Phone: (202) 693-7347 Black Lung: VACANT Phone: (202) 693-7300 Job Training Partnership Act (JTPA) regulatory amendments, 59 Fed. Reg. 45815 (Sept. 2, 1994) (Revised Part 627)
[Excerpt from Federal Register / Vol. 59, No. 170 / Friday, September 2, 1994
/ 45815 (amendments to JTPA regulations)]
2. Part 627 is revised to read as follows:
PART 627--GENERAL PROVISIONS GOVERNING PROGRAMS UNDER TITLES I, II,
AND III OF THE ACT
Subpart A--Scope and Purpose
627.100 Scope and purpose of this Part 627.
Subpart B--Program Requirements
627.200 Governor/Secretary agreement.
627.201 Waivers.
627.205 Public service employment prohibition.
627.210 Nondiscrimination and nonsectarian activities.
627.215 Relocation.
627.220 Coordination with programs under title IV of the Higher
Education Act including the Pell grant program.
627.225 Employment generating activities.
627.230 Displacement.
627.235 General program requirements.
627.240 On-the-job training.
627.245 Work experience.
627.250 Interstate agreements.
Subpart C--Payments, Supportive Services, and Benefits and Working
Conditions
627.300 Scope and purpose.
627.305 Payments.
627.310 Supportive services.
627.315 Benefits and working conditions.
Subpart D--Administrative Standards
627.400 Scope and purpose.
627.405 Grant agreement and funding.
627.410 Reallotment and reallocation.
627.415 Insurance.
627.420 Procurement.
627.422 Selection of service providers.
627.423 Funding restrictions for "high-risk" recipients and
subrecipients.
627.424 Prohibition of subawards to debarred and suspended parties.
627.425 Standards for financial management and participant data
systems.
627.430 Grant payments.
627.435 Cost principles and allowable costs.
627.440 Classification of costs.
627.445 Limitations on certain costs.
627.450 Program income.
627.455 Reports required.
627.460 Requirements for records.
627.463 Public access to records.
627.465 Property management standards.
627.470 Performance standards.
627.471 Reorganization plan appeals.
627.475 Oversight and monitoring.
627.477 Governor's determination of substantial violation.
627.480 Audits.
627.481 Audit resolution.
627.485 Closeout.
627.490 Later disallowances and adjustments after closeout.
627.495 Collection of amounts due.
Subpart E--Grievances Procedures at the State and Local Level
627.500 Scope and purpose.
627.501 State grievance and hearing procedures for noncriminal
complaints at the recipient level.
627.502 Grievance and hearing procedures for noncriminal complaints
at the SDA and SSG levels.
627.503 Recipient-level review.
627.504 Noncriminal grievance procedure at employer level.
Subpart F--Federal Handling of Noncriminal Complaints and Other
Allegations
627.600 Scope and purpose.
627.601 Complaints and allegations at the Federal Level.
627.602 Resolution of investigative findings.
627.603 Special handling of labor standards violations under
section 143 of the Act.
627.604 Alternative procedure for handling labor standards
violations under section 143--Binding arbitration.
627.605 Special Federal review of SDA- and SSG-level complaints
without decision.
627.606 Grant officer resolution.
627.607 Grant Officer resolution of Governor's failure to promptly
take action.
Subpart G--Sanctions for Violations of the Act
627.700 Scope and purpose.
627.702 Sanctions and corrective actions.
627.703 Failure to comply with procurement provisions.
627.704 Process for waiver of State liability.
627.706 Process for advance approval of a recipient's contemplated
corrective actions.
627.708 Offset process.
Subpart H--Hearings by the Office of Administrative Law Judges
627.800 Scope and purpose.
627.801 Procedures for filing request for hearing.
627.802 Rules of procedure.
627.803 Relief.
627.804 Timing of decisions.
627.805 Alternative dispute resolution.
627.806 Other authority.
Subpart I--Transition Provisions
627.900 Scope and purpose.
627.901 Transition period.
627.902 Governor's actions.
627.903 Actions which are the discretion of the Governor.
627.904 Transition and implementation.
627.905 Guidance on contracts and other agreements.
627.906 Determinations on state and SDA implementation.
Authority: 29 U.S.C. 1579(a); Sec. 6305(f), Pub. L. 100-418, 102
Stat. 1107; 29 U.S.C. 1791i(e).
Subpart A--Scope and Purpose
Sec. 627.100 Scope and purpose of this part 627.
(a) This part sets forth requirements for implementation of
programs under titles I, II, and III of the Job Training Partnership
Act.
(b) Subpart B provides general program requirements that apply to
all programs under the titles I, II, and III of the Act, except as
provided elsewhere in the Act or this chapter. These requirements
include the Governor/Secretary agreement, the nondiscrimination and
nonsectarian activity provisions, coordination provisions with Higher
Education Act programs, and the prohibitions on public service
employment, relocation assistance, displacement, and employment
generating activities. This subpart also sets forth comprehensive rules
for on-the-job training for JTPA participants as well as for work
experience.
(c) Subpart C sets forth requirements for allowable payments to
JTPA participants.
(d) Subpart D establishes the administrative and financial
standards and requirements that apply to funds received under the Act.
(e) Subpart E establishes the procedures that apply to the handling
of noncriminal complaints under the Act at the Governor, the SDA, and
title III SSG levels.
(f) Subpart F establishes the procedures that apply to the filing,
handling, and review of complaints at the Federal level.
(g) Subpart G sets forth the provisions that apply to the sanctions
and corrective actions that may be imposed by the Secretary for
violations of the Act, regulations, or grant terms and conditions.
(h) Subpart H sets forth procedures that apply to hearing by the
Office of the Administrative Law Judges.
Subpart B--Program Requirements
Sec. 627.200 Governor/Secretary agreement.
(a)(1) To establish a continuing relationship under the Act, the
Governor and the Secretary shall enter into a Governor/Secretary
agreement. The agreement shall consist of a statement assuring that the
State shall comply with (i) the Job Training Partnership Act and all
applicable rules and regulations and (ii) the Wagner-Peyser Act and all
applicable rules and regulations. The agreement shall specify that
guidelines, interpretations, and definitions, adopted and issued by the
Governor and identified pursuant to section 124 of the Act, shall, to
the extent that they are consistent with the Act and applicable rules
and regulations, be accepted by the Secretary.
(2) Either the Governor or the Secretary may seek a modification,
revision, or termination of the agreement at any time, to be effective
at the end of a program year.
(b) Except as provided at part B of title III of the Act and part
631, subpart G, of this chapter, the State shall be the grant recipient
of JTPA funds awarded under titles I, II, and III.
Sec. 627.201 Waivers.
