.500, the Department stipulated, in accordance with the
2000 Amendments (OAA sec. 516(2)), that anyone who is at least 55 years
old and who is a member of a family with an income that is not more
than 125 percent of the family income levels defined in the Federal
poverty guidelines is eligible to participate in the SCSEP. The
Department indicated that a person with a disability may be treated as
a ``family of one'' for income eligibility determination purposes.
There were several comments on this section. Several comments
requested clarification of participant residence requirements for
eligibility--i.e., are participants still required to live in the State
where they are enrolled since ``border'' residents might be more easily
served in a State adjacent to their resident State.
The regulation is based on the statutory eligibility criteria,
which do not mention residence. However, the commenters have raised an
issue about residence, which needs to be resolved. Because the formula
for the distribution of funds among the States is based, in part, on
the number of potentially eligible individuals in the State, the basic
presumption must be that eligible individuals must be served in their
State of residence. In the interests of customer service and in order
to more closely align with the WIA system, however, the Department has
revised the regulation to authorize States to enter into agreements
between themselves to permit cross-border enrollment. Such agreements
should cover both State grantee and national grantee slots and must be
submitted to the Department.
One commenter noted that the distinction between ``enrolled'' and
``eligible for,'' although clear enough in regard to any specific
individual, is not consistently clear in terms of the services that can
be offered by SCSEP staff.
The differences in the services available to those enrolled and
those eligible is discussed elsewhere in the regulations and in this
Preamble, in particular in Sec. Sec. 641.535 and 641.550.
Another commenter recommended that all applicants be considered a
``family of one'' for eligibility purposes, as provided for disabled
persons, since ``many older persons experience a variety of
disabilities as a result of the aging process.''
The general rule in determining individual eligibility is to
consider family income. The exception for considering a disabled
individual a ``family of one'' is one that is used in many government
programs to recognize the barriers that disabled individuals face in
the labor market. The Department does not believe it has the authority
to extend that exception to all older workers.
Another commenter noted that the 125 percent of family income
levels eligibility requirement was ``excessively restrictive.''
The 125 percent limitation is provided in section 516(2) of the
OAA. The Department does not have the authority to increase it.
When Is Eligibility Determined? (Sec. 641.505)
In Sec. 641.505, the Department indicated that once individuals
become SCSEP participants, the grantee/subgrantee is responsible for
verifying their continued income eligibility at
[[Page 19028]]
least once every 12 months. The Department also noted that grantees may
also verify an individual's eligibility as circumstances require.
There were a number of comments on this section. Most recommended
that eligibility be re-verified once in a grant year rather than at the
anniversary date of each participant. They indicated that this would
permit all participants to be notified simultaneously, would lead to
other streamlined procedures, and is supported by findings that only a
miniscule number of participants are determined ineligible upon
recertification. One commenter noted that this procedure is an enormous
amount of extra work for a minimal number of changes.
The Department agrees with the commenters that recertifying
eligibility once a grant year should be an option for those grantees
that wish to use it. The Department believes that the language of the
current regulation can be read to permit that option. In fact, the
intent of this provision is to permit grantees to choose either to re-
verify income on or near a participant's anniversary date or to re-
verify all participants at one time during the grant period. Therefore,
there will be no change to the regulation.
While there may be some validity in the comment that annual income
verification is a lot of work for little result, it is important that
the SCSEP serve the people for whom the program was designed: Low-
income seniors with barriers to employment. Failing to re-verify income
could mean that the program serves ineligibles for potentially long
periods of time. The Department believes that the work involved in
annual recertification of income is a necessary price to pay for
keeping the program focused on providing services to eligible seniors.
What Types of Income Are Included and Excluded for Participant
Eligibility Determinations? (Sec. 641.507)
The Department reserved Sec. 641.507 and sought comments on the
types of income that grantees must consider when determining a
participant's eligibility. Older Worker (OW) Bulletin 95-5 lists the
current inclusions and exclusions for determining a participant's
income. The Department specifically sought comments on whether certain
categories should be consolidated or eliminated, or if certain rules
should be revised or eliminated,--i.e., elimination of the exclusion of
the first $500 of a participant's income for recertification purposes,
limits on the amount of assets a participant may have to be eligible
for the program, and limits on the amount of one-time unearned income
that may be excluded.
The Department received many comments about the $500 exclusion.
Some commenters said that they rarely used the $500 exclusion and that
they did not oppose its elimination. However, the Department received
many comments protesting the possibility that the exclusion of the
first $500 of a participant's income for initial eligibility or
recertification purposes might be eliminated. Many indicated that
eliminating the $500 for current and re-enrolled participants would be
counterproductive, if not punitive. They argued that the exclusion
serves as an incentive for participants to exit the program for
unsubsidized employment because it allows them to return if the
employment is unsuccessful. Thus, they suggested that without the
exclusion, fewer participants would leave the program, which would be
contrary to the new emphasis on unsubsidized employment. A number of
commenters suggested that if the exclusion is eliminated, that it only
apply to new participants, and that current participants be
``grandfathered'' in. Another commenter suggested more than a 30-day
notice period for termination under these circumstances. Several
commenters argued that the $500 exclusion permitted grantees to serve
individuals who had serious multiple barriers to employment. They said
that grantees needed the flexibility to meet the SCSEP's goal of
serving those most in need. One commenter said that the $500 exclusion
was needed because the area in which its program operated was a high
cost area.
The law clearly states, at section 516(2), that the income
threshold for SCSEP eligibility is not more than 125 percent of the
poverty guidelines established by OMB. The Department must enforce the
law as written. Nothing in the statute gives the Department the
authority to waive the clear statutory income eligibility limit, no
matter how arguably worthy the purpose of the waiver. This applies to
current participants as well as new applicants.
The Department received many comments relating to the other
inclusions and exclusions for determining eligibility. A number of
commenters opposed the inclusion of one-time unearned income from the
income eligibility criteria, indicating that it would penalize those
who had taken lump sum annuities, had received modest inheritances, or
had sold their lifelong residences. A number of commenters opposed
including savings and assets. Many noted that older workers should not
be penalized for having ``nest egg'' income resulting from a lifetime
of savings to cover burial or catastrophic situations. One commenter
suggested that the Department should clarify what it considers assets,
noting that depending upon the definition, a large number of people the
program is supposed to serve could be excluded. There were also
comments on the impact of government entitlement programs on income
eligibility. A number of comments recommended that a work group of
SCSEP practitioners be established to discuss issues related to income
inclusions and exclusions.
The Department did not receive any comments proposing the use of
established criteria for income eligibility. As specified in OAA
section 516(2), eligible individuals are those who have an income not
more that 125 percent of the poverty guidelines established by the
Office of Management and Budget. The Department has decided to use the
U.S. Census Bureau's Current Population Survey (CPS) as the standard
for determining income eligibility for the SCSEP. The Department will
issue administrative guidance detailing the definitions for the
categories of income sources included in the CPS standard, and
specifying which of these sources will be included and excluded for
purposes of determining SCSEP eligibility.
The Department received a number of comments on the time period to
be used to calculate income. All urged the Department to calculate
income eligibility by counting applicant income for the most recent
three-month period instead of six months. The basis for this
recommendation was that this time period ``recognizes the severe impact
of recent economic conditions and allows the program to intervene
before individuals become completely destitute.''
The Department will consider these comments as it develops the
income guidance.
What Happens if a Grantee/Subgrantee Determines That a Participant Is
No Longer Eligible for the SCSEP Due to an Increase in Family Income?
(Sec. 641.510)
In Sec. 641.510, the Department stipulated that upon determination
of ineligibility, the participant must be given written notice within
30 days, and terminated within 30 days of receipt of the notice. The
regulation further stated that such individuals must be referred to the
One-Stop or other appropriate partner program and that they may file a
grievance under the grantee's grievance procedure.
[[Page 19029]]
Some commenters related the requirement that grantees refer
ineligibles to the One-Stop system to the coordination requirements in
Sec. 641.210 and suggested that more Department of Labor guidance to
the WIA system on how to work with SCSEP grantees is needed to enable
the systems to work together. One commenter suggested that the language
be clarified to specify that the participant will not be terminated
until 30 days after receiving the written notice consistent with Sec.
641.580. Another commenter asked that the Department add ``to the
extent possible'' to the language for those areas that cannot be served
by the One-Stop system. One commenter praised the Department for
clarifying the former regulations on this issue.
Although the Department appreciates grantees' desire to provide
good outcomes to all seniors with whom they come in contact, the
funding and eligibility limitations on the SCSEP simply do not permit
grantees to provide significant services to ineligible individuals.
Thus, under this section, referral to the One-Stop system under which
core services, including job referrals for those who are job ready, are
available to all who seek them discharges the grantee's responsibility
to the ineligible former participant. If grantees have other
partnerships, for example, with Area Agencies on Aging, they may
provide additional referrals as well.
The Department agrees that Sec. Sec. 641.510 and 641.580 should
provide the same rule. We have revised Sec. 641.510 to read the same
as Sec. 641.580(b) and (c)--i.e., ``30 days after the participant
receives the notice.'' To be sure that the regulation is entirely
clear, we have added an exception requiring the immediate termination
for those found ineligible for providing false information to Sec.
641.510.
The Department acknowledges that referrals to the One-Stop system
are more difficult if it is not located in their area, and encourages
grantees to work as partners by establishing satellite services in
areas without current One-Stop access and to establish other
partnerships with organizations that may be able to provide services in
the area to referred individuals.
How Must Grantees/Subgrantees Recruit and Select Eligible Individuals
for Participation in the SCSEP? (Sec. 641.515)
In Sec. 641.515, the Department required that grantees, to the
extent feasible, seek to enroll individuals who are eligible
minorities, limited English speakers, Indians, or who have greatest
economic needs at least in proportion to the incidence in the
population, taking into account their rates of poverty and
unemployment. For the purposes of these regulations, these individuals
are considered ``preference'' applicants, consistent with the
requirements of section 502(b)(1)(M) of the OAA. The Department views
the ``preferences'' as a way of assuring that certain groups which
often face severe barriers to employment are served in proportion to
their incidence in the population, taking into account their rates of
poverty and unemployment. The requirement to serve preference
individuals is not absolute. As made clear in Sec. 641.530, grantees
have discretion in selecting non-preference participants. The
regulation further provided that grantees must notify the State
Workforce Agency of all SCSEP community service opportunities, and must
use the One-Stop Delivery System in the recruitment and selection of
eligible individuals.
The Department received a number of comments on this section. Many
commenters recommended that it is not appropriate to require grantees
to notify the State Workforce Agency of all SCSEP community service
opportunities because participants are selected based on priority and
community service assignments are then developed to meet their needs,
not the other way around. One commenter suggested that this requirement
is more stringent than section 502(b)(1)(H) of the statute. Two
commenters suggested clarification of the final sentence in Sec.
641.515(a) by ending the sentence after the word ``unemployment.'' The
remaining comments objected to the mandatory use of the One-Stop system
for recruitment, especially in rural areas, and suggested that the term
``must'' be softened to ``should.''
The Department believes the intent of the requirement is to list
all community service assignments with the State Workforce Agency and
all appropriate local offices and to assist with recruitment efforts in
locations that have difficulty finding eligible participants. The
Department has revised this section to more closely track the statute's
requirements, specifically the requirements of section 502(b)(1)(H) of
the OAA and more generally with the statute's emphasis on coordination
with the One-Stop system. Grantees must bear in mind that the 2000
Amendments require much closer coordination with the WIA system than
was previously the case. The nature of this coordination is, of course,
subject to negotiation in MOUs. Beyond these requirements, grantees
have a great deal of flexibility to determine how to recruit and select
individuals and are encouraged to be as creative as possible,
especially in rural areas. The Department has revised the final
sentence in Sec. 641.515(a) as recommended. We have retained the word
``must'' in paragraph (b) because it is consistent with the
coordination requirements of the Act.
Are There Any Priorities That Grantees/Subgrantees Must Use in
Selecting Eligible Individuals for Participation in the SCSEP? (Sec.
641.520)
In Sec. 641.520, the Department delineated the order of priorities
that grantees must use in selecting eligible individuals consistent
with the requirements of OAA section 516(2) and the Jobs for Veterans
Act, Public Law 107-288 (2002).
The Department received several comments on this section. All were
concerned about the interplay between these priorities and the
preferences delineated at Sec. Sec. 641.515 and 641.525. Some
commenters recommended the elimination of priorities and preferences,
stating that they were an administrative burden, that they
discriminated against their primarily female (non-veteran) population,
and that priority should be given to those having the greatest need,
regardless of how they fit into particular categories. One commenter
suggested that there may be situations in which non-veterans and/or 55-
year olds who are not eligible for Federal benefits are needier than
veterans and/or those who are 60 or older. Another commenter asked that
the distinctions between priorities and preferences be more clearly
defined. Other commenters asked for further guidance and clarification
to help design application and information collection methodologies
that might conflict with ADA requirements. The remaining commenters
stated that the priority and preference requirements were contrary to
the new unsubsidized employment performance measures.
These priorities are statutory requirements. Grantees must abide by
them. Grantees must apply the preferences delineated in Sec. Sec.
641.515 and 641.525, to the extent feasible, when selecting individuals
within or outside the priority groups. The Department is providing
grantees/subgrantees with the flexibility to exercise their judgment
when they determine that a non-preference eligible individual should
receive services over a preference eligible individual. Grantees
concerned about the effect of the priorities and preferences on
performance measures also should be aware that ``the number of persons
served, with particular consideration
[[Page 19030]]
given to those in the preference categories'' is also a mandatory
performance measure. As will be discussed in more detail in subpart G,
the Department intends to design the performance measures to take
operational realities into account. In designing the performance
measure, the Department will take into account the statutory
instructions that preference groups be served ``at least in proportion
to their numbers in the State'' and that in deciding how to serve these
preference groups grantees ``take into consideration their rates of
poverty and unemployment.''
Some commenters asked for more detailed guidance on the operation
of the priorities and preferences. The Department believes that the
operation of the priorities is fairly clear in the regulation, but will
consider issuing administrative guidance on the operation of the
preferences if needed.
Some guidance can be supplied in response to some specific
comments. One commenter asked whether a person with a high priority
gets served first even if the individual has no access to
transportation, has little ``job interests'' or desire to comply with
program requirements.
There is no absolute answer to this question. A grantee is not
required to provide service to a person who cannot take advantage of
the available service or who is not interested in receiving the service
or who will not abide by the program's rules. On the other hand, the
SCSEP, through the assessment and IEP process, focuses on helping
individuals with barriers to employment to overcome those barriers.
Transportation is a supportive service that grantees may provide to
assist participants who live in remote places to participate in the
program. In the process of developing a participant's IEP, a grantee
should work with the participant to develop possible assignments to
meet the participant's interests and to refine those interests.
Similarly, the IEP process should clearly explain to a participant what
the rules are and work with the participant to help him or her adhere
to the rules.
Another commenter said that it served all individuals who sought
service and that it has no waiting lists.
If the grantee is making reasonable outreach efforts to recruit
those individuals who are in the eligible population and it provides
services to all individuals who are eligible for the program, there is
no need to apply the priorities and preferences.
Are There Any Other Groups of Individuals Who Should Be Given Special
Consideration When Selecting SCSEP Participants? (Sec. 641.525)
In this section, the Department delineated categories of persons to
whom special consideration must be given, to the extent feasible, in
selecting eligible participants.
The Department received several comments on this section. Most
asked for clarification of the term ``poor employment prospects.'' One
comment noted that the first sentence of Sec. 641.525 should be
corrected to eliminate the word ``to'' immediately before ``special
consideration.''
The Department provides a definition of ``poor employment
prospects'' in Sec. 641.140. The definition is derived from the prior
regulation. The Department will issue administrative guidance on how to
calculate the number of persons served with poor employment prospects
for performance standards purposes. The Department has made the
editorial correction in Sec. 641.525. We also added a reference back
to Sec. 641.515 for ``preference'' individuals.
Must the Grantee/Subgrantee Always Select Priority or Preference
Individuals? (Sec. 641.530)
This section provided that grantees must adhere to the priorities
in Sec. 641.520 and must apply the preferences in Sec. 641.525 to the
extent feasible but may in certain circumstances select a non-
preference individual over a preference individual. The regulation also
provides that the Department may ask for evidence that the grantee is
adhering to the priorities and preferences when examining participant
characteristics. There was one comment on this section that asserted
that ``preferences to be applied within priority groups should not be
qualified to the extent feasible,'' and that ``available community
service employment opportunities'' should play no part in the
application of preferences.
It is the Department's intent to provide grantees with the
flexibility to exercise their judgment when they determine that a non-
preference individual receives services over a preference individual,
factoring in the characteristics of the individual and the availability
of appropriate community service opportunities. The Department believes
that the language of the regulation properly communicates the existence
of and extent of the discretion available to grantees and has not
changed the regulation as suggested. The phrase ``to the extent
feasible'' comes from the statute. It is generally true that grantees
should seek to create community service opportunities to meet the needs
of eligible individuals. However, from a recruitment perspective,
grantees may also seek to match the needs and abilities of eligible
individuals to those community service opportunities that are
available.
What Services Must Grantees/Subgrantees Provide to Participants? (Sec.
641.535)
In proposed Sec. 641.535, the Department outlined the various
services that grantees and subgrantees must provide to participants.
The Department received a large number of comments on this section,
which focused on the following three issues: Paragraph (a)(2), which
proposed quarterly assessments by providers, and paragraph (a)(3),
which proposed corresponding quarterly updates of participants' IEPs;
paragraph (a)(14), which required follow-up with participants who have
transitioned into unsubsidized employment to make sure they receive any
needed follow-up services; and paragraph (c), which prohibited using
SCSEP funds on stand-alone job clubs or job search activities.
In their comments on the paragraphs (a)(2) and (a)(3), the
commenters were virtually unanimous in opposing quarterly assessments
and updating of IEPs, though one commenter noted that it is an
excellent objective. Various commenters stated that quarterly reviews
will serve no practical purpose; they will not increase the quality of
participant services; they will be more costly; and they will require
more resources in staff and transportation time, especially where
participants are scattered across wide geographical areas. One
commenter stated that the logical time for assessments and updating of
IEPs is at the beginning of the participant's enrollment and just
before the job search begins in earnest. Several commenters stated that
paragraph (a)(13), which requires assessment of the participant's
progress in meeting the goals of the IEP as necessary, provides
adequate regulatory guidance, eliminating the need for paragraphs
(a)(2) and (a)(3).
A number of commenters stated that annual reviews at a minimum are
adequate, and several suggested that the Department encourage periodic
reviews as necessary when participant needs change, stating that this
would provide needed flexibility to the process. As one commenter
noted, ``Short term goals might require reassessment within a month,
while longer term goals might
[[Page 19031]]
not be fulfilled for several months.'' Several other commenters
suggested a six-month reevaluation, if closer spacing between
evaluations is desired, and one commenter noted that developmental
steps for many participants are often not completed in three months.
Several comments spoke to the differences between participants who
only wish to stay in their community service assignments and those for
whom unsubsidized employment is a goal. One commenter suggested that
assessments and IEPs should be updated more frequently for participants
whose goal is unsubsidized employment. Another said that specific
language is needed with respect to whether community service is an
acceptable IEP employment goal; if so, the commenter believed that
there is no need for IEPs.
A commenter inquired about the purpose of quarterly assessments,
and another stated the opinion that updating IEPs quarterly is based on
standardizing the regulations with WIA. A commenter stated that
quarterly updates are not in the best interests of the people served,
and another expressed the view that time spent on quarterly assessments
could be better spent on job development, recruitment and placement
efforts. Another commenter stated that a requirement for quarterly
assessments ``increases pressure to simplify and shorten assessments in
order to reduce the time and expense needed to administer them
resulting in a reduction in overall quality and effectiveness'' and
``increases pressure to eliminate assessment tools and services
currently used, but too costly if done for each participant
quarterly.''
The Department agrees with the commenters that an absolute
requirement for a reassessment every quarter may be too costly and of
little benefit. The Department remains concerned that the participant's
IEP be a living document that is changed as the participant's needs and
circumstances change and as the goals of the IEP are reached. We have,
therefore, revised paragraphs (a)(2) and (a)(3) to make clear that
grantees are expected to treat the assessment/IEP process as a living
process and must conduct assessments and update the IEP as necessary
but no less frequently than twice in a 12 month period. We have revised
paragraph (a)(13) to more closely track OAA section 502(b)(1)(M)(iii).
In addition, we strongly encourage the good practice of updating
assessments as necessary, as a standard time for conducting an
assessment may not meet the needs of certain individuals. More frequent
assessments also foster better relationships with participants.
In Sec. 641.535(a)(14), the Department proposed that grantees must
follow up with participants placed into unsubsidized employment during
the first six months of placement to ensure that they receive any
necessary services.
Two commenters stated their appreciation at being able to spend
program funds to foster job retention, while another noted that there
are not sufficient funds in the program to do so. The latter commenter
also expressed concern that some participants might consider the six-
month time period an entitlement, whether the participant needed
services or not. Finally, a commenter asked whether SCSEP funds could
be expended to ensure that a participant is still employed at the six-
month mark and that any identified services are being provided.
The Department recognizes that, given the funding limitations in
the SCSEP, grantees will not be able to provide all needed supportive
services, whether for current participants or for follow-up services,
from grant funds. The Department does not view these services as a
requirement or an entitlement. Rather, they are an important adjunct to
obtaining successful results for participants. Grantees must be
creative in using their connections to the One-Stop and to other
programs to arrange for needed support or follow-up services. The issue
of expending SCSEP funds to ensure that a participant is still employed
at the six-month mark and that any identified services are being
provided is addressed below in Sec. 641.555.
In Sec. 641.535(c), the Department proposed that ``Grantees may
not use SCSEP funds for individuals who only need job search assistance
or job referral services.'' A number of commenters opposed this change,
while two supported it.
Several commenters noted that it is difficult for seniors to look
for work, due to such factors as depression, lack of self-confidence,
and lack of motivation. On a practical note, a commenter asserted that
it is hard to identify job-ready individuals before they are enrolled
because they will not yet have been assessed. Two commenters stated
that they do not favor requiring participants to take community service
assignments just so they can obtain job club/job search services.
Two commenters stated that job clubs and soft skills training
should be considered training since they include classroom instruction,
lectures, and seminars. They argued that such soft skills training,
which is tailored to seniors, is not provided by the One-Stops. Other
commenters stated that often One-Stops depend on SCSEP to provide soft
skills training to seniors, and that which entity provides such
training in a given locale can be the subject of negotiations and the
resulting MOU. Several commenters noted that the effects of not
providing stand-alone job search/job referral assistance would be
magnified in rural areas, where One-Stop services are often at great
distances. One commenter recommended expansion of counseling and job
readiness training.
With respect to interactions with potential employers, one
commenter noted that networking and word-of-mouth are the sources of
many referrals. This provision will ``negatively impact our ability to
help older workers obtain jobs and employers from obtaining suitable
help.'' Another commenter stated that ``[w]ith the emphasis on placing
older workers into unsubsidized jobs, losing this valuable service
would be not only detrimental to the participants, it would be counter
to the goals'' of the SCSEP program. Another commenter noted that job
search and job club activities provide the flexibility needed to bridge
gaps between workers and employers.
One commenter stated that this provision should be removed or the
unsubsidized placement goals for SCSEP should be lowered to reflect
this change, while another recommended deletion of this provision
because its inclusion makes the work of the grantees more challenging
with respect to meeting performance measures and makes it impossible to
meet unsubsidized placement goals, thus risking sanctions and loss of
funds. Another commenter recommended that ``DOL allow SCSEP, in some
limited way, to provide job search and referral assistance and be able
to count it.'' Another commenter stated that it would impair her
agency's role as advocate of all older workers if it can't help all
older workers get unsubsidized jobs and take credit for successes.
Of those who agreed with the proposal, one suggested ``that the
Department provide some latitude regarding this restriction,''
especially where One-Stops are geographically inaccessible. Another
commenter recommended that the Department include in Sec. 641.560
language similar to that in Sec. 641.535(c).
The intent of this rule is to assure that grantees concentrate
their efforts and limited funds on providing community service work
assignments to those older workers who are most in need and who are
enrolled in the program. The Department does not consider job search
[[Page 19032]]
and job referral activities to be training per se. Job search, job
club, and job referral activities are available from a variety of
sources in the One-Stop system. The Department sees no need for SCSEP
grantees to duplicate those services.
A number of SCSEP providers are offering job search and job
referral services to seniors based on agreements with One-Stops. As
noted in the Preamble to the NPRM, SCSEP providers who are working
within the One-Stop framework can continue providing the agreed-upon
services, both to SCSEP participants and to those who are not enrolled
in the SCSEP. Those SCSEP providers that wish to address services to
rural populations in particular may wish to address this issue in their
MOUs with the One-Stops. If SCSEP grantees take on these activities,
particularly if they do so for older workers generally, they should
make appropriate financial arrangements in the MOUs. They should be
compensated for their services by reducing their contributions to the
One-Stops.
Finally, grantees are not prohibited from conducting job club and
job referral activities for enrolled participants. We have added a
sentence to Sec. 641.535(c) to make this clear. However, individuals
who are not enrolled (i.e., are not assigned to community service
positions) cannot be counted as unsubsidized placements. This is
because unsubsidized placements are based on authorized positions,
which require legitimately enrolled individuals. This policy is a long-
standing element of program operations.
With respect to the recommendation that the Department add language
similar to that in Sec. 641.535(c) to Sec. 641.560, we believe that
the language in Sec. 641.535 is sufficient.
What Types of Training May Grantees/Subgrantees Provide to SCSEP
Participants? (Sec. 641.540)
In proposed Sec. 641.540, the Department outlined the kinds of
training that may be provided to SCSEP participants. Commenters raised
five main issues. The first issue was whether community service in and
of itself is to be considered training.
Historically, grantees have framed community service in terms of
training to encourage participants to look beyond community service
assignments toward unsubsidized employment. That is a valid approach
when feasible and is strongly encouraged. The training aspects of a
community service assignment should be reflected in a participant's
IEP. The kinds of training envisioned in this section, however, are
those that occur outside of the community service assignment. For
clarity, a second sentence has been added to paragraph (a): ``This
section does not apply to training provided as part of a community
service assignment.''
Several commenters raised a second issue. They recommended
modifying the language of Sec. 641.540(a) to say that training
``should, when feasible'' rather than ``must'' be provided, given
limited resources and the difficulty of providing training in a rural
location.
The Department believes that these commenters misunderstand the
intent of the Proposed Rule. The rule requires that when grantees
provide training, the training be ``realistic and consistent with the
participants' IEP,'' not that grantees provide training in all cases.
The rule is intended to reinforce the program's assessment and IEP
requirements. We have added language in paragraph (a) to make clear
that the rule applies when grantees are providing training to a
participant.
Commenters suggested that training also be permitted as part of
private employment, and not just community service, to allow for
greater flexibility and better service to participants.
The Department is developing guidance on innovative ways to expand
the permissible on-the-job training and work experience activities
listed in the rule at Sec. 641.540(c).
Commenters raised an issue about whether wages may be paid while
participants are in training.
The answer to this question is yes. We have added the statement
``Participants may be paid wages while in training'' to paragraph (f).
Several commenters asked if participants are limited with respect
to the number of hours they may engage in training.
There are no limitations on the number of hours in which
participants may engage in training other than those that may be
imposed by needs reflected in the IEP.
Finally, one commenter asked whether training provided by other
sources than grantees or subgrantees could be considered required
training, or whether that term must be reserved for training provided
through the SCSEP.
Training provided by a One-Stop Center or any other source would be
considered required training and Sec. 641.540(e) encourages grantees
to seek training from the One-Stop and other locally available
resources. In addition, paragraph (h) allows for ``self development
training available through other sources during hours when not assigned
to community service activities.''
We also have substituted the word ``pay'' for ``reimburse'' in
Sec. 641.540(g) to make it clear that grantees are not expected to
make participants initially pay the costs of travel or room and board
themselves.
What Supportive Services May Grantees/Subgrantees Provide to
Participants? (Sec. 641.545)
Proposed Sec. 641.545 listed various supportive services that may
be provided to participants. Commenters noted that funds for supportive
services are quite limited and another noted that at least some of the
specified services are quite expensive. One commenter also inquired to
what extent a project is required to provide these services, and to
what extent this decision should be made at the project level. Other
commenters questioned how funds can be spent to support employees
placed in unsubsidized employment and, more specifically, how auditors
would view such expenditures.
To meet the needs of the seniors the SCSEP serves, grantees must
make every effort to provide them the supportive services they need to
be able to participate in their community service assignments. The
Department recognizes that SCSEP grantees will not be able to provide
all needed or desirable supportive services with grant funds. This
regulation addresses this concern in two ways. First, it states that
such supportive services may be provided. Secondly, paragraph (b)
states that, where possible, grantees should use other resources to
provide these services first. The Department agrees that the decision
about what kind of supportive services to provide and how to provide
them in a decision to be made on a case-by-case basis by the grantee or
subgrantee. But the Department expects grantees and subgrantees to make
every reasonable effort to provide participants with the supportive
services provided for in their IEPs. To the extent that it is possible
for a grantee to provide supportive services through other programs or
resources, concerns about expenses and audits would not arise, as the
costs would be borne by other organizations and thus no auditable SCSEP
funds would be involved. As to funds spent by grantees for follow-up
services, the statute permits such expenditures in section
502(c)(6)(A)(iv) as allowable services which should resolve any
questions that auditors may raise. Grantees may provide follow-up for
up to 6 months
[[Page 19033]]
after an unsubsidized placement, which allows grantees to ensure
retention in the program as required in subpart G of this part.
What Responsibility Do Grantees/Subgrantees Have To Place Participants
in Unsubsidized Employment? (Sec. 641.550)
In Sec. 641.550, the Department proposed that grantees ``make
every reasonable effort to prepare participants who desire unsubsidized
employment for such employment.''
Several commenters addressed this section. Two commenters stated
that some participants will want to remain in community service
assignments indefinitely, and one noted that participants may have
barriers that will make unsubsidized employment difficult if not
impossible to obtain. A commenter recommended that ``[i]f participants
can elect community service as their goal, they should not be factored
into the placement goal population.''
Two commenters stated that the goal for all participants should be
unsubsidized employment. One commenter noted the omission in the
Proposed Rule of Sec. 641.314 of the prior regulations, which states
that ``grantees shall employ reasonable means to place each enrollee
into unsubsidized employment,'' and recommended that this language be
inserted in the Proposed Rule.
As to the question of whether unsubsidized employment should always
be a goal, it is the Department's view that the statute provides for
the dual goals of community service and unsubsidized employment. While
we acknowledge that some participants may desire to remain in community
service placements indefinitely, the Department believes it to be the
best practice to inform participants when they enter the program that
the community service position is a not a job, but rather a training
opportunity to obtain skills towards placement in an unsubsidized job.
Should grantees wish to make unsubsidized employment a goal for each
participant or move participants out of the program after a specified
period of time, they must obtain the Department's approval as required
in Sec. 641.570.
