1 WORKFORCE NY 2009 SPRING CONFERENCE ARRA FISCAL ISSUES Presented by: Phil Wagner & Maryrose Walsh

2 Spend! Spend! Spend Increase Services Increase Training Increase NRPs/Supportive Services

3 Technical Advisories TA Training ITAs TA Reporting Training Costs TA PY 09 Supplemental Distribution TA 09-3 – Gas Cards Rural Counties TA Transportation Assistance Non-Rural counties TA Availability of WIA Funds for Technology Purchases

4 Other TAs New York State Department of Labor (NYSDOL) Policy Renovation Costs Allowable Against Workforce Investment Act (WIA) funds Draft-New York State policy on the transfer of ARRA funds. The policy will allow a transfer of up to 30% between Dislocated Worker and Adult

5 WIA Reporting Changes Training Needs Related Payments/Supportive Services

6 ARRA The workforce system must be guided by 4 principles in utilizing the ARRA funding Transparency and accountability Timely spending of funds and implementation of activities Increasing workforce system capacity and service levels Using data and workforce information to guide strategic planning and service delivery

7 ARRA ETA expects states and local areas to fully utilize these funds to substantially increase the number of customers served and to substantially increase the proportion of those customers who receive training These funds must be used to supplement WIA/Wagner-Peyser appropriations and must only be used for activities that are in addition to those otherwise available in the local area

8 Allowable Costs All the rules regulations for use of formula funds remain unless specifically excepted in: The ARRA USDOL Guidance State Waiver This applies to the allowability of costs.

9 Allowable Costs WIA and Wagner-Peyser funds provided under the Recovery Act are subject to all WIA and Wagner- Peyser rules and regulations, except where otherwise specified in the Recovery Act, the terms of the grant, or in formal ETA guidance. TEGL identifies Recovery Act rules as they pertain to WIA formula and Wagner-Peyser programs. Many of the Recovery Act exceptions to WIA and Wagner-Peyser rules and regulations pertain to WIA Youth formula funds and Reemployment Services. Additional examples include the Recovery Act requirement that the workforce system give low-income individuals priority of service under the Recovery-Act funded WIA adult formula program, and the Recovery Act waiver policies developed by ETA.

10 Allowable Costs Youth: Age eligibility increased to a maximum of 24 years old Strong emphasis on summer employment as major component of funding Work readiness indicator will be only indicator to assess the effectiveness of summer employment

11 Allowable Costs Section 1604 of the Recovery Act prohibits States, local governments, or any private entity from using stimulus funds for any casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool. Under this prohibition, Recovery Act funds may not be used to support these types of organizations through employment and training services such as on-the-job training (OJT), customized training, and use of funds at summer employment worksites. NOTE: This applies to all ARRA funds – not just summer Youth

12 Allowable Activities The Recovery act contains several provisions designed to target services to populations most heavily impacted by the recession including low skill or low-income adults, public assistance recipients, and disconnected youth who are out of school and out of work

13 Allowable Costs For intensive and training services under the Recovery Act WIA Adult program, local areas must give priority to recipients of public assistance and other low-income individuals as described in WIA section 134(d)(4)(e). Unlike the normal formula- funded WIA program, the Recovery Act priority applies regardless of whether funds are limited in the local area or not. The priority of service for recipients of public assistance and other low-income individuals does not apply to the WIA Dislocated Worker program, either under WIA or under the Recovery Act.

14 Allowable Costs To increase the availability of training to workforce system customers, the Recovery Act allows Local Workforce Investment Boards (LWIB) to award contracts to institutions of higher education, such as community colleges, or other eligible training providers, if the board determines, it would facilitate the training of multiple individuals in high- demand occupations and if the contracts do not limit customer choice.