(a)(1) The Governor may request, and the Secretary may grant, a
waiver of specific provisions of these regulations to the extent that
such request is consistent with the provisions of the Act.
(2) In requesting a waiver under paragraph (a)(1) of this section,
the Governor shall demonstrate how it will either improve the targeting
of services to the hard to serve, increase the level of basic and
occupational skills training provided by the JTPA program in the State,
contribute to the provision of academic enrichment services to youth,
promote coordination of JTPA programs with other human resource
programs, or substantially improve the job placement outcomes of the
JTPA program.
(3) Waivers granted by the Secretary shall be effective for no more
than four years from the date the waiver is granted.
Sec. 627.205 Public service employment prohibition.
No funds available under titles I, II-A, II-C, or III-A of the Act
may be used for public service employment (sections 141(p) and
314(d)(2)).
Sec. 627.210 Nondiscrimination and nonsectarian activities.
(a)(1) Recipients, SDA grant recipients, title III substate
grantees, and other subrecipients shall comply with the
nondiscrimination provisions of section 167 of the Act.
(2) Nondiscrimination and equal opportunity requirements and
procedures, including complaint processing and compliance reviews, are
governed by the provisions of 29 CFR part 34 and are administered and
enforced by the DOL Directorate of Civil Rights.
(3) Funds may be used to meet a recipient's or subrecipient's
obligation to provide physical and programmatic accessibility and
reasonable accommodation in regard to the JTPA program as required by
Section 504 of the Rehabilitation Act of 1973, as amended, and the
Americans with Disabilities Act of 1990.
(b) The employment or training of participants in sectarian
activities is prohibited.
Sec. 627.215 Relocation.
(a) No funds provided under the Act shall be used, or proposed for
use, to encourage or to induce the relocation of an establishment, or
part thereof, that result in the loss of employment for any employee or
such establishment at the original location.
(b) For 120 days after the commencement or the expansion of
commercial operations of a relocating establishment, no funds provided
under this Act shall be used for customized or skill training, on-the-
job training, or company-specific assessments of job applicants or
employees, for any relocating establishment or part thereof at a new,
or expanded location, if the relocation of such establishment or part
thereof results in a loss of employment for any employee of such
establishment at the original location.
(c) For the purposes of this section, relocating establishment
means a business entity, including a successor-in-interest, which is
moving any operations from a facility in one labor market area within
the United States and its territories to a new or expanding facility in
another labor market area. For the purposes of this section, a labor
market area is an area within which individuals can readily change
employment without changing their place of residence.
(d) Pre-award review. To verify that an establishment which is new
or expanding is not, in fact, relocating employment from another area,
standardized pre-award review procedures developed by the State shall
be completed and documented jointly by the service delivery area or
substate grantee and the establishment as a prerequisite to JTPA
assistance. The review should include names under which the
establishment does business, including successors-in-interest; the
name, title, and address of the company official certifying the
information; the name and address of the facility in the other
geographic location which is being closed or from which business is
being transferred; a statement from the employer about job losses at
that location; the nature of the products or business being
transferred; the date the facility will commence or expand operations,
and whether JTPA assistance is sought in connection with past or
impending job losses at other facilities.
(e) Violations and sanctions. The Department will promptly review
and take appropriate action with regard to alleged violations of the
provisions of paragraphs (a) and (b) of this section. Procedures for
the investigation and resolution of the violations are provided for
under subpart F of this part. Sanctions and remedies are provided for
under subpart G of this part.
Sec. 627.220 Coordination with programs under title IV of the Higher
Education Act including the Pell grant program.
(a) Coordination. Financial assistance programs under title IV of
the Higher Education Act of 1965, as amended (HEA) (the Pell Grant
program, the Supplemental Education Opportunity Grant program, the
Work-study program, and Federal loan programs such as Federal Perkins
Loans. Federal Stafford Loans and Federal Direct Stafford Loans)
provide student financial aid and are available to JTPA participants
enrolling in postsecondary level education programs. SDA's and title
III SSG's shall establish coordination procedures and contractual
safeguards to ensure that JTPA funds are used in addition to funds
otherwise available in the area and are coordinated with these funding
sources.
(b) Affordable programs. (1) The SDA shall assist the participant
early in the objective assessment, as appropriate, to establish
eligibility for Pell Grants, student loans and other forms of financial
aid.
(2) The SDA or SSA shall record in the ISS or participant record
the participant's training-related financial assistance needs and the
mix of JTPA and other funds, including Pell Grant funds (sections
141(b), 107(b), 205(b) and 265(b)).
(3) The SDA shall ensure, to the extent practicable, that available
Federal, State, and local resources are coordinated sufficiently to
meet the training and education-related costs of services, so that the
participant can afford to complete the agreed-upon program
successfully.
(4) Participants shall not be required to apply for or access
student loans, or incur personal debt as a condition of JTPA
participation.
(c) Information sharing. To prevent duplication of funding and to
streamline the tracking of the participant's financial needs and use of
funds when HEA, title IV programs are involved, contracts and
agreements with educational institutions shall require the educational
institution's financial aid officer to inform the SDA's/SSG's of the
amounts and disposition of any HEA, title IV awards and other types of
financial aid to each JTPA participant awarded after the enrollment of
the participant, as part of a continuing, regular information sharing
process (section 141(b)).
Sec. 627.225 Employment generating activities.
(a)(1) No funds available under the Act shall be used for
employment generating activities, economic development activities,
investment in revolving loan funds, capitalization of businesses,
investment in contract bidding resource centers, or similar activities.
(2) No funds available under titles I, II, or III of the Act shall
be used for foreign travel for employment generating activities,
economic development activities, or similar activities.
(b) JTPA funds may be used for normal employer outreach and job
development activities including, but not limited to: contacts with
potential employers for the purpose of placement of JTPA participants;
participation in business associations (such as chambers of commerce);
JTPA staff participation on economic development boards and
commissions, and work with economic development agencies, to provide
information about JTPA and to assist in making informed decisions about
community job training needs; subscriptions to relevant publications;
general dissemination of information on JTPA programs and activities;
labor market surveys; and development of on-the-job training (OJT)
opportunities, as defined in Sec. 627.240; and other allowable JTPA
activities in the private sector.
Sec. 627.230 Displacement.
(a) No currently employed worker shall be displaced by any
participant (including partial displacement such as a reduction in the
hours of nonovertime work, wages, or employment benefits).
(b) No participant shall be employed or job opening filled: (1)
When any other individual is on layoff from the same or any
substantially equivalent job, or
(2) When the employer has terminated any regular employee without
cause or otherwise reduced its workforce with the intention of filling
the vacancy so created by hiring a participant whose wages are
subsidized under the Act.