As to whether participants whose goal is community service and
participants whose goal is unsubsidized employment should be tracked
separately for purposes of performance evaluation and time limitations
in the program, the Department believes that it would be very difficult
to maintain two tracking and reporting systems. Participants may well
move from one group to the other, complicating record-keeping
considerably.
A commenter asked whether participants without a goal of
unsubsidized employment could be exempted from the time limit in Sec.
641.570.
Since Sec. 641.570 does not establish a time limit, but merely
authorizes grantees to do so with the Department's approval, the
Department sees no need to exempt participants from it.
A commenter observed that employer education and job development
are crucial to placements in unsubsidized employment, and urged that
the regulation further emphasize the need for collaboration with the
One-Stop Center. Another commenter suggested that the proposed
regulations ``[p]romote the increase of coordination with employers and
private businesses in the area to increase the ratio of applicants to
jobs.''
The Department agrees that employer education and job development
are crucial to placements in unsubsidized employment. We believe that
the regulation adequately addresses this issue and have made no changes
in the Final Rule.
The Department also is engaged in outreach activities to employers
to make them aware of our program and the benefits of utilizing older
workers.
What Responsibility Do Grantees Have to Participants Who Have Been
Placed in Unsubsidized Employment? (Sec. 641.555)
Proposed Sec. 641.555 required grantees to contact participants
within the first six months of unsubsidized placement to ascertain if
they need supportive services, and at the six-month mark to determine
whether the participant is still employed.
One commenter commended the six-month follow up requirement. Two
commenters stated that they consider this requirement an unfunded
administrative burden, and another asked how program money (for
supportive services) can be spent on individuals who have left the
SCSEP program.
Two other commenters stated that this section is redundant and
should be removed on the basis of their comments on Sec. Sec. 641.140
and 641.525, which address the propriety of information collection and
administrative burdens imposed by such requirements.
Two commenters noted the difficulty of obtaining information from
employers. One commenter observed that ``[i]f the grantees are going to
be allowed to use wage records to verify continued employment, the
reporting agencies should be mandated to provide this information to
the grantees.''
With regard to the concern about administrative burden, the
Department believes that the burden--which in most instances will
consist of making one or two telephone calls--to be minimal. Neither of
the comments discussing redundancy addresses the information that is
the subject of this section. With respect to obtaining information from
employers, the Department notes that no data collection beyond
verification of unsubsidized employment is contemplated. We will
provide additional guidance on how to determine retention in
unsubsidized employment in the reporting instructions for the
performance measures.
The Department also recognized that grantees may have other follow-
up requirements deriving from the performance measures, such as the
earnings increase measure, or other reporting requirements. Therefore,
the Department has added the following sentence at Sec. 641.555(c):
``Grantees may have other follow-up requirements under subparts G and
H.''
Supportive services, which are described in Sec. 641.545, may be
provided to individuals who have left the program. Section
502(c)(6)(A)(iv) of the OAA allows grantees to provide supportive
services for follow-up activities. Also, the Department believes that
the introduction of a 6-month retention performance measure provides
the authority for grantees to spend grant funds to assist participants
who have been placed in unsubsidized employment to retain that
employment and to determine whether they meet the retention measure.
Grantees may pay for these services through use of program funding
under the ``other participant costs'' category. Decisions to pay for
such services should be made locally and on a case-by-case basis,
depending on the needs of the participant. Since funds in this category
will be limited, grantees should be judicious in their spending for
this purpose and clear in their criteria for making such expenditures.
May Grantees Place Participants Directly Into Unsubsidized Employment?
(Sec. 641.560)
In Sec. 641.560, the Department proposed that participants who are
ready for placement in unsubsidized employment be referred to One-Stop
Centers for appropriate services. This provision furthers the
regulations' overall emphasis on the SCSEP's mission to serve those who
are most
[[Page 19034]]
difficult to place and to coordinate with the One-Stop System.
Commenters raised a variety of issues that centered on the relative
merits of One-Stops and SCSEP grantees with respect to older workers;
customer service considerations with respect to both participants and
employers; and performance measures.
With respect to the One-Stops, some commenters see them as variable
in quality, and as not always considering service to seniors a
priority, which results in the older workers having difficulty
accessing the necessary services. A commenter noted that referring
rural candidates to distant One-Stops would represent a hardship for
the participants.
A commenter noted that in some cases the One-Stops refer seniors to
the SCSEP program for services, as the SCSEP providers will have the
``time, patience, and knowledge'' to provide the necessary services,
and if the One-Stops are to fill this role, they will need education
about the special characteristics and needs of seniors. Commenters
suggested that referrals to One-Stops be made in situations where the
SCSEP is unable to meet the needs of the participants.
Other commenters expressed the view that placement by the SCSEP in
an unsubsidized slot would be quicker and represent better customer
service for both the participant and the business than referral to a
One-Stop, and that seeing such placements occur within the SCSEP
program can also be a morale-booster for other participants. They noted
that SCSEP providers often work hand-in-hand with potential employers
to develop unsubsidized placements benefiting both parties as well as
the participants in a complementary process that will be lost if this
section is implemented. One commenter pointed out that referring
participants to private sector jobs and counting the referrals as
placements ``makes good business sense, is cost effective, and gets
results. This is good use of taxpayer dollars.''
Some commenters were concerned with the effect of the rule on
performance results. They stated that the grantee should be able to
take credit for those referrals as placements, especially given the
emphasis on serving those most difficult to place. They cautioned that
the emphasis on serving the hardest to serve would put grantees at a
disadvantage in meeting performance standards, since the remaining
participants would have the lowest skills and the greatest need for
training.
One commenter suggested that dual enrollment might be used in some
cases, allowing both the One-Stop and the SCSEP to take credit for the
placement, and another suggested that credit be given under ``other
services provided.'' The commenter also stated that ``this regulation
could result in an increased workload for title V providers in that it
seems to require a much more intensive intake process than normal just
to determine initial eligibility and make appropriate referrals. Also,
this regulation does not allow title V providers to work with
participant (sic) who need training, but not community placements.''
The 2000 Amendments changed the SCSEP in a number of ways. One of
the most important changes was the requirement for coordination between
the SCSEP and the WIA and the One-Stop system. This requirement appears
in several places in the OAA, in sections 502(b)(1)(O), 502(b)(4),
502(c)(4), 503(b)(2), 505(c)(1), 510, 512, and 515(c)(5). Section
641.560 acknowledges the coordination requirement. It also
reemphasizes, as do several of the other provisions of this rule, the
SCSEP's focus on serving those most in need. It is important to
recognize that the SCSEP is not a general-purpose employment program
for seniors. Rather, it is a program to place seniors who have serious
barriers to employment in community service assignments which, combined
with training and supportive services, may lead to unsubsidized
employment.
For these reasons, the Department believes that Sec. 641.560
places a proper emphasis on coordination and service to the intended
beneficiaries of the SCSEP. It is important to note, however, that the
regulation is not phrased in mandatory terms. It is intended to serve
as a reminder to grantees and subgrantees of the need to coordinate
with the One-Stop system and to assign each its proper role. The
regulation does not forbid SCSEP grantees from providing placement
services for participants. Because of the limited funding available for
placement services, the regulation encourages grantees to use the
services already available from the One-Stop to provide these services.
The Department recommends that the assignment of placement
responsibilities be set out in the MOU with the Local Board. As
provided in Sec. 641.220, however, grantees may not spend SCSEP grant
funds to provide services, including placement services, to ineligible
individuals.
A number of commenters were concerned about the effect of Sec.
641.560 on performance measures. As discussed previously and in subpart
G, the Department intends to design the performance measures to take
into account any changes in grantee operations that the new statutory
requirements may engender. Whether by providing dual credit for
referrals, by defining the cohort of participants against whom the
placement is measured, or by some other means, the Department intends
to design the performance measures to reflect, as closely as possible,
actual grantee experience and performance. However, the practice of
counting the placement of ineligibles or individuals who have not been
enrolled in SCSEP as placements will not be continued in the
performance measures.
What Policies Govern the Provision of Wages and Fringe Benefits to
Participants? (Sec. 641.565)
In Sec. 641.565, the Department described the policies governing
the payment of wages and the provision of fringe benefits in this
section of the regulation.
The Department received several comments on this section. A number
related to situations in which the State's minimum wage exceeds the
Federal minimum wage. Some commenters commended the Department for
acknowledging in the Preamble to the NPRM that grantees cannot fill the
authorized level of positions allotted to them when their State minimum
wage exceeds the Federal minimum wage and for stating that it would
adjust performance measures to take that factor into account.
Commenters suggested that the allocation of positions among the States
be based on the State minimum wage in such instances or that additional
funding be provided to States with higher minimum wages.
As stated in the Preamble to the NPRM, it is the Department's
intent to take a higher State minimum wage into account when setting
performance measures. The formula for allocating funds among the States
is set in section 506 of the OAA and is based on the ``cost per
authorized position,'' which is defined by reference to the Federal
minimum wage. Because of that definition, the Department cannot adjust
the allotment of funds or positions among the States because of
differing minimum wages. What it can do is take the higher minimum wage
into account when setting the levels for performance measures. The
Department appreciates commenters' support of the regulation on the
uses of SCSEP funds for unemployment insurance or pension
contributions.
[[Page 19035]]
A commenter commended the Department's position on restrictions on
using grant funds to pay the cost of unemployment insurance for
participants or to contribute to retirement funds; another commenter
asked for a complete prohibition against such uses of funds. The
Department concurs with the comments relating to the use of grant funds
to contribute to retirement funds, and has changed the rule to indicate
that grant funds may not be used for this purpose under any
circumstances. Given that the SCSEP is more focused on unsubsidized
employment rather than long-term participation in community service,
providing retirement benefits is inconsistent with the new goals of the
program. In addition, the Department believes that the cost benefit
ratio no longer favors this kind of expenditure with limited funds.
The Department does not have the authority to override State
unemployment compensation laws and so cannot prohibit the use of grant
funds for unemployment compensation in States that require coverage.
There were comments on Sec. 641.565(b)(1)(ii)(A), relating to
physical examinations for participants and compliance with the Health
Insurance Portability and Accountability Act (HIPAA) requirements, and
asking the Department to recognize that it was appropriate to ask a
participant returning from worker's compensation to obtain a ``fitness
to work'' release from his or her personal physician.
SCSEP grantees would not be constrained by the requirements of
HIPAA. The physical examination provision presents no issue concerning
voluntary disclosures to grantees by participants. The results of the
physical examination are to be reported to the participant and are not
required to be disclosed to the grantee. Also, grantees are not HIPAA-
covered entities.
The Department has no authority to require participants returning
from workers' compensation to obtain a ``fitness to work'' release.
That is a matter to be resolved by grantees' and host agencies'
policies, taking into account applicable antidiscrimination laws.
Is There a Time Limit for Participation in the Program? (Sec. 641.570)
Section 641.570 provided that, although there is no time limit on
participation in SCSEP, grantees may establish one with the
Department's approval. If the grantee chooses to establish a time
limit, it must provide for a system to transition the participant into
unsubsidized employment or other assistance before the end of the
specified period. In the Preamble to proposed Sec. 641.570, the
Department stated that the regulation provides that there is no time
limit for participation in the SCSEP program, but it anticipates that
most participants will spend no longer than two to three years in the
program.
The Department received a variety of comments, with several
organizations opposing the Department having any expectations about
time frames. One commenter thought that time limits are unreasonable
because assistance other than unsubsidized employment is not likely to
be forthcoming. Another thought that the two-to-three-year expectation
should be removed because some individuals will never be able to move
on to unsubsidized employment and it is not fair to treat differently
those who can from those who cannot. Still another commenter was wary
of stating expectations at all for fear they would be considered
entitlements.
One commenter felt that an SCSEP provider would lose the respect of
the participants if it imposed ``arbitrary'' time frames and
recommended that ``[i]f time limits are truly beneficial, they should
be mandatory. However, the time limit should be five to seven years
rather than two or three years.'' Another advocated a time limit for
those under 70 years old, but not for those older, since the older
group faces discrimination barriers that the younger group does not.
Another commenter noted that some individuals are quite content
with their subsidized placements and that a rotation system and time
frame would be useful for those who are capable of moving into
unsubsidized employment, with waivers available for those who need more
time or who cannot make the transition. Another commenter suggested
exemptions for participants who are assigned to work with/for the
grantee itself.
Finally, one commenter noted that this provision does not address
how much time must elapse before a former participant of one program
may be ``picked up'' by another SCSEP in the area.
The regulation is clear that there is no requirement for grantees
to establish time limits on enrollment. Whether to establish time
limits, and the duration of and conditions under which the time limits
will be administered, is a matter for the grantee to determine. The
Department must, however, approve any time limit policy. The
``expectation'' stated in the Preamble to the NPRM is just a guideline.
The Department believes that the language of this section provides
sufficient flexibility for grantees to adopt or not adopt time
limitations that fit their circumstances.
The regulation neither prohibits nor imposes any time limit for an
SCSEP provider from picking up a former participant of another SCSEP
provider in the same area.
May a Grantee Establish a Limit on the Amount of Time Its Participants
May Spend at Each Host Agency? (Sec. 641.575)
In Sec. 641.575, the Department proposed that a grantee may set
limits on how long participants may remain at a host agency, as long as
the Department approves and the limits are noted in participants' IEPs.
All but one commenter opposed this provision. The commenter that
favored this provision stated that grantees must set a fair policy and
participants should be made fully aware of the parameters before they
begin participation.
One commenter stated that ``[i]t would be better to establish
separate tracks for participants choosing community service and for
those choosing employment. Slots should be reserved (perhaps on a 50/50
basis) for each track and new enrollments would be based on the
applicant's goal.'' This commenter also predicted that terminations of
enrollment based on time frames would lead unemployment insurance costs
to rise, and suggested funding that extends beyond the Program Year for
this purpose.
Section 641.575 is simply an authorization for grantees to adopt a
rotation policy; it is not a requirement. Several commenters who
opposed this provision seem to have interpreted it more generally than
intended, i.e., as relating to participation in the SCSEP program as a
whole, rather than to the amount of time spent at a particular host
agency. Many grantees find that setting time limits at host agencies is
advantageous because participants thus do not become comfortable in
their community service assignments and do not view their community
service assignments as an entitlement. Also, rotation to various host
agencies may help an individual acquire new and/or marketable skills
that will also lead to an unsubsidized placement. It also serves to
prevent maintenance of effort violations with host agencies. As with
the previous section, however, this provision represents an option, not
a mandate. The Department does not believe that any changes to this
section are needed. Grantees should take unemployment insurance costs
into account in deciding whether to adopt a rotation policy.
[[Page 19036]]
Under What Circumstances May a Grantee Terminate a Participant? (Sec.
641.580)
This section delineated rules for terminating participants: (1) The
bases for termination; (2) the procedures for informing the participant
of the reasons for termination; (3) the requirement to be consistent
with the Department's administrative guidelines, including appeal
rights, and (4) the prohibition against termination solely on the basis
of age.
We received several comments on this section. Several commenters
recommended that additional examples be cited. Another suggested that
the Department identify benchmarks (i.e., specific numbers) to define
the term ``reasonable'' as applied to refusal of job offers. One
commenter suggested that in the circumstances defined under Sec.
641.580(a), the grantee or subgrantee must immediately terminate the
participant.
Additional examples of circumstances that warrant termination will
be provided in administrative guidance. The Department chooses to defer
to the discretion of the grantee to determine what constitutes a
``reasonable'' number for refusals of job offers. The Department has
modified Sec. 641.510 to provide that grantees or subgrantees must
immediately terminate participants who provided false information for
eligibility purposes and has added the word ``immediately'' to Sec.
641.580(a) as well.
Are Participants Employees of the Federal Government? (Sec. 641.585)
Proposed Sec. 641.585 provided that SCSEP participants are not
Federal employees, but that where a grantee or host agency is a Federal
agency, Sec. 641.590 applies. One commenter opposed this provision on
the basis that the definition of employee status should derive from
Federal law for the sake of uniformity.
The OAA, at section 504(a), clearly states that SCSEP participants
are not to be considered Federal employees.
Are Participants Employees of the Grantee, the Local Project and/or the
Host Agency? (Sec. 641.590)
Proposed Sec. 641.590 provided that the grantee must consult with
an attorney to determine whether its workers are employees of the
grantee, the local project, or the host agency.
Commenters had a variety of objections to this provision. One
commenter opposed classifying participants as employees of the grantee,
since grantees cannot provide the level of supervision normally
envisioned in an employer-employee relationship, and another opposed
classifying participants as employees of either the grantee or the host
agency. One commenter noted that participants are employees in some
respects (e.g., payroll matters) but not in other respects (e.g.,
employment discrimination). Another commenter argued that, if
participants are classified as employees, State employment laws may be
brought to bear, and this perspective is not appropriate for SCSEP
participants.
Two commenters stated that hiring attorneys is too costly and
suggested that the Department obtain a blanket determination from the
Internal Revenue Service (IRS) regarding whether SCSEP participants are
employees. A commenter suggested that the Department make ``an
affirmative statement that enrollee participants are not employees of
SCSEP grantees,'' and another commenter noted that in the past,
appropriations language has addressed this ongoing issue.
The statute is silent on participants' status as employees, with
the exception of stating that participants are not Federal employees.
The Department's primary concern is to assure that participants are
protected in cases of injury and potential tort liability for
activities that occur within the scope of the participant's duties in a
community service assignment. Generally, participants will be covered
by the workers' compensation provision in section 504(b) of the OAA.
Should participants become involved in work-related incidents that
injure others, however, there is no similar provision for liability
coverage. To the extent that a participant is considered an employee,
either of the grantee or of the host agency, the participant will have
that same liability coverage as other employees. It may be that the
best solution is for grantees to adopt policies to assure that
participants receive this kind of liability coverage, from whatever
source, regardless of whether the participants are considered employees
for other purposes.
As at least one commenter pointed out there are some indicia that
participants are employees of the grantees and others that they are
not. We believe this is a matter of State law and perhaps a matter best
resolved in reauthorization. In the meantime, with respect to the
question of liability in case of employee negligence while in a
community service assignment, we do not have a single Federal answer.
For this reason is it not possible for the Department to issue a
blanket statement, as requested. Grantees will have to either adopt a
policy to provide liability protection or determine the status of
participants as employees. We have revised the Final Rule to delete the
requirement to ``consult with an attorney.''
Other Issues
The Department received several other comments on issues covered in
subpart E and which were not discussed in the Proposed Rule. These
comments concerned the average number of hours of work per week to be
offered to participants and the maximum number of hours per grant year
per participant.
The Department did not regulate the average number of hours per
week to be offered to participants because there is a statutory
definition at OAA section 515(2)(a) that defines part-time employment
within a workweek as at least 20 hours. In addition, the Department
thought that this was an area in which some flexibility could be
provided to grantees, given that there will be a community service
performance measure and because grantees will need to balance this
measure with the unsubsidized placement performance measures, as
discussed in Subpart G. That being said, grantees should ensure that
participants work on a part-time basis and should monitor the hours so
that they do not become full-time employees.
As to the issue of the maximum number of hours per year that a
participant can work in a community service assignment, the Department
chose to allow a reasonable level of flexibility. The prior 1300-hour
requirement is still a benchmark and good practice that the Department
strongly encourages grantees to follow.
Subpart F--Private Sector Training Projects Under Section 502(e) of the
OAA
What Is the Purpose of the Private Sector Training Projects Authorized
Under Section 502(e) of the OAA? (Sec. 641.600)
The section 502(e) program is required by the OAA, which authorizes
the Department to reserve up to 1.5 percent of the total appropriation
to place individuals into private sector job opportunities. In Sec.
641.600, the Department proposed to provide more funding for the
section 502(e) program and to select the grantees through a full and
open competition for 502(e) funds. Before the enactment of the 2000
Amendments, SCSEP grantees had been allowed to routinely set aside a
portion of their own funds to underwrite most 502(e) activities. There
was a limited
[[Page 19037]]
competition among the grantees only for a small section 502(e) set-
aside.
Many commenters protested that the elimination of the set-aside
practice would impede their ability to meet placement performance
measures. Many commenters objected to limiting 502(e) funds to the
winners of a competition, some questioned the Department's authority to
do so, and others questioned whether small grantees could fairly
compete against national organizations. A number of commenters
suggested a pro-rated equitable distribution of funds, providing for a
recapture of refused funds that could be reallocated or competed.
Several commenters said State budget cutbacks limited the ability of
host agencies to provide unsubsidized placements to ``compensate'' for
the new 502(e) requirements. One commenter expressed concern for
participants in current 502(e) projects who have not completed their
training.
The practice of allowing 502(e) projects to be funded out of the
general SCSEP grants is not permitted by the 2000 Amendments. Section
502(e) sets up a specific set aside program with different rules from
``primary'' SCSEP grants.
To provide for maximum flexibility in the award of 502(e) funds in
subsequent Program Years, however, the Department agrees to eliminate
the phrase ``through an open competition'' in Sec. 641.600 of the
Final Rule. This will enable the Department to explore other award
mechanisms in any given Program Year. However, full and open
competition is consistent with the intent of the OAA and Department
policy, and ensures the selection of the best providers, thus
contributing to the betterment of the SCSEP overall. It provides an
opportunity for private business concerns to compete, as specified in
the OAA. The Department also believes that competing this program
strengthens the unsubsidized placement goals of the program as a whole.
Commenters expressed concern that awarding section 502(e) grants
through competition will prevent their use of funds set aside under
their grants to promote private sector placements. The Department
believes that this concern can be addressed through innovative use of
funds in their existing grants. Nothing in the statute forbids the use
of funds in the ``other participant costs'' cost category or in the
``wages and fringe benefits'' cost category for appropriate training
expenditures. However, grantees using SCSEP funds for such activities
are not exempted from normal SCSEP requirements--e.g., non-Federal
share--as are actual 502(e) recipients. The Department will issue
administrative guidance that expands on innovative ways to expand on
permissible on-the-job training and work experience activities listed
in the rule at Sec. 641.540(c).
How Are Section 502(e) Activities Administered? (Sec. 641.610)
In this section, the Department described who may apply for section
502(e) projects, what private sector activities should be emphasized,
and the need to coordinate 502(e) activities with WIA title I and SCSEP
projects operating in the area whenever possible. In the past, private
businesses were not permitted to apply for 502(e) projects.
There were several comments on paragraph (a) of this section, most
of which were concerned about allowing private businesses to compete.
The commenters were concerned that private businesses would be too
narrowly focused in their implementation of the section 502(e)
program--would only train for specific jobs they needed and would not
meet the needs of many older workers for training in other kinds of
jobs which might use their previous skills. Some commenters argued that
existing grantees could do a better job of providing private sector
placements because of their ability to focus on both the employer and
the participant's needs. The commenters were also concerned that the
regulations did not make clear that the priority requirements of the
OAA applied to section 502(e) projects and that providing section
502(e) grants to private businesses would undermine the community
service aims of the SCSEP.
One commenter suggested adding a paragraph (d): ``Private sector
grantees must coordinate section 502(e) training activities with SCSEP
grantees operating in the service delivery area, with particular regard
to participant recruitment and co-enrollment, and must adhere to the
Governor's State Senior Employment Services Coordination Plan and
equitable distribution.''
The Department believes that the inclusion of ``private business
concerns'' as entities with which the Department is authorized to enter
into agreements is in accord with Congressional direction to include
private businesses in the section 502(e) program. This is particularly
clear when the language of section 502(e) is contrasted with the
language of section 502(b)(1) which does not mention private businesses
as potential grantees for primary SCSEP grants. Although the Department
has not in the past included private businesses as grantees in the
section 502(e) program, the Department thinks that their inclusion is
more consistent with the statute, with Departmental polices favoring
competition, and with the 2000 Amendments' increased emphasis on
placements in unsubsidized employment.
The Department does not intend, nor does it believe, that enabling
private business concerns to apply for 502(e) funds will necessarily
disadvantage current grantees. If, as suggested by the comments,
current grantees have good programs for training and placing older
workers for placement in private sector jobs, there is no reason why
their proposals to perform those services should not be successful in a
502(e) competition. The Department intends that the same standards for
using innovative work modes and for emphasizing second career training
will apply to all applicants.
The Department agrees that section 502(e) grantees should
coordinate with the grantees in the areas in which they operate and
that they are subject to the same requirements as other grantees. We
think, however, that the regulations, especially Sec. Sec. 641.610(c)
and 641.660, already so provide.
How May an Organization Apply for Section 502(e) Funding? (Sec.
641.620)
We did not receive any comments on this section. Nevertheless, in
light of our decision, discussed above, to retain flexibility in the
method by which section 502(e) funds will be awarded, we have revised
the rule to delete the reference to a Solicitation for Grant
Applications and to remove the phrase ``or other similar instrument''
at the end of the section. The section now provides that organizations
may apply for section 502(e) grants by following instructions that the
Department will publish in the Federal Register or in another
appropriate medium.
What Private Sector Training Activities Are Allowable Under Section
502(e)? (Sec. 641.630)
This section listed the activities that are authorized for private
sector training under section 502(e). In particular, paragraph (a)(7)
indicated that job clubs or job search assistance are only allowable in
combination with other listed services or in conjunction with the local
One-Stop Delivery System.
Many commenters believed that grantees should have the flexibility
to provide job clubs or job search assistance as stand-alone
activities. Some suggested this restriction would
[[Page 19038]]
have a negative effect on achievement of unsubsidized placements.
One of the key priorities of the SCSEP is to serve the hardest-to-
serve of the eligible population. Consistent with that focus and given
the limited funds that are available, eligible individuals who are
essentially job-ready should be referred to the One-Stop Delivery
System. Section 502(e) funds, which are limited to no more than 1.5
percent of the appropriation, can then be targeted to prepare
participants most in need for unsubsidized employment. Section 502(e)
specifically focuses on providing ``second career training'' leading to
placement in private sector jobs. The Department does not view stand-
alone job clubs or job search activities, which are essentially aimed
at individuals who are already job ready, as fitting within the type of
training Congress envisioned for section 502(e) projects. Where job
clubs or job search assistance are used to assist someone who has
received or is receiving second career training to successfully find a
job, they are allowable section 502(e) activities. The Department
addresses this issue in more detail in Sec. 641.535(c).
The Department acknowledges that focusing on the hardest-to-serve
presents challenges. We address the negotiation and establishment of
performance measures in Subpart G and later administrative issuances.
How Do Private Sector Training Activities Aauthorized Under Section
502(e) Differ From Other SCSEP Activities? (Sec. 641.640)
Section 641.640 listed the differences between activities under
section 502(e) grants and other SCSEP activities. These differences
include that section 502(e) projects are not required to have a
community service component, that they focus solely on second career
training leading to private sector employment, that non-Federal share
is not required, and that private businesses are eligible for 502(e)
grants.
The Department received several comments on this section. One
commenter urged the Department to preserve the historical balance
between unsubsidized employment and community service.
The purpose of the SCSEP is to provide both community service and
unsubsidized employment opportunities. The Department views the section
502(e) program as being primarily related to the unsubsidized
employment focus of the program. However, 502(e) participants must also
be co-enrolled in a community service SCSEP project.
Another recommended that the 10 percent non-Federal share
requirement apply to 502(e) activities as it does to regular SCSEP
grants.
The Department is authorized to pay all of the costs of section
502(e) activities. The Department believes that Congress' authorization
to pay the entire costs of section 502(e) grants and its expectation
that section 502(e) grants will involve some activities unique to the
SCSEP suggests an intent that the Department not impose a non-Federal
share requirement. Thus, the Department will not require a non-Federal
share from any section 502(e) grantee; but such recipients may choose
to provide non-Federal share funds and are encouraged to do so. We have
revised the regulation to include the option to provide a non-Federal
share.
One commenter recommended that if the Department contracts directly
with private businesses for section 502(e) projects, that it let the
SCSEP grantees in the area know who the successful 502(e) applicant is
so that they can refer eligible individuals for 502(e) services. This
commenter further recommended that if a referral by an SCSEP grantee to
a private business 502(e) grantee results in an unsubsidized placement,
then that placement should also be counted for the SCSEP grantee.
The Department agrees to identify all section 502(e) awardees and
will post the names and locations of all such awardees on the SCSEP
website. The Department also agrees that a referral from an SCSEP
grantee to a different 502(e) grantee that results in an unsubsidized
placement will also be credited to the SCSEP grantee. We have added
language in Sec. 641.680 to indicate that placement credit for a
referred participant may also be credited to the referring SCSEP
grantee. However, if the SCSEP grantee is also a 502(e) grantee, the
unsubsidized placement of the participant may only be counted once.
Does the Requirement That Not Less Than 75 Percent of the Funds Used To
Pay Participant Wages and Fringe Benefits Apply to Section 502(e)
Activities? (Sec. 641.650)
Section 641.650 provided that the requirement that not less than 75
percent of SCSEP grant funds be expended for wages and fringe benefits,
either to the 502(e) grant if the grantee receives only a 502(e) grant
or to the entire grant if the 502(e) grantee is also an SCSEP grantee.
The Department received several comments on this section.
Commenters thought that the application of the 75 percent requirement
to section 502(e) grants, as stand-alone grants was impractical. One
commenter said that that it would make coordination between a 502(e)
grantee and an SCSEP grantee more difficult since both programs would
want to spend wage funding to meet the 75 percent requirement. Another
commenter asked that the requirement for enrollee wages should be
reduced to at least 65 percent to free up more funds for more intensive
training that will help ensure a successful transition into
unsubsidized employment. That commenter suggested that more 502(e)
funds be awarded in the competitive process to those that already have
SCSEP grants to mitigate the burden of the 75 percent requirement.
The Department interprets section 502(c)(6)(B) of the Act, which
requires that ``[n]ot less than 75 percent of the funds made available
through a grant under this title shall be used to pay wages and fringe
benefits,'' to mean that when the 75 percent requirement applies to all
grants made with title V funds, including section 502(e) grants. The
Department will continue to permit SCSEP grantees receiving 502(e)
funds to apply the 75 percent requirement to the combined total of its
funds. While we recognize that the requirement may cause operational
problems, there is no authority in the OAA to waive the 75 percent
requirement for entities that only receive a 502(e) grant.
One commenter asked for more flexibility in 502(e) grants,
suggesting that limiting placements to private business makes it too
difficult for grantees to use the funds to best serve older workers.
Section 502(e) placements cannot be with public agencies or non-
profits. Section 502(e) specifies that placements must be made with
private business concerns. In addition to for-profit organizations, we
interpret private business concerns to also include any for-profit
component of a non-profit organization.
Who Is Eligible to Participate in Section 502(e) Private Sector
Training Activities? (Sec. 641.660)
When Is Eligibility Determined? (Sec. 641.665)
May an Eligible Individual Be Enrolled Simultaneously in Section 502(e)
Private Sector Training Activities Operated by One Grantee and a
Community Service SCSEP Project Operated by a Different SCSEP Grantee?
(Sec. 641.670)
This Proposed Rule provided that an eligible individual may be
simultaneously enrolled in a section 502(e) and a community service
SCSEP
[[Page 19039]]
project operated by two different SCSEP grantees. (All section 502(e)
participants must also be co-enrolled in a community service SCSEP
project, whether the projects are operated by a single grantee or by
two different grantees.) Under these circumstances, the Department
expects grantees to work together to ensure that they are providing
complementary and not duplicative services.