15 Allowable Costs The development of curriculum by institutions of higher education can be considered a training activity under WIA, if it is developed in the context of providing training to WIA participants. Should focus on adapting existing or new curriculum that will result in a short-term increase in training capacity rather than long-term curriculum development activities

16 Allowable Costs While always allowable under WIA, the Recovery Act specifically emphasizes the authority to use these funds for supportive and needs related payments to enable participants to pursue training for sufficient duration to acquire skills and credentials to prepare for emerging jobs

17 Allowable Costs Q.Can ARRA/WIA funds be used to pay for Youth to attend summer school? A.By itself, paying youth to go to summer school is not an allowable activity. However, combined work and learning models are an allowable expense for which stipends may be provided for time attending the classroom component of the program.

18 Eligibility The specific identification of WIA Adults, Dislocated Workers, and Wagner-Peyser Employment Service individuals served with Recovery Act funds only versus regular formula funds is a challenge since there are no differentiating eligibility requirements specified in the Act. It is further complicated by the fact that Recovery Act funds must be spent concurrently with ongoing funding streams for these programs specified in the Recovery Act. Therefore, because characteristics and eligibility are identical and because services may well be paid for with both regular and Recovery Act funds it is not possible to distinguish who is a Recovery Act participant in any meaningful way.

19 Cost Charging & Allocation The Recovery Act requires that all expenditures related to the Recovery Act funding be accounted for and reported separately from regular WIA and Wagner- Peyser formula funds. States and local areas must implement methods to account for and report Recovery Act funds appropriately, including cost allocation methods. States and local areas do not need to track summer youth activities separately from year-round youth activities under the Recovery Act.

20 Cost Charging & Allocation Cost allocation is cost allocation whether under WIA or ARRA. The same principles apply. Allocability is a measure of the extent to which a cost benefits the ETA grant program in general and its cost objectives in particular. To the extent a cost does nor benefit the program, the cost cannot be charged to that program.

21 Cost Charging & Allocation Same old stuff – follow the appropriate OMB Circulars as defined at 20 CFR 97.22(b) and Direct Costs Indirect Costs Choose an allocation basis that best measures benefit received

22 Cost Charging & Allocation If not much is new regarding cost charging and cost allocation, why do we need to pay special attention to this? Because we should anticipate that Congress and the public will be looking for expenditures and performance results very quickly Vey important to actively manage your appropriations and your budgets

23 Cost Charging and Allocation The ARRA NOAs say: The intent of the Recovery Act is that funds be spent quickly and effectively A Technical Advisory explaining the recapture of unexpended funds will be issued shortly To maximize the accrued expenditures, and to avoid the potential recapture of funds, it is imperative that accruals be appropriately reported

24 Cost Charging & Allocation The ARRA NOAs issued authorizes PY 2008 for the period 2/17/09 through 6/30/11 Funds to be spent quickly. Do not hold onto them expecting theyll be there in the future – there will be recapture provisions! Use it (wisely and effectively) or lose it.

25 Cost Charging & Allocation Therefore, youll need to know what the spending requirements are (percentages and timelines) and actively manage your services, spending and budgets to ensure you optimize your funds and avoid recapture. No one wants to explain to their public officials or to the public why they are giving back employment and training funds in this economy and with record high UI rates.

26 Cost Charging & Allocation What do we need to be aware of – what is different under ARRA than under WIA? The mechanics of cost allocation are the same regardless of whether WIA or ARRA You need to be aware of what types of costs are allowable under one program that are not allowable under the other (and vice versa) and based on that you will know where to charge the costs

27 Cost Charging & Allocation ADULT and DW The specific identification of WIA Adults, Dislocated Workers, and Wagner-Peyser Employment Service individuals served with Recovery Act funds only versus regular formula funds is a challenge since there are no differentiating eligibility requirements specified in the Act. Therefore, because characteristics and eligibility are identical and because services may well be paid for with both regular and Recovery Act funds it is not possible to distinguish who is a Recovery Act participant in any meaningful way. This gives you almost complete discretion as to which program you charge Adult and DW costs (there are a few exceptions). Critical to have good, active communication between program and fiscal staff.