(c) Violations and sanctions. The Department will promptly review
and take appropriate action with regard to alleged violations of the
provisions of paragraphs (a) and (b) of this section. Procedures for
the investigation and resolution of violations are provided for under
subpart F of this part. Sanctions and remedies are provided for under
subpart G of this part.
Sec. 627.235 General program requirements.
(a) The requirements set forth in sections 141, 142 and 143 of the
Act apply to all programs under titles I, II, and III of the Act,
except as provided elsewhere in the Act.
(b) Recipients shall ensure that an individual enrolled in a JTPA
program meets the requirements of section 167(a)(5) of the Act, Section
3 of the Military Selective Service Act (50 U.S.C. App. 453) and other
requirements applicable to programs funded under the specific section
or title of the Act under which the participant is enrolling (section
604).
(c) Recipients shall ensure that individuals are enrolled within 45
days of the date of eligibility determination or a new eligibility
determination (including new application, if necessary) shall be made,
except that eligible summer program applicants under title II-B may be
enrolled within 45 days into a summer youth enrollee pool, and no
subsequent eligibility determination need be made prior to
participation during the period of that summer program. In addition,
the 45-day enrollment requirement shall not apply for individuals who
have a valid certificate of continuing eligibility under the title III
program, as described in Sec. 631.3 and Sec. 631.53 of this chapter.
(d) Programs operated under titles I, II, and III of the Act are
not subject to the provisions of 29 CFR part 97, "Uniform
Administrative Requirements for Grants and Cooperative Agreements to
State and Local Governments," except as otherwise explicitly provided
in this chapter.
(e) If a recipient or SDA imposes a requirement that is in addition
to the provisions of the Act and these regulations relating to the
administration and operation of programs funded by the Act, the
recipient or SDA shall identify the requirement as a State- or SDA-
imposed requirement (section 124).
Sec. 627.240 On-the-job training.
(a) General--(1) On-the-job training (OJT) means training by an
employer in the private or public sector given to a participant who,
after objective assessment, and in accordance with the ISS, has been
referred to and hired by the employer following the development of an
agreement with the employer to provide occupational training in
exchange for reimbursement of the employer's extraordinary costs. On-
the-job training occurs while the participant is engaged in productive
work which provides knowledge and skills essential to the full and
adequate performance of the job.
(2) This does not preclude a participant who has been trained by
one employer from ultimately being placed in a comparable training-
related position with another employer.
(3) On-the-job training may be sequenced with or accompanied by
other types of training such as classroom training or literacy
training.
(b) Duration of OJT.--(1) OJT authorized for a participant shall be
limited to a period not in excess of that required for the participant
to acquire the skills needed for the OJT position. Except as described
in paragraph (b) (3) of this section, the period of reimbursement to
the employer under an OJT agreement shall not exceed 6 months of
training.
(2) The 6-month duration of OJT may be expressed as a number of
hours, days, or weeks the participant is expected to work in a 6-month
period if the participant works full-time.
(3) In the event that a participant's regular employment is less
than full-time and less than 500 hours of OJT has occurred by the end
of 6 months, that participant may remain in OJT until 499 hours OJT
hours have occurred.
(4)(i) Recipients shall develop policies and procedures for
determining the average training duration for occupations including to
reflect an individual participant's need for additional training time,
or reduction in training time to reflect the individual participant's
partial acquisition of needed skills. (In no case should an individual
who is fully skilled in an occupation be placed in OJT in that
occupation.)
(ii) In determining the average training time, consideration should
be given to recognized reference materials, such as the "Dictionary of
Occupational Titles" (DOT) and employer training plans. Such materials
need not be limited to the DOT, however.
(5) On-the-job training is encouraged, but not required, in all
occupations with significant training content, particularly in higher-
skill occupations appropriate to the participant's needs. Training
plans may be developed that recognize the full duration of the OJT
period necessary for the full and adequate performance of the job, but
the period of reimbursement may not exceed the duration in paragraph
(a)(1) or (a)(2) of this section.
(6) When the OJT period in a given occupation for a participant for
whom the ISS identifies OJT as appropriate varies from the average for
that occupation, the basis for the variation shall be recorded in the
ISS.
(c) On-the-job training payments to employers. (1) On-the-job
training payments to employers are deemed to be in compensation for the
extraordinary costs associated with training participants and in
compensation for the costs associated with the lower productivity of
such participants. Employers shall not be required to document such
extraordinary costs or lower productivity (section 141(g)(1)).
(2)(i) On-the-job training payments to employers shall not, during
the period of such training, average more than 50 percent of the wages
paid by the employer to OJT participants.
(ii) On-the-job training payments to employers may be based upon
scheduled raises or regular pay increases.
(iii) On-the-job training payments may not be based on overtime,
shift differential, premium pay and other nonregular wages paid by the
employer to participants.
(iv) On-the-job training payments may not be based upon periods of
time such as illness, holidays, plant downtime or other events in which
no training occurs.
(3) Employers which provide classroom or vestibule training to meet
the specific training needs of JTPA participants to equip them with
education and knowledge necessary to the OJT occupation may be
separately reimbursed for training costs, such as instructors and
training material.
(d) On-the-job training agreements. (1) Each OJT agreement shall,
at a minimum, specify the occupation(s) for which training is to be
provided, the duration of the training, the number of participants to
be trained in each occupation, wage rates to be paid, the rate of
reimbursement, the maximum amount of reimbursement, a job description
or training outline that reflects what the participant will learn, and
any other separate classroom training that may be provided.
(2) The agreement shall provide that the employer will maintain and
make available time and attendance, payroll and other records to
support amounts reimbursed under OJT contracts.
(e) Labor standards. OJT participants shall be compensated by the
employer at the same rates, including periodic increases, as similarly
situated employees, but in no event less than the higher of the minimum
wage specified under the Fair Labor Standards Act of 1938, as amended
or the applicable State or local minimum wage. Participants must
receive the same benefits and have the same working conditions as
similarly situated employees.
(f) Suitability of participants. (1) Only those participants who
have been assessed and for whom OJT has been determined as an
appropriate activity in the participant's ISS may be referred to an
employer for participation in OJT.
(2) An individual referred to the JTPA program by an employer may
be enrolled in an OJT program with such employer only upon completion
of the objective assessment and individual service strategy in which
OJT with such employer has been determined to be an appropriate
activity and only if the employer has not already hired such
individual.
(3) OJT with the participant's previous or current employer in the
same, a similar, or an upgraded job is not permitted.
(g) Monitoring. (1) OJT agreements shall be monitored periodically
on-site by the entity issuing the contract to assure that the validity
and propriety of amounts claimed for reimbursement are substantiated by
payroll and time and attendance records and that the training is being
provided as specified in the agreement.
(2) Brokering contractors shall conduct on-site monitoring of the
OJT employers and other subcontractors to verify compliance with
subcontract terms before making payments.