The Department received two comments on this section, both of which
commended it for this clarification. The regulation is unchanged.
How Should Grantees Report on Participants Who Are Co-Enrolled? (Sec.
641.680)
We have revised this section to reflect our earlier-stated
agreement that credit for the placement of a referred SCSEP participant
may be shared by both the section 502(e) grantee and the referring
SCSEP grantee. However, if the SCSEP grantee is also the section 502(e)
grantee, the placement of the participant may only be counted once.
How Is the Performance of Section 502(e) Grantees Measured? (Sec.
641.690)
Subpart G--Performance Accountability
What Performance Measures Apply to SCSEP Grantees? (Sec. 641.700)
Section 641.700 described the four SCSEP performance accountability
indicators listed in section 513 of the OAA: Number of persons served;
community services provided; placement into and retention in
unsubsidized employment; and satisfaction of participants, employers,
and host agencies. In addition, this section adds the new earnings
increase common performance measure.
Several commenters had suggestions and questions about the
structure, cost and burden, clarity, and removal of the performance
measures.
Structure of Performance Indicators. Commenters addressed the
structure of the proposed performance definitions. Although many
commenters agreed that performance indicators are essential to ensure
SCSEP grantee accountability, many commenters also believed that the
indicators as defined will promote ``creaming,'' by enrolling
individuals who will be easier to serve and produce positive program
outcomes. One commenter believed that changing the definition for
unsubsidized placement and retention would increase the emphasis on
these performance measures, effectively deterring the original intent
of the program to serve those with the poorest employment prospects.
Other commenters suggested that the definitions take into consideration
the older population that the SCSEP is serving by including incentives
for grantees to provide services to those participants most difficult
to place. One commenter suggested that because the structure of the
performance measures is an effort to closely align the SCSEP with the
WIA system, the alignment of SCSEP and WIA definitions, and more
specifically the definition for unsubsidized placement, would be a more
accurate comparison of program performance.
One commenter urged that the rules not be implemented, unless
approved by OMB for paperwork reduction requirements. Another commenter
questioned the validity of the definitions carrying equal weight
without taking into consideration the retention rates, wage increases,
and unemployment rates in rural areas. Finally, one commenter believed
applying common performance measures to the SCSEP will not
appropriately measure the performance because of the dual purposes of
the program, which are job training and employment, and community
service.
Cost and Burden of Performance Indicators. Commenters addressed the
issue of the cost and burden of implementing the performance measures.
Some commenters believed the new responsibility that accompanies the
change in performance measure definitions will increase the
administrative cost for all SCSEP sponsors and employers. Another
commenter was concerned about the impact of reporting and data
collection requirements on staff time. One commenter suggested the
Department provide forms or a software program and training. Three
commenters suggested an increase in other enrollee costs and
administrative funding. Commenters asked if grantees will be provided
with alternative means of securing information in cases of non-
cooperation. Finally, one commenter questioned the burden of asking an
employer to fill out a satisfaction survey, especially when the
employer has never heard of the agency or organization from which the
survey came.
Clarification of Indicators. Commenters believed that the
performance measure definitions, or portions of the definitions, needed
clarification. Some commenters asked for further clarification of
``total number of participants served'' under ``the number of
individuals served'' performance indicator. Another commenter asked for
clarification of both the difference in the State's minimum wage as a
factor in determining the number of persons served, and whether income
on an initial application is compared to income at the point of
unsubsidized job placement when determining earnings increase. Two
commenters asked for an explanation of the difference between the
proposed placement measure, participants placed to the total number of
participants, and the current placement measure, participants placed to
the authorized slots. Finally, with regard to ``customer satisfaction
of participants,'' one commenter asked when customer satisfaction
surveys are to be completed and at what frequency should they be
conducted.
Removal of Indicators. A few commenters believed that some
performance measures, or portions of the measures, should be removed
from the Final Rule. Most of these commenters urged the Department to
reject the proposed definition comparing both the number of
participants placed into and number of participants retained in
unsubsidized employment to the total number of participants. Commenters
asserted that the proposed placement and retention measure limits the
options available to achieve goals that are inconsistent with the
program goal of placing more participants, and that the end result will
hurt the older workers, especially those with health limitations or who
live in remote areas. Three commenters believed the six-month retention
factor for unsubsidized employment is far too stringent for the
population that the SCSEP serves. Some commenters believed the earnings
increase indicator is not an accurate measure, because many individuals
retire from full-time employment and seek part-time employment, which
would cause the earnings increase to be negative. One commenter
believed the employment entrance and retention measures are
duplicative. Further, the commenter believed community service does not
seem to apply to 502(e) grants, which are a required project activity
for the regular SCSEP projects.
The measures listed in Sec. 641.700(a) are statutory and cannot be
changed. While the Department has some discretion about the adoption of
the earnings increase measure in Sec. 641.700(b), the Department has
made a policy decision in consultation with OMB to implement the common
measures to the extent possible in all Department-funded workforce
development programs. As explained in the Preamble to the NPRM, the
definitions for two of the common measures cannot be adopted because of
[[Page 19040]]
different definitions in OAA section 513(c)(2).
The Department recognizes that administering a performance
measurement system will increase administrative costs for grantees.
Since the statute limits the amount of administrative funds available
to grantees, the Department cannot accede to requests to provide
additional administrative funding beyond those limitations. The
Department will, however, recognize that the increased costs occasioned
by the performance measurement are a legitimate reason for requesting
an increase in administrative funds to the 15 percent limit permitted
by OAA section 502(c)(3)(B)(1). The Department will also make every
effort to reduce the costs of administering the performance measurement
system through the provision of technical assistance and training and
through the development, in consultation with grantees and other
stakeholders, of data collection and reporting methods that will reduce
the costs of the performance measurement system to the extent possible.
The Department will, of course, follow the requirements of the
Paperwork Reduction Act before requiring the use of forms or other data
collection methods.
The Department also recognizes that the implementation of a
performance measurement system has the potential to change the way
grantees operate. There may be, as some commenters suggested, a
tendency toward ``creaming'' occasioned by the placement and retention
and participants served measures. On the other hand, the community
service and greatest economic and social need measures emphasize the
community service and service to those most in need goals of the SCSEP
and will have some offsetting effect on any tendency to cream. Other
provisions of these regulations, like the limitation on stand alone job
clubs and job referral services, will also have the effect of reducing
creaming. The Department intends to work with the SCSEP community to
shape the performance measures in ways which will recognize and reward
attainment of all of the SCSEP goals and will recognize the operational
changes that the 2000 Amendments will require, and will issue more
detailed administrative guidance.
How Are These Performance Indicators Defined? (Sec. 641.710)
OAA section 513(b) lists four performance indicators with multiple
subparts for several of the indicators. The Proposed Rule clarified the
indicators by severing many of the indicators. This section provides
definitions for determining each of the measures along with the
additional indicator of earnings increase.
The Department received a significant number of comments on these
definitions. Many of the comments requested more details on the
definitions and, in some cases, requested that the Department issue
Older Worker Bulletins with more detailed information. Other commenters
raised concerns that the performance measures recognize the differences
in the population served by the SCSEP and the geographic isolation of
some participants, particularly in rural areas.
The Department's intent in structuring the performance measurement
regulations was to provide only basic definitions in the regulations.
The details of the system's implementation will be developed in
consultation with the SCSEP community and provided in an Older Worker
Bulletin and/or Federal Register Notice. As stated elsewhere in this
Preamble, the Department intends to work with the SCSEP community to
make sure that the performance measures system accurately measures the
actual operations of the program and that the system is administered in
a way that recognizes and encourages the goals of the SCSEP.
Commenters raised specific issues on the definitions themselves. We
address these comments below.
Number of Persons Served (Sec. 641.710(b)(1)). Several commenters
agreed with the proposed definition and thanked the Department for its
critical adjustment to the definition, which accounts for differences
in the wage rates paid to participants as required by State law. The
Department appreciates those comments.
Community Services Provided (Sec. 641.710(b)(3)). Some commenters
raised concerns about whether the definition of community service
includes particular kinds of activities, including administrative work
and job development for the grantee or subgrantees and whether such
activities would be counted in determining this measure.
The definition of community service at Sec. 641.140 and at OAA
section 516(1) is intended to be illustrative. The Department will
resolve these issues as we consultatively develop the details of the
performance measurement system.
Placement into Unsubsidized Employment (Sec. 641.710(b)(4)). A
number of commenters disagreed with the proposed regulation's use of
total number of participants as the denominator in the definition of
the placement into unsubsidized employment measure. They pointed out
that this definition differs from the current practice of measuring
placements against the number of authorized positions (slots). Several
commenters argued that the new definition would substantially reduce
placement rates, bringing many grantees below the statutorily required
20 percent placement rate and substantially below the Department's 35
percent Government Performance and Results Act of 1993 (GPRA) goal.
Commenters suggested either retaining the current definition or
aligning the definition with WIA and measuring against total exiters.
The Department agrees and will collect data consistent with the
current practice for calculating unsubsidized placements. Therefore,
the language of Sec. 641.710(b)(4) has been modified to replace ``the
total number of participants'' with ``the total number of authorized
positions.''
Retention in Unsubsidized Employment (Sec. 641.710(b)(5)). All
comments received on this provision asserted that the measure of
retention that makes sense is the number of participants still in
unsubsidized employment divided by the number of participants placed in
unsubsidized employment. Some commenters questioned how the rate of
retention will be measured for participants placed in the second six
months of the grant.
The Department agrees with the comments about the definition. The
retention denominator has been changed to ``those who are employed in
the first quarter after exit''--i.e., the number placed.
Although grants are only for one year, the one-year grants may be
extended for up to three years once this Final Rule is published. Thus,
the program will continue, as will many grantees and subgrantees. The
process of measuring retention rates will be ongoing and all placements
will count toward the measure.
Earnings Increase (Sec. 641.610(b)(9)). The Department proposed to
add the additional performance measure of earnings increase which
measures the percentage change in earnings from pre-registration to
post-program, and between the first and third quarters after exiting
the program. Several comments addressed this proposed performance
measure. Some commenters believed the earnings increase measure worked
against the older population the SCSEP is meant to serve. Because the
SCSEP is supposed to work with the hardest-to-serve and most-difficult-
to-place, the commenters asserted that the earnings
[[Page 19041]]
increase measure is not feasible. One commenter believed the vast
majority of participants who are attracted to community service remain
satisfied with minimum wage and are highly unlikely to post significant
earnings increases. Another commenter asserted that part-time workers
frequently do not receive a salary increase until after 12 months of
employment. Two commenters believed that many older workers need to
work part-time because of health, transportation, and social service
needs, and it would be difficult to measure benefits. One commenter
believed gathering wage and benefit increase information could be a
violation of privacy. Finally, one commenter suggested expanding the
definition of earnings increase to include such non-wage factors as
increases in fringe benefits and reduction in transportation costs.
OAA section 513(b)(5) authorizes the Secretary to add performance
indicators. The Department has chosen to add earnings increase, one of
the Common Measures, as an additional performance indicator. The
Department will retain this measure consistent with its decision to
implement the Common Measures across all employment and training
programs. The Department recognizes that the commenters have raised
legitimate concerns and will work with the SCSEP community to address
them during the performance measures implementation process.
What Are the Common Performance Measures? (Sec. 641.715)
How Do the Common Performance Measures Affect Grantees and the OAA
Performance Measures? (Sec. 641.720)
The SCSEP is part of the Department's common performance measures
initiative. This initiative has identified performance indicators that
will be applied across Federal job training programs and has a common
set of definitions and data sets. Those common performance measures are
``entered employment,'' ``retention in employment,'' and ``earnings
increase.'' Some commenters thought the proposed measures were not
feasible because of the dual purpose of SCSEP, job training and
employment, and community service. The commenters also asserted that
the unique population served by the SCSEP cannot be measured
appropriately by the application of common performance standards,
particularly by the earnings increase measure.
Several commenters highlighted a Government Accounting Office
report that found older workers had different needs than other
populations served by employment, and had different goals for career
advancement. A few commenters believed the definitions for the
performance measures, such as earnings increase, were too restrictive
and hard to implement because they measure only one possible positive
outcome from employment and, therefore, are not feasible. Several
commenters recommended that the common performance measures be
calculated in a more simplified manner and suggested using the
definitions for placement into unsubsidized employment or retention in
subsidized employment, as outlined in Sec. 641.710. Some suggested
that performance measurements be adjusted based on factors enumerated
in the Proposed Rule, such as unemployment, poverty or welfare rates,
and proportion of participants served. Finally, some commenters asked
for guidance on methods to track and collect the data for common
performance measures.
As discussed above, the Department is committed to adopting the
Administration's new common performance measures initiative for
employment and job training programs. In the case of the SCSEP, two of
the measures, entered employment and retention in employment, are
already required by the OAA, although the measures are defined slightly
differently. The Department is committed to adopting the common
performance measures' definitions for these two measures when the SCSEP
is reauthorized. The common performance measures serve two useful
purposes. They reduce the burden of data collection on workforce
development program grantees and they permit a degree of comparison
among various workforce development programs. The Department
recognizes, however, that there are differences in the population
served by the SCSEP, as there are in other workforce development
programs, and will take these into account in administering the
performance measurement system.
How Will the Department Set and Adjust Performance Levels? (Sec.
641.730)
The Department proposed to set levels of performance using a method
similar to the WIA method of negotiating performance levels. The
negotiations will occur before the beginning of each Program Year. The
placement into unsubsidized employment measure has a statutory floor of
20 percent, and may be negotiated with the grantees to establish a
higher level. In negotiating levels with grantees, the Department
proposed to set baseline goals. Adjustments to these negotiated levels
of performance may be made only if they are based on the factors
described in section 513(a)(2)(B) of the OAA. Grantees may propose
adjustments to those levels at the beginning of, and during, the
Program Year.
Some commenters were concerned about how the performance levels
would be set in negotiations. Some commenters suggested that the
performance levels should not be set based on past performance because
of the changes in the program. Some commenters thought that performance
levels for all grantees should be set at the same level so as not to
punish good performers. Many of the commenters were particularly
concerned about the placement measure, and, in particular, the
possibility that the Department might set the rate at more than 20
percent. These comments variously argued that the proposed prohibition
on stand alone job clubs and job referral activities and the proposed
change in the baseline for measuring the placement rate to total
positions and in the allocation of section 502(e) funds would make it
more difficult to attain even the 20 percent placement rate. Other
commenters argued that the program's focus on the hardest to serve and
the characteristics of the population served make it very difficult to
place participants. Some commenters said that there were disincentives
to accepting unsubsidized employment, including loss of other benefits,
specifically citing HUD housing benefits.
One commenter believed the Department should look at the difference
in participants' age and experience when comparing the performance
measures of WIA to the SCSEP. The commenter believed that a higher
placement goal, as proposed, would restrict the ability of the program
to serve the population in rural areas and smaller communities, where
sufficient employment opportunities do not exist. Some commenters
believed that the SCSEP program mandate to target individuals who are
elderly, low-income, and hardest to serve, makes setting performance
levels difficult or impossible. In addition, barriers to employment and
economic conditions should be taken into consideration. Finally, some
commenters believed that an additional condition for performance level
adjustment should be allowed for those States with a minimum wage
higher than the Federal minimum wage, because the higher minimum wage
in some States will limit the number of positions available and the
placement targets may need to be adjusted.
[[Page 19042]]
The Department agrees that performance baselines will have to take
into account the changes in the program wrought by the 2000 Amendments
and these regulations, as well as the different challenges faced by
different grantees in serving particular areas and populations. For
that reason, the Department will ask grantees to collect data in
Program Year, PY 2004, to serve as the basis for setting the initial
performance levels in PY 2005. The Department also realizes that the
performance measures are new and will consider this in negotiating
performance levels in the early years of implementing the system.
While the Department appreciates the commenters' concerns about the
difficulty of placing some SCSEP participants, the SCSEP community must
realize that Congress, in the 2000 Amendments, required a new emphasis
on placement into unsubsidized employment while retaining the program
goals of serving the most in need and of providing community service.
This new emphasis may require some adjustments in the way grantees and
subgrantees operate. In any event, the 20 percent placement rate is
required by the statute and the Department cannot change it. The
Department continues to believe that many grantees will be able to do
much better than that rate and thus will retain the option to set
placement rates above 20 percent. In addition, exceeding the 20 percent
goal is important because there is an additional goal of 35 percent
overall placement for the entire program based on the Department's GPRA
goal.
The Department believes it is entirely appropriate to negotiate
different performance levels with different grantees. Because of varied
circumstances, many discussed by the commenters, it is unrealistic to
expect the same performance level of all grantees. The Department will
take such differences into account in negotiating performance levels.
In addition, one purpose of the performance measurement system is to
promote continuous improvement. Setting identical performance levels
regardless of their actual performance undercuts that purpose. Fair and
appropriately tailored performance levels will enable good performers
to meet and exceed their performance measures and be recognized and
rewarded appropriately.
The three adjustment factors listed in Sec. 641.730(d) are the
only ones allowed by section 513(a)(2)(B) of the Act. Thus, the
Department cannot add an additional factor as suggested. As discussed
earlier, the Department will account for higher State minimum wages in
the implementation and negotiation of the performance measures.
Finally, as discussed previously, the Department will monitor
actual performance under the new measures in order to set realistic
expected performance levels.
How Will the Department Determine Whether a Grantee Fails, Meets, or
Exceeds Negotiated Levels of Performance? (Sec. 641.740)
Section 641.740 stated the rules for negotiating the performance
status of each grantee. The Department proposed to evaluate each
performance indicator to determine the level of success that a grantee
has achieved and aggregate the measures to determine if, on the whole,
the grantee met its performance objectives. The aggregate is calculated
by combining the percentage results achieved on each of the individual
measures to obtain an average score. A grantee fails to meet its
performance measures when it is unable to meet 80 percent of the
negotiated level of performance for the aggregate of all of the
measures. Performance in the range of 80 to 100 percent constitutes
meeting the level for the performance measures. Performance in excess
of 100 percent constitutes exceeding the level for the performance
measures.
In addition, each national grantee in a State must meet the
measures negotiated for the State in which the national grantee serves.
The Department will impose the sanctions outlined in section 514 of the
OAA when a grantee fails to meet overall negotiated levels of
performance or the levels of performance for its projects in a State.
When a grantee fails one or more measures, but does meet its
performance measures in the aggregate, the Department will provide
technical assistance on the particular failed measures but will not
impose other sanctions. The Department will provide further guidance
through administrative issuances.
Some commenters urged that these provisions not be included in
regulations, but instead be transmitted through Older Worker Bulletins.
Because this is the first year in which the Department is implementing
performance standards, ``DOL may need the flexibility to make
adjustments in order to drive desired results.''
One commenter was of the opinion that it is not equitable or valid
to apply an 80 percent pass/fail standard when the performance levels
are negotiable. In addition, the commenter believed that ``these
performance measures are unnecessarily complicated'' and will make it
difficult for grantees ``to monitor their programs and make adjustments
throughout the year.'' This commenter doubted that the Department will
be able to provide sufficient technical assistance: ``with the
decreased flexibility to use 502(e) and the increased focus on hard-to-
hire individuals, it is highly likely that there will be a large number
of grantees that fail individual measures. DOL does not have the
capacity to provide this level of technical assistance or they will
have to spend additional funds contracting for technical assistance.''
As discussed above, the Department will use the Older Worker
Bulletin system and/or a Federal Register Notice to further explain the
measures and requirements and to delineate the Department's approach.
The Department believes that it is equitable to apply the same
standards for passing or failing performance measures to all grantees.
The fact that the levels of performance are negotiable simply assures
that each grantee's circumstances will be taken into account in setting
performance levels and promotes continuous improvement. Performance
levels may be adjusted if the factors listed in section 513(a)(2)(B)
exist. The Department believes that this system is fair to all grantees
and that it is equitable to apply the same pass/fail standards to each
grantee. The Department disagrees that significant numbers of grantees
will fail their performance measures and intends to provide all
technical assistance that grantees may need.
What Sanctions Will the Department Impose if a Grantee Fails To Meet
Negotiated Levels of Performance? (Sec. 641.750)
What Sanctions Will the Department Impose if a National Grantee Fails
To Meet Negotiated Levels of Performance Under the Total SCSEP Grant?
(Sec. 641.760)
The Department received no comments on this section. For clarity,
however, we have added: ``The poor performing grantee that had its
funds competed is not eligible to compete for the same funds.''
What Sanctions Will the Department Impose if a National Grantee Fails
To Meet Negotiated Levels of Performance in any State it Serves? (Sec.
641.770)
Section 641.770 listed the sanctions that will be imposed if a
national grantee fails to meet its negotiated performance level in a
State. The test of failure is different in this case than it is for
national grants generally. A national
[[Page 19043]]
grantee is considered to have failed its performance measures in a
State if its levels of performance are 20 percent or more below its
national performance measures and it has failed to meet the performance
levels set for the State. The failure to meet performance measures for
State projects may be justified using factors such as size of the
project and the factors listed in OAA section 513(a)(2)(B).
Three comments were virtually identical: ``[b]ased on our
experience, size of project is not a valid consideration in measuring
success. Some of our most successful projects have been our smallest,
while some of our poorest performers have been extremely large.
Mitigating factors should include only those factors identified by
Congress in section 513 of the OAA, as cited above.''
Because program size is mentioned in the OAA, at section
514(e)(3)(A), the Department cannot remove the reference to program
size from the regulation.
When Will the Department Assess the Performance of a National Grantee
in a State? (Sec. 641.780)
Section 641.780 detailed the circumstances under which the
Department will assess the performance of a national grantee in any
State. Commenters recommended adding the phrase ``or his/her designee''
after ``State'' in Sec. 641.780(b)(2).
The Department accepts this addition.
What Sanctions Will the Department Impose If the State Grantee Fails To
Meet Negotiated Levels of Performance? (Sec. 641.790)
Section 641.790 details the sanctions that will be imposed if a
State grantee fails to meet negotiated levels of performance. One
commenter said it does not seem fair that programs may be financially
sanctioned as a result of not meeting the outplacement ratios. If a
program can document its efforts to achieve outplacement goals, those
efforts should be rewarded. A second commenter pointed out that grantee
performance is evaluated within 120 days of the end of the program
year, but one of the measures, retention in the job for 6 months, would
not be established that early for any end-of-the-year placements.
Regarding giving credit for efforts to achieve outplacement goals,
the Department believes that time spent documenting such efforts would
not be the best use of grantee resources. Grantees may seek adjustments
of their placement goals based on the criteria enumerated in section
513(a)(2)(B) of the OAA.
The question of how to address the incompatibility of the retention
measure and 120-day reporting deadline will be discussed in a
forthcoming Federal Register Notice or in forthcoming administrative
guidance.
Will There be Incentives for Exceeding Performance Measures? (Sec.
641.795)
Section 641.795 indicated that the Department is authorized by
section 515(c)(1) of the OAA to use recaptured funds to provide
incentive grants. The Department will issue administrative guidance
detailing how incentive grants will be awarded.
Three commenters complimented the Department for providing
incentives for exceeding performance measures, saying these are ``long
overdue.'' One commenter, however, urged the Department to reverse the
proposal to recover all grantee carryover funds. High performing
grantees should be allowed to retain these funds, the commenter said,
as an added incentive.
A representative of a contractor specializing in customer
satisfaction studies called for using customer satisfaction as an
incentive rather than a sanctionable measure. The commenter suggested
that high customer satisfaction scores be used as an additional
consideration for grantees that perform well on other measures. This
would give grantees a reason to take customer service seriously but
would not penalize them for substandard performance.
As to the issue of recapturing funds, section 515(c) of the OAA
gives the Department the authority to recapture unexpended funds from
SCSEP recipients at the end of the Program Year and reobligate those
funds within the two succeeding Program Years to be used for incentive
grants, technical assistance, or grants or contracts for any other
SCSEP program. Unless those funds are recaptured and reobligated, they
will lapse. The Department will issue administrative guidance to
provide SCSEP recipients with additional details on how recapture will
be implemented. The Department will retain its discretionary authority
to determine the best use of the funds. To the extent that high
performing grantees have excess funds, they may be able to recoup those
funds through incentive awards.
Regarding the use of customer satisfaction as an incentive, the
2000 Amendments, section 513(b)(4), lists customer satisfaction as a
required indicator. It cannot, therefore, be used merely as an
incentive. However, the Department will not use customer satisfaction
as a sanctionable measure until baseline rates can be established.
Subpart H--Administrative Requirements
What Uniform Administrative Requirements Apply to the Use of SCSEP
Funds? (Sec. 641.800)
Section 641.800 listed the various uniform administrative
requirements and allowable cost principles that apply to the various
kinds of SCSEP grantees and subgrantees. One commenter suggested that
the references to allowable cost requirements in paragraphs (b) and (c)
should be removed because they are covered in 641.847, and because
administrative requirements shouldn't be confused with allowable cost
requirements. The commenter also suggested that the language ``OMB
Circular A-102'' should be inserted before ``common rule.''
The references to allowable cost requirements in paragraphs (b) and
(c) of Sec. 641.806 have been removed. The rest of the paragraph
language, relating to uniform administrative requirements, has been
retained. The reference to ``OMB Circular A-102'' has been added to
paragraph (b).
What Is Program Income? (Sec. 641.803)
How Is SCSEP Program Income To Be Used? (Sec. 641.806)
Section 641.806 provided for the use of program income for program
purposes in various situations. Several commenters agreed that programs
should be able to continue using program income if their grants are
renewed; if not, then the program income should be remitted to the
Department for ``reprogramming.'' Under 29 CFR parts 95 and 97 and this
regulation, continuing and terminated grantees may continue to use
program income for SCSEP-related purposes without any time limitation.
The grantee is not required to remit to the Department income that is
earned after the termination of the SCSEP grant relationship between
the grantee and the Department. If a grantee has unexpended program
income on hand at the time its grant terminates, paragraph (c) requires
that the program income be remitted to the Department.
A commenter suggested that Sec. 641.806(b), which deals with
income earned after the grant period, either should be removed because
it is inconsistent with the generally applicable program income
requirements or clarified as to continuing grant relationships. The
program income requirements for governmental grantees (29 CFR 97.25(h))
[[Page 19044]]
provide that grantees are not accountable for income earned after the
end of the grant period unless program regulations or grant agreements
provide otherwise. The related regulation for non-profit and other non-
governmental organizations (29 CFR 95.24(b)) is substantially similar
but does not contain an exception for grant agreements and regulations
that provide otherwise. The commenter also suggested that if the
provision is retained, the regulation should explain when liability
ends, or what ``continue'' means as used in the regulation.
The Department does not agree that Sec. 641.806(b) should be
removed. Most SCSEP grantees have a continuing grant relationship with
the Department and earn substantial amounts of program income. Although
grant terminations will punctuate these relationships at least once
every three years, many of the relationships are likely to continue for
much longer periods under new SCSEP grants, and program income will
continue to be earned. Consequently, the Department has applied to the
Office of Management and Budget (OMB) for an exception to 29 CFR
95.24(b), in accordance with 29 CFR 95.4, and has obtained OMB's
approval of the exception and of Sec. 641.806(b).
What Non-Federal Share (Matching) Requirements Apply to the Use of
SCSEP Funds? (Sec. 641.809)
In Sec. 641.809, the Department set out the rules for the
situations in which non-Federal share funds are and are not required
and what kinds of funding qualifies as match. One commenter said that
it would be useful for DOL to add a requirement that funds be accounted
for in the same way Federal funds are audited.
The commenter was referring to the fact that the uniform
administrative requirements require all non-Federal contributions to
project costs, including cash and third party in-kind contributions, to
be allowable under the applicable allowable cost requirements. We agree
that it would be useful to clearly state this principle in this
regulation by: substituting the word ``determine'' for ``calculate'' in
paragraph (c) of Sec. 641.809; by redesignating paragraphs (e) and (f)
as paragraphs (f) and (g); and by making the second sentence of
paragraph (d) into a new paragraph (e). As changed, paragraphs (c) and
(d) more clearly indicate that the determination of the non-Federal
share of costs is subject to all the non-Federal share requirements in
the uniform administrative regulations, not just those pertaining to
calculation of the non-Federal share of costs. The Department believes
it is inappropriate and unnecessary to re-state the non-Federal share
requirements that are referred to in 29 CFR 95.23 and 29 CFR 97.24. The
generally applicable administrative requirements referred to paragraphs
(c) and (d) are not related to the prohibition now separately set out
in new paragraph (e).
What Is the Period of Availability of SCSEP Funds? (Sec. 641.812)
May the Period of Availability Be Extended? (Sec. 641.815)
Section 641.815 outlined the circumstances under which grantees may
request and the Department may approve an extension of the period of
fund availability. One commenter suggested allowing for the use of a
carryover of prior grant year funds, if any money is left since States
may be losing funding under section 502(e) of the Act.
The Act permits the Secretary to extend the period for the
obligation and expenditure of SCSEP funds where ``necessary to ensure
the effective use of such funds.'' The Secretary may also recapture
unexpended funds and take one of the three reobligation actions
indicated in Sec. 641.818. It is the Department's policy to encourage
recipients to fully obligate and expend all available funds within the
Program Year in which they are awarded. Thus, the Department will not
amend the regulation to permit carryover.
What Happens to Funds That Are Unexpended at the End of the Program
Year? (Sec. 641.818)
Section 641.815 indicated several options the Department has for
redistributing funds that are unexpended at the end of a program year.
Several commenters, while supporting the recapture and redistribution
features of this provision, recommended that the Department should
continue to allow recipients to request short-term extensions at the
end of the year so that they can ``make most effective use of the
funds.'' One commenter suggested that carried over funds should retain
their original cost category identification in the carryover period.
The extension issue is fully discussed in the Department's response
to comments on Sec. 641.815. With regard to the suggestion that cost
category identification be retained, we believe the comment is directed
to spending plans, i.e., budgets, not cost categories, since SCSEP
funds have no cost category identification until they are expended. The
Department considers imposing expenditure limitations based on original
budget estimates in addition to the cost limitations imposed by the Act
to be an unnecessary added burden to affected grantees. Funds that are
expended in an extension period are subject to the same cost
limitations that apply to the original grant.
What Audit Requirements Apply to the Use of SCSEP Funds? (Sec.
641.821)
Section 641.821 listed the generally applicable Single Audit Act
requirements that SCSEP grantees must follow and established audit
requirements for commercial organizations. One commenter suggested
changing the references in Sec. 641.821(c)(2) from OMB Circular A-133
to 29 CFR part 99.
The Department does not agree with this suggestion. It is
appropriate to refer to the OMB Circular here since the issue addressed
in this paragraph is the selection of the threshold for single audit
coverage, an organization-wide issue. However, OMB Circular A-133 was
recently revised to raise the threshold from $300,000 to $500,000 (68
FR 38401, June 27, 2003). Accordingly, the reference to the threshold
in the regulation is being raised to $500,000.
What Lobbying Requirements Apply to the Use of SCSEP Funds? (Sec.
641.824)
What General Nondiscrimination Requirements Apply to the Use of SCSEP
Funds? (Sec. 641.827)
The NPRM contained two sections dealing with nondiscrimination.
