WIOA: Fiscal & Legal Issues Michael Brustein, Esq. mbrustein@bruman.com Steven Spillan, Esq. sspillan@bruman.com www.bruman.com

2017 Case Study: Maine July 27, 2017, local WIBs receive just 1/3 of their Title I-B funds for PY 17 Period of performance: July 1- October 31, 2017 Governor has a pending request to DOL to do away with local WIBs (July 11, 2017) DOL Rejected request Governor “rejected” continued participation Notified local WIBs to “wind down” by November 30

Maine Case Study (cont.) October 23 – Maine DOL withholds remainder of PY 16 funds October 24 - Local board files suit against State to release funds Maine DOL offers to settle with local WIB WIB must agree to spend 60% of funds on direct training No resolution?

Maine Case Study (cont.) Primary Issue: Governor’s authority to: Bypass local WIBs Withdraw from Title II-B of WIOA Mandate local use of funds? Things to Consider: Statutory framework of local boards Governor’s authority in a “State-administered” program Congressional intent

Maine Case Study (cont.) Relevant Laws & Regulations: WIOA Sec. 128(b) & 133(b) – within state allocations 20 CFR Part 679, Subpart B – State and local governance under WIOA 2 CFR § 200.331(a)(2-3) – authority of pass-through entities

Legal Authorities Training & Employment Notices (TENs) Statute Workforce Innovation and Opportunity Act (WIOA) 29 U.S.C. §§ 3101 et seq. Regulations Program Regulations WIOA Implementation Rules 20 CFR Parts 676, 677, 678, 679, 680, etc. 34 CFR Parts 361 and 461, 462, 463, etc. Administrative Rules, Cost Principles, Audit Requirements (Uniform Guidance) Includes 2 CFR Part 200; Part 2900 Guidance Training & Employment Guidance Letters (TEGLs) Training & Employment Notices (TENs)

Workforce Innovation & Opportunity Act Signed into Law: July 22, 2014 Effective Date: July 1, 2015 Unified/Combined State Plans Due: April 1, 2016 Notice of Proposed Rulemaking NPRM: April 16, 2015 Final Rules: June 30, 2016 (Available); August 19, 2016 (Federal Register) New Accountability Provisions Effective: July 1, 2016 Provisions delayed until July 1, 2017…

Performance Reports TEGL No. 03-17 (9/12/2017) Annual Performance Reports Due October 1, 2017 Accepted through October 16, 2017 New Guidance Regarding Data Elements: TEGL No. 10-16, Change 1 https://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=3255

Infrastructure Costs & Proportionate Use Relative Benefits Received General Policy: Infrastructure Costs must be based on: Proportionate Use & Relative Benefits Received Citation: 20 CFR § 678.715

What Does That Mean? Controlling Authority 2 CFR § 200.405 of the UGG “Allocable Costs” 20 CFR § 678.715(a)(3)

Allocability Services must be “assignable” based on benefit received by program. Examples: 20% of participants enrolled in college or provider are referred by One-Stop 5% of college/provider staff work directly/indirectly with One-Stop

But… What if college/provider has no participants referred from One-Stop, and no staff interface with One-Stop? WIOA statute/regs/guidance all require partner programs provide “career services” through the One-Stop, regardless of proportionate benefit

What does that mean for infrastructure? Does the “career services” mandate establish the requisite nexus with the One-Stop? If so, would it mandate an Infrastructure Costs Agreement?

How Do We Rectify This? Complete an Infrastructure Costs Agreement (IFA) 15 Easy Steps!

Step 1 Local WIBs and Chief Elected Officials (CEOs) finalize list of One-Stop partner programs Sec. 121(b) of WIOA

Step 2 WIBs, CEOs, and partners determine One-Stop locations and types: Comprehensive Affiliate Virtual Satellite

Step 3 WIBs, CEOs, and partners determine services to be provided through One-Stop system

Step 4 WIBs and partners enter into a MOU. The MOU describes how One-Stop partners coordinate services. (Deadline: 7/1/2017)

Step 5 MOU includes a One-Stop operating budget which reflects One-Stop operating costs

Step 6 A required component of the One-Stop operating budget is the Infrastructure Costs Agreement (IFA) which outlines the budgeted infrastructure costs and additional costs (Deadline: 1/1/18)

Step 7 Additional Costs: Must include applicable career services 20 CFR § 678.430 May include shared operating costs and shared services necessary for general operation of the One-Stop Center 20 CFR § 678.760

Shared Operating Costs Initial intake assessment of needs, appraisal of basic skills, referrals, etc.

Step 8 Funding for IFA may be: Cash Non-cash 3rd party in-kind contributions 20 CFR § 678.720

Step 9 Perkins funds may be administrative. AEFLA funds must be administrative.

Step 10 Examples of Infrastructure Costs (§678.700) Utilities Common supplies/equipment Telephone systems Common reception area Informational services Data input on consumers Maintenance of space

Step 11 These costs may be: Direct costs that benefit one program Shared direct costs that can be readily allocated to different programs Indirect costs incurred for common purposes, but not readily assignable to different programs

Step 12 These costs must be allocated to the benefitting programs, based on benefits received, not availability of funds. Cannot shift costs that are not allowable.

Step 13 WIOA Title I AEFLA PERKINS P/S Unshaded center are shared costs that benefit WIOA, CTE, & AEFLA participants

Step 14 Staffing formula Calculate full time equivalent (FTE) of the partner program divided by total FTE of all programs at the Center (based on average of past 2 years) Percentage shall be multiplied by sum total of infrastructure costs Establish a schedule to reconcile projected costs to actual costs quarterly

Step 15 Customer Formula: Same as above, but based on participants

WARNING!!!!!!! If no Agreement, State option triggered

Questions?

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