(3) Nothing in this paragraph (g) shall relieve recipients and
SDA's from responsibility for monitoring expenditures under the Act.
(h) Employer eligibility. (1) OJT agreements shall not be entered
into with employers which, under previous agreements, have exhibited a
pattern of failing to provide OJT participants with continued long-term
employment as regular employees with wages, benefits and working
conditions at the same level and to the same extent as similarly
situated employees. This prohibition does not apply to OJT agreements
for youth in the program under title II-B who are returning to school.
(2) Governors shall issue procedures and criteria to implement the
requirement in paragraph (h)(1) of this section, which shall specify
the duration of the period of loss of eligibility. The procedures and
criteria shall provide that situations in which OJT participants quit
voluntarily, are terminated for cause, or are released due to
unforeseeable changes in business conditions will not necessarily
result in termination of employer eligibility.
(i) Brokered OJT. Each agreement with an OJT employer that is
written by a brokering contractor (not written directly by the SDA/SSA
or recipient) shall specify and clearly differentiate the services to
be provided by the brokering contractor (including but not limited to
outreach, recruitment, training, counseling, assessment, placement,
monitoring, and followup), the employer and other agencies and
subcontractors, including services provided with or without cost by
other agencies or subcontractors.
(j) Youth OJT. OJT conducted under title II-C shall meet the
requirements of subpart H of part 628 of this chapter (628.804), as
well as the requirements of this section. Where OJT is provided to
youth concurrently enrolled under titles II-B and II-C, the source of
funding for the OJT shall govern which requirements apply.
(k) Employment and employee leasing agencies.
(1) Definition. The terms employment agency and employee leasing
agency mean an employer that provides regular, on-going employment
(i.e., not probationary, temporary, or intermittent employment) in a
specific occupation and, for a fee, places employees at the worksite of
another employer to perform work for such employer.
(2) Employment and employee leasing agencies that meet the other
requirements of this section may be eligible for OJT agreements when
the agreement specifies the source of training and specifies that the
payments are for the extraordinary training costs of the entity
providing the training.
Sec. 627.245 Work experience.
(a) Definition.--Work Experience means a short-term or part-time
training assignment with a public or private nonprofit organization for
a participant who needs assistance in becoming accustomed to basic work
requirements. It is prohibited in the private for-profit sector.
(b) Suitability. Work experience should be designed to promote the
development of good work habits and basic work skills.
(c) Duration of work experience. Participation in work experience
shall be for a reasonable length of time, based on the needs of the
participant. The duration of work experience shall be recorded in the
participant's ISS.
(d) Combination with other services. Work experience under titles
II-A and C shall be accompanied either concurrently or sequentially by
other services designed to increase the basic education and/or
occupational skills of the participant, as recorded in the ISS.
(e) Work experience is not an allowable activity under title III of
the Act. (Sections 204(b) and (c), 253(a), and 264 (c) and (d).)
Sec. 627.250 Interstate agreements.
The Secretary hereby grants authority to the several States to
enter into interstate agreements and compacts in accordance with
section 127 of the Act and, as specified in Sec. 627.420(g),
Procurement.
Subpart C--Payments, Supportive Services, and Benefits and Working
Conditions
Sec. 627.300 Scope and purpose.
This subpart sets forth requirements for allowable payments to JTPA
participants under titles I and II. These include needs-based payments
under title II, incentive and bonus payments under title II, work-based
training payments under title II, and payments for combined activities
under title II. Requirements for supportive services under titles I,
II, and III, including financial assistance and needs-related payments,
are also included in this subpart. This subpart also sets forth rules
for benefits and working conditions for JTPA participants. These
include requirements for: Compliance with applicable labor laws;
workers' compensation coverage or medical and accident insurance where
there is no State workers' compensation coverage; and working
conditions which are not detrimental to the participant's health and
safety.
Sec. 627.305 Payments.
(a)(1) General. Allowable types of payments which may be made to
participants are: Needs-based payments for eligible individuals in
programs under title II; incentive and bonus payments for participants
in title II programs; work-based training payments for work experience,
entry employment experience, internships and other work-based training
activities; payments for participants in title II-B activities; and
training payments for combined activities in title II programs. These
payments shall be made in accordance with paragraphs (b) through (f) of
this section.
(2) A participant shall receive no payments for training activities
in which the participant fails to participate without good cause
(section 142(a)(1)).
(3) The SDA shall ensure to the extent possible that similarly
situated participants receive similar payments.
(4) Payments to participants, broadly defined for this subsection
as all funds distributed to participants except OJT wages, shall not be
considered as income for the purposes of determining eligibility for
and the amount of income transfer and in-kind aid furnished under any
Federal or federally assisted program based on need, other than as
provided under the Social Security Act (section 142(b)).
(5) The SDA is responsible for meeting any applicable Internal
Revenue Service and Fair Labor Standards Act requirements (section
142(a)(3)).
(6) An SDA may set fixed levels for any non-wage payment.
(b) Needs-based payments. (1) Participants in programs funded under
title II may receive needs-based payments when such payments are
necessary to enable the individual to participate in training programs.
Payments shall be made in accordance with a locally developed policy
which is included in the job training plan approved by the Governor.
(2) The individual determination of participants' needs-based
payments and the amount of such payments shall be based upon the
results of the continuing objective assessment and determined in
accordance with a locally developed policy. The provisions and amount
of such payments shall be recorded in the ISS.
(c) Incentive and bonus payments. Participants in programs funded
under title II may receive incentive and bonus payments based on their
attendance and performance in accordance with a locally developed
policy. The policy shall be described in the job training plan approved
by the Governor and shall include a specification of the requirements
for the receipt of such payments and the level of payments.
(d) Work-based training payments. Individuals participating in work
experience, in entry employment experience programs, in limited
internships for youth in the private sector, or in other work-based
training activities under title II of the Act may receive work-based
training payments which may be wages.
(e) Summer participants may receive training payments for
participation in activities under title II-B.
(f) Training payments for combined activities. For title II
programs, participants in one of the activities described in paragraph
(d) of this section for which work-based training payments are payable
for more than 50 percent of the participant's time, including classroom
training, may also receive training payments for hours of participation
in classroom training.
Sec. 627.310 Supportive services.
(a)(1) The SDA or SSG shall develop a policy on supportive services
in accordance with the definition at section 4(24) of the Act. This
policy shall be included in the job training plan approved by the
Governor (section 4(24)). Supportive services may be provided to
participants through in-kind or cash assistance, or by arrangement with
another human service agency when necessary to enable an individual who
is eligible for training under a JTPA assisted program, but who cannot
afford to pay for such services, to participate in such JTPA-assisted
program.