Section 641.827 dealt with general requirements applicable to all grant
programs; Sec. 641.830 dealt with requirements specific to the SCSEP
program. In reviewing the comments on the two sections, particularly a
question asking what non-discrimination protections apply specifically
to participants in the SCSEP program, the Department has decided that
the material covered could be more clearly presented by combining
proposed Sec. Sec. 641.827 and 641.830 into a single section
containing requirements based on the OAA Amendments and on regulatory
sources.
Paragraph 641.827(a) of the combined section remains unchanged.
This paragraph notifies grantees that, as recipients of Federal
financial assistance, they are subject to 29 CFR part 31, which
prohibits discrimination based on race, color, or national origin under
title VI of the Civil Rights Act of 1964, and 29 CFR part 32, which
prohibits discrimination based on handicap, under section 504 of the
Rehabilitation Act of 1973.
Paragraph 641.827(b) covered the nondiscrimination requirements
[[Page 19045]]
applicable to SCSEP programs and activities provided through the One-
Stop system authorized by the Workforce Investment Act. One commenter
asked what was intended by the phrase ``operates programs and
activities through One-Stop'' in Sec. 641.827(b)(1). In this
connection, the commenter asked whether the Department intended this
provision to cover an SCSEP participant assigned to a One-Stop or only
those cases where an SCSEP grantee physically co-located its operations
in a One-Stop.
The Department has extensively revised Sec. 641.827(b). It
notifies grantees of the circumstances under which they may be subject
to 29 CFR part 37, which implements the nondiscrimination provisions of
section 188 of WIA. Paragraph (1) States that the WIA nondiscrimination
regulations apply to One-Stop partners that operate ``programs and
activities that are part of the One-Stop Delivery System.'' This
paragraph contains the same requirements as 29 CFR 37.2(a)(2) regarding
which entities are subject to the WIA nondiscrimination regulations.
Coverage under this provision is not limited to grantees that co-locate
their operations in a One-Stop Center. Paragraph (2) is simply intended
to make grantees aware that there may be additional circumstances under
which they are subject to 29 CFR part 37. Readers should refer to the
definition of ``recipient'' in 29 CFR 37.4 for a complete listing of
the types of entities covered by paragraph (2).
New Sec. 641.827(c) implements section 503(b)(3) of the Act, which
relates to providing participants with informational materials on their
rights under the Age Discrimination in Employment Act of 1975.
New Sec. 641.827(d) contains the DOL address for questions and
complaints concerning nondiscrimination violations, which is the same
material that appeared in Sec. 641.830(b) of the Proposed Rule.
New Sec. 641.827(e) is a revision of the material that appeared in
Sec. 641.830(a) of the NPRM. The paragraph omits the list of examples
of Federal laws that may be applicable to such persons that appeared in
paragraph 641.830(a) of the NPRM. The list of examples was omitted
merely to simplify the paragraph; this change is not intended to alter
the meaning of the paragraph.
One commenter suggested that the Department should emphasize that
title VII of the Civil Rights Act, which applies to employees, does not
cover SCSEP participants because participants are not employees. The
Department does not take a position on the question of whether
participants may or must be considered employees. The reason is that
the only reference to employee status in title V is in section 504 of
the OAA, which says that participants employed in any project funded
under title V shall not be considered Federal employees. Accordingly,
the issue of whether participants are considered employees for any
other purposes must be decided by entities other than the Department.
Another commenter was concerned that the wording of proposed Sec.
641.830(a) could be misinterpreted to cover only SCSEP participants
whereas the nondiscrimination protections should also apply to
applicants for participation, employees, and applicants for employment.
Based on that suggestion, we have added language to clarify that the
nondiscrimination protections of Federal, State, or local laws may
apply to applicants for participation in SCSEP programs, or to other
individuals, as well as to participants.
What Nondiscrimination Requirements Apply Specifically to Participants
in SCSEP Programs? (Sec. 641.830) [Removed]
What Policies Govern Political Patronage? (Sec. 641.833)
Section 641.833 contained a prohibition on selecting or not
selecting SCSEP participants or on funding or not funding subrecipients
or host agencies based on political affiliation or belief. One
commenter stated that 29 CFR part 37 governs issues regarding
``political affiliation or belief,'' and asks that this section be
amended to indicate that 29 CFR part 37 prohibits discrimination on
these bases in SCSEP programs and activities that are part of the One-
Stop system.
The Department agrees that this provision should explicitly
prohibit the use of ``political affiliation or belief'' as the basis of
personnel actions involving SCSEP participants in One-Stop system
programs and activities. Accordingly, we are adding a cross reference
to the WIA nondiscrimination requirements.
What Policies Govern Political Activities? (Sec. 641.836)
Section 641.836 describes various requirements and prohibitions on
political activities involving grantees and participants, including
those established under the ``Hatch Act.'' Several commenters agreed
that the Hatch Act restrictions should be posted in grantee
administrative offices, but questioned whether it is reasonable or
practical to require the posting of the restrictions in ``every
workplace in which SCSEP activities are conducted.'' In order to avoid
the ``burdensome and onerous'' task, they recommend that grantees be
required to inform participants of Hatch Act restrictions through
written information provided upon enrollment.
The notice posting requirement is statutory. It is required by
section 502(b)(1)(P) of the OAA. Not only must the required notice
explaining allowable and unallowable political activities be posted in
every workplace in which SCSEP activities are conducted, but an
explanation of the law must be made available to each category of
persons associated with the project. Therefore, the regulation has not
changed as suggested.
Commenters also suggested that the Department provide the language
that it wishes grantees to communicate to their participants so that
everyone will communicate a consistent message.
The Department concurs and will provide this information by
administrative issuance and has revised the regulation accordingly.
What Policies Govern Union Organizing Activities? (Sec. 641.839)
What Policies Govern Nepotism? (Sec. 641.841)
What Maintenance of Effort Requirements Apply to the Use of SCSEP
Funds? (Sec. 641.844)
What Uniform Allowable Cost Requirements Apply to the Use of SCSEP
Funds? (Sec. 641.847)
Are There Other Specific Allowable and Unallowable Cost Requirements
for the SCSEP? (Sec. 641.850)
Section 641.850 listed several provisions governing allowable and
unallowable costs that are unique to the SCSEP program or unique to
grant programs administered by the Department. One commenter suggested
that Sec. 641.850(e), which discusses ``accessibility and reasonable
accommodation,'' be amended to permit SCSEP funds/financial assistance
to be used to meet obligations under ``Section 188 of the Workforce
Investment Act of 1998, as amended; Section 504 of the Rehabilitation
Act of 1973, as amended; any other applicable Federal disability
nondiscrimination laws; and the regulations implementing these laws, to
provide physical and programmatic accessibility and reasonable
accommodation/modifications for, and effective communication with,
individuals with disabilities.''
The Department agrees and Sec. 641.850 has been amended to permit
SCSEP resources to be used to provide
[[Page 19046]]
``physical and programmatic accessibility and reasonable accommodation/
modifications for, and effective communication with, individuals with
disabilities.''
A second commenter suggested amending Sec. 641.850(e) to provide
that ``Recipients and subrecipients may use SCSEP funds to meet their
own obligations (emphasis provided) under section 504.'' The change
would emphasize that ``scarce'' SCSEP funds ``are not intended to meet
the obligations of community agencies or others subject to the relevant
provisions of law.''
The Department does not agree that it should limit the use of SCSEP
funds for meeting reasonable accommodation obligations under Federal
disability nondiscrimination law to recipients' and subrecipients'
``own'' obligations. While there is no requirement to use SCSEP funds
to modify host agencies' facilities, SCSEP funds may be used for this
purpose. Regardless of where participants are placed, Federal
disability nondiscrimination law requires their host agency to provide
reasonable accommodations/modifications for qualified participants with
disabilities.
One commenter stated ``[a]ccept in kind at One Stops.'' Another
commenter questioned whether SCSEP funds could be used for One-Stop
activities.
The Department's position on both comments is stated in a paper
entitled Resource Sharing for Workforce Investment Act One-Stop
Centers; Methodologies for Paying or Funding Each Partner Program's
Fair Share of Allocable One-Stop Costs, published as a notice in the
Federal Register (66 FR 29637, May 31, 2001) and available on ETA's Web
site at http://www.doleta.gov/usworkforce/documents/fr/fr-5-31-2001-a.pdf.
As the notice indicates, One-Stop partners, including the SCSEP,
must use a portion of their funds to support the One-Stop system. One-
Stop costs, like all other SCSEP costs, must be determined in
accordance with the applicable cost principles, which provide that each
partner must pay its fair share of allowable and allocable One-Stop
costs. The Department does not mandate how this is to be accomplished.
Instead, the One-Stop partners must mutually agree on each partner's
share of One-Stop costs and on what resources shall be provided by each
of the partners to defray its fair share of One-Stop costs. Such an
agreement may include acceptance of in-kind services in satisfaction of
the SCSEP fair share of One-Stop costs. More information on allocating
One-Stop costs can be found in Part 1 of the One Stop Comprehensive
Financial Management Technical Assistance Guide, also available on
ETA's Web site at: http://wdsc.doleta.gov/sga/pdf/FinalTAG_August_02.pdf.
The Department has decided to emphasize and clarify its
position on the use of SCSEP funds for the support of One-Stop
activities (see 20 CFR 662.230) by inserting a new paragraph (d) in
Sec. 641.850 covering One-Stop costs and redesignating paragraphs (d)-
(f) respectively (e)-(g). As discussed in more detail in the Preamble
discussion of subpart B, grantees may seek to negotiate agreements in
which they become service providers for older workers in the One-Stop,
which may lead to a significant reduction of their required
contribution.
How Are Costs Classified? (Sec. 641.853)
Section 641.853 provided that costs are classified as program or
administrative costs and provided rules for the classification of
participant wage and fringe benefit costs as program costs. Four
commenters stated that this section does not ``make sense'' and that
clarification is needed or the section should be deleted because
enrollee costs are always charged to Enrollee Wages and Fringe Benefits
(EWFB).
The Department agrees with the commenters that this provision needs
to be clarified, especially in presenting the idea that participant
wages and fringe benefits costs are always treated as program costs,
regardless of what function is performed by participants in their
community service assignments. The Department has revised paragraph (b)
accordingly.
One commenter requested relief from cost category restrictions due
to the increased administrative effort required to comply with the
Older Americans Act Amendments of 2000.
The Department agrees with the commenter that the OAA Amendments do
require increased administrative effort. However, the Department cannot
provide relief from the cost category restrictions since they are
established by section 502(c)(3), (c)(4), and (c)(6) of the Act. The
only relief available is the Department's authority, under section
502(c)(3)(b), to increase the administrative cost limitation from 13.5
percent to 15 percent. As stated in the Preamble discussion of Sec.
641.700, the Department will take the possible increased costs of
administering some of the new requirements of the 2000 Amendments into
account in reviewing requests for increases in the administrative cost
limitation. Further, relief from the cost category limitations probably
is unnecessary since the definitions of Administrative Cost and Program
Cost under the 2000 Amendments will result in substantial amounts of
costs that may previously have been charged to the Administrative Cost
cost category being charged to the Program Cost cost category. For
example, costs of assessments, IEP preparation, and related data
collection costs are chargeable to the Program Cost cost category.
What Functions and Activities Constitute Costs of Administration?
(Sec. 641.856)
What Other Special Rules Govern the Classification of Costs as
Administrative Costs or Program Costs? (Sec. 641.859)
Sections 641.856 and 641.859 provided the rules for classifying
costs as either administrative or program costs. One commenter
suggested that the Department insert a new paragraph (c) in Sec.
641.859 which would state: ``All other costs under awards to
subrecipients are program costs except for awards to first tier
subrecipients that have comprehensive responsibilities for SCSEP
program operations in the geographic area covered by their award.'' The
objective of the proposed change was to reflect Congressional intent to
make SCSEP administrative cost standards consistent with the WIA
administrative cost provision at 20 CFR 667.220(a).
Paragraph (c) of Sec. 641.859 was inadvertently omitted from the
NPRM. This paragraph applies the following two criteria to costs
classified as Administrative Cost: (1) The costs must be incurred for
one of the functions listed in Sec. 641.856(b); and (2) the cost must
be incurred by a direct recipient of SCSEP funds, a first-tier
subrecipient (awardee of funds from a direct recipient that has broad
responsibilities for administering SCSEP programs), a recipient of an
award from a direct recipient or a covered first tier subrecipient, or
a vendor which performs administrative functions for recipients or
first tier subrecipients and must be solely for the performance of
administrative functions. This change in Sec. 641.859 makes the
treatment of SCSEP administrative costs consistent with the treatment
of administrative costs under the WIA. Thus, it furthers the
integration of SCSEP activities with WIA One-Stop system activities, as
provided in the 2000 Amendments.
The Department's intent in applying the WIA cost structure to SCSEP
is twofold. First, the Department wants to use the same type of cost
structure for SCSEP as is used for WIA. Both programs offer many of the
same types
[[Page 19047]]
of activity, and many organizations involved in the SCSEP program also
are involved in the WIA program. These organizations benefit from the
use of the same cost structure for both programs due to simplified
accounting and financial reporting. Second, while every organization
incurs what it considers administrative costs, the Department is
interested in measuring only the administrative cost incurred by direct
recipients and subrecipients that have broad responsibilities for
successful program outcomes and that provide a broad range of services
to participants. In the WIA context, States, local workforce areas, and
One-Stop operators incur such costs. In the SCSEP context, direct
grantees and first-tier subrecipients incur such costs. First-tier
subrecipients are subrecipients that conduct three specified SCSEP
program activities for all participants: eligibility determination;
participant assessment; and development of and placement of
participants into community service opportunities. The Department has
determined that subrecipients that perform all of these functions have
approximately the same breadth of responsibilities as WIA local grant
recipients and One-Stop operators. It is therefore appropriate to use
the same special rules for SCSEP administrative costs as for WIA
administrative costs.
In order to effectuate the suggested change, Sec. Sec. 641.856 and
641.859 have been modified. A new paragraph (c) defining first-tier
subrecipient has been added to Sec. 641.856 and the description of
administrative costs in paragraph (a) has been modified to limit its
coverage of subrecipients to first-tier subrecipients. Paragraph (b) of
Sec. 641.859 has been modified to fully describe administrative costs
in terms of what types of entities can incur them and paragraph (e) has
been incorporated in the revised paragraph (b).
Must SCSEP Recipients Provide Funding for the Administrative Costs of
Subrecipients? (Sec. 641.861)
What Functions and Activities Constitute Program Costs? (Sec. 641.864)
Section 641.864 listed some of the activities that are counted as
program costs. We have added language to Sec. 641.864(d) to reflect
the prohibition on stand alone job search assistance and job referral
activities in Sec. 641.535(c).
What Are the Limitations on the Amount of SCSEP Administrative Costs?
(Sec. 641.867)
Under What Circumstances May the Administrative Cost Limitation Be
Increased? (Sec. 641.870)
What Minimum Expenditure Levels Are Required for Participant Wages and
Fringe Benefits? (Sec. 641.873)
Section 641.873 set forth the rule that 75 percent of grant
expenditures must be made for participant wages and fringe benefits and
explained how that rule would be applied. Three commenters took issue
with the requirement that 75 percent of SCSEP funds be expended on
participant wages and fringe benefits. They pointed out that this
requirement makes it more difficult to achieve the Act's objectives
relating to other allowable activities such as training for
unsubsidized employment.
The Act, at section 502(c)(6)(B), requires that 75 percent of funds
be expended on participant wages and fringe benefits. Since the
Department has no discretion to alter this requirement, recipients must
design their SCSEP-funded programs and activities to maximize
coordination with the One-Stop system and other programs that can train
and place SCSEP participants in unsubsidized jobs.
When Will Compliance With Cost Limitations and Minimum Expenditure
Levels Be Determined? (Sec. 641.876)
What Are the Fiscal and Performance Reporting Requirements for
Recipients? (Sec. 641.879)
This section established the reporting requirements for the program
and indicated areas in which the Department may administratively issue
supplemental reporting instructions. Several commenters stated that the
proposed 45 days to submit a final Quarterly Progress Report (QPR) does
not give sufficient time to submit accurate year-end reports, and
suggested that a minimum of 60 to 120 days is needed to account for
final placement, retention, and wage information. One commenter pointed
out that Sec. 641.879 of the proposed regulation and the Preamble
discussing that section are inconsistent; the regulation requires that
final financial and non-financial reports are due within 45 days while
the Preamble states that they are due within 90 days.
The Department concurs with the commenters and the regulation has
been changed to require submission of the QPR and quarterly financial
status reports 30 days after the end of each quarter and final
financial and non-financial reports 90 days after the end of the grant
period.
One commenter noted that the language in paragraph (a) indicating
that data that cannot be validated or verified may be treated as not
reported only applies to the QPR non-financial report and suggested
that it should refer to both performance and financial reports. One
commenter suggested replacing the term ``demographics'' to
``demographic characteristics'' in Sec. 641.879(f).
The Department agrees with the other comments and has incorporated
them into the Final Rule.
What Are the SCSEP Recipient's Responsibilities Relating to Awards to
Subrecipients? (Sec. 641.881)
What Are the Grant Closeout Procedures? (Sec. 641.884)
Subpart I--Grievance Procedures and Appeals Process
What Appeal Process Is Available to an Applicant That Does Not Receive
a Grant? (Sec. 641.900)
In Sec. 641.900, the Department reserved its opportunity to
provide a rule on an administrative appeal process for grantees that do
not receive a grant and asked for advice and guidance on this issue.
The Proposed Rule requested comments on whether there should be an
administrative appeal process and how it should be structured given the
complexities of fashioning a remedy. Additionally, the Department
requested suggestions on how to operate such an appeals process. For
example, could such a SCSEP appeals process be modeled after the
appeals process in the WIA Indian and Native American program? Finally,
the Department sought feedback on whether it should create an appeals
process for one-year grant applicants and 502(e) projects and if so
whether and how such a process should differ from a process established
for multi-year project appeals.
In this section, the Department establishes a formal appeals
process for SCSEP grant applicants that feel they have been
inappropriately denied a grant. This section should be read in
conjunction with Sec. 641.470, ``What happens if an applicant's
application is rejected?''
The Department received several comments on this section. Some
comments suggested procedures for protesting the content or form of a
Solicitation for Grant Applications (SGA) and appeals therein as well
as procedures for protesting the rejection of a grant application and
appeals
[[Page 19048]]
therein. None, however, addressed a separate appeals process for one-
year grant applicants and section 502(e) projects.
The comments suggested that to protest the content of an SGA, a
formal protest be submitted to the Department's Grant Officer by an
interested party or potential grant applicant in a timely manner. The
Grant Officer would be required to make a determination within ten
days, in writing, stating factual findings and conclusions. If the
protesting party found the determination adverse, it may appeal the
determination to the Department's Office of Administrative Law Judge
(ALJ). The ALJ would try to render a decision before the application
submission deadline in order to provide time to implement a remedy.
Remedies would include amendment to the SGA, reissuance of the SGA and/
or extension of the deadline for submission of applications.
The comments also recommended the right to protest the award
decision. To do so, the protesting party would, again, file a protest
with the Grant Officer. Adverse decisions would be appealable to the
ALJ and ultimately to the Department's Administrative Review Board.
The commenters suggested that the initial protest to the Grant
Officer would need to be filed within ten days of the grant decision.
In doing so, the protesting party may request, and receive within five
days, a debriefing about the justification of the grant denial. The
protest must also include a factual basis for the complaint and the
specific issues contested. Furthermore, the protesting party would be
given two working days following the debriefing to amend the protest
document. The Grant Officer would then have thirty days to provide a
determination of the protest. The final determination would contain
findings of fact, conclusions or law, and in the event of an adverse
decision for the protesting party, the Grant Officer would also inform
the party of the opportunity to appeal the Grant Officer's
determination to the ALJ. In the event the Grant Officer or the ALJ
found in favor of the protesting party, the Grant Officer would have
the authority to provide the following remedies: Retroactive award,
reallocation or distribution of authorized positions, resolicitation or
recompetition of the grant funds, or any other appropriate remedy.
The Department has decided not to institute a protest and appeal
procedure for challenges to the SGA. The Department believes that the
process could become too complicated and take too long to be
worthwhile. The absence of a formal appeals process does not preclude
applicants from raising questions about the contents of an SGA nor
preclude the Grant Officer from making changes in response to such
questions.
The Department believes that grant applicants dissatisfied with an
award decision should have the opportunity to protest/appeal the award
decision. The process, which places a strong emphasis on timeliness of
appeals and decisions, will be as follows:
(a) An applicant for financial assistance under title V of the OAA
that is dissatisfied because the Department has issued a determination
not to award financial assistance, in whole or in part, to such
applicant, may request that the Grant Officer provide the reasons for
not awarding financial assistance to that applicant (a debriefing). The
request must be made within 10 days of the date of notification
indicating that the grant would not be awarded. The Grant Officer must
provide the protesting applicant with a debriefing and a written
decision stating the reasons for the decision not to award the grant
within 20 days of receipt of the protest. Applicants may appeal to the
U.S. Department of Labor, Office of Administrative Law Judges, within
21 days of the date of the Grant Officer's notice providing reasons for
not awarding financial assistance. The appeal may be for a part or the
whole of a denial of funding. This appeal will not in any way interfere
with the Department's decisions to fund other organizations to provide
services during the appeal period.
(b) Failure to either request a debriefing within the 10 day
requirement or to file an appeal within 21 days as provided in
paragraph (a) of this section constitutes a waiver of the right to a
hearing.
(c) A request for a hearing under this section must state
specifically those issues in the Grant Officer's notification upon
which review is requested. Those provisions of the Grant Officer's
notification not specified for review, or the entire final
determination when no hearing has been requested within the 21 days,
are considered resolved and not subject to further review.
(d) A request for a hearing must be transmitted by certified mail,
return receipt requested, to the Chief Administrative Law Judge, U.S.
Department of Labor, Suite 400, 800 K Street, NW., Washington, DC
20001, with one copy to the Departmental official who issued the
determination.
(e) The decision of the ALJ constitutes final agency action unless,
within 21 days of the decision, a party dissatisfied with the ALJ's
decision, in whole or in part, has filed a petition for review with the
Administrative Review Board (ARB) (established under Secretary's Order
No. 2-96, published at 61 FR 19978 (May 3, 1996)), specifically
identifying the procedure, fact, law or policy to which exception is
taken. The Department will deem any exception not specifically urged to
have been waived. A copy of the petition for review must be sent to the
opposing party at that time. Thereafter, the decision of the ALJ
constitutes final agency action unless the ARB, within 30 days of the
filing of the petition for review, notifies the parties that the case
has been accepted for review. Any case accepted by the ARB must be
decided within 180 days of acceptance. If not so decided, the decision
of the ALJ constitutes final agency action.
(f) The Rules of Practice and Procedure for Administrative Hearings
Before the Office of Administrative Law Judges, set forth at 29 CFR
part 18, govern the conduct of hearings under this section, except
that:
(1) The appeal is not considered as a complaint; and
(2) Technical rules of evidence, such as the Federal Rules of
Evidence and subpart B of 29 CFR part 18, will not apply to any hearing
conducted under this section. However, rules designed to assure
production of the most credible evidence available and to subject
testimony to test by cross-examination will be applied when the
Administrative Law Judge conducting the hearing considers them
reasonably necessary. The certified copy of the administrative file
transmitted to the Administrative Law Judge by the official issuing the
final determination must be part of the evidentiary record of the case
and need not be moved into evidence.
(g) The Administrative Law Judge should render a written decision
no later than 90 days after the closing of the record.
(h) The remedies available are provided in Sec. 641.470.
(i) This section only applies to multi-year grant awards.
The Department does not believe that there is a generally effective
way to provide an appeal for a single-year award because of the time it
takes to perfect and try a case, and the time it takes to effectuate a
remedy. However, such appellants protest basic review of the
Department's decision in Federal District Court.
[[Page 19049]]
What Grievance Procedures Must Grantees Make Available to Applicants,
Employees, and Participants? (Sec. 641.910)
In Sec. 641.910, the Department required State and national
grantees to establish grievance procedures for handling employee,
participant, and applicant complaints. These procedures must be
described in the grant agreement. Paragraph (c) allowed complaints that
a grantee had not complied with applicable Federal laws to be filed
with the Department if these grievances are not resolved within 60 days
under the grantee's procedures. Paragraph (d) provided special
procedures for complaints of discrimination under title VI of the Civil
Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, and
where applicable, the WIA.
The Department received several comments on this section. Two
comments suggested that the section, in general, be reorganized and
that the appeal process for participants should actually be moved to
Sec. 641.580, which addresses the termination of participants. The
commenter then asserted that the ``grantee appeal process'' could
remain listed in Sec. 641.910. The commenter also suggested that the
term ``employees'' be deleted from the section.
One comment suggested concern about language in Sec. 641.910(d),
which states, ``[Q]uestions about or complaints alleging discrimination
may be directed or mailed to CRC.'' The commenter asserted that this
language may be misinterpreted as signifying that all discrimination
complaints must be filed with CRC, when in fact, under the WIA
nondiscrimination regulations, complainants have the option of filing
at the recipient level. The comment also requested that the language be
amended to state that questions about ``the requirements for complaint-
processing procedures'' may be directed to CRC and that the Preamble
discussion of this paragraph be amended to make this point clear.
We agree and have revised the Final Rule to reflect these
suggestions.
Two commenters questioned the omission of a reference to 29 CFR
part 31 and one of the comments requested that employment
antidiscrimination laws not be applied to SCSEP participants' relations
to grantees because the participants are not employees of the grantees.
Grantees must have grievance procedures in place for resolving
complaints arising between the grantee and its employees, subgrantees,
applicants, or participants in the SCSEP program. There may be separate
grievance processes for applicants and participants and for employees
or subgrantees. A grievance procedure should cover applicants who wish
to dispute a determination of non-eligibility for the SCSEP program and
participants who wish to grieve other complaints with the grantee.
There should also be clear easily understood steps for the applicant/
participant to take in attempting to resolve an issue.
The Department will not investigate a grantee's final determination
regarding a grievance except to determine whether the grantee's
grievance procedures were followed. When the grievance has alleged a
violation of Federal law (other than Federal nondiscrimination law),
and has not been resolved within 60 days under the grantee's grievance
procedures, the grievant may file the grievance with the Department as
described in paragraph (c).
Complaints alleging discrimination under title VI or section 504
must be filed at the Federal level with the Department's Civil Rights
Center (CRC) at the address listed in Sec. 641.910(d). If the grantee
is subject to the WIA nondiscrimination regulations, discrimination
complaints under section 188 of WIA may be filed either with the
grantee or directly with CRC. The grantee may attempt to resolve
discrimination complaints by using the same procedures it uses to
process grievances, if those procedures meet the requirements in 29 CFR
37.70 and 37.80. In such cases, if the complaint is not resolved to the
complainant's satisfaction at the grantee level, the complainant may
refile the complaint with CRC. Questions about grantee-level complaint-
processing procedures may also be addressed to CRC.
The nondiscrimination provisions of 29 CFR parts 31, 32 and 37
apply to the relationship of grantees and participants whether or not
the participants are considered employees of the grantees. As
recipients of Federal financial assistance, grantees assume the
obligation not to discriminate against participants.
What Actions of the Department May a Grantee Appeal and What Procedures
Apply to Those Appeals? (Sec. 641.920)
In Sec. 641.920, the Department prescribed rules for appealing
certain grant decisions and the rules of procedure and timing of
decisions for the Office of the Administrative Law Judge hearings. This
section should be read in conjunction with the rule established in
Sec. 641.900--``What appeal process is available to an applicant that
does not receive a grant?''
The Department received a few comments on this section. Some
comments overlapped with the comments on Sec. 641.900 in that they
focus on the protest and appeal of Solicitation of Grant Application
terms and grant decisions, specifically the denial of grant
applications. Others proposed a procedure for protesting and appealing
decisions about the grant and suggested procedures for such appeals.
The comments suggested the following procedure:
Within 21 days of receipt of the final determination, an applicant
may appeal a Grant Officer's decision by requesting a hearing before
the OALJ. Such a hearing shall be requested in writing and transmitted
by certified mail, return receipt requested, to the Chief
Administrative Law Judge, United States Department of Labor, with a
copy to the Grant Officer.
(i) Failure to request a hearing within 21 days of receipt of the
final determination constitutes the waiver of a right to a hearing.
(ii) A request for a hearing under this section must state
specifically those issues in the final determination upon which review
is requested. Those provisions of the final determination not specified
for review are considered resolved and not subject to further review.
(iii) The rules of practice and procedure promulgated by the OALJ
govern the conduct of hearings under this section.
(iv) In ordering relief, the ALJ may provide remedies and other
redress with the full authority of the Secretary under the Act.
(v) The ALJ should render a written decision within 60 days
following the closing of the record. The ALJ's decision constitutes a
final agency action unless a petition for review by the ARB is properly
made within 21 days thereof, specifically identifying the procedure,
fact, law or policy to which exception is taken.
The ALJ's decision will not constitute a final agency action if the
ARB, within 15 days of the filing of a petition for review, notifies
the interested parties that the case has been accepted for review. Any
case accepted by the ARB must be decided within 60 days of acceptance.
If not so decided, the decision of the ALJ constitutes final agency
action under the Administrative Procedure Act (APA).
The ALJ's decision with regard to grant decision protests shall be
reviewable at the discretion of the Secretary who may issue a final
order on the contested matter.
[[Page 19050]]
Regarding other legal remedies, a party to a proceeding which
resulted in a final agency action either by ARB decision or Secretary's
final order may either pursue an appeal to the United States Court of
Appeals having jurisdiction over the applicant by filing a review
petition with in 30 days thereof; or in the alternative, a party to a
proceeding resulting in final agency action may seek de novo review of
the ARB decision or Secretary's final order in an appropriate district
court. Nothing contained in this section prejudices the separate
exercise of other legal rights in pursuit of other available remedies
and sanctions.
The commenters' suggestions generally parallel the proposed
regulation, with some difference in time limits. We have retained the
proposed regulation as written but have added the imposition of
sanctions as a ground for appeal and have accepted the commenters'
suggestion to specify the ALJ's authority to order relief. We did not
adopt the commenters' suggestion to create a protest procedure. The
kinds of decisions that are appealable under this section are those in
which written final determinations are routinely made, obviating the
need for an additional procedural layer. We did not adopt the
commenters' suggestion that the OALJ's rules of practice and procedure
be adopted without exceptions. We have found that the two exceptions
listed in the Proposed Rule in Sec. 641.920(c)(3) have worked well in
other Department programs, making the hearing process less formal. We
did not adopt the suggestion that appears to create a second level of
discretionary review by the Secretary. The Secretary has delegated her
review authority to the ARB, making that suggestion redundant. We did
not adopt the suggestion on appeal rights because it misstates the
rights available. Since, unlike WIA, the OAA does not provide for
review in the Court of Appeals, the only available avenue for review
would be in the District Courts under the APA. The standard of review
under the APA is whether the agency action was arbitrary, capricious or
otherwise not in accordance with law. It is not a de novo review.