28 Cost Charging & Allocation ADULT and DW Exceptions to the prior observation The related costs of serving participants served under contracts to institutions of higher education, such as community colleges, or other eligible training providers as allowable under ARRA (but not WIA) must be charged to ARRA.

29 Cost Charging & Allocation ADULT Exceptions to the prior observation Priority of service. If the LWIAs WIA priority of service policy is different than the priority of service policy required under ARRA, this may set up differentiating eligibility criteria which would in turn require the related participant costs to be specifically identified to the appropriate program.

30 Cost Charging & Allocation Youth The related costs of serving Youth participants ages must be charged to ARRA (since participants those ages are not eligible as WIA Youth) The costs of serving participants who work at a casino or other gambling establishment, aquarium, zoo, golf course, or swimming pool must be charged to WIA (as those costs are not allowable under ARRA)

31 Cost Charging & Allocation Example: An Adult or DW participant is provided an ITA. The LWIA has discretion to charge the costs of the ITA to WIA, ARRA or to split fund the costs between the 2 funding sources (consider the exceptions previously discussed) Take into account your remaining funding levels and your spending targets in making the decision where to charge the cost. Thats why communication between program and fiscal staff is critical.

32 Cost Charging & Allocation Example: A counselor provides services to 3 participants whose direct training costs were charged to: 1) WIA; 2) ARRA; 3) Split-funded The LWIA has the discretion of allocating the counselors time totally to ARRA, totally to WIA or to split-fund in any way they choose because there is no distinction in the eligibility requirements of the 3 participants Must have records to support all charges

33 Cost Charging & Allocation Example: Youth participant age 23 – Direct costs must be charged to ARRA because participant is not eligible under WIA Youth Youth participant age 20 – LWIA has discretion to charge the direct costs to either WIA or ARRA because participant is eligible under both programs

34 Cost Charging & Allocation Example: WIA Summer Counselor has a caseload that includes participants age 22 – 24 and participants age The time spent serving the participants age 22 – 24 must be charged to ARRA. The time spent serving the other participants can be charged to either WIA or ARRA (or split-charged)*. Must have a documented basis for the allocations. *Be aware of exceptions

35 Cost Charging & Allocation Example: The LWIA contracts with the local community college to provide classroom training. The total costs of this training must be charged to ARRA (and the participants enrolled as ARRA in OSOS) because these are not allowable under WIA.

36 Procurement WIA Procurement Requirements Minimum standards set by 29 CFR Parts 95 or 97 In general States and local boards/governments must follow their own/local procurement requirements States usually Allow local governmental entities to follow their own procedures Require local boards to develop procedures with minimum standards set by the CFR and /or the state

37 Procurement Per TEGL States and local areas should explore expedited or emergency procurement processes that may be available under current state and local law, provided that these processes comply with 29 CFR Parts and In order to implement summer employment during the summer of 2009, ETA recognizes the need for flexibility in the youth procurement requirements in WIA section 123. States have the option of applying for a waiver as detailed in Section 19 of this guidance.

38 Procurement NYS has been granted waivers from ETA: Expand existing competitively procured contracts through 9/30/09 Conduct an expedited, limited competition to select service providers (must be among service providers with proven records of success in providing youth services These only apply to WIA Youth program funds made available thru ARRA and only applies to summer 2009

39 Procurement The chief elected officials (which may include local government units operating as a consortium) are the grant recipients for local youth funds, unless another entity is chosen to be grant recipient or fiscal agent If providers other than the grant recipient/fiscal agent, are used to provide summer youth program activities the providers must be selected on a competitive basis. The governmental entities that comprise the consortium in multi-county LWIAs are considered the grant recipient and they can provide summer youth program activities WITHOUT competitive procurement. The selection of employers who are providing unsubsidized employment opportunities are excluded from the competitive process.

40 Procurement Class Size Training LWIBs may award a contract to an institution of higher education or other eligible training provider if the local board determines that it would facilitate the training of multiple individuals in high-demand occupations if such contract does not limit customer choice AND Proper Procurement Protocol is Followed!!