(2) In the event that an SDA or SSG adopts a policy of providing a
fixed reimbursement for a particular supportive service to all
participants, it shall, as part of its policy, state the rationale for
its choice and the fixed amounts it has adopted.
(b) Limited supportive services may be provided to applicants in
order to permit them to complete the application process.
(c) Necessary supportive services shall be recorded in a
participant's ISS under title II or should be recorded in a
participant's individual readjustment plan under title III. When
supportive services are provided in accordance with paragraph (b) of
this section, information on any supportive service provided may be
maintained for future inclusion in an ISS.
(d) The SDA or SSG shall ensure, to the extent possible, that
similarly situated participants receive similar supportive services.
(e) For title II participants, necessary supportive services (with
the exception of financial assistance) may be provided for up to one
year following termination as post-termination or followup services
(sections 4(24), 204(b)(2)(J), and 204(c)(4)). For title III
participants, the provisions at section 314(c)(15) of the Act shall
apply.
(f) An SDA or SSG may set fixed levels of benefit for any
supportive service.
(g)(1) For purposes of title II, financial assistance is defined as
a general supportive service payment for the purpose of retaining
participants in training.
(2) Financial assistance payments may be considered to be necessary
for participation in training for title II participants, i.e., a
separate, individual determination of need is not necessary.
(h) Needs-related payments. The requirements pertaining to needs-
related payments provided for under section 315(b) under title III of
the Act, are described in part 631 of this chapter.
Sec. 627.315 Benefits and working conditions.
(a) In the development and conduct of programs funded under the
Act, SDA's and SSG's shall ensure that participants are not assigned to
work for employers which do not comply with applicable labor laws,
including wage and hour, occupational health and safety, and child
labor laws (29 CFR part 570).
(b) To the extent that a State workers' compensation law is
applicable, workers' compensation benefits in accordance with such law
shall be available with respect to injuries suffered by participants.
Where a State's workers' compensation law is not applicable, recipients
and subrecipients shall secure insurance coverage for injuries suffered
by such participants in all JTPA work-related activities. Income
maintenance coverage (e.g., contributions for unemployment
compensation), is not required for participants (section 143(a)(3)).
(c) Where a participant is engaged in activities not covered under
the Occupational Safety and Health Act of 1970, as amended, the
participant shall not be required or permitted to work, be trained, or
receive services in buildings or surroundings or under working
conditions which are unsanitary, hazardous, or dangerous to the
participant's health or safety. A participant employed or trained for
inherently dangerous occupations, e.g., fire or police jobs, shall be
assigned to work in accordance with reasonable safety practices
(section 143(a)(2)).
Subpart D--Administrative Standards
Sec. 627.400 Scope and purpose.
This subpart establishes the administrative and financial standards
and requirements that apply to funds received under the Act.
Sec. 627.405 Grant agreement and funding.
(a)(1) Pursuant to Sec. 627.200 of this part and the Governor/
Secretary agreement, each program year there will be executed a grant
agreement signed by the Governor or the Governor's designated
representative and the Secretary or the Secretary's designated
representative (Grant Officer).
(2) The grant agreement described in paragraph (a)(1) of this
section shall be the basis for Federal obligation of funds for the
program year for programs authorized by titles I, II, and III,
including any title III discretionary projects awarded to the State,
and such other funds as the Secretary may award under the grant.
(b) Funding. The Secretary shall allot funds to the States in
accordance with sections 162, 202, 252, 262, and 302 of the Act. The
Secretary shall obligate such allotments through Notices of Obligation.
(c) Pursuant to instructions issued by the Secretary, additional
funds may be awarded to States for the purpose of carrying out the
administrative activities described in section 202(c)(1)(A) when a
State receives an amount under such section that is less than $500,000
(section 453(d)).
(d) Termination. Each grant shall terminate when the period of
availability for expenditure (funding period), as specified in section
161(b) of the Act, has expired and shall be closed in accordance with
Sec. 627.485, of this part, Closeout.
Sec. 627.410 Reallotment and reallocation.
(a)(1) The Governor shall reallocate title II-A and II-C funds
among service delivery areas within the State in accordance with the
provisions of section 109(a) of the Act. The amount to be reallocated,
if any, shall be based on SDA obligations of the funds allocated
separately to each SDA for title II-A or II-C programs.
(2) The Governor shall not establish reallocation requirements that
are inconsistent with the provisions of section 109(a) of the Act.
(b) The Secretary shall reallot title II-A and II-C funds among the
States in accordance with the provisions of section 109(b) of the Act.
The amounts to be reallotted, if any, shall be based on State
obligations of the funds allotted separately to each State for title
II-A or II-C programs, excluding funds allotted under section
202(c)(1)(D) and the State's obligation of such funds.
(c) Title III funds shall be reallotted by the Secretary in
accordance with section 303 of the Act.
Sec. 627.415 Insurance.
(a) General. Each recipient and subrecipient shall follow its
normal insurance procedures except as otherwise indicated in this
section and Sec. 627.465, Property Management Standards.
(b) DOL assumes no liability with respect to bodily injury,
illness, or any other damages or losses, or with respect to any claims
arising out of any activity under a JTPA grant or agreement whether
concerning persons or property in the recipient's or any subrecipient's
organization or that of any third party.
Sec. 627.420 Procurement.
(a) General. (1) For purposes of this section, the term procurement
means the process which leads to any award of JTPA funds.
(2) The Governor, in accordance with the minimum requirements
established in this section, shall prescribe and implement procurement
standards to ensure fiscal accountability and prevent waste, fraud, and
abuse in programs administered under this Act.
(3) When procuring property and services, a State shall follow the
same policies and procedures it uses for procurements from its non-
Federal funds, provided that the State's procurement procedures also
comply with the minimum requirements of this section.
(4) Each subrecipient shall use its own procurement procedures
which reflect applicable State and local laws and regulations, provided
that the subrecipient's procurement procedures also comply with the
requirements of this section and the standards established by the
Governor, pursuant to paragraph (a)(2) of this section.
(5) States and subrecipients shall not use funds provided under
JTPA to duplicate facilities or services available in the area (with or
without reimbursement) from Federal, State, or local sources, unless it
is demonstrated that the JTPA-funded alternative services or facilities
would be more effective or more likely to achieve performance goals
(sections 107(b) and 141(h)).
(6) Awards are to be made to responsible organizations possessing
the demonstrated ability to perform successfully under the terms and
conditions of a proposed subgrant or contract. A determination of
demonstrated ability shall be done in accordance with the requirements
contained in Sec. 627.422 (b) and (d).