Is There an Alternative Dispute Resolution Process That May Be Used in
Place of an ALJ Hearing? (Sec. 641.930)
In Sec. 641.930, the Department provided for an alternative
dispute resolution system in lieu of requesting a hearing with an ALJ.
Any decision rendered through this process would be considered a final
determination.
The Department received several comments on this section. The
commenters made three suggestions for changes to the rule.
First, the commenters suggested that a written decision should be
issued within 30 days, not 60. Second, the commenters suggested that
any waiver to an administrative hearing should be revoked or become
void if a settlement has not been reached or a decision has not been
issued within 30 days. Finally, the commenters suggested that any final
decision reached through this informal process be treated as a decision
from an ALJ and that it be appealed accordingly.
Considering the amount of time it necessarily takes to prepare and
present arguments and for the mediator to evaluate evidence and
arguments, the Department believes that 60 days for the issuance of a
decision in an alternative dispute resolution case is a reasonable time
limit. Since we have decided to retain the 60-day time limit for
resolution, the time for automatic revocation of the election to use
alternative dispute resolution also needs to remain at 60 days. The
Proposed Rule already provided that the decision in the alternative
dispute resolution procedure would be treated as a final decision of
the ALJ, and would constitute final agency action. The Department
believes that not having a decision in the alternate dispute resolution
procedures be appealable is consistent with the intent of alternate
dispute resolution to create quick and inexpensive ways to resolve
disputes and is more consistent with the deference that is given to
arbitral and other alternate dispute resolution decisions.
A commenter requested that the reference to ``641.920'' in
paragraph (a) be amended to ``641.920(a).''
We agree with the commenter that the regulation should make clear
that the complaints involving discrimination are not subject to this
alternate dispute resolution process. We have revised the regulation to
change the reference to Sec. 641.920 to Sec. 641.920(a), (c), and
(d).
Section 641.630(b) has been revised to provide an option for the
parties to agree, in writing, to extend the alternative dispute
resolution period.
IV. Administrative Information
A. Paperwork Reduction Act
Under the Paperwork Reduction Act, information collection
requirements, which must be imposed as a result of this regulation have
been submitted to the Office of Management and Budget. Public reporting
burden for the collection of information is estimated to average 55
hours per response, including the time for reviewing instructions,
searching existing data sources, gathering and maintaining the data
needed, and completing and reviewing the collection of information. The
required reports described at Sec. 641.879 are as follows: the
Quarterly and Final Progress Report, the Quarterly and Final Financial
Status Report, the Quarterly Report of Federal Cash Transaction, the
Annual Equitable Distribution Report; a 502(e) Activity Report; reports
related to the Common Performance Measure; and reports related to
demographic characteristics.
Send comments regarding this burden estimate or any other aspect of
this collection of information, including suggestions for reducing this
burden, to the Office of Management and Budget, Paperwork Reduction
Project (1205-0040), Washington, DC 20503: Attention: Desk Officer for
Employment and Training Administration.
B. Executive Order 13132 (Federalism)
The Employment and Training Administration (ETA) has reviewed this
rule in accordance with Executive Order 13132 on Federalism, and has
determined that it does not have ``Federalism implications.'' A rule
has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on them. We have analyzed this rule under
that Order and have determined that it does not have implications for
federalism. The rule establishes the administrative requirements for
the Senior Community Service Employment Program, a grant program to
assist older workers. The rule includes the process for applying for
and receiving federal grants. If a State chooses to participate in the
program, it receives grant funds from ETA for the cost of the program.
The rule involves no preemption of State law nor does it limit State
policymaking discretion.
After the enactment of the 2000 Amendments to the OAA, the
Department consulted with public interest groups and intergovernmental
groups on the development of regulations necessary to implement the
amendments to the OAA. Included in the consultation process were the
Intergovernmental Organizations; interested individuals; and
representatives of the grantee community, including State
representatives and representatives from the U.S. Forest Service;
National Senior Citizens Education and Research Center;
[[Page 19051]]
National Council on the Aging; AARP Foundation; Green Thumb, Inc.;
National Urban League, Inc.; National Center and Caucus for the Black
Aged, Inc.; Asociacion Nacional Por Personas Mayores; National Asian
Pacific Center on Aging; and National Indian Council on Aging.
C. Regulatory Flexibility and Regulatory Impact Analysis, SBREFA;
Family Well-Being
The Regulatory Flexibility Act (5 U.S.C. Chapter 6) requires the
Federal government to anticipate and reduce the impact of rules and
paperwork requirements on small businesses and other small entities.
``Small entities'' are defined as small businesses (those with fewer
than 500 employees, except where otherwise provided) and small non-
profit organizations (those with fewer than 500 employees, except where
otherwise provided) and small governmental entities (those in areas
with fewer than 50,000 residents). This rule will affect primarily the
50 States, the District of Columbia, and certain Territories; however,
it affects those national organizations and host agencies that have
fewer than 500 employees. As described in this Preamble, ETA has taken
a variety of measures to consult with grant recipients of this program.
The Department has assessed the potential impact of the Proposed Rule
in order to identify any areas of concern. Based on that assessment,
the Department certifies that these rules, as promulgated, will not
have a significant impact on a substantial number of small entities.
In addition, under the Small Business Regulatory Enforcement
Fairness Act (SBREFA) (5 U.S.C. Chapter 8), the Department has
determined that these are not ``major rules,'' as defined in 5 U.S.C.
804(s). While these rules govern the distribution and administration of
funds appropriated by Congress, the rules themselves do not result in
an annual effect on the economy of $100,000,000 or more; a major
increase in costs or prices for consumers, individual industries,
Federal, state, or local government agencies, or geographic regions; or
significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
enterprises. Accordingly, under the Small Business Regulatory
Enforcement Fairness Act (SBREFA) (5 U.S.C. Chapter 8), the Department
has determined that these are not ``major rules,'' as defined in 5
U.S.C. 804(2).
The Department certifies that the rule has been assessed in
accordance with Public Law 105-277, 112 Stat. 2681, for its effect on
family well-being. The purpose of SCSEP is to provide community service
activities and employment opportunities to individuals age 55 and over
who are low income and have poor employment prospects. This program is
designed at the State and local level to fulfill this purpose with the
effect of enhancing family well-being through increased skills and
earnings and to promote self-sufficiency for older individuals.
D. Executive Order 12866
Executive Order 12866 requires that regulations be drafted to
ensure that they are consistent with the priorities and principles set
forth in the Executive Order. The Department has determined that these
rules are consistent with these priorities and principles. This
rulemaking implements statutory authority based on broad consultation
and coordination. It reflects the Department's response to suggestions
received in writing and through work groups.
To a considerable degree, these rules reflect the suggestions
received. They also reflect the intent of the Act to improve the SCSEP
by integrating SCSEP into the One-Stop Delivery System and improving
the performance of the grantee community. The Department has determined
that the rule will not have an adverse effect in a material way on the
nation's economy.
However, this rule is a significant regulatory action under section
(3)(f)(1) of Executive Order 12866 because it includes many provisions
that are new to SCSEP and, therefore, the rule has been reviewed by OMB
in accordance with that Order.
E. Executive Order 13211 (Energy Effects)
Executive Order 13211 requires all agencies to provide a Statement
of Energy Effects for regulatory actions that effect energy supply,
energy distribution, or energy use. The Department has analyzed this
rule and determined that it is not a ``significant energy action''
under that order because it is not a ``significant regulatory action''
under Executive Order 12866 and is not likely to have a significant
adverse effect on the supply, distribution, or use of energy. It has
not been designated by the Administrator of the Office of Information
and Regulatory Affairs as a significant energy action. Therefore, this
rule does not require a Statement of Energy Effects under Executive
Order 13211.
F. Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1501 et seq.) requires that a covered agency prepare a budgetary impact
statement before promulgating a rule that includes any Federal mandate
that may result in the expenditure by State, local, and tribal
governments, in the aggregate, or by the private sector, of $100
million or more in any one year.
The Department has determined that the Final Rule will not require
the expenditure by State, local, or Tribal governments, in the
aggregate, or by the private sector, of more than $100 million in any
one year. Accordingly, the Department has not prepared a budgetary
impact statement specifically addressing the regulatory alternatives
considered, or prepared a plan for informing and advising any
significantly or uniquely affected small government.
G. Executive Order 12988 (Civil Justice Reform)
The Department drafted and reviewed this rule according to
Executive Order 12988, and determined that it will not unduly burden
the Federal court system. The rule has been written to minimize
litigation and provide a clear legal standard for affected conduct, and
has been reviewed carefully to eliminate drafting errors and
ambiguities.
H. Executive Order 13175 (Tribal Summary Impact Statement)
Executive Order 13175 requires consultation and coordination with
Indian Tribal Governments and also requires a Tribal summary impact
statement in the Preamble of regulation, which describes the extent of
the agency's prior consultation with Tribal officials, a summary of
nature of their concerns and the agency's position supporting the need
to issue the regulation, and a statement of the extent to which the
concerns of Tribal officials have been met. The Department has reviewed
this regulation for Tribal impact and has determined that no provision
preempts Tribal law or the ability of Tribes to self-govern.
Signed at Washington, DC, this 25th day of March, 2004.
Emily Stover DeRocco,
Assistant Secretary, Employment and Training Administration.
0
For the reasons stated in the Preamble, 20 CFR part 641 is revised to
read as follows:
[[Page 19052]]
PART 641--PROVISIONS GOVERNING THE SENIOR COMMUNITY SERVICE
EMPLOYMENT PROGRAM
Subpart A--Purpose and Definitions
Sec.
641.100 What does this part cover?
641.110 What is the SCSEP?
641.120 What are the purposes of the SCSEP?
641.130 What is the scope of this part?
641.140 What definitions apply to this part?
Subpart B--Coordination with the Workforce Investment Act
641.200 What is the relationship between the SCSEP and the Workforce
Investment Act?
641.210 What services, in addition to the applicable core services,
must SCSEP grantees provide through the One-Stop Delivery System?
641.220 Does title I of WIA require the SCSEP to use OAA funds for
individuals who are not eligible for SCSEP services or for services
that are not authorized under the OAA?
641.230 Must the individual assessment conducted by the SCSEP
grantee and the assessment performed by the One-Stop Delivery System
be accepted for use by either entity to determine the individual's
need for services in the SCSEP and adult programs under title IB of
WIA?
641.240 Are SCSEP participants eligible for intensive and training
services under title I of WIA?
Subpart C--The State Senior Employment Services Coordination Plan
641.300 What is the State Plan?
641.305 Who is responsible for developing and submitting the State
Plan?
641.310 May the Governor delegate responsibility for developing and
submitting the State Plan?
641.315 Who participates in developing the State Plan?
641.320 Must all national grantees operating within a State
participate in the State planning process?
641.325 What information must be provided in the State Plan?
641.330 How should the State Plan reflect community service needs?
641.335 How should the Governor address the coordination of SCSEP
services with activities funded under title I of WIA?
641.340 Must the Governor submit a State Plan each year?
641.345 What are the requirements for modifying the State Plan?
641.350 How should public comments be solicited and collected?
641.355 Who may comment on the State Plan?
641.360 How does the State Plan relate to the equitable distribution
(ED) report?
641.365 How must the equitable distribution provisions be reconciled
with the provision that disruptions to current participants should
be avoided?
Subpart D--Grant Application, Eligibility, and Award Requirements
641.400 What entities are eligible to apply to the Department for
funds to administer SCSEP community service projects?
641.410 How does an eligible entity apply?
641.420 What factors will the Department consider in selecting
grantees?
641.430 What are the eligibility criteria that each applicant must
meet?
641.440 What are the responsibility conditions that an applicant
must meet?
641.450 Are there responsibility conditions that alone will
disqualify an applicant?
641.460 How will the Department examine the responsibility of
eligible entities?
641.465 Under what circumstances may the Department reject an
application?
641.470 What happens if an applicant's application is rejected?
641.480 May the Governor make recommendations to the Department on
grant applications?
641.490 When may SCSEP grants be awarded competitively?
Subpart E--Services to Participants
641.500 Who is eligible to participate in the SCSEP?
641.505 When is eligibility determined?
641.507 What types of income are included and excluded for
participant eligibility determinations?
641.510 What happens if a grantee/subgrantee determines that a
participant is no longer eligible for the SCSEP due to an increase
in family income?
641.515 How must grantees/subgrantees recruit and select eligible
individuals for participation in the SCSEP?
641.520 Are there any priorities that grantees/subgrantees must use
in selecting eligible individuals for participation in the SCSEP?
641.525 Are there any other groups of individuals who should be
given special consideration when selecting SCSEP participants?
641.530 Must the grantee/subgrantee always select priority or
preference individuals?
641.535 What services must grantees/subgrantees provide to
participants?
641.540 What types of training may grantees/subgrantees provide to
SCSEP participants?
641.545 What supportive services may grantees/subgrantees provide to
participants?
641.550 What responsibility do grantees/subgrantees have to place
participants in unsubsidized employment?
641.555 What responsibility do grantees have to participants who
have been placed in unsubsidized employment?
641.560 May grantees place participants directly into unsubsidized
employment?
641.565 What policies govern the provision of wages and fringe
benefits to participants?
641.570 Is there a time limit for participation in the program?
641.575 May a grantee establish a limit on the amount of time its
participants may spend at each host agency?
641.580 Under what circumstances may a grantee terminate a
participant?
641.585 Are participants employees of the Federal Government?
641.590 Are participants employees of the grantee, the local project
and/or the host agency?
Subpart F--Private Sector Training Projects Under Section 502(e) of the
OAA
641.600 What is the purpose of the private sector training projects
authorized under section 502(e) of the OAA?
641.610 How are section 502(e) activities administered?
641.620 How may an organization apply for section 502(e) funding?
641.630 What private sector training activities are allowable under
section 502(e)?
641.640 How do the private sector training activities authorized
under section 502(e) differ from other SCSEP activities?
641.650 Does the requirement that not less than 75 percent of the
funds be used to pay participant wages and fringe benefits apply to
section 502(e) activities?
641.660 Who is eligible to participate in section 502(e) private
sector training activities?
641.665 When is eligibility determined?
641.670 May an eligible individual be enrolled simultaneously in
section 502(e) private sector training activities operated by one
grantee and a community service SCSEP project operated by a
different SCSEP grantee?
641.680 How should grantees report on participants who are co-
enrolled?
641.690 How is the performance of section 502(e) grantees measured?
Subpart G--Performance Accountability
641.700 What performance measures apply to SCSEP grantees?
641.710 How are these performance indicators defined?
641.715 What are the common performance measures?
641.720 How do the common performance measures affect grantees and
the OAA performance measures?
641.730 How will the Department set and adjust performance levels?
641.740 How will the Department determine whether a grantee fails,
meets, or exceeds negotiated levels of performance?
641.750 What sanctions will the Department impose if a grantee fails
to meet negotiated levels of performance?
641.760 What sanctions will the Department impose if a national
grantee fails to meet negotiated levels of performance under the
total SCSEP grant?
641.770 What sanctions will the Department impose if a national
grantee fails to meet negotiated levels of performance in any State
it serves?
641.780 When will the Department assess the performance of a
national grantee in a State?
641.790 What sanctions will the Department impose if a State grantee
fails to meet negotiated levels of performance?
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641.795 Will there be incentives for exceeding performance measures?
Subpart H--Administrative Requirements
641.800 What uniform administrative requirements apply to the use of
SCSEP funds?
641.803 What is program income?
641.806 How must SCSEP program income be used?
641.809 What non-Federal share (matching) requirements apply to the
use of SCSEP funds?
641.812 What is the period of availability of SCSEP funds?
641.815 May the period of availability be extended?
641.818 What happens to funds that are unexpended at the end of the
Program Year?
641.821 What audit requirements apply to the use of SCSEP funds?
641.824 What lobbying requirements apply to the use of SCSEP funds?
641.827 What general nondiscrimination requirements apply to the use
of SCSEP funds?
641.833 What policies govern political patronage?
641.836 What policies govern political activities?
641.839 What policies govern union organizing activities?
641.841 What policies govern nepotism?
641.844 What maintenance of effort requirements apply to the use of
SCSEP funds?
641.847 What uniform allowable cost requirements apply to the use of
SCSEP funds?
641.850 Are there other specific allowable and unallowable cost
requirements for the SCSEP?
641.853 How are costs classified?
641.856 What functions and activities constitute costs of
administration?
641.859 What other special rules govern the classification of costs
as administrative costs or program costs?
641.861 Must SCSEP recipients provide funding for the administrative
costs of subrecipients?
641.864 What functions and activities constitute program costs?
641.867 What are the limitations on the amount of SCSEP
administrative costs?
641.870 Under what circumstances may the administrative cost
limitation be increased?
641.873 What minimum expenditure levels are required for participant
wages and fringe benefits?
641.876 When will compliance with cost limitations and minimum
expenditure levels be determined?
641.879 What are the fiscal and performance reporting requirements
for recipients?
641.881 What are the SCSEP recipient's responsibilities relating to
awards to subrecipients?
641.884 What are the grant closeout procedures?
Subpart I--Grievance Procedures and Appeals Process
641.900 What appeal process is available to an applicant that does
not receive a grant?
641.910 What grievance procedures must grantees make available to
applicants, employees, and participants?
641.920 What actions of the Department may a grantee appeal and what
procedures apply to those appeals?
641.930 Is there an alternative dispute resolution process that may
be used in place of an OALJ hearing?
Authority: 42 U.S.C. 3056 et seq.
Subpart A--Purpose and Definitions
Sec. 641.100 What does this part cover?
Part 641 contains the Department of Labor's regulations for the
Senior Community Service Employment Program (SCSEP), authorized under
the title V of the Older Americans Act, 42 U.S.C. 3056 et seq., as
amended by the Older Americans Act Amendments of 2000 (OAA), Public Law
106-501. This part, and other pertinent regulations expressly
incorporated by reference, set forth the regulations applicable to the
SCSEP.
(a) Subpart A of this part contains introductory provisions and
definitions that apply to this part.
(b) Subpart B of this part describes the required relationship
between the OAA and the Workforce Investment Act of 1998 (WIA), 29
U.S.C. 2801 et seq. These provisions discuss the coordinated efforts to
provide services through the integration of the SCSEP within the One-
Stop Delivery System.
(c) Subpart C of this part sets forth the requirements for the
State Senior Employment Services Coordination Plan (State Plan), such
as required coordination efforts, public comments, and equitable
distribution.
(d) Subpart D of this part establishes grant planning and
application requirements, including grantee eligibility, and
responsibility review.
(e) Subpart E of this part details SCSEP participant services.
(f) Subpart F of this part provides the rules for projects designed
to assure second career training and the placement of eligible
individuals into unsubsidized jobs in the private sector.
(g) Subpart G of this part outlines the performance accountability
requirements. This subpart establishes requirements for performance
measures, defines such measures, and establishes corrective actions,
including the imposition of sanctions for failure to meet performance
measures.
(h) Subpart H of this part sets forth the administrative
requirements for SCSEP grants.
(i) Subpart I of this part describes the grievance and appeals
processes and requirements.
Sec. 641.110 What is the SCSEP?
The Senior Community Service Employment Program or the SCSEP is a
program administered by the Department of Labor that serves low-income
persons who are 55 years of age and older and who have poor employment
prospects by placing them in part-time community service positions and
by assisting them to transition to unsubsidized employment.
Sec. 641.120 What are the purposes of the SCSEP?
The purposes of the SCSEP are to foster and promote useful part-
time opportunities in community service activities for unemployed low-
income persons who are 55 years of age or older and who have poor
employment prospects; to foster individual economic self-sufficiency;
and to increase the number of older persons who may enjoy the benefits
of unsubsidized employment in both the public and private sectors.
Sec. 641.130 What is the scope of this part?
The regulations in this part address the requirements that apply to
the SCSEP. More detailed policies and procedures are contained in
administrative guidelines issued by the Department. Throughout this
part, phrases such as, ``according to instructions (procedures) issued
by the Department'' or ``additional guidance will be provided through
administrative issuance'' refer to the SCSEP Bulletins, technical
assistance guides, and other SCSEP directives.
Sec. 641.140 What definitions apply to this part?
The following definitions apply to this part:
Authorized position level means the number of SCSEP enrollment
opportunities that can be supported for a 12-month period based on the
average national unit cost. The authorized position level is derived by
dividing the total amount of funds appropriated for a Program Year by
the national average unit cost per participant for that Program Year as
determined by the Department. The national average unit cost includes
all costs of administration, other participant costs, and participant
wage and fringe benefit costs as defined in section 506(g) of the OAA.
A grantee's total award is divided by the national unit cost to
determine the authorized position level for each grant agreement.
[[Page 19054]]
Co-enrollment applies to any individual who meets the
qualifications for SCSEP participation as well as the qualifications
for any other relevant program as defined in the Individual Employment
Plan.
Community service includes, but is not limited to, social, health,
welfare, and educational services (including literacy tutoring); legal
assistance, and other counseling services, including tax counseling and
assistance and financial counseling; library, recreational, and other
similar services; conservation, maintenance, or restoration of natural
resources; community betterment or beautification; anti-pollution and
environmental quality efforts; weatherization activities; and economic
development. (OAA sec. 516(1)).
Core Services means those services described in section 134(d)(2)
of WIA.
Department or DOL means the United States Department of Labor,
including its agencies and organizational units.
Disability is defined at section 101(8) of the OAA as follows: a
disability attributable to mental or physical impairment, or a
combination of mental and physical impairments, that results in
substantial functional limitations in one or more of the following
areas of major life activity: (A) Self-care, (B) receptive and
expressive language, (C) learning, (D) mobility, (E) self-direction,
(F) capacity for independent living, (G) economic self-sufficiency, (H)
cognitive functioning, and (I) emotional adjustment.
Equitable distribution report means a report based on the latest
available Census data, which lists the optimum number of participant
positions in each designated area in the State, and the number of
authorized participant positions each grantee serves in that area,
taking the needs of underserved counties into account. This report
provides a basis for improving the distribution of SCSEP positions.
Grant period means the time period between the effective date of
the grant award and the ending date of the award, which includes any
modifications extending the period of performance, whether by the
Department's exercise of options contained in the grant agreement or
otherwise. Also referred to as ``project period'' or ``award period.''
Grantee means an entity receiving financial assistance directly
from the Department to carry out SCSEP activities. The grantee is the
legal entity that receives the award and is legally responsible for
carrying out the SCSEP, even if only a particular component of the
entity is designated in the grant award document. Grantees include
States, Tribal organizations, territories, public and private nonprofit
organizations, agencies of a State government or a political
subdivision of a State, or a combination of such political subdivisions
that receive SCSEP grants from the Department. (OAA sec. 502). In the
case of the section 502(e) projects, grantee may be used to include
private business concerns. As used here, ``grantees'' include
``grantees'' as defined in 29 CFR 97.3 and ``recipients'' as defined in
29 CFR 95.2(g).
Greatest economic need means the need resulting from an income
level at or below the poverty guidelines established by the Department
of Health and Human Services and approved by the Office of Management
and Budget. (OAA sec. 101(27)).
Greatest social need means the need caused by non-economic factors,
which include: physical and mental disabilities; language barriers; and
cultural, social, or geographical isolation, including isolation caused
by racial or ethnic status that restricts the ability of an individual
to perform normal daily tasks, or threatens the capacity of the
individual to live independently. (OAA sec. 101(28)).
Host agency means a public agency or a private nonprofit
organization exempt from taxation under the provisions of section
501(c)(3) of the Internal Revenue Code of 1986, other than a political
party, which provides a work site and supervision for one or more
participants. (See also OAA sec. 502(b)(1)(C)). A host agency may be a
religious organization as long as the projects do not involve the
construction, operation, or maintenance of any facility used or to be
used as a place for religious instruction or worship.
Indian means a person who is a member of an Indian Tribe. (OAA sec.
101(5)).
Indian Tribe means any Tribe, band, nation, or other organized
group or community of Indians (including Alaska Native village or
regional or village corporation as defined in or established pursuant
to the Alaska Native Claims Settlement Act) which:
(1) Is recognized as eligible for the special programs and services
provided by the United States to Indians because of their status as
Indians; or
(2) Is located on, or in proximity to, a Federal or State
reservation or rancheria. (OAA sec. 101(6)).
Individual employment plan or IEP means a plan for a participant
that includes an employment goal, achievement of objectives, and
appropriate sequence of services for the participant based on an
assessment conducted by the grantee or subgrantee and jointly agreed
upon by the participant. (OAA sec. 502(b)(1)(N)).
Intensive services means those services authorized by section
134(d)(3) of the Workforce Investment Act.
Jobs for Veterans Act means the program established in section 2 of
Public Law 107-288 (2002) (38 U.S.C. 4215), that provides a priority
for veterans and the spouse of a veteran who died in a service-
connected disability, the spouse of a member of the Armed Forces on
active duty who has been listed for a total of more than 90 days as
missing in action, captured in the line of duty by a hostile force, or
forcibly detained by a foreign government or power, the spouse of any
veteran who has a total disability resulting from a service-connected
disability, and the spouse of any veteran who died while a disability
so evaluated was in existence, who meet program eligibility
requirements to receive services in any Department of Labor-funded
workforce development program.
Local Workforce Investment Area or local area means an area
established by the Governor of a State under section 116 of the
Workforce Investment Act.
Local Board means a Local Workforce Investment Board established
under section 117 of the Workforce Investment Act.
National grantee means Federal public agencies and organizations,
private nonprofit agencies and organizations, or Tribal organizations
that operate under title V of the OAA that are capable of administering
multi-State projects under a national grant from the Department. (See
OAA sec. 506(g)(5)).
OAA means the Older Americans Act as amended by the Older Americans
Act Amendments of 2000 (Pub. L. 106-501; 42 U.S.C. 3056 et seq.).
One-Stop Center means the One-Stop Center system in a WIA Local
Area which must include a comprehensive One-Stop Center through which
One-Stop partners provide applicable core services and which provides
access to other programs and services carried out by the One-Stop
partners. (See WIA sec. 134(c)(2)).
One-Stop Delivery System means a system under which employment and
training programs, services, and activities are available through a
network of eligible One-Stop partners, which assures that information
about and access to core services is available regardless of where the
individuals initially enter the statewide workforce investment system.
(WIA sec. 134(c)(2)).
One-Stop partner means an entity described in section 121(b)(1) of
the
[[Page 19055]]
Workforce Investment Act; i.e., required partners, and an entity
described in section 121(b)(2) of the Workforce Investment Act, i.e.,
additional partners.
Other participant (enrollee) cost means the cost of participant
training, including the payment of reasonable costs to instructors,
classroom rental, training supplies, materials, equipment, and tuition,
and which may be provided on the job or in conjunction with a community
service assignment, in a classroom setting, or under other appropriate
arrangements; job placement assistance, including job development and
job search assistance; participant supportive services to assist a
participant to successfully participate in a project, including the
payment of reasonable costs of transportation, health care and medical
services, special job-related or personal counseling, incidentals (such
as work shoes, badges, uniforms, eyeglasses, and tools), child and
adult care, temporary shelter, and follow-up services; and outreach,
recruitment and selection, intake orientation, and assessments. (OAA
sec. 502(c)(6)(A)).
Participant means an individual who is eligible for the SCSEP, has
been enrolled and is receiving services as prescribed under subpart E
of this part.
Placement into public or private unsubsidized employment means
full- or part-time paid employment in the public or private sector by a
participant for 30 days within a 90-day period without the use of funds
under title V or any other Federal or State employment subsidy program,
or the equivalent of such employment as measured by the earnings of a
participant through the use of wage records or other appropriate
methods. (OAA sec. 513(c)(2)(A)).
Poor employment prospects means the likelihood that an individual
will not obtain employment without the assistance of the SCSEP or any
other workforce development program. Persons with poor employment
prospects include, but are not limited to, those without a substantial
employment history, basic skills, and/or English-language proficiency;
displaced homemakers, school dropouts, persons with disabilities,
including disabled veterans, homeless individuals, and individuals
residing in socially and economically isolated rural or urban areas
where employment opportunities are limited.
Program year means the one-year period beginning July 1 and ending
on June 30. (OAA sec. 515(b)).
Project means an undertaking by a grantee or subgrantee according
to a grant agreement that provides community service, training, and
employment opportunities to eligible individuals in a particular
location within a State.
Recipient means grantee. As used here, ``recipients'' include
``recipients'' as defined in 29 CFR 95.2(g) and ``grantees'' as defined
in 29 CFR 97.3.
Residence means an individual's declared dwelling place or address
as demonstrated by appropriate documentation.
Retention in public or private unsubsidized employment means full-
or part-time paid employment in the public or private sector by a
participant for 6 months after the starting date of placement into
unsubsidized employment without the use of funds under title V or any
other Federal or State employment subsidy program. (OAA sec.
513(c)(2)(B)).
SCSEP means the Senior Community Service Employment Program
authorized under title V of the OAA.
Service area means the geographic area served by a local SCSEP
project.
State Workforce Agency means the State agency that administers the
State Wagner-Peyser program.
State Board means a State Workforce Investment Board established
under section 111 of the Workforce Investment Act.
State grantee means the entity designated by the Governor to enter
into a grant with the Department to administer a State or territory
SCSEP project under the OAA. Except as applied to funding distributions
under section 506 of the OAA, this definition applies to the 50 States,
Puerto Rico, the District of Columbia and the following territories:
Guam, American Samoa, U.S. Virgin Islands, and the Commonwealth of the
Northern Mariana Islands.
State Plan means the State Senior Employment Services Coordination
Plan required under section 503(a) of the OAA.
Subgrantee means the legal entity to which a subaward of financial
assistance, which may include a subcontract, is made by the grantee (or
by a higher tier subgrantee or recipient), and that is accountable to
the grantee for the use of the funds provided. As used here,
``subgrantee'' includes ``subgrantees'' as defined in 29 CFR 97.3 and
``subrecipients'' as defined in 29 CFR 95.2(kk).
Subrecipient means a subgrantee.
Title V of the OAA means 42 U.S.C. 3056 et seq. or title V of
Public Law 106-501.
Training services means those services authorized by section
134(d)(4) of the Workforce Investment Act.
Tribal organization means the recognized governing body of any
Indian Tribe, or any legally established organization of Indians which
is controlled, sanctioned, or chartered by such governing body. (OAA
sec. 101(7)).
Workforce Investment Act or WIA means the Workforce Investment Act
of 1998 (Public Law 105-220--Aug. 7, 1998; 112 Stat. 936); 29 U.S.C.
2801 et seq.
Workforce Investment Act regulations or WIA regulations means
regulations at 20 CFR part 652 and parts 660-671.
Subpart B--Coordination with the Workforce Investment Act
Sec. 641.200 What is the relationship between the SCSEP and the
Workforce Investment Act?
The SCSEP is a required partner under the Workforce Investment Act.
As such, it is a part of the One-Stop Delivery System. SCSEP grantees
are required to follow all applicable rules under WIA and its
regulations. (WIA section 121(b)(1)(B)(vi) (29 U.S.C.
2841(b)(1)(B)(vi)) and the 29 CFR part 662 subpart B (Sec. Sec.
662.200 through 662.280))
Sec. 641.210 What services, in addition to the applicable core
services, must SCSEP grantees provide through the One-Stop Delivery
System?
In addition to providing core services, SCSEP grantees must make
arrangements through the One-Stop Delivery System to provide eligible
and ineligible individuals with access to other activities and programs
carried out by other One-Stop partners.
Sec. 641.220 Does title I of WIA require the SCSEP to use OAA funds
for individuals who are not eligible for SCSEP services or for services
that are not authorized under the OAA?
No, SCSEP requirements continue to apply. Title V resources may
only be used to provide title V services to title V-eligible
individuals. The Workforce Investment Act creates a seamless service
delivery system for individuals seeking workforce development services
by linking the One-Stop partners in the One-Stop Delivery System.
Although the overall effect is to provide universal access to core
services, SCSEP resources may only be used to provide services that are
authorized and provided under the SCSEP to eligible individuals. Title
V funds can be used to pay wages to SCSEP participants receiving
intensive and training services under title I of WIA provided that the
SCSEP participants are functioning in a community service assignment.
All other individuals who are in need of the
[[Page 19056]]
services provided under the SCSEP, but who do not meet the eligibility
criteria to enroll in the SCSEP, should be referred to or enrolled in
WIA or other appropriate partner programs. (WIA sec. 121(b)(1)). These
arrangements should be negotiated in the MOU.
Sec. 641.230 Must the individual assessment conducted by the SCSEP
grantee and the assessment performed by the One-Stop Delivery System be
accepted for use by either entity to determine the individual's need
for services in the SCSEP and adult programs under title IB of WIA?
Yes, section 502(b)(4) of the OAA provides that an assessment or
IEP completed by the SCSEP satisfies any condition for an assessment,
service strategy, or IEP completed at the One-Stop and vice-versa.
These reciprocal arrangements and the contents of the SCSEP IEP and WIA
IEP should be negotiated in the MOU. (OAA sec. 502(b)(4)).
Sec. 641.240 Are SCSEP participants eligible for intensive and
training services under title I of WIA?
(a) Yes, although SCSEP participants are not automatically eligible
for intensive and training services under title I of WIA, Local Boards
may deem SCSEP participants, either individually or as a group, as
satisfying the requirements for receiving adult intensive and training
services under title I of WIA.
(b) SCSEP participants who have been assessed through an SCSEP IEP
have received an intensive service according to 20 CFR 663.240(a) of
the WIA regulations. SCSEP participants who seek unsubsidized
employment as part of their SCSEP IEP, may require training to meet
their objectives. The SCSEP grantee/subgrantee, the host agency, the
WIA program, or another One-Stop partner may provide training as
appropriate and as negotiated in the MOU.
(c) The SCSEP provides opportunities for eligible individuals to
engage in part-time community service activities for which they are
compensated. These assignments are analogous to work experience
activities or intensive service under 20 CFR 663.200 of the WIA
regulations.
(d) SCSEP participants may be paid wages while receiving intensive
or training services provided that the participant is functioning in a
community service assignment.
Subpart C--The State Senior Employment Services Coordination Plan
Sec. 641.300 What is the State Plan?
The State Senior Employment Services Coordination Plan (the State
Plan) is a plan, submitted by the Governor in each State, as an
independent document or as part of the WIA Unified Plan, that describes
the planning and implementation process for SCSEP services in the
State, taking into account the relative distribution of eligible
individuals and employment opportunities within the State. The State
Plan is intended to foster coordination among the various SCSEP
grantees operating within the State and to facilitate the efforts of
stakeholders, including State and Local Boards under WIA, to work
collaboratively through a participatory process to accomplish the SCSEP
program's goals. (OAA sec. 503(a)(1)). The State Plan provisions are
listed at proposed Sec. 641.325.
Sec. 641.305 Who is responsible for developing and submitting the
State Plan?
The Governor of each State is responsible for developing and
submitting the State Plan to the Department.
Sec. 641.310 May the Governor delegate responsibility for developing
and submitting the State Plan?
Yes, the Governor may delegate responsibility for developing and
submitting the State Plan, provided that any such delegation is
consistent with State law and regulations. To delegate responsibility,
the Governor must submit to the Department a signed statement
indicating the individual and/or organization that will be submitting
the State Plan on his or her behalf.
Sec. 641.315 Who participates in developing the State Plan?
(a) In developing the State Plan the Governor must obtain the
advice and recommendations of representatives from:
(1) The State and Area Agencies on Aging;
(2) State and Local Boards under the Workforce Investment Act
(WIA);
(3) Public and private nonprofit agencies and organizations
providing employment services, including each grantee operating an
SCSEP project within the State, except as provided for in Sec.
641.320(b);
(4) Social service organizations providing services to older
individuals;
(5) Grantees under title III of the OAA;
(6) Affected communities;
(7) Underserved older individuals;
(8) Community-based organizations serving older individuals;
(9) Business organizations; and
(10) Labor organizations.
(b) The Governor may also obtain the advice and recommendations of
other interested organizations and individuals, including SCSEP program
participants, in developing the State Plan. (OAA sec. 503(a)(2)).
Sec. 641.320 Must all national grantees operating within a State
participate in the State planning process?
(a) Yes, although section 503(a)(2) requires the Governor to obtain
the advice and recommendations of SCSEP national grantees with no
reciprocal provision requiring the national grantees to participate in
the State planning process, the eligibility provision at section
514(c)(5) requires grantees to coordinate with other organizations at
the State and local level. Therefore, any national grantee that does
not participate in the State planning process may be deemed ineligible
to receive SCSEP funds in the following Program Year.
(b) National grantees serving older American Indians are exempted
from participating in the planning requirements under section 503(a)(8)
of the OAA. These national grantees may choose not to participate in
the State planning process, however, the Department encourages
participation. If a national grantee serving older American Indians
does not participate in the State planning process, it must describe
its plans for serving older American Indians in its application for
SCSEP grant funds.
Sec. 641.325 What information must be provided in the State Plan?
The Department issues instructions detailing the information that
must be provided in the State Plan. At a minimum, the State Plan must
include information on the following:
(a) The ratio of eligible individuals in each service area to the
total eligible population in the State;
(b) The relative distribution of:
(1) Eligible individuals residing in urban and rural areas within
the State;
(2) Eligible individuals who have the greatest economic need;
(3) Eligible individuals who are minorities; and
(4) Eligible individuals who have the greatest social need;
(c) The employment situations and the types of skills possessed by
eligible individuals;
(d) The localities and populations for which community service
projects of the type authorized by title V are most needed;
[[Page 19057]]
(e) Actions taken or planned to coordinate activities of SCSEP
grantees with the activities being carried out in the State under title
I of WIA;
(f) A description of the State's procedures and time line for
ensuring an open and inclusive planning process that provides
meaningful opportunity for public comment;
(g) Public comments received, and a summary of the comments;
(h) A description of the steps taken to avoid disruptions to the
greatest extent possible (see Sec. 641.365); and
(i) Such other information as the Department may require in the
State Plan instructions. (OAA sec. 503(a)(3)-(4), (6)).
Sec. 641.330 How should the State Plan reflect community service
needs?
The Governor must ensure that the State Plan identifies the types
of community services that are needed and the places where these
services are most needed. The State Plan should specifically identify
the needs and locations of those individuals most in need of community
services and the groups working to meet their needs. (OAA sec.
503(a)(4)(E)).
Sec. 641.335 How should the Governor address the coordination of
SCSEP services with activities funded under title I of WIA?
The Governor must seek the advice and recommendations from
representatives of the State and Area Agencies on Aging in the State
and the State and Local Boards established under title I of WIA. (OAA
sec. 503(a)(2)). The State Plan must describe the steps that are being
taken to coordinate SCSEP activities within the State with activities
being carried out under title I of WIA. (OAA sec. 503(a)(4)(F)). The
State Plan must describe the steps being taken to ensure that the SCSEP
is an active partner in each One-Stop Delivery System and the steps
that will be taken to encourage and improve coordination with the One-
Stop Delivery System.
Sec. 641.340 Must the Governor submit a State Plan each year?
The Governor is not required to submit a full State Plan each year;
however, at a minimum, the Governor must seek the advice and
recommendations of the individuals and organizations identified in the
statute at section 503(a)(2) about what, if any, changes are needed,
and publish the changes to the State Plan for public comment each year
and submit a modification to the Department.
Sec. 641.345 What are the requirements for modifying the State Plan?
(a) Modifications are required when:
(1) There are changes in Federal or State law or policy that
substantially change the assumptions upon which the State Plan is
based;
(2) There are changes in the State's vision, strategies, policies,
performance indicators, or organizational responsibilities;
(3) The State has failed to meet performance goals and must submit
a corrective action plan; or
(4) There is a change in a grantee or grantees.
(b) Modifications to the State Plan are subject to the same public
review and comment requirements that apply to the development of the
State Plan under Sec. Sec. 641.325 and 641.350.
(c) The Department will issue additional instructions for the
procedures that must be followed when requesting modifications to the
State Plan. (OAA sec. 503(a)(1)).
Sec. 641.350 How should public comments be solicited and collected?
The Governor should follow established State procedures to solicit
and collect public comments. The State Plan must include a description
of the State's procedures and schedule for ensuring an open and
inclusive planning process that provides meaningful opportunity for
public comment.
Sec. 641.355 Who may comment on the State Plan?
Any individual or organization may comment on the Plan.
Sec. 641.360 How does the State Plan relate to the equitable
distribution (ED) report?
The two documents address some of the same areas, and are prepared
at different points in time. The ED report is prepared by State
agencies at the beginning of each fiscal year and provides a
``snapshot'' of the actual distribution of all of the authorized
positions within the State, grantee-by-grantee, and the optimum number
of participant positions in each designated area based on the latest
available Census data. It provides a basis for improving the
distribution of SCSEP positions within the State. (See OAA sec. 508).
The State Plan is prepared by the Governor and covers many areas in
addition to equitable distribution, as discussed in Sec. 641.325, and
sets forth a proposed plan for distribution of authorized positions in
the State. Any distribution or redistribution of positions made as a
result of a State Plan proposal will be reflected in the subsequent
year's ED report, which then forms the basis for the proposed
distribution in the next year's State Plan. This process is iterative
in that it moves the authorized positions from over-served areas to
underserved areas over a period of time.
Sec. 641.365 How must the equitable distribution provisions be
reconciled with the provision that disruptions to current participants
should be avoided?
Governors must describe the steps that are being taken to comply
with the statutory requirement to avoid disruptions in the State Plan.
(OAA sec. 503(a)(6)). When there are new Census data indicating that
there has been a shift in the location of the eligible population or
when there is over-enrollment for any other reason, the Department
recommends a gradual shift that encourages current participants in
subsidized community service positions to move into unsubsidized
employment to make positions available for eligible individuals in the
areas where there has been an increase in the eligible population. The
Department does not define disruptions to mean that participants are
entitled to remain in a subsidized community service employment
position indefinitely. As discussed in Sec. Sec. 641.570 and 641.575,
grantees may, under certain circumstances, place time limits on an
SCSEP community service assignment, thus permitting positions to be
transferred over time. Grantees shall not transfer positions from one
geographic area to another without first notifying the State agency
responsible for preparing the State Plan and equitable distribution
report. Grantees must submit, in writing, any proposed changes in
distribution that occur after submissions of the equitable distribution
report to the Federal Project Officer for approval. All grantees are
strongly encouraged to coordinate any proposed changes in position
distribution with the other grantees servicing in the State, including
the State project director, prior to submitting the proposed changes to
their Federal Project Officer for approval.
Subpart D--Grant Application, Eligibility, and Award Requirements
Sec. 641.400 What entities are eligible to apply to the Department
for funds to administer SCSEP community service projects?
(a) National Grants. Entities eligible to apply for national grants
include nonprofit organizations, Federal public agencies, and Tribal
organizations. These entities must be capable of administering a multi-
State program.
[[Page 19058]]
State and local agencies may not apply for these funds.
(b) National Grants in a State. Section 514(e)(3) of the OAA
permits nonprofit organizations, public agencies, and States to receive
SCSEP funds when a national grantee in a State fails to meet its
performance measures in the second and third year of failure. The poor
performing grantee that had its funds competed is not eligible to
compete for the same funds.
(c) State Grants. Section 506(e) of the OAA requires the Department
to enter into agreements with each State to provide SCSEP services.
States may use individual State agencies, political subdivisions of a
State, a combination of such political subdivisions, or a national
grantee operating in the State to administer SCSEP funds. If the
State's funds are competed under section 514(f) of the OAA, other
agencies within the State, political subdivisions of a State, a
combination of political subdivisions of a State, and national grantees
operating in the State are eligible to apply for funds. Other States
may not apply for this funding.
Sec. 641.410 How does an eligible entity apply?
(a) General. An eligible entity must follow the application
guidelines issued by the Department. The Department will issue
application guidelines announcing the availability of State and
national SCSEP funds whether they are awarded on a competitive or
noncompetitive basis. The guidelines will contain application due
dates, application instructions, and other necessary information. All
entities must submit applications in accordance with the Department's
instructions.
(b) National Grant Applicants. All applicants for SCSEP national
grant funds, except organizations proposing to serve older American
Indians, must submit their applications to the Governor of each State
in which projects are proposed before submitting the application to the
Department. (OAA sec. 503(a)(5)).
(c) State Applicants. A State that submits a Unified Plan under WIA
section 501 may include the State's SCSEP community service project
grant application in its Unified Plan. Any State that submits an SCSEP
grant application as part of its WIA Unified Plan must address all of
the application requirements as published in the Department's
instructions. State Plan applications and modifications are addressed
in Sec. Sec. 641.340 and 641.345.
Sec. 641.420 What factors will the Department consider in selecting
grantees?
The Department will select grantees from among applicants that are
able to meet the eligibility and responsibility review criteria at
section 514 of the OAA. (Section 641.430 contains the eligibility
criteria and Sec. Sec. 641.440 and 641.450 contain the responsibility
criteria.) If there is a full and open competition, the Department also
will take the rating criteria described in the Solicitation for Grant
Application or other instrument into consideration, including the
applicant's/grantee's past performance in any prior Federal grants or
contracts for the past 3 years.
Sec. 641.430 What are the eligibility criteria that each applicant
must meet?
To be eligible to receive SCSEP funds, each applicant must be able
to demonstrate:
(a) An ability to administer a program that serves the greatest
number of eligible participants, giving particular consideration to
individuals with greatest economic need, greatest social need, poor
employment history or prospects, and over the age of 60;
(b) An ability to administer a program that provides employment for
eligible individuals in communities in which they reside, or in nearby
communities, that will contribute to the general welfare of the
community;
(c) An ability to administer a program that moves eligible
participants into unsubsidized employment;
(d) An ability to move participants with multiple barriers to
employment into unsubsidized employment;
(e) An ability to coordinate with other organizations at the State
and local levels, including the One-Stop Delivery System;
(f) An ability to properly manage the program, including its plan
for fiscal management of the SCSEP program;
(g) An ability to minimize program disruption for current
participants if there is a change in project sponsor and/or location,
and its plan for minimizing disruptions; and
(h) Any additional criteria that the Secretary of Labor deems
appropriate in order to minimize disruptions for current participants.
Sec. 641.440 What are the responsibility conditions that an applicant
must meet?
Each applicant must meet each of the listed responsibility
``tests'' by not having committed any of the acts of misfeasance or
malfeasance described in Sec. 641.440(a)-(n) of this section.
(a) The Department has been unable to recover a debt from the
applicant, whether incurred by the applicant or by one of its
subgrantees or subcontractors, or the applicant has failed to comply
with a debt repayment plan to which it agreed. In this context, a debt
is established by final agency action, followed by three demand letters
to the applicant, without payment in full by the applicant.
(b) Established fraud or criminal activity of a significant nature
within the applicant's organization.
(c) Serious administrative deficiencies identified by the
Department, such as failure to maintain a financial management system
as required by Federal regulations.
(d) Willful obstruction of the auditing or monitoring process.
(e) Failure to provide services to applicants as agreed to in a
current or recent grant or to meet applicable performance measures.
(f) Failure to correct deficiencies brought to the grantee's
attention in writing as a result of monitoring activities, reviews,
assessments, or other activities.
(g) Failure to return a grant closeout package or outstanding
advances within 90 days after the grant expiration date or receipt of
closeout package, whichever is later, unless an extension has been
requested and granted.
(h) Failure to submit required reports.
(i) Failure to properly report and dispose of Government property
as instructed by the Department.
(j) Failure to have maintained effective cash management or cost
controls resulting in excess cash on hand.
(k) Failure to ensure that a subgrantee complies with applicable
audit requirements, including OMB Circular A-133 audit requirements
specified at 20 CFR 667.200(b) and Sec. 641.821.
(l) Failure to audit a subgrantee within the period required under
Sec. 641.821.
(m) Final disallowed costs in excess of five percent of the grant
or contract award if, in the judgment of the Grant Officer, the
disallowances are egregious findings.
(n) Failure to establish a mechanism to resolve a subgrantee's
audit in a timely fashion.
Sec. 641.450 Are there responsibility conditions that alone will
disqualify an applicant?
(a) Yes, an applicant may be disqualified if either of the first
two responsibility tests listed in Sec. 641.440 is not met.
(b) The remainder of the responsibility tests listed in Sec.
641.440 require a substantial or persistent failure (for 2 or more
consecutive years).
[[Page 19059]]
(c) The second responsibility test addresses ``fraud or criminal
activity of a significant nature.'' The existence of significant fraud
or criminal activity will be determined by the Department and typically
will include willful or grossly negligent disregard for the use,
handling, or other fiduciary duties of Federal funding where the
grantee has no effective systems, checks, or safeguards to detect or
prevent fraud or criminal activity. Additionally, significant fraud or
criminal activity will typically include coordinated patterns or
behaviors that pervade a grantee's administration or are focused at the
higher levels of a grantee's management or authority. To be consistent
with the OAA section 514(d)(4)(B), this determination will be made on a
case-by-case basis regardless of what party identifies the alleged
fraud or criminal activity.
Sec. 641.460 How will the Department examine the responsibility of
eligible entities?
The Department will conduct a review of available records to assess
each applicant's overall fiscal and administrative ability to manage
Federal funds. The Department's responsibility review may consider any
available information, including the organization's history with regard
to the management of other grants awarded by the Department or by other
Federal agencies. (OAA sec. 514(d)(1) and (d)(2)).
Sec. 641.465 Under what circumstances may the Department reject an
application?
(a) The Department may question any proposed project component of
an application if it believes that the component will not serve the
purposes of the SCSEP program. The Department may reject the
application if the applicant does not submit or negotiate an acceptable
alternative.
(b) The Department may reject any application that the Grant
Officer determines unacceptable based on the content of the
application, rating score, past performance, fiscal management, or any
other factor the Grant Officer believes serves the best interest of the
program, including the application's comparative rating in a
competition.
Sec. 641.470 What happens if an applicant's application is rejected?
(a) Any entity whose application is rejected in whole or in part
will be provided a timely notice as well as an explanation, or
debriefing, of the Department's basis for its rejection. Notifications
will include an explanation of the Department's decision and
suggestions as to how to improve the applicant's position for future
competitions.
(b) Incumbent grantees will not have an opportunity to cure in an
open competition because that will create an inequity in favor of
incumbents which already have opportunities to correct deficiencies
through technical assistance, provided by the Department, under OAA
sec. 514(e)(2)(A).
(c) If the Administrative Law Judge (ALJ) rules that the
organization should have been selected, in whole or in part, and the
organization continues to meet the requirements of this part, the
matter must be remanded to the Grant Officer. The Grant Officer must,
within 10 working days, determine whether the slots which are the
subject of the ALJ's decision will be awarded, in whole or in part, to
the organization and the timing of the award. In making this
determination, the Grant Officer must take into account disruption to
participants, disruption to grantees and the operational needs of the
SCSEP. The Grant Officer must return the decision to the ALJ for
review. In the event that the Grant Officer determines that it is not
feasible, the successful appellant will be awarded its bid preparation
costs or a pro rata share of those costs if Grant Officer's finding
applies to only a portion of the funds that would be awarded to the
successful appellant. An applicant so selected is not entitled to the
full grant amount but will only receive the funds remaining in the
grant that have not been expended by the current grantee through its
operation of the grant and its subsequent closeout. The available
remedy in an SCSEP non-selection appeal is the right to be selected in
the future as an SCSEP grantee for the remainder of the current grant
cycle. Neither retroactive nor immediately effective selection status
may be awarded as relief in a non-selection appeal under this section
and Sec. 641.900.
Any organization selected and/or funded as an SCSEP grantee is
subject to having its slots reduced or to being removed as an SCSEP
grantee of an ALJ decision so orders. The Grant Officer provides
instructions on transition and closeout to both the newly designated
grantee and to the grantee whose slots are affected or which is being
removed. All parties must agree to the provisions of this paragraph as
a condition of being an SCSEP grantee.
Sec. 641.480 May the Governor make recommendations to the Department
on grant applications?
(a) Yes, each Governor will have a reasonable opportunity to make
comments on any application to operate a SCSEP project located in the
Governor's State before the Department makes a final decision on a
grant award. The Governor's comments should be directed to the
Department and may include the anticipated effect of the proposal on
the overall distribution of program positions within the State;
recommendations for redistribution of positions to underserved areas as
vacancies occur in previously encumbered positions in other areas; and
recommendations for distributing any new positions that may become
available as a result of an increase in funding for the State. The
Governor's recommendations should be consistent with the State Plan.
(b) Under noncompetitive conditions, the Governor may make the
authorized recommendations on all applications. However, under
competitive conditions, the Governor has the option of making the
authorized recommendations on all applications or only on those
applications proposed for award following the rating process. It is
incumbent on each Governor to inform the Department of his or her
intent to review the applications before or after the rating process.
Sec. 641.490 When may SCSEP grants be awarded competitively?
(a) The Department must hold a competition for SCSEP funds when a
grantee (national grantee, national grantee in a State, or State
grantee) fails to meet its performance measures; the eligibility
requirements; or the responsibility tests established by section 514 of
the OAA.
(b) The Department may hold a full and open competition before the
beginning of a new grant period, or if additional grantees are funded.
The details of the competition will be provided in a Solicitation for
Grant Applications published in the Federal Register. The Department
believes that full and open competition is the best way to assure the
highest quality of services to eligible participants.
Subpart E--Services to Participants
Sec. 641.500 Who is eligible to participate in the SCSEP?
(a) Anyone who is at least 55 years old and who is a member of a
family with an income that is not more than 125 percent of the family
income levels prepared by the Department of Health and Human Services
and approved by the Office of Management and Budget (OMB) (poverty
guidelines) is eligible to participate in the SCSEP. (OAA sec. 516(2)).
A person with a disability may be treated as a ``family of one'' for
[[Page 19060]]
income eligibility determination purposes. The Department will issue
administrative guidance on the procedures for computing family income
for purposes of determining SCSEP eligibility.
(b) States may enter into agreements between themselves to permit
cross-border enrollment of eligible participants. Such agreements
should cover both State and national grantee slots and must be
submitted to the Department.
Sec. 641.505 When is eligibility determined?
Initial eligibility is determined at the time individuals apply to
participate in the SCSEP. Once individuals become SCSEP participants,
the grantee/subgrantee is responsible for verifying their continued
income eligibility at least once every 12 months. Grantees may also
verify an individual's eligibility as circumstances require.
Sec. 641.507 What types of income are included and excluded for
participant eligibility determinations?
(a) The prior practice of excluding the first $500 of a
participant's income for eligibility purposes is contrary to the
section 516(2) of the OAA, which limits SCSEP eligibility to no more
than 125 percent of the poverty guidelines established by OMB.
Therefore, this practice will no longer be permitted, either for
current participants or new applicants.
(b) The Department will use the U.S. Census Bureau's Current
Population Survey (CPS) as the standard for determining income
eligibility for the SCSEP. The Department will issue administrative
guidance regarding income definitions and income inclusion and
exclusion standards for determining eligibility.
Sec. 641.510 What happens if a grantee/subgrantee determines that a
participant is no longer eligible for the SCSEP due to an increase in
family income?
If a grantee/subgrantee determines that a participant is no longer
eligible for the SCSEP, the grantee/subgrantee must give the
participant written notification of termination within 30 days, and the
participant must be terminated 30 days after the participant receives
the notice. The only exception is for participants found ineligible
because of providing false information who must be terminated
immediately with written notification of the reason therefore.
Grantees/subgrantees must refer such individuals to the services
provided under the One-Stop Delivery System or other appropriate
partner program. Participants may file a grievance according to the
grantee's procedures and subpart I.
Sec. 641.515 How must grantees/subgrantees recruit and select
eligible individuals for participation in the SCSEP?
(a) Grantees and subgrantees must develop methods of recruitment
and selection that assure that the maximum number of eligible
individuals have an opportunity to participate in the program. To the
extent feasible, grantees should seek to enroll individuals who are
eligible minorities, limited English speakers, Indians, or who have the
greatest economic need at least in proportion to their numbers in the
area, taking into consideration their rates of poverty and
unemployment. (OAA sec. 502(b)(1)(M)).
(b) Grantees and subgrantees must list all community service
opportunities with the State Workforce Agency and all appropriate local
offices and must use the One-Stop Delivery System in the recruitment
and selection of eligible individuals. (OAA sec. 502(b)(1)(H)).
Sec. 641.520 Are there any priorities that grantees/subgrantees must
use in selecting eligible individuals for participation in the SCSEP?
(a) Yes, in selecting eligible individuals for participation in the
SCSEP, priority must be given to:
(1) Individuals who are at least 60 years old (OAA sec. 516(2));
and
(2) A veteran, or the spouse of a veteran who died of a service-
connected disability, a member of the Armed Forces on active duty, who
has been listed for a total of more than 90 days as missing in action,
captured in the line of duty by a hostile force, or forcibly detained
by a foreign government or power, the spouse of any veteran who has a
total disability resulting from a service-connected disability, and the
spouse of any veteran who died while a disability so evaluated was in
existence, who meet program eligibility requirements under section 2 of
the Jobs for Veterans Act, Public Law 107-288 (2002).
(b) Grantees must apply these priorities in the following order:
(1) Veterans and qualified spouses at least 60 years old;
(2) Other individuals at least 60 years old;
(3) Veterans and qualified spouses aged 55-59; and
(4) Other individuals aged 55-59.
Sec. 641.525 Are there any other groups of individuals who should be
given special consideration when selecting SCSEP participants?
Yes, in selecting participants from among those individuals who are
eligible, special consideration must be given, to the extent feasible,
to individuals who have incomes below the poverty level, who have poor
employment prospects and who have the greatest social and/or economic
need and to individuals who are eligible minorities, limited English
speakers, or Indians, as further defined in Sec. 641.515. (OAA sec.
502(b)(1)(M)).
Sec. 641.530 Must the grantee/subgrantee always select priority or
preference individuals?
Grantees must always select qualified individuals in accordance
with Sec. 641.520. Grantees must apply the preference, to the extent
feasible, when selecting individuals within the priority groups, unless
the grantee determines based on an assessment of their circumstances
and the available community service employment opportunities, that a
non-preference individual should receive services over a preference
individual. When the Department examines the characteristics of a
grantee's participant population, the grantee may be asked to provide
evidence that it is adhering to the enrollment priorities and
preferences set forth in Sec. Sec. 641.515, 641.520, and 641.525.
Sec. 641.535 What services must grantees/subgrantees provide to
participants?
(a) When individuals are selected for participation in the SCSEP,
the grantee/subgrantee is responsible for:
(1) Providing orientation to the SCSEP, including information on
project goals and objectives, community service assignments, training
opportunities, available supportive services, the availability of a
free physical examination, participant rights and responsibilities, and
permitted and prohibited political activities (OAA sec. 502);
(2) Assessing participants' work history, skills and interests,
talents, physical capabilities, aptitudes, needs for supportive
services, occupational preferences, training needs, potential for
performing community service assignments, and potential for transition
to unsubsidized employment as necessary, but no less frequently that
two times during a twelve month period;
(3) Using the information gathered during the assessment to develop
IEPs for participants; except that if an assessment has already been
performed and an IEP developed under title I of WIA, the WIA IEP will
satisfy the requirement for an SCSEP assessment and IEP (see Sec.
641.260) and updating the IEPs as necessary to reflect information
[[Page 19061]]
gathered during the participant assessments (OAA sec. 502(b)(1)(N));
(4) Placing participants in appropriate community service
activities in the community in which they reside, or in a nearby
community (OAA sec. 502(b)(1)(B));
(5) Providing or arranging for necessary training specific to the
participants' community service assignments (OAA sec. 502(b)(1)(I));
(6) Assisting participants in arranging for other training
identified in their SCSEP IEPs (OAA sec. 502(b)(1)(N));
(7) Assisting participants in arranging for needed supportive
services identified in their SCSEP IEPs (OAA sec. 502(b)(1)(N));
(8) Providing participants with wages and fringe benefits for time
spent working in the assigned community service employment activity
(OAA sec. 502(c)(6)(A)(i));
(9) Ensuring that participants have safe and healthy working
conditions at their community service worksites (OAA sec.
502(b)(1)(J));
(10) Verifying participant income eligibility at least once every
12 months;
(11) Assisting participants in obtaining unsubsidized employment,
including providing or arranging for employment counseling in support
of their IEPs;
(12) Providing appropriate services for participants through the
One-Stop Delivery System established under WIA (OAA sec. 502(b)(1)(O));
(13) Providing counseling on participants' progress in meeting the
goals and objectives identified in their IEPs, and in meeting their
supportive service needs (OAA sec. 502(b)(1)(N)(iii));
(14) Following-up with participants placed into unsubsidized
employment during the first 6 months of placement to make certain that
participants receive any follow-up services they may need to ensure
successful placements; and
(15) Following-up at 6 months with participants who are placed in
unsubsidized employment to determine whether they are still employed
(OAA sec. 513(c)(2)(B));
(b) In addition to the services listed in paragraph (a) of this
section, grantees and subgrantees must provide service to participants
according to administrative guidelines that may be issued by the
Department.
(c) Grantees may not use SCSEP funds for individuals who only need
job search assistance or job referral services. Grantees may provide
job search assistance and job club activities to participants who are
enrolled in the SCESEP and are assigned to community service
assignments.
Sec. 641.540 What types of training may grantees/subgrantees provide
to SCSEP participants?
(a) Grantees and subgrantees must arrange skill training that is
realistic and consistent with the participants' IEP, and that makes the
most effective use of their skills and talents. This section does not
apply to training provided as part of a community service assignment.
(b) Training may be provided before or after placement in a
community service activity.
(c) Training may be in the form of lectures, seminars, classroom
instruction, individual instruction, on-the-job experiences, or other
arrangements, including but not limited to, arrangements with other
workforce development programs such as WIA. (OAA sec.
502(c)(6)(A)(ii)).
(d) Grantees and subgrantees are encouraged to place a major
emphasis on training available through on-the-job experience.
(e) Grantees/subgrantees are encouraged to obtain training through
locally available resources, including host agencies, at no cost or
reduced cost to the SCSEP.