(b) Competition. (1) Each State and subrecipient shall conduct
procurements in a manner which provides full and open competition. Some
of the situations considered to be restrictive of competition include,
but are not limited to:
(i) Placing unreasonable requirements on firms or organizations in
order for them to qualify to do business;
(ii) Requiring unnecessary experience and excessive bonding;
(iii) Noncompetitive pricing practices between firms or
organizations or between affiliated companies or organizations;
(iv) Noncompetitive awards to consultants that are on retainer
contracts;
(v) Organizational conflicts of interest;
(vi) Specifying only a "brand name" product instead of allowing
"an equal" product to be offered and describing the performance of
other relevant requirements of the procurement;
(vii) Overly restrictive specifications; and
(viii) Any arbitrary action in the procurement process.
(2) Each State and subrecipient shall have written procedures for
procurement transactions. These procedures shall ensure that all
solicitations:
(i) Incorporate a clear and accurate description of the technical
requirements for the material, product, or service to be procured
(including quantities). Such description shall not, in competitive
procurements, contain features which unduly restrict competition; and
(ii) Identify all requirements which the offerors must fulfill and
all other factors to be used in evaluating bids or proposals.
(3) Each State and subrecipient shall ensure that all prequalified
lists of persons, firms, or other organizations which are used in
acquiring goods and services are current and include sufficient numbers
of qualified sources to ensure maximum open and free competition.
(c) Conflict of interest. (1) Each recipient and subrecipient shall
maintain a written code of standards of conduct governing the
performance of persons engaged in the award and administration of JTPA
contracts and subgrants. To the extent permitted by State or local law
or regulation, such standards of conduct will provide for penalties,
sanctions, or other disciplinary actions for violations of such
standards by the awarding agency's officers, employees, or agents, or
by awardees or their agents.
(2) Staff conflict of interest. Each recipient and subrecipient
shall ensure that no individual in a decisionmaking capacity shall
engage in any activity, including participation in the selection,
award, or administration of a subgrant or contract supported by JTPA
funds if a conflict of interest, real or apparent, would be involved.
(3) PIC conflict of interest. (i) A PIC member shall not cast a
vote, nor participate in any decisionmaking capacity, on the provision
of services by such member (or any organization which that member
directly represents), nor on any matter which would provide any direct
financial benefit to that member.
(ii) Neither membership on the PIC nor the receipt of JTPA funds to
provide training and related services shall be construed, by itself, to
violate provisions of section 141(f) of the Act or Sec. 627.420.
(4) A conflict of interest under paragraphs (c) (2) and (3) of this
section would arise when:
(i) The individual,
(ii) Any member of the individual's immediate family,
(iii) The individual's partner, or
(iv) An organization which employs, or is about to employ, any of
the above, has a financial or other interest in the firm or
organization selected for award.
(5) The officers, employees, or agents of the agency and PIC
members making the award will neither solicit nor accept gratuities,
favors, or anything of monetary value from awardees, potential
awardees, or parties to subagreements. States and subrecipients may set
minimum rules where the financial interest is not substantial or the
gift is an unsolicited item of nominal intrinsic value.
(d) Methods of procurement. (1) Each State and subrecipient shall
use one of the following methods of procurement, as appropriate for
each procurement action:
(i) Small purchase procedures--simple and informal procurement
methods for securing services, supplies, or other property that do not
cost more than $25,000 in the aggregate. Recipients and subrecipients
shall not break down one purchase into several purchases merely to be
able to use small purchase procedures. The Governor shall establish
standards for small purchase procedures to ensure that price or rate
quotations will be documented from an adequate number of qualified
sources.
(ii) Sealed bids (formal advertising)--bids are publicly solicited
procurements for which a firm-fixed-price award (lump sum or unit
price) or other fixed-price arrangement is awarded to the responsible
bidder whose bid, conforming with all the material terms and conditions
of the invitation for bids, is the lowest in price. The Governor shall
establish standards for sealed bids which include requirements that
invitations for bids be publicly advertised, and that bids be solicited
from an adequate number of organizations.
(iii) Competitive proposals--normally conducted with more than one
source submitting an offer and either a fixed-price or cost-
reimbursement type award is made. The Governor shall establish
standards for competitive proposals which include requirements for the
establishment of a documented methodology for technical evaluations and
award to the responsible offeror whose proposals are most advantageous
to the program with price, technical, and other factors considered.
(iv) Noncompetitive proposals (sole source)--procurement through
solicitation of a proposal from only one source, the funding of an
unsolicited proposal, or when, after solicitation of a number of
sources, competition is determined inadequate. Each State and
subrecipient shall minimize the use of sole source procurements to the
extent practicable, but in every case the use of sole source
procurements shall be justified and documented. On-the-job training
(OJT) awards (except OJT brokering awards, which shall be selected
competitively) and the enrollment of individual participants in
classroom training may be sole sourced. For all other awards,
procurement by noncompetitive proposals may be used only when the award
is infeasible under small purchase procedures, sealed bids, or
competitive proposals and one of the following circumstances applies:
(A) The item or service is available only from a single source;
(B) The public exigency or emergency need for the item or service
does not permit a delay resulting from competitive solicitation;
(C) For SDAs, SSGs and subrecipients, the awarding agency
authorizes noncompetitive proposals; for States, the noncompetitive
proposal is approved through the State's normal sole source approval
process;
(D) After solicitation of a number of sources, competition is
determined inadequate;
(2) Pass Throughs--The procurement rules do not apply to pass
throughs of monies from any unit of State or local government (or SDA
or SSG administrative entities) to other such units, such as a local
educational agency or public housing authority. To qualify as a pass
through, the receiving entity must either further pass through the
monies to another such entity or procure services in accordance with
the procurement rules.
(e) Cost or price analysis. (1) Each recipient, in accordance with
the minimum requirements established in this section, shall establish
standards on the performance of cost or price analysis.
(2) Each recipient and subrecipient shall perform a cost or price
analysis in connection with every procurement action, including
modifications (except for modifications where a determination has been
made that they do not have a monetary impact). The method and degree of
analysis depends on the facts surrounding the particular procurement
and pricing situation. At a minimum, the awarding agency shall make
independent estimates before receiving bids or proposals. A cost
analysis is necessary when the offeror is required to submit the
elements of the estimated cost (e.g., as in the case of subrecipient
relationships), when adequate price competition is lacking, and for
sole source procurements, including modifications or change orders. A
price analysis shall be used when price reasonableness can be
established on the basis of a catalog or market price of a commercial
product sold in substantial quantities to the general public or based
on prices set by law or regulation (including situations involving
inadequate price competition and sole source procurements where a price
analysis may be used in lieu of a cost analysis). When a cost analysis
is necessary and there is inadequate price competition, the offeror
shall certify that to the best of its knowledge and belief, the cost
data are accurate, complete, and current at the time of agreement on
price. Awards or modifications negotiated in reliance on such data
should provide the awarding agency a right to a price adjustment to
exclude any significant sum by which the price was increased because
the awardee had knowingly submitted data that were not accurate,
complete, or current as certified.