(f) Grantees/subgrantees may pay reasonable costs for instructors,
classroom rental, training supplies and materials, equipment, tuition,
and other costs of training. Participants may be paid wages while in
training. (OAA sec. 502(c)(6)(A)(ii)).
(g) Grantees/subgrantees may pay for costs associated with travel
and room and board necessary to participate in training.
(h) Nothing in this section prevents or limits participants from
engaging in self-development training available through other sources
during hours when not assigned to community service activities.
Sec. 641.545 What supportive services may grantees/subgrantees
provide to participants?
(a) Grantees/subgrantees may provide or arrange for supportive
services to assist participants in successfully participating in SCSEP
projects, including but not limited to payment of reasonable costs of
transportation; health care and medical services; special job-related
or personal counseling; incidentals such as work shoes, badges,
uniforms, eyeglasses, and tools; child and adult care; temporary
shelter; and follow-up services. (OAA sec. 502(c)(6)(A)(iv)).
(b) To the extent practicable, the grantee/subgrantee should
provide for the payment of these expenses from other resources.
Sec. 641.550 What responsibility do grantees/subgrantees have to
place participants in unsubsidized employment?
Because one goal of the program is to foster economic self-
sufficiency, grantees and subgrantees should make reasonable efforts to
place as many participants as possible into unsubsidized employment, in
accordance with each participant's IEP. Grantees are responsible for
working with participants to ensure that, for those participants whose
IEPs include an unsubsidized employment goal, the participants are
receiving services and taking actions designed to help them achieve
this goal. Grantees and subgrantees must contact private and public
employers directly or through the One-Stop Delivery System to develop
or identify suitable unsubsidized employment opportunities. They must
also encourage host agencies to assist participants in their transition
to unsubsidized employment, including unsubsidized employment with the
host agency.
Sec. 641.555 What responsibility do grantees have to participants who
have been placed in unsubsidized employment?
(a) Grantees must contact placed participants during the first 6
months to determine if participants have the necessary supportive
services to remain in the job.
(b) Grantees must contact participants 6 months after placement to
determine if they have been retained by the employer or use wage
records to verify continued employment. (OAA sec. 513(c)(2)(B)).
(c) Grantees may have other follow-up requirements under subparts G
and H.
Sec. 641.560 May grantees place participants directly into
unsubsidized employment?
Grantees are encouraged to refer individuals who may be placed
directly in an unsubsidized employment position to an employment
provider, including the One-Stop for job placement assistance under
WIA. The SCSEP encourages grantees to work closely with participants to
develop an IEP and assessment to determine what training the individual
may need. The Department encourages grantees to work with those
participants who are the most difficult to place to provide them with
the services necessary to develop the skills needed for job placement.
Sec. 641.565 What policies govern the provision of wages and fringe
benefits to participants?
(a) Wages. Grantees must pay participants the highest applicable
minimum wage for time spent in orientation, training required by the
[[Page 19062]]
grantee/subgrantee, and work in community service assignments. The
highest applicable minimum wage is either the minimum wage applicable
under the Fair Labor Standards Act of 1938; the State or local minimum
wage for the most nearly comparable covered employment; or the
prevailing rate of pay for persons employed in similar public
occupations by the same employer.
(b) Fringe benefits--(1) Required fringe benefits. Except as
provided in paragraphs (b)(3) and (b)(4) of this section, grantees must
ensure that participants receive all fringe benefits required by law.
(i) Grantees must provide fringe benefits uniformly to all
participants within a project or subproject, unless the Department
agrees to waive this provision due to a determination that such a
waiver is in the best interests of applicants, participants, and
project administration.
(ii) Grantees must offer participants the opportunity to receive
physical examinations annually.
(A) Physical examinations are a fringe benefit, and not an
eligibility criterion. The examining physician must provide, to
participants only, a written report of the results of the examination.
Participants may, at their option, provide the grantee or subgrantee
with a copy of the report.
(B) Participants may choose not to accept the physical examination.
In that case, the grantee or subgrantee must document this refusal,
through a signed statement or other means, within 60 workdays after
commencement of the community service assignment. Each year thereafter,
grantees and subgrantees must offer the physical examination and
document the offer and any participant's refusal.
(iii) When participants are not covered by the State workers'
compensation law, the grantee or subgrantee must provide participants
with workers' compensation benefits equal to those provided by law for
covered employment.
(2) Allowable fringe benefit costs. Grantees may provide the
following fringe benefits: annual leave; sick leave; holidays; health
insurance; social security; and any other fringe benefits approved in
the grant agreement and permitted by the appropriate Federal cost
principles found in OMB Circulars A-87 and A-122, except for retirement
costs. (See subpart H, Sec. Sec. 641.847 and 641.850).
(3) Retirement. Grantees may not use grant funds to provide
contributions into a retirement system or plan.
(4) Unemployment compensation. Unless required by law, grantees may
not pay the cost of unemployment insurance for participants.
Sec. 641.570 Is there a time limit for participation in the program?
No, there is no time limit for participation in the SCSEP; however,
a grantee may establish a maximum duration of enrollment in the grant
agreement, when authorized by the Department. If there is such a time
limit on enrollment established in the grant agreement, the grantee
must provide for a system to transition participants to unsubsidized
employment or other assistance before the maximum enrollment duration
has expired. Provisions for transition must be reflected in the
participant's IEP.
Sec. 641.575 May a grantee establish a limit on the amount of time
its participants may spend at each host agency?
Yes, grantees may establish limits on the amount of time that its
participants may spend at a host agency. Such limits should be
established in the grant agreement, as approved by the Department, and
reflected in the participants' IEPs.
Sec. 641.580 Under what circumstances may a grantee terminate a
participant?
(a) If, at any time, a grantee or subgrantee determines that a
participant was incorrectly declared eligible as a result of false
information given by that individual, the grantee or subgrantee must
immediately terminate the participant and provide the participant with
a written notice that explains the reason for termination.
(b) If, during annual income verification, a grantee finds a
participant to be no longer eligible for enrollment because of changes
in family income, the grantee may terminate the participant. In order
to terminate the participant in such a case, the grantee must provide
the participant with a written notice and terminate the participant 30
days after the participant receives the notice. (See Sec. 641.505).
(c) If, at any time, the grantee or subgrantee determines that it
incorrectly determined a participant to be eligible for the program
through no fault of the participant, the grantee or subgrantee must
give the participant immediate written notice explaining the reason(s)
and must terminate the participant 30 days after the participant
receives the notice.
(d) A grantee and subgrantee may terminate a participant for cause.
In doing so, the grantee or subgrantee must inform the participant, in
writing, of the reason(s) for termination. Grantees must discuss the
proposed reasons for such terminations in the grant application, and
must discuss such reasons with participants and provide each
participant a written copy of its policies for terminating a
participant for cause or otherwise at the time of enrollment.
(e) A grantee or subgrantee may terminate a participant if the
participant refuses to accept a reasonable number of job offers or
referrals to unsubsidized employment consistent with the SCSEP IEP and
there are no extenuating circumstances that would hinder the
participant from moving to unsubsidized employment.
(f) When a grantee or subgrantee makes an unfavorable determination
of enrollment eligibility under paragraphs (a), (b), and (c) of this
section, it must give the individual a reason for termination and, when
feasible, should refer the individual to other potential sources of
assistance, such as the One-Stop Delivery System.
(g) Any termination, as described in paragraphs (a) through (f) of
this section, must be consistent with administrative guidelines issued
by the Department, and the termination must be subject to the
applicable grievance procedures described in Sec. 641.910.
(h) Participants may not be terminated from the program solely on
the basis of their age. Grantees and subgrantees may not impose an
upper age limit for participation in the SCSEP.
Sec. 641.585 Are participants employees of the Federal Government?
(a) No, participants are not Federal employees. (OAA sec. 504(a)).
(b) If a Federal agency is a grantee or host agency, Sec. 641.590
applies.
Sec. 641.590 Are participants employees of the grantee, the local
project, and/or the host agency?
Grantees must determine if a participant is an employee of the
grantee, local project, or host agency as the definition of an
``employee'' varies depending on the laws defining an employer/employee
relationship.
Subpart F--Private Sector Training Projects Under Section 502(e) of
the OAA
Sec. 641.600 What is the purpose of the private sector training
projects authorized under section 502(e) of the OAA?
The purpose of the private sector training projects authorized
under section 502(e) of the OAA is to allow States, public agencies,
nonprofit organizations and private businesses to develop and operate
projects designed to provide SCSEP participants with second career
training and placement
[[Page 19063]]
opportunities with private business concerns. In addition, the OAA
provides section 502(e) grantees or contractors with opportunities to
initiate or enhance their relationships with the private sector,
fostering collaboration with the One-Stop Delivery System, improving
their ability to meet and exceed performance standards, and broadening
the range of options available to SCSEP participants.
Sec. 641.610 How are section 502(e) activities administered?
(a) The Department may enter into agreements with States, public
agencies, private nonprofit organizations, and private businesses to
carry out section 502(e) projects.
(b) To the extent possible, private sector training activities
should emphasize different work modes, such as job sharing, flex-time,
flex-place, arrangements relating to reduced physical exertion, and
innovative work modes with a focus on second career training and
placement in growth industries in jobs requiring new technological
skills.
(c) Grantees must coordinate section 502(e) private sector training
activities with programs carried out under title I of WIA and with
SCSEP projects operating in the area whenever possible.
Sec. 641.620 How may an organization apply for section 502(e)
funding?
Organizations applying for section 502(e) funding must follow the
instructions issued by the Department which will be published in the
Federal Register, or in another appropriate medium.
Sec. 641.630 What private sector training activities are allowable
under section 502(e)?
Allowable activities authorized under section 502(e) include:
(a) Providing participants with services leading to transition to
private sector employment, including:
(1) Training in new technological skills;
(2) On-the-job training with private-for-profit employers;
(3) Work experience with private-for-profit employers;
(4) Adult basic education;
(5) Classroom training;
(6) Occupational skills training;
(7) In combination with other services listed in paragraphs (a)(1)
through (6) of this section or in conjunction with the local One-Stop
Delivery System, job clubs or job search assistance;
(8) In combination with other services listed in paragraphs (a)(1)
through (7) of this section, supportive services, which may include
counseling, motivational training, and job development; or
(9) Combinations of the above-listed activities.
(b) Working with employers to develop jobs and innovative work
modes including job sharing, flex-time, flex-place and other
arrangements, including those relating to reduced physical exertion.
Sec. 641.640 How do the private sector training activities authorized
under section 502(e) differ from other SCSEP activities?
(a) The private sector training activities authorized under section
502(e) are not required to have a community service project component.
However, 502(e) participants must also be co-enrolled in a community
service assignment in a SCSEP project.
(b) The private sector training activities authorized under section
502(e) focus solely on providing SCSEP-eligible individuals with second
career training, placement opportunities, and other assistance
necessary to obtain unsubsidized employment in the private sector.
(c) The Department is authorized to pay all of the costs of section
502(e) activities (i.e., there is no non-Federal share requirement).
However section 502(e) grantees may choose to provide a non-Federal
share and are encouraged to do so.
(d) The Department may enter directly into agreements with private
businesses for section 502(e) activities.
(e) Grantees may fund private-for-profit and other organizations
that do not have the IRS 501(c)(3) designation or are not public
agencies to conduct section 502(e) activities if provided for in their
grant or contract agreement with the Department.
Sec. 641.650 Does the requirement that not less than 75 percent of
the funds be used to pay participant wages and fringe benefits apply to
section 502(e) activities?
Yes, under section 502(c)(6)(B) of the OAA, 75 percent of SCSEP
funds made available through a grant must be used to pay for the wages
and fringe benefits of participants employed under SCSEP projects. This
requirement applies to the total grant, and not necessarily to
individual components of the grant. For entities that receive an SCSEP
grant for both community service projects and section 502(e) projects,
the requirement applies to the total grant. For entities that receive
only a section 502(e) grant, the requirement applies to that grant.
Sec. 641.660 Who is eligible to participate in section 502(e) private
sector training activities?
The same eligibility criteria used in the community service portion
of the program apply for participation in the private sector training
activities. (See subpart E, Sec. Sec. 641.500, 641.510, 641.520,
641.525, and 641.530).
Sec. 641.665 When is eligibility determined?
Eligibility is determined at the time individuals apply to
participate in the SCSEP. Grantees may also verify an individual's
eligibility as circumstances require.
Sec. 641.670 May an eligible individual be enrolled simultaneously in
section 502(e) private sector training activities operated by one
grantee and a community service SCSEP project operated by a different
SCSEP grantee?
Yes, an eligible individual must be enrolled simultaneously in
section 502(e) private sector training activities and a community
service SCSEP project, operated by two different SCSEP grantees. This
is known as co-enrollment.
Sec. 641.680 How should grantees report on participants who are co-
enrolled?
Referrals from a regular SCSEP grantee to a 502(e) only grantee
that result in an unsubsidized placement may also be credited to the
referring SCSEP grantee. However, if the SCSEP grantee is also a 502(e)
grantee, the unsubsidized placement of the participant may only be
counted once. The Department will issue administrative guidance on
additional requirements.
Sec. 641.690 How is the performance of section 502(e) grantees
measured?
(a) The following performance measures apply to section 502(e)
grantees. The common performance measures that apply to this program
are:
(1) Entered employment;
(2) Retention in employment; and
(3) Earnings increase.
(b) These measures are defined in and governed by subpart G of this
part and the applicable provisions of administrative issuances
implementing the SCSEP performance standards.
(c) If a section 502(e) grantee fails to meet its performance
standards, the Department may require corrective action, may provide
technical assistance, or may decline to fund the grantee in the next
Program Year.
[[Page 19064]]
Subpart G--Performance Accountability
Sec. 641.700 What performance measures apply to SCSEP grantees?
(a) The OAA, at section 513(b), enumerates the indicators of
performance as follows:
(1) The number of persons served, with particular consideration
given to individuals with greatest economic need, greatest social need,
or poor employment history or prospects, and individuals who are over
the age of 60;
(2) Community services provided;
(3) Placement into and retention in unsubsidized public or private
employment;
(4) Satisfaction of the participants, employers, and their host
agencies with their experiences and the services provided; and
(5) Additional indicators of performance that the Department
determines to be appropriate to evaluate services and performance.
(b) The additional indicator of performance is earnings increase.
Sec. 641.710 How are these performance indicators defined?
(a) For ease of calculation and to make the indicators better
measures of performance, the Department has divided some of the
indicators into multiple parts.
(b) The individual indicators are defined as follows:
(1) The number of persons served is defined by comparing the total
number of participants served to a grantee's authorized number of
positions adjusted for the differences in wages required paid in a
State or area.
(2) The number of persons served with the greatest economic need,
greatest social need or with poor employment history or prospects and
individuals who are over age 60 is defined by comparing the total
number of participants served to the total number of participants who:
(i) Have an income level at or below the poverty line; (OAA sec.
101(27))
(ii) Have physical and mental disabilities; language barriers; and
cultural, social, or geographical isolation, including isolation caused
by racial or ethnic status, that restricts the ability of the
individual to perform normal daily tasks, or threatens the capacity of
the individual to live independently; or (OAA sec. 101(28))
(iii) Have poor employment history or prospects; and
(iv) Are over the age of 60.
(3) Community services provided is defined as the number of hours
of community service provided by SCSEP participants. Community service
is defined in the OAA at section 516(1) and in Sec. 641.140.
(4) Placement into unsubsidized public or private employment is
defined by comparing the number of participants placed into
unsubsidized employment, as defined in Sec. 641.140, to the total
number authorized positions. (OAA sec. 513(c)(2)(A)).
(5) Retention in public or private unsubsidized employment means
the number of participants retained in unsubsidized employment, as
defined in Sec. 641.140, compared to the total number of those who are
employed in the first quarter after exit--i.e., the number placed. (OAA
sec. 513(c)(2)(B)).
(6) Satisfaction of participants means the results accumulated as
the results of surveys of the participant customer group of their
satisfaction with their experiences and the services provided.
(7) Satisfaction of employers means the results accumulated as the
results of surveys of the employer customer group of their satisfaction
with their experiences and the services provided.
(8) Satisfaction of host agencies means the results accumulated as
the results of surveys of the host agency customer group of their
satisfaction with their experiences and the services provided.
(9) Earnings increase means the percentage change in earnings pre-
registration to post-program, and between the first quarter after exit
and the third quarter after exit.
(c) The Department will publish administrative issuances that
elaborate on these definitions and their application.
Sec. 641.715 What are the common performance measures?
The common performance measures are a Government-wide initiative
adopted by the Department that apply to DOL-funded employment and job
training programs. Adoption of these common measures across government
will help implement the President's Management Agenda for budget and
performance integration as well as reduce barriers to integrated
service delivery through the local One-Stop Career Centers. Grantees
will be required to report on the common performance measures as
required under Sec. 641.879. The common performance measure indicators
are:
(a) Entered employment, defined as the percentage employed in the
first quarter after program exit;
(b) Retention in employment, defined as the percentage of those
employed in the first quarter after exit who were still employed in the
second and third quarter after program exit; and
(c) Earnings increase, defined as the percentage change in earnings
pre-registration to post-program; and between the first quarter after
exit and the third quarter after exit.
(d) Program efficiency is defined as the cost per participant.
Sec. 641.720 How do the common performance measures affect grantees
and the OAA performance measures?
One of the common performance measures, earnings increase, has been
included as a performance measures under Sec. Sec. 641.700 and 641.710
under the Secretary's discretionary authority. The two additional
common performance measures will be used to determine the overall
success of the program as compared to other programs Government-wide.
The results will be the basis for making funding determinations for the
SCSEP. The Department will require grantees to collect data for the
common performance measures as a reporting requirement under Sec.
641.879.
Sec. 641.730 How will the Department set and adjust performance
levels?
(a) Before the beginning of each Program Year, the Department will
negotiate and set baseline levels of negotiated performance for each
measure with each grantee, taking into consideration the need to
promote continuous improvement in the program overall, past
performance, and, when applicable, the performance of similar programs.
(b) The baseline level of negotiated performance for ``placement
into public or private unsubsidized employment'' is set at 20 percent.
(OAA sec. 513(a)(2)(C)).
(c) Grantees may request adjustments from these baseline levels
before or during the Program Year. Grantees may base such requests only
on the factors in paragraph (d) of this section. The Department will
issue guidance for negotiating adjustment requests.
(d) Adjustments to performance levels may be made based on the
following conditions only:
(1) High rates of unemployment, poverty, or welfare recipiency in
the areas served by a grantee relative to other areas of the State or
Nation;
(2) Significant economic downturns in the areas served by the
grantee or in the national economy; or
(3) Significantly higher numbers or proportions of participants
with one or more barriers to employment served by a grantee relative to
grantees serving other areas of the State or Nation. (OAA sec.
513(a)(2)(B)).
[[Page 19065]]
(e) Grantees may seek an adjustment to their performance levels,
based on the factors listed in paragraph (d) of this section, during
the negotiation process or during the grant period.
Sec. 641.740 How will the Department determine whether a grantee
fails, meets, or exceeds negotiated levels of performance?
(a) The Department will evaluate each performance indicator to
determine the level of success that a grantee has achieved and take the
aggregate to determine if, on the whole, the grantee met its
performance objectives. The aggregate is calculated by combining the
percentage results achieved on each of the individual measures to
obtain an average score.
(b) Once the aggregate is determined, if a grantee is unable to
meet 80 percent of the negotiated levels of performance for the
aggregate of all of the performance measures, that grantee has failed
to meet its performance measures. Performance in the range of 80 to 100
percent constitutes meeting the levels for the performance measures.
Performance in excess of 100 percent constitutes exceeding the levels
for the performance measures.
(c) A national grantee in a State must meet 80 percent of the
negotiated level of performance for its national measures, and it must
meet the measures negotiated for the State in which the national
grantee serves.
(d) The Department will impose the sanctions outlined in section
514 of the OAA and in Sec. Sec. 541.750, 541.760, 541.770 and 541.790
when a grantee fails to meet overall negotiated levels of performance.
(e) When a grantee fails one or more measures, but does not fail to
meet its performance measures in the aggregate, the Department will
provide technical assistance on the particular measures that a grantee
failed.
(f) The Department will provide further guidance through
administrative issuances.
Sec. 641.750 What sanctions will the Department impose if a grantee
fails to meet negotiated levels of performance?
(a) Grantees that fail to meet negotiated levels of performance
will be subject to the sanctions established in section 514 of the OAA.
The sanctions that apply are grantee specific (i.e., national grantee,
national grantee in a State, or State grantee). These sanctions range
from requiring grantees to submit a corrective action plan and receive
technical assistance, to competition of part of the grant funds, to a
competition of all of the grant funds.
(b) Until the Department establishes baseline levels for customer
satisfaction measures, grantees that only fail the customer
satisfaction performance measure, but meet or exceed all other
performance measures, will not be subject to sanctions. The Department
will provide additional instructions for how it will measure customer
satisfaction.
Sec. 641.760 What sanctions will the Department impose if a national
grantee fails to meet negotiated levels of performance under the total
SCSEP grant?
(a) The Department will annually assess the performance of each
national grantee no later than 120 days after the end of a Program Year
to determine if a national grantee has failed to meet its negotiated
levels of performance. (OAA sec. 514(e)(1)).
(b) If the Department determines that a national grantee has failed
to meet its negotiated levels of performance for a Program Year, the
national grantee must submit a corrective action plan not later than
160 days after the end of that Program Year. The plan must detail the
steps the national grantee will take to improve performance. The
Department will provide technical assistance related to performance
issue(s). (OAA sec. 514(e)(2)(A)-(e)(2)(B)).
(c) If a national grantee fails to meet its negotiated levels of
performance for a second consecutive Program Year, the Department will
conduct a national competition to award an amount equal to 25 percent
of that organization's funds in the following full Program Year. (OAA
sec. 514(e)(2)(C)). The Department reserves the right to specify the
locations of the positions that will be subject to competition. The
poor performing grantee that had its funds competed is not eligible to
compete for the same funds.
(d) If a national grantee fails to meet its negotiated levels of
performance for a third consecutive Program Year, the Department will
conduct a national competition to award an amount equal to the full
amount of that organization's remaining grant after deducting the
amount awarded in paragraph (c) of this section. (OAA sec.
514(e)(2)(D)). The poor performing grantee that had its funds competed
is not eligible to compete for the same funds.
(e) To the extent possible, the competitions outlined in paragraphs
(c) and (d) of this section will be conducted in such a way as to
minimize the disruption of services to participants. (OAA sec.
514(e)(2)(C)).
(f) The organizations selected to receive a grant through the
national competitions discussed in paragraphs (c) and (d) of this
section must continue to provide service to the geographic areas
formerly served by the national grantee(s) whose positions were the
subject of the competition. (OAA sec. 514(e)(2)(D)).
Sec. 641.770 What sanctions will the Department impose if a national
grantee fails to meet negotiated levels of performance in any State it
serves?
(a) Each national grantee must be assessed on the performance of
the projects it operates within any State. Such an assessment may lead
to a finding that the national grantee has failed to meet negotiated
levels of performance for its projects in a particular State. A
national grantee's failure to meet performance measures in a State may
be mitigated by justifying the failure, taking into consideration the
adjustments permitted under section 513(a)(2)(B) of the OAA, or size of
the project. (OAA sec. 514(e)(3)(A)).
(b) If the Department determines that there has been a failure to
meet negotiated levels of performance within a State, the Department
will require a corrective action plan and may take other appropriate
actions, including transfer of the responsibility for the project to
other grantees or providing technical assistance. (OAA sec.
514(e)(3)(B)).
(c) The Department will take corrective action if there is a second
consecutive Program Year of failure by a national grantee operating
within a particular State. Such corrective action may include transfer
of, or a competition for, all or a portion of the project(s) of the
national grantee in the State to another entity. Entities that were the
subject of this corrective action will not be eligible to receive the
funds of the transfer or to compete. (OAA sec. 514(e)(3)(C)).
(d) If there is a third consecutive Program Year of failure, the
Department will conduct a competition for all of the funds available to
a national grantee for operations within a particular State. Entities
that are the subject of this corrective action will not be eligible to
participate in the competition. (OAA sec. 514(e)(3)(D)).
Sec. 641.780 When will the Department assess the performance of a
national grantee in a State?
(a) The Department will assess the performance of a national
grantee in a State annually.
(b) The Department may also initiate an assessment of a national
grantee's performance in a State if:
(1) The Department receives information indicating that a grantee
is having difficulty implementing a particular performance indicator;
or
[[Page 19066]]
(2) The Governor of a State, or his or her designee, requests the
Department to review the performance of a particular national grantee
serving in the State. (OAA sec. 514(e)(4)).
Sec. 641.790 What sanctions will the Department impose if a State
grantee fails to meet negotiated levels of performance?
(a) The Department will annually assess the performance of State
grantees no later than 120 days after the end of a Program Year to
determine if the State has failed to meet its negotiated levels of
performance. (OAA sec. 514(f)(1)).
(b) A State failing to meet its negotiated levels of performance
must submit a corrective action plan not later than 160 days after the
end of the Program Year in which the failure occurred. The plan must
detail the steps the State will take to improve performance. The
Department will also provide technical assistance. (OAA sec. 514(f)(2)
and (f)(3)).
(c) If a State fails to meet its negotiated levels of performance
after two consecutive years, then the State must conduct a competition
to award an amount equal to 25 percent of its allotted funds for the
following year. The Department reserves the right to specify the
locations of the positions that will be subject to competition.
(d) In the event that a State fails to meet its negotiated levels
of performance after three consecutive years, then the State must
conduct a competition to award an amount equal to 100 percent of its
allotted funds for the following year.
(e) Entities that operated any portion of the State's program that
contributed to the failure will not be eligible to participate in the
competitions.
Sec. 641.795 Will there be incentives for exceeding performance
measures?
Yes, the Department will address non-financial incentives in
administrative issuances. The Department is authorized by section
515(c)(1) of the OAA to use recaptured funds to provide incentive
grants. The Department will issue administrative guidance detailing how
incentive grants will be awarded.
Subpart H--Administrative Requirements
Sec. 641.800 What uniform administrative requirements apply to the
use of SCSEP funds?
(a) SCSEP recipients and subrecipients must follow the uniform
administrative requirements and allowable cost requirements that apply
to their type of organization. (OAA sec. 503(f)(2)).
(b) Governments, State, local, and Indian Tribal Organizations that
receive SCSEP funds under grants or cooperative agreements must follow
the common rule implementing OMB Circular A-102, ``Grants and
Cooperative Agreements with State and Local Governments'' (10/07/1994)
(further amended 08/29/1977), codified at 29 CFR part 97.
(c) Nonprofit and commercial organizations, institutions of higher
education, hospitals, other nonprofit organizations, and commercial
organizations that receive SCSEP funds under grants or cooperative
agreements must follow the common rule implementing OMB Circular A-110,
codified at 29 CFR part 95.
Sec. 641.803 What is program income?
Program income, as described in 29 CFR 97.25 (governments) and 29
CFR 95.2(bb) (nonprofit and commercial organizations), is income earned
by the recipient or subrecipient during the grant period that is
directly generated by an allowable activity supported by grant funds or
earned as a result of the award of grant funds. Program income includes
income earned from license fees and royalties for copyrighted material,
patents, patent applications, trademarks, and inventions produced under
an award. (See 29 CFR 95.24(e) and 29 CFR 97.25(e)). Costs of
generating SCSEP program income may be deducted from gross income
received by SCSEP recipients and subrecipients to determine SCSEP
program income earned or generated provided these costs have not been
charged to the SCSEP program.
Sec. 641.806 How must SCSEP program income be used?
(a) SCSEP recipients that earn or generate program income during
the grant period must add the program income to the Federal and non-
Federal funds committed to the SCSEP program and use it for the
program, as provided in 29 CFR 95.24(a) or 29 CFR 97.25(g)(2), as
applicable.
(b) Recipients that continue to receive an SCSEP grant from the
Department must spend program income earned or generated from SCSEP
funded activities after the end of the grant period for SCSEP purposes
in the Program Year it was received.
(c) Recipients that do not continue to receive an SCSEP grant from
the Department must remit unexpended program income earned or generated
during the grant period from SCSEP funded activities to the Department
after the end of the grant period.
Sec. 641.809 What non-Federal share (matching) requirements apply to
the use of SCSEP funds?
(a) The Department will pay no more than 90 percent of the total
cost of activities carried out under a SCSEP grant. (OAA sec.
502(c)(1)).
(b) All SCSEP recipients, including Federal agencies if there is no
statutory exemption, must provide or ensure that at least 10 percent of
the total cost of activities carried out under an SCSEP grant (non-
Federal share of costs) consists of non-Federal funds, except as
provided in paragraphs (e) and (f) of this section.
(c) Recipients must determine the non-Federal share of costs in
accordance with 29 CFR 97.24 for governmental units, or 29 CFR 95.23
for nonprofit and commercial organizations.
(d) The non-Federal share of costs may be provided in cash, or in-
kind, or a combination of the two. (OAA sec. 502(c)(2)).
(e) A recipient may not require a subgrantee or host agency to
provide non-Federal resources for the use of the SCSEP project as a
condition of entering into a subrecipient or host relationship.
(f) The Department may pay all of the costs of activities carried
out under section 502(e) of the OAA. (OAA sec. 502(e)).
(g) The Department may pay all of the costs of activities in an
emergency or disaster project or a project in an economically
distressed area. (OAA sec. 502(c)(1)).
Sec. 641.812 What is the period of availability of SCSEP funds?
(a) Except as provided in Sec. 641.815, recipients must expend
SCSEP funds during the Program Year for which they are awarded (July 1-
June 30). (OAA sec. 515(b)).
(b) SCSEP recipients must ensure that no sub-agreement provides for
the expenditure of any SCSEP funds before July 1, or after the end of
the grant period, except as provided in Sec. 641.815.
Sec. 641.815 May the period of availability be extended?
SCSEP recipients may request in writing, and the Department may
grant, an extension of the period during which SCSEP funds may be
obligated or expended. SCSEP recipients requesting an extension must
justify that an extension is necessary. (OAA sec. 515(b)). The
Department will notify recipients in writing of the approval or
disapproval of any such requests.
[[Page 19067]]
Sec. 641.818 What happens to funds that are unexpended at the end of
the Program Year?
(a) The Department may recapture any unexpended funds at the end of
any Program Year and use the recaptured funds during the two succeeding
Program Years for:
(1) Incentive grants;
(2) Technical assistance; or
(3) Grant and contract awards for any other SCSEP programs and
activities. (OAA sec. 515(c)).
(b) The Department will provide the necessary information through
an administrative issuance.
Sec. 641.821 What audit requirements apply to the use of SCSEP funds?
(a) Recipients and subrecipients receiving Federal awards of SCSEP
funds must follow the audit requirements in paragraphs (b) and (c) of
this section that apply to their type of organization. As used here,
Federal awards of SCSEP funds include Federal financial assistance and
Federal cost-reimbursement contracts received directly from the
Department or indirectly under awards by SCSEP recipients or higher-
tier subrecipients. (OAA sec. 503(f)(2)).