(3) JTPA procurements shall not permit excess program income (for
nonprofit and governmental entities) or excess profit (for private for-
profit entities). If profit or program income is included in the price,
the awarding agency shall negotiate profit or program income as a
separate element of the price for each procurement in which there is no
price competition and in all cases where cost analysis is performed. To
establish a fair and reasonable profit or program income, consideration
shall be given to:
(i) The complexity of the work to be performed;
(ii) The risk borne by the awardee;
(iii) The offeror's investment;
(iv) The amount of subcontracting/subgranting;
(v) The quality of the offeror's record of past performance;
(vi) Industry profit rates in the surrounding geographical area for
similar work; and
(vii) Market conditions in the surrounding geographical area.
(4) Each recipient and subrecipient may charge to the agreement
only those costs which are consistent with the allowable cost
provisions of Sec. 627.435 of this part, including the guidelines
issued by the Governor, as required at Sec. 627.435(i) of this part.
(5) The cost plus a percentage of cost method shall not be used.
(f) Oversight. (1) Each recipient and subrecipient shall conduct
and document oversight to ensure compliance with the procurement
standards, in accordance with the requirements of Sec. 627.475 of this
part, Oversight and monitoring.
(2) Each recipient and subrecipient shall maintain an
administration system which ensures that vendors and subrecipients
perform in accordance with the terms, conditions, and specifications of
their awards.
(g) Transactions between units of government. (1) Except as
provided in paragraph (g)(2) of this section, procurement transactions
between units of State or local governments, or any other entities
organized principally as the administrative entity for service delivery
areas or substate areas, shall be conducted on a cost reimbursable
basis. Cost plus type awards are not allowable.
(2) In the case of procurement transactions with schools that are a
part of these entities, such as State universities and secondary
schools, when tuition charges or entrance fees are not more than the
educational institution's catalogue price, necessary to receive
specific training, charged to the general public to receive the same
training, and for training of participants, the tuition and/ or
entrance fee does not have to be broken out by items of cost.
(h) Award provisions. Each recipient and subrecipient agreement
shall:
(1) Clearly specify deliverables and the basis for payment; and
(2) In the case of awards to subrecipients, contain clauses that
provide for:
(i) Compliance with the JTPA regulations;
(ii) Assurance of nondiscrimination and equal opportunity as found
in 29 CFR 34.20, Assurance required; duration of obligation; covenants.
(3) In the case of awards to vendors, contain clauses that provide
for:
(i) Access by the recipient, the subrecipient, the Department of
Labor, the Comptroller General of the United States, or any of their
duly authorized representatives to any books, documents, papers, and
records (including computer records) of the contractor or subcontractor
which are directly pertinent to charges to the program, in order to
conduct audits and examinations and to make excerpts, transcripts, and
photocopies; this right also includes timely and reasonable access to
contractor's and subcontractor's personnel for the purpose of
interviews and discussions related to such documents;
(4) In the case of awards to both subrecipients and vendors,
contain clauses that provide for:
(i) Administrative, contractual, or legal remedies in instances
where contractors/subgrantees violate or breach agreement terms, which
shall provide for such sanctions and penalties as may be appropriate;
(ii) Notice of 29 CFR 97.34 requirements pertaining to copyrights
(agreements which involve the use of copyrighted materials or the
development of copyrightable materials);
(iii) Notice of requirements pertaining to rights to data.
Specifically, the awarding agency and the Department of Labor shall
have unlimited rights to any data first produced or delivered under the
agreement (agreements which involve the use/development of computer
programs/ applications, or the maintenance of databases or other
computer data processing program, including the inputing of data);
(iv) Termination for cause and for convenience by the awarding
agency, including the manner by which the termination will be effected
and the basis for settlement;
(v) Notice of awarding agency requirements and regulations
pertaining to reporting;
(vi) Audit rights and requirements;
(vii) Payment conditions and delivery terms;
(viii) Process and authority for agreement changes; and
(ix) Provision against assignment;
(5) The Governor may establish additional clauses, as deemed
appropriate, for State and subrecipient procurements.
(i) Disputes. (1) The Governor shall ensure that the recipient and
each subrecipient have protest procedures to handle and resolve
disputes relating to their procurements. A protester shall exhaust all
administrative remedies with the subrecipient before pursuing a protest
at a higher level.
(2) Violations of law will be handled in accordance with the
requirements contained in Sec. 627.500(c).
(j) Each recipient and subrecipient shall maintain records
sufficient to detail the significant history of a procurement. These
records shall include, but are not necessarily limited to, the
following: rationale for the method of procurement, selection of
agreement type, awardee selection or rejection, and the basis for the
agreement price.
Sec. 627.422 Selection of service providers.
(a) Service providers selected under titles I, II, and III of the
Act shall be selected in accordance with the provisions of section 107
of the Act, except that section 107(d) shall not apply to training
under title III.
(b) Consistent with the requirements of this section, the Governor
shall establish standards to be followed by recipients and
subrecipients in making determinations of demonstrated performance,
prior to the award of all agreements under titles I, II, and III of the
Act. These standards shall comply with the requirements of this
section, Sec. 627.420, of this part, Procurement, and section 164(a)(3)
of the Act. The standards shall require that determinations of
demonstrated performance will be in writing, and completed prior to the
award of an agreement.
(c) Each recipient and subrecipient, to the extent practicable,
shall select service providers on a competitive basis, in accordance
with the standards established in Sec. 627.420(b) of this part,
Procurement. When a State, SDA, SSG, or administrative entity
determines that services other than intake and eligibility
determination will be provided by its own staff, a determination shall
be made of the demonstrated performance of the entity to provide the
services. This determination: Shall be in writing; shall take into
consideration the matters listed in paragraph (d) of this section; and
may, if appropriate, be documented and described in the Job Training
Plan, GCSSP, or EDWAA plan.
(d) Awards are to be made to organizations possessing the
demonstrated ability to perform successfully under the terms and
conditions of a proposed subgrant or contract. Where comparable
proposals have been received from an offeror which has demonstrated
performance and a high-risk recipient/subrecipient, and a determination
has been made that both proposals are fundable, the award should be
made to the offeror which has demonstrated performance, unless other
factors dictate a contrary result. Determinations of demonstrated
performance shall be in writing, and take into consideration such
matters as whether the organization has:
(1) Adequate financial resources or the ability to obtain them;
(2) The ability to meet the program design specifications at a
reasonable cost, as well as the ability to meet performance goals;
(3) A satisfactory record of past performance (in job training,
basic skills training, or related activities), including demonstrated
quality of training; reasonable drop-out rates from past programs;
where applicable, the ability to provide or arrange for appropriate
supportive services as specified in the ISS, including child care;
retention in employment; and earning rates of participants;
(4) For title II programs, the ability to provide services that can
lead to the achievement of competency standards for participants with
identified deficiencies;
(5) A satisfactory record of integrity, business ethics, and fiscal
accountability;
(6) The necessary organization, experience, accounting and
operational controls; and
(7) The technical skills to perform the work.