(b) All governmental and nonprofit organizations that are
recipients or subrecipients must follow the audit requirements of OMB
Circular A-133. These requirements are codified at 29 CFR parts 96 and
99 and referenced in 29 CFR 97.26 for governmental organizations; and
in 29 CFR 95.26 for institutions of higher education, hospitals, and
other nonprofit organizations.
(c) (1) The Department is responsible for audits of SCSEP
recipients that are commercial organizations.
(2) Commercial organizations that are subrecipients under the SCSEP
program and that expend more than the minimum level specified in OMB
Circular A-133 ($500,000, for fiscal years ending after December 31,
2003) must have either an organization-wide audit conducted in
accordance with OMB Circular A-133 or a program-specific financial and
compliance audit.
Sec. 641.824 What lobbying requirements apply to the use of SCSEP
funds?
SCSEP recipients and subrecipients must comply with the
restrictions on lobbying codified in the Department's regulations at 29
CFR part 93. (Also refer to Sec. 641.850(c), ``Lobbying costs.'')
Sec. 641.827 What general nondiscrimination requirements apply to the
use of SCSEP funds?
(a) SCSEP recipients, subrecipients, and host agencies are required
to comply with the nondiscrimination provisions codified in the
Department's regulations at 29 CFR parts 31 and 32.
(b) Recipients and subrecipients of SCSEP funds are required to
comply with the nondiscrimination provisions codified in the
Department's regulations at 29 CFR part 37 if:
(1) The recipient:
(i) is a One-Stop partner listed in section 121(b) of WIA, and
(ii) operates programs and activities that are part of the One-Stop
Delivery System established under the Workforce Investment Act; or
(2) The recipient otherwise satisfies the definition of
``recipient'' in 29 CFR 37.4.
(c) Recipients must ensure that participants are provided
informational materials relating to age discrimination and/or their
rights under the Age Discrimination in Employment Act of 1975 that are
distributed to recipients by the Department pursuant to section
503(b)(3) of the OAA.
(d) Questions about, or complaints alleging a violation of the
nondiscrimination requirements cited in this section may be directed or
mailed to the Director, Civil Rights Center, U.S. Department of Labor,
Room N-4123, 200 Constitution Avenue, NW., Washington, DC 20210, for
processing. (See Sec. 641.910(d)).
(e) The specification of any right or protection against
discrimination in paragraphs (a) through (d) of this section must not
be interpreted to exclude or diminish any other right or protection
against discrimination in connection with an SCSEP program that may be
available to any participant, applicant for participation, or other
individual under any applicable Federal, State, or local laws
prohibiting discrimination, or their implementing regulations.
Sec. 641.833 What policies govern political patronage?
(a) A recipient or subrecipient must not select, reject, promote,
or terminate an individual based on political services provided by the
individual or on the individual's political affiliations or beliefs. In
addition, as indicated in Sec. 641.827(b), certain recipients and
subrecipients of SCSEP funds are required to comply with the Workforce
Investment Act nondiscrimination regulations in 29 CFR part 37. These
regulations prohibit discrimination on the basis of political
affiliation or belief.
(b) A recipient or subrecipient must not provide funds to any
subrecipient, host agency or other entity based on political
affiliation.
(c) SCSEP recipients must ensure that every entity that receives
SCSEP funds through the recipient is applying the policies stated in
paragraphs (a) and (b) of this section.
Sec. 641.836 What policies govern political activities?
(a) No project under title V of the OAA may involve political
activities. SCSEP recipients must ensure compliance with the
requirements and prohibitions involving political activities described
in paragraphs (b) and (c) of this section.
(b) State and local employees involved in the administration of
SCSEP activities may not engage in political activities prohibited
under the Hatch Act (5 U.S.C. chapter 15), including:
(1) Seeking partisan elective office;
(2) Using official authority or influence for the purpose of
affecting elections, nominations for office, or fund-raising for
political purposes. (5 U.S.C. 1502).
(c) SCSEP recipients must provide all persons associated with SCSEP
activities with a written explanation of allowable and unallowable
political activities under the Hatch Act. A notice explaining these
allowable and unallowable political activities must be posted in every
workplace in which SCSEP activities are conducted. The Department will
provide the form and content of the notice and explanatory material by
administrative issuance. (OAA sec. 502(b)(l)(P).
(d) SCSEP recipients must ensure that:
(1) No SCSEP participants or staff persons engage in partisan or
nonpartisan political activities during hours for which they are being
paid with SCSEP funds.
(2) No participants or staff persons engage in partisan political
activities in which such participants or staff persons represent
themselves as spokespersons for the SCSEP program.
(3) No participants are employed or out-stationed in the offices of
a Member of Congress, a State or local legislator, or on the staff of
any legislative committee.
(4) No participants are employed or out-stationed in the immediate
offices of any elected chief executive officer of a State or unit of
general government, except that:
(i) Units of local government may serve as host agencies for
participants, provided that their assignments are non-political; and
(ii) While assignments may technically place participants in such
offices, such assignments actually must be concerned with program and
service activities and not in any way involved in political functions.
[[Page 19068]]
(5) No participants are assigned to perform political activities in
the offices of other elected officials. Placement of participants in
such offices in non-political assignments is permissible, however,
provided that:
(i) SCSEP recipients develop safeguards to ensure that participants
placed in these assignments are not involved in political activities;
and
(ii) These safeguards are described in the grant agreement and are
subject to review and monitoring by the SCSEP recipient and by the
Department.
Sec. 641.839 What policies govern union organizing activities?
Recipients must ensure that SCSEP funds are not used in any way to
assist, promote, or deter union organizing.
Sec. 641.841 What policies govern nepotism?
(a) SCSEP recipients must ensure that no recipient or subrecipient
hires, and no host agency serves as a worksite for, a person who works
in an SCSEP community service position if a member of that person's
immediate family is engaged in a decision-making capacity (whether
compensated or not) for that project, subproject, recipient,
subrecipient, or host agency. The Department may exempt this
requirement from worksites on Native American reservations and in rural
areas provided that adequate justification can be documented, such as
that no other persons are eligible and available for participation in
the program.
(b) To the extent that an applicable State or local legal
requirement regarding nepotism is more restrictive than this provision,
SCSEP recipients must ensure that the more restrictive requirement is
followed.
(c) For purposes of this section, ``Immediate family'' means wife,
husband, son, daughter, mother, father, brother, sister, son-in-law,
daughter-in-law, mother-in-law, father-in-law, brother-in-law, sister-
in-law, aunt, uncle, niece, nephew, stepparent, stepchild, grandparent,
or grandchild.
Sec. 641.844 What maintenance of effort requirements apply to the use
of SCSEP funds?
(a) Employment of a participant funded under title V of the OAA is
permissible only in addition to employment that would otherwise be
funded by the recipient, subrecipient, and host agency without
assistance under the OAA. (OAA sec. 502(b)(1)(F)).
(b) Each project funded under title V:
(1) Must result in an increase in employment opportunities in
addition to those that would otherwise be available;
(2) Must not result in the displacement of currently employed
workers, including partial displacement such as a reduction in hours of
non-overtime work, wages, or employment benefits;
(3) Must not impair existing contracts for service or result in the
substitution of Federal funds for other funds in connection with work
that would otherwise be performed;
(4) Must not substitute SCSEP-funded positions for existing
Federally assisted jobs; and
(5) Must not employ or continue to employ any participant to
perform work that is the same or substantially the same as that
performed by any other person who is on layoff. (OAA sec.
502(b)(1)(G)).
Sec. 641.847 What uniform allowable cost requirements apply to the
use of SCSEP funds?
(a) General. Unless specified otherwise in this part or the grant
agreement, recipients and subrecipients must follow the uniform
allowable cost requirements that apply to their type of organization.
For example, a local government subrecipient receiving SCSEP funds from
a nonprofit organization must use the allowable cost requirements for
governmental organizations in OMB Circular A-87. The Department's
regulations at 29 CFR 95.27 and 29 CFR 97.22 identify the Federal
principles for determining allowable costs that each kind of
organization must follow. The applicable Federal principles for each
kind of organization are described in paragraphs (b)(1) through (b)(5)
of this section. (OAA sec. 503(f)(2)).
(b) Allowable costs/cost principles. (1) Allowable costs for State,
local, and Indian Tribal government organizations must be determined
under OMB Circular A-87, ``Cost Principles for State, Local and Indian
Tribal Governments.''
(2) Allowable costs for nonprofit organizations must be determined
under OMB Circular A-122, ``Cost Principles for Non-Profit
Organizations.''
(3) Allowable costs for institutions of higher education must be
determined under OMB Circular A-21, ``Cost Principles for Educational
Institutions.''
(4) Allowable costs for hospitals must be determined in accordance
with appendix E of 45 CFR part 74, ``Principles for Determining Costs
Applicable to Research and Development Under Grants and Contracts with
Hospitals.''
(5) Allowable costs for commercial organizations and those
nonprofit organizations listed in Attachment C to OMB Circular A-122
must be determined under the provisions of the Federal Acquisition
Regulation (FAR), at 48 CFR part 31.
Sec. 641.850 Are there other specific allowable and unallowable cost
requirements for the SCSEP?
(a) Yes, in addition to the generally applicable cost principles in
Sec. 641.847(b), the cost principles in paragraphs (b) through (g) of
this section apply to SCSEP grants.
(b) Claims against the Government. For all types of entities, legal
expenses for the prosecution of claims against the Federal Government,
including appeals to an Administrative Law Judge, are unallowable.
(c) Lobbying costs. In addition to the prohibition contained in 29
CFR part 93, SCSEP funds must not be used to pay any salaries or
expenses related to any activity designed to influence legislation or
appropriations pending before the Congress of the United States or any
State legislature. (See Sec. 641.824).
(d) One-Stop Costs. Costs of participating as a required partner in
the One-Stop delivery system established in accordance with section
134(c) of the Workforce Investment Act of 1998 are allowable, provided
that SCSEP services and funding are provided in accordance with the
Memorandum of Understanding required by the Workforce Investment Act
and section 502(b)(1)(O) of the Older Americans Act, and costs are
determined in accordance with the applicable cost principles.
(e) Building repairs and acquisition costs. Except as provided in
paragraph (e) of this section and as an exception to the allowable cost
principles in Sec. 641.847(b), no SCSEP funds may be used for the
purchase, construction, or renovation of any building except for the
labor involved in:
(1) Minor remodeling of a public building necessary to make it
suitable for use for project purposes;
(2) Minor repair and rehabilitation of publicly used facilities for
the general benefit of the community; and
(3) Minor repair and rehabilitation by participants of housing
occupied by persons with low incomes who are declared eligible for such
services by authorized local agencies.
(f) Accessibility and reasonable accommodation. Recipients and
subrecipients may use SCSEP funds to meet their obligations under
section 504 of the Rehabilitation Act of 1973, as amended, and the
Americans with Disabilities Act of 1990 and any other applicable
Federal disability nondiscrimination laws to provide
[[Page 19069]]
physical and programmatic accessibility and reasonable accommodation/
modifications for, and effective communications with, individuals with
disabilities. (29 U.S.C. 794).
(g) Participants' fringe benefit costs. Recipients and
subrecipients may use SCSEP funds for participant fringe benefit costs
only under the conditions set forth in Sec. 641.565.
Sec. 641.853 How are costs classified?
(a) All costs must be classified as ``administrative costs'' or
``program costs.'' (OAA sec. 502(c)(6)).
(b) Recipients and subrecipients must assign participants' wage and
fringe benefit costs and other participant (enrollee) costs such as
supportive services to the Program Cost cost category. (See Sec.
641.864). When participants' community service assignments involve
functions whose costs are normally classified as Administrative Cost,
compensation provided to the participants shall be charged as program
costs instead of administrative costs, since participant wage and
fringe benefit costs are always charged to the Program Cost category.
Sec. 641.856 What functions and activities constitute costs of
administration?
(a) The costs of administration are that allocable portion of
necessary and reasonable allowable costs of recipients and first-tier
subrecipients (as defined in paragraph (c) of this section) that are
associated with those specific functions identified in paragraph (b) of
this section and that are not related to the direct provision of
programmatic services specified in Sec. 641.864. These costs may be
both personnel and non-personnel and both direct and indirect costs.
(b) The costs of administration are the costs associated with:
(1) Performing overall general administrative and coordination
functions, including:
(i) Accounting, budgeting, financial, and cash management
functions;
(ii) Procurement and purchasing functions;
(iii) Property management functions;
(iv) Personnel management functions;
(v) Payroll functions;
(vi) Coordinating the resolution of findings arising from audits,
reviews, investigations, and incident reports;
(vii) Audit functions;
(viii) General legal services functions; and
(ix) Developing systems and procedures, including information
systems, required for these administrative functions;
(2) Oversight and monitoring responsibilities related to
administrative functions;
(3) Costs of goods and services used for administrative functions
of the program, including goods and services such as rental or purchase
of equipment, utilities, office supplies, postage, and rental and
maintenance of office space;
(4) Travel costs incurred for official business in carrying out
administrative activities or the overall management of the program; and
(5) Costs of information systems related to administrative
functions (for example, personnel, procurement, purchasing, property
management, accounting, and payroll systems) including the purchase,
systems development, and operating costs of such systems. (OAA sec.
502(c)(4)).
(c) First-tier subrecipients are those subrecipients that receive
SCSEP funds directly from an SCSEP recipient and perform the following
activities for all participants:
(1) Eligibility determination;
(2) Participant assessment;
(3) Development of and placement into community service
opportunities.
Sec. 641.859 What other special rules govern the classification of
costs as administrative costs or program costs?
(a) Recipients and subrecipients must comply with the special rules
for classifying costs as administrative costs or program costs set
forth in paragraphs (b) through (e) of this section.
(b)(1) Costs of awards by recipients and first-tier subrecipients
that are solely for the performance of their own administrative
functions are classified as administrative costs.
(2) Costs incurred by recipients and first tier subrecipients for
administrative functions listed in Sec. 641.856(b) are classified as
administrative costs.
(3) Costs incurred by vendors performing administrative functions
for recipients and first tier subrecipients are classified as
administrative costs.
(4) Except as provided in paragraph (b)(1), all costs incurred by
subrecipients other than first-tier subrecipients are classified as
program costs.
(5) Except as provided in paragraph (b)(3) of this section (i.e.,
costs that are incurred to perform administrative functions for
recipients and first tier subrecipients), all costs incurred by vendors
are program costs. (See 29 CFR 99.210 for a discussion of factors
differentiating subrecipients from vendors.)
(c) Personnel and related non-personnel costs of staff who perform
both administrative functions specified in Sec. 641.856(b) and
programmatic services or activities must be allocated as administrative
or program costs to the benefiting cost objectives/categories based on
documented distributions of actual time worked or other equitable cost
allocation methods.
(d) Specific costs charged to an overhead or indirect cost pool
that can be identified directly as a program cost must be charged as a
program cost. Documentation of such charges must be maintained.
(e) Costs of the following information systems including the
purchase, systems development and operating (e.g., data entry) costs
are charged to the ``program cost'' category:
(1) Tracking or monitoring of participant and performance
information;
(2) Employment statistics information, including job listing
information, job skills information, and demand occupation information;
and
(3) Local area performance information.
Sec. 641.861 Must SCSEP recipients provide funding for the
administrative costs of subrecipients?
(a) Recipients and subrecipients must obtain funding for
administrative costs to the extent practicable from non-Federal
sources. (OAA sec. 502(c)(5)).
(b) SCSEP recipients must ensure that sufficient funding is
provided for the administrative activities of subrecipients that
receive SCSEP funding through the recipient. Each SCSEP recipient must
describe in its grant application the methodology used to ensure that
subrecipients receive sufficient funding for their administrative
activities. (OAA sec. 502(b)(1)(R)).
Sec. 641.864 What functions and activities constitute program costs?
Program costs include, but are not limited to, the costs of the
following functions:
(a) Participant Wages and Fringe Benefits, consisting of wages paid
and fringe benefits provided to participants for hours of community
service assignments, as described in Sec. 641.565;
(b) Outreach, recruitment and selection, intake, orientation,
assessment, and preparation and updating of IEPs;
(c) Participant training provided on the job, in a classroom
setting, or utilizing other appropriate arrangements, consisting of
reasonable costs of instructors' salaries, classroom space, training
supplies, materials, equipment, and tuition;
(d) Subject to the restrictions in Sec. 641.535(c), job placement
assistance,
[[Page 19070]]
including job development and job search assistance, job fairs, job
clubs, and job referrals; and
(e) Participant supportive services, as described in Sec. 641.545.
(OAA sec. 502(c)(6)(A)).
Sec. 641.867 What are the limitations on the amount of SCSEP
administrative costs?
(a) Except as provided in paragraph (b), no more than 13.5 percent
of the SCSEP funds received for a Program Year may be used for
administrative costs.
(b) The Department may increase the amount available for
administrative costs to not more than 15 percent, in accordance with
Sec. 641.870. (OAA sec. 502(c)(3)).
Sec. 641.870 Under what circumstances may the administrative cost
limitation be increased?
(a) SCSEP recipients may request that the Department increase the
amount available for administrative costs. The Department may honor the
request if:
(1) The Department determines that it is necessary to carry out the
project; and
(2) The recipient demonstrates that:
(i) Major administrative cost increases are being incurred in
necessary program components, including liability insurance, payments
for workers' compensation, costs associated with achieving unsubsidized
placement goals, and other operation requirements imposed by the
Department;
(ii) The number of employment positions in the project or the
number of minority eligible individuals participating in the project
will decline if the amount available for paying the cost of
administration is not increased; or
(iii) The size of the project is so small that the amount of
administrative expenses incurred to carry out the project necessarily
exceeds 13.5 percent of the amount for such project. (OAA sec.
502(c)(3)).
(b) A request by a recipient or prospective recipient for an
increase in the amount available for administrative costs may be
submitted as part of the grant application or as a separate submission
at any time after the grant award.
Sec. 641.873 What minimum expenditure levels are required for
participant wages and fringe benefits?
(a) Not less than 75 percent of the SCSEP funds provided under a
grant from the Department must be used to pay for the wages and fringe
benefits of participants in such projects, including awards made under
section 502(e) of the OAA. (OAA sec. 502(c)(6)(B)).
(b) An SCSEP recipient is in compliance with this provision if at
least 75 percent of the total expenditures of SCSEP funds provided to
the recipient were for wages and benefits, even if one or more
subrecipients did not expend at least 75 percent of their SCSEP funds
for wages and fringe benefits for community service projects.
(c) Recipients receiving both general SCSEP funds and section
502(e) funds must meet the 75 percent requirement based on the total of
both grants.
Sec. 641.876 When will compliance with cost limitations and minimum
expenditure levels be determined?
The Department will determine compliance by examining expenditures
of SCSEP funds. The cost limitations and minimum expenditure level
requirements must be met at the time all such funds have been expended
or the period of availability of such funds has expired, whichever
comes first.
Sec. 641.879 What are the fiscal and performance reporting
requirements for recipients?
(a) In accordance with 29 CFR 97.40 or 29 CFR 95.51, as
appropriate, each SCSEP recipient must submit an SCSEP Quarterly
Progress Report (QPR) to the Department in electronic format via the
Internet within 30 days after the end of each quarter of the Program
Year (PY). The SCSEP recipient must prepare this report to coincide
with the ending dates for Federal PY quarters. Each SCSEP recipient
must also submit a final QPR to the Department within 90 days after the
end of the grant period. If the grant period ends on a date other than
the last day of a Federal Program Year quarter, the SCSEP recipient
must submit the final QPR covering the entire grant period no later
than 90 days after the ending date of the grant. The Department will
provide instructions for the preparation of this report. (OAA sec.
503(f)(3)).
(b) In accordance with 29 CFR 97.41 or 29 CFR 95.52, each SCSEP
recipient must submit an SCSEP Financial Status Report (FSR) in
electronic format to the Department via the Internet within 30 days
after the ending of each quarter of the Program Year. Each SCSEP
recipient must also submit a final FSR to the Department via the
Internet within 90 days after the end of the grant period. If the grant
period ends on a date other than the last day of a Federal PY quarter,
the SCSEP recipient must submit the final FSR covering the entire grant
period no later than 90 days after the ending date of the grant. The
Department will provide instructions for the preparation of this
report. (OAA sec. 503(f)(3)).
(1) Financial data are required to be reported on an accrual basis,
and cumulatively by funding year of appropriation. Financial data may
also be required on specific program activities.
(2) If the SCSEP recipient's accounting records are not normally
kept on the accrual basis of accounting, the SCSEP recipient must
develop accrual information through an analysis of the documentation on
hand.
(c) Each State agency receiving title V funds must annually submit
an equitable distribution report of SCSEP positions by all recipients
in the State. The Department will provide instructions for the
preparation of this report. (OAA sec. 508).
(d) Each SCSEP recipient that receives section 502(e) funds must
submit reports on its section 502(e) activities. The Department will
provide instructions for the preparation of these reports. (OAA sec.
503(f)(3)).
(e) Each SCSEP recipient must collect data and submit reports
regarding the program performance measures and the common performance
measures. See Sec. Sec. 641.700-641.720. The Department will provide
instructions detailing these measures and how recipients must prepare
this report.
(f) Each SCSEP recipient may be required to collect data and submit
reports about the demographic characteristics of program participants.
The Department will provide instructions detailing these measures and
how recipients must prepare this report.
(g) Federal agencies that receive and use SCSEP funds under
interagency agreements must submit project fiscal and progress reports
in accordance with this section. Federal recipients must maintain the
necessary records that support required reports according to
instructions provided by the Department. (OAA sec. 503(f)(3)).
(h) Recipients may be required to maintain records that contain any
other information that the Department determines to be appropriate in
support of any other reports that the Department may require. (OAA sec.
503(f)(3)).
(i) Grantees submitting reports that cannot be validated or
verified as accurately counting and reporting activities in accordance
with the reporting instructions may be treated as failing to submit
reports, which may result in failing one of the responsibility tests
outlined in Sec. 641.440 and section 514(d) of the OAA.
[[Page 19071]]
Sec. 641.881 What are the SCSEP recipient's responsibilities relating
to awards to subrecipients?
(a) The SCSEP recipient is responsible for all grant activities,
including the performance of SCSEP activities by subrecipients, and
ensuring that subrecipients comply with the OAA and this part. (See
also OAA sec. 514 on responsibility tests).
(b) Recipients must follow their own procedures for allocating
funds to other entities. The Department will not grant funds to another
entity on the recipient's behalf.
Sec. 641.884 What are the grant closeout procedures?
SCSEP recipients must follow the grant closeout procedures at 29
CFR 97.50 or 29 CFR 95.71, as appropriate. The Department will issue
supplementary closeout instructions to title V recipients as necessary.
Subpart I--Grievance Procedures and Appeals Process
Sec. 641.900 What appeal process is available to an applicant that
does not receive a grant?
(a) An applicant for financial assistance under title V of the OAA
that is dissatisfied because the Department has issued a determination
not to award financial assistance, in whole or in part, to such
applicant, may request that the Grant Officer provide the reasons for
not awarding financial assistance to that applicant (debriefing). The
request must be filed within 10 days of the date of notification
indicating that it would not be awarded. The Grant Officer must provide
the protesting applicant with a debriefing and with a written decision
stating the reasons for the decision not to award the grant within 20
days of the protest. Applicants may appeal to the U.S. Department of
Labor, Office of Administrative Law Judges, within 21 days of the date
of the Grant Officer's notice providing reasons for not awarding
financial assistance. The appeal may be for a part or the whole of a
denial of funding. This appeal will not in any way interfere with the
Department's decisions to fund other organizations to provide services
during the appeal period.
(b) Failure to either request a debriefing within 10 days or to
file an appeal within 21 days provided in paragraph (a) of this section
constitutes a waiver of the right to a hearing.
(c) A request for a hearing under this section must state
specifically those issues in the Grant Officer's notification upon
which review is requested. Those provisions of the Grant Officer's
notification not specified for review, or the entire final
determination when no hearing has been requested within the 21 days,
are considered resolved and not subject to further review.
(d) A request for a hearing must be transmitted by certified mail,
return receipt requested, to the Chief Administrative Law Judge, U.S.
Department of Labor, Suite 400, 800 K Street, NW., Washington, DC
20001, with one copy to the Departmental official who issued the
determination.
(e) The decision of the ALJ constitutes final agency action unless,
within 20 days of the decision, a party dissatisfied with the ALJ's
decision, in whole or in part, has filed a petition for review with the
Administrative Review Board (ARB) (established under Secretary's Order
No. 2-96, published at 61 FR 19978 (May 3, 1996)), specifically
identifying the procedure, fact, law or policy to which exception is
taken. The Department will deem any exception not specifically urged to
have been waived. A copy of the petition for review must be sent to the
opposing party at that time. Thereafter, the decision of the ALJ
constitutes final agency action unless the ARB, within 30 days of the
filing of the petition for review, notifies the parties that the case
has been accepted for review. Any case accepted by the ARB must be
decided within 180 days of acceptance. If not so decided, the decision
of the ALJ constitutes final agency action.
(f) The Rules of Practice and Procedures for Administrative
Hearings Before the Office of Administrative Law Judges, set forth at
29 CFR part 18, govern the conduct of hearings under this section,
except that:
(1) The appeal is not considered as a complaint; and
(2) Technical rules of evidence, such as the Federal Rules of
Evidence and subpart B of 29 CFR part 18, will not apply to any hearing
conducted under this section. However, rules designed to assure
production of the most credible evidence available and to subject
testimony to test by cross-examination will be applied when the
Administrative Law Judge conducting the hearing considers them
reasonably necessary. The certified copy of the administrative file
transmitted to the Administrative Law Judge by the official issuing the
final determination must be part of the evidentiary record of the case
and need not be moved into evidence.
(g) The Administrative Law Judge should render a written decision
no later than 90 days after the closing of the record.
(h) The remedies available are provided in Sec. 641.470.
(i) This section only applies to multi-year grant awards.
Sec. 641.910 What grievance procedures must grantees make available
to applicants, employees, and participants?
(a) Each grantee must establish, and describe in the grant
agreement, grievance procedures for resolving complaints, other than
those described by paragraph (d) of this section, arising between the
grantee, employees of the grantee, subgrantees, and applicants or
participants.
(b) The Department will not review final determinations made under
paragraph (a) of this section, except to determine whether the
grantee's grievance procedures were followed, and according to
paragraph (c) of this section.
(c) Allegations of violations of Federal law, other than those
described in paragraph (d) of this section, which are not resolved
within 60 days under the grantee's procedures, may be filed with the
Chief, Division of Older Worker Programs, Employment and Training
Administration, U.S. Department of Labor, 200 Constitution Avenue, NW.,
Washington, DC 20210. Allegations determined to be substantial and
credible will be investigated and addressed.
(d) Questions about, or complaints alleging a violation of, the
nondiscrimination requirements of Title VI of the Civil Rights Act of
1964, Section 504 of the Rehabilitation Act of 1973, Section 188 of the
Workforce Investment Act of 1998 (WIA), or their implementing
regulations may be directed or mailed to the Director, Civil Rights
Center, U.S. Department of Labor, Room N-4123, 200 Constitution Avenue,
NW., Washington, DC 20210. In the alternative, complaints alleging
violations of WIA section 188 may be filed initially at the grantee
level. See 29 CFR 37.71, 37.76. In such cases, the grantee must use
complaint processing procedures meeting the requirements of 29 CFR
37.70 through 37.80 to resolve the complaint.
Sec. 641.920 What actions of the Department may a grantee appeal and
what procedures apply to those appeals?
(a) Appeals from a final disallowance of costs as a result of an
audit must be made under 29 CFR 96.63.
(b) Appeals of suspension or termination actions taken on the
grounds of discrimination are processed under 29 CFR part 31 or 37, as
appropriate.
(c) Protests and appeals of decisions not to award a grant, in
whole or in part, will be handled under Sec. 641.900.
[[Page 19072]]
(d) Upon a grantee's receipt of the Department's final
determination relating to costs (except final disallowance of costs as
a result of an audit, as described in paragraph (a) of this section),
payment, suspension or termination or the imposition of sanctions, the
grantee may appeal the final determination to the Department's Office
of Administrative Law Judges, as follows:
(1) Within 21 days of receipt of the Department's final
determination, the grantee may transmit by certified mail, return
receipt requested, a request for a hearing to the Chief Administrative
Law Judge, United States Department of Labor, 800 K Street, NW., Room
400 N, Washington, DC 20001 with a copy to the Department official who
signed the final determination. The Chief Administrative Law Judge will
designate an Administrative Law Judge to hear the appeal.
(2) The request for hearing must be accompanied by a copy of the
final determination, and must state specifically those issues of the
determination upon which review is requested. Those provisions of the
determination not specified for review, or the entire determination
when no hearing has been requested within the 21 days, are considered
resolved and not subject to further review.
(3) The Rules of Practice and Procedures for Administrative
Hearings Before the Office of Administrative Law Judges, set forth at
29 CFR part 18, govern the conduct of hearings under this section,
except that:
(i) The appeal is not considered as a complaint; and
(ii) Technical rules of evidence, such as the Federal Rules of
Evidence and Subpart B of 29 CFR Part 18, will not apply to any hearing
conducted under this section. However, rules designed to assure
production of the most credible evidence available and to subject
testimony to test by cross-examination will be applied when the
Administrative Law Judge conducting the hearing considers them
reasonably necessary. The certified copy of the administrative file
transmitted to the Administrative Law Judge by the official issuing the
final determination must be part of the evidentiary record of the case
and need not be moved into evidence.
(4) The Administrative Law Judge should render a written decision
no later than 90 days after the closing of the record. In ordering
relief, the ALJ may exercise the full authority of the Secretary under
the OAA.
(5) The decision of the ALJ constitutes final agency action unless,
within 21 days of the decision, a party dissatisfied with the ALJ's
decision, in whole or in part, has filed a petition for review with the
Administrative Review Board (ARB) (established under Secretary's Order
No. 2-96), specifically identifying the procedure, fact, law or policy
to which exception is taken. The Department will deem any exception not
specifically urged to have been waived. A copy of the petition for
review must be sent to the opposing party at that time. Thereafter, the
decision of the ALJ constitutes final agency action unless the ARB,
within 30 days of the filing of the petition for review, notifies the
parties that the case has been accepted for review. Any case accepted
by the ARB must be decided within 180 days of acceptance. If not so
decided, the decision of the ALJ constitutes final agency action.
Sec. 641.930 Is there an alternative dispute resolution process that
may be used in place of an OALJ hearing?
(a) Parties to a complaint that has been filed according to the
requirements of Sec. 641.920 (a), (c), and (d) may choose to waive
their rights to an administrative hearing before the OALJ. Instead,
they may choose to transfer the settlement of their dispute to an
individual acceptable to all parties who will conduct an informal
review of the stipulated facts and render a decision in accordance with
applicable law. A written decision must be issued within 60 days after
submission of the matter for informal review.
(b) Unless the parties agree in writing to extend the period, the
waiver of the right to request a hearing before the OALJ will
automatically be revoked if a settlement has not been reached or a
decision has not been issued within the 60 days provided in paragraph
(a) of this section.
(c) The decision rendered under this informal review process will
be treated as the final agency decision.
[FR Doc. 04-7282 Filed 4-8-04; 8:45 am]
BILLING CODE 4510-30-P