(e) In selecting service providers to deliver services in a service
delivery area/substate area, proper consideration shall be given to
community-based organizations (section 107(a)). These community-based
organizations, including women's organizations with knowledge about or
experience in nontraditional training for women, shall be organizations
which are recognized in the community in which they are to provide
services. Where proposals are evenly rated, and one of these proposals
has been submitted by a CBO, the tie breaker may go to the CBO.
(f) Appropriate education agencies in the service delivery area/
substate area shall be provided the opportunity to provide educational
services, unless the administrative entity demonstrates that
alternative agency(ies) or organization(s) would be more effective or
would have greater potential to enhance the participants' continued
educational and career growth (section 107(c)). Where proposals are
evenly rated, and one of these proposals has been submitted by an
educational institution, the tie breaker shall go to the educational
institution.
(g) In determining demonstrated performance of institutions/
organizations which provide training, such performance measures as
retention in training, training completion, job placement, and rates of
licensure shall be taken into consideration.
(h) Service providers under agreements to conduct projects under
section 123(a)(2) shall be selected in accordance with the requirements
of this section.
(i) The requirements of section 204(d)(2)(B) shall be followed in
entering into agreements to provide services for older individuals
funded under title II, part A.
(j) Additional requirements for selection of service providers by
substate grantees are described at section 313(b)(6) of the Act and
Sec. 631.52 of this chapter.
(k) Amounts for service providers. Each SDA/SSG shall ensure that,
for all services provided to participants through contracts, grants, or
other agreements with a service provider, such contract, grant, or
agreement shall include appropriate amounts necessary for
administration and supportive services (section 108(b)(5)).
(l) When a State, SDA or SSG has a policy of awarding additional
points to proposals received from such organizations as minority
business enterprises and women-owned businesses, and this policy is
generally applicable to its other funds, the State, SDA or SSG may
apply this policy to the JTPA funds.
Sec. 627.423 Funding restrictions for "high-risk" recipients and
subrecipients.
(a) A recipient or subrecipient may be considered "high-risk" if
an awarding agency determines that the recipient or subrecipient is
otherwise responsible, but:
(1) Has a history of unsatisfactory performance;
(2) Is not financially stable;
(3) Has a management system which does not meet the management
standards set forth in this part; or
(4) Has not conformed to terms and conditions of a previously
awarded grant or subgrant.
(b) If the awarding agency determines that an award will be made to
a "high-risk" recipient or subrecipient, then special funding
restrictions that address the "high-risk" status may be included in
the award. Funding restrictions may include, but are not limited to:
(1) Payment on a reimbursement basis;
(2) Requiring additional and/or more detailed financial or
performance reports;
(3) Additional monitoring;
(4) Requiring the recipient or subrecipient to obtain specific
technical or management assistance; and/or
(5) Establishing additional prior approvals.
(c) If an awarding agency decides to impose such funding
restrictions, the awarding official will notify the recipient or
subrecipient as early as possible, in writing, of:
(1) The nature of the funding restrictions;
(2) The reason(s) for imposing them;
(3) The corrective actions which must be taken before they will be
removed and the time allowed for completing the corrective actions; and
(4) The method of requesting reconsideration of the restrictions
imposed.
Sec. 627.424 Prohibition of subawards to debarred and suspended
parties.
(a) No recipient or subrecipient shall make any awards or permit
any awards at any tier to any party which is debarred or suspended or
is otherwise excluded from or ineligible for participation in Federal
assistance programs in accordance with the Department of Labor
regulations at 29 CFR part 98.
(b) Recipients and subrecipients shall comply with the applicable
requirements of the Department of Labor regulations at 29 CFR part 98.
Sec. 627.425 Standards for financial management and participant data
systems.
(a)(1) General. The financial management system and the participant
data system of each recipient and subrecipient shall provide federally
required records and reports that are uniform in definition, accessible
to authorized Federal and State staff, and verifiable for monitoring,
reporting, audit, program management, and evaluation purposes (sections
165(a)(1) and (2), and 182).
(2) An awarding agency may review the adequacy of the financial
management system and participant data system of any recipient/
subrecipient as part of a preaward review or at any time subsequent to
award.
(b) Financial systems. Recipients and subrecipients shall ensure
that their own financial systems as well as those of their
subrecipients provide fiscal control and accounting procedures that
are:
(1) In accordance with generally accepted accounting principles
applicable in each State including:
(i) Information pertaining to subgrant and contract awards,
obligations, unobligated balances, assets, liabilities, expenditures,
and income;
(ii) Effective internal controls to safeguard assets and assure
their proper use;
(iii) A comparison of actual expenditures with budgeted amounts for
each subgrant and contract;
(iv) Source documentation to support accounting records; and
(v) Proper charging of costs and cost allocation; and
(2) Sufficient to:
(i) Permit preparation of required reports;
(ii) Permit the tracing of funds to a level of expenditure adequate
to establish that funds have not been used in violation of the
applicable restrictions on the use of such funds;
(iii) As required by section 165(g), permit the tracing of program
income, potential stand-in costs and other funds that are allowable
except for funding limitations, as defined in Sec. 627.480(f) of this
part, Audits; and
(iv) Demonstrate compliance with the matching requirement of
section 123(b)(2).
(c) Applicant and participant data systems. Each recipient and
subrecipient shall ensure that records are maintained:
(1) Of each applicant for whom an application has been completed
and a formal determination of eligibility or ineligibility made;
(2) Of each participant's enrollment in a JTPA-funded program in
sufficient detail to demonstrate compliance with the relevant
eligibility criteria attending a particular activity and with the
restrictions on the provision and duration of services and specific
activities imposed by the Act; and
(3) Of such participant information as may be necessary to develop
and measure the achievement of performance standards established by the
Secretary.
Sec. 627.430 Grant payments.
(a) Except as provided in paragraph (h)(2) of this section, JTPA
grant payments shall be made to the Governor in accordance with the
Cash Management Improvement Act of 1990 (31 U.S.C. 6501, et seq.),
Department of Treasury regulations at 31 CFR part 205, and the State
Agreement entered into with the Department of the Treasury.
(b) Basic standard. Except as provided in paragraphs (d) and (e) of
this section, each recipient and subrecipient shall be paid in advance,
provided it demonstrates the willingness and ability to limit advanced
funds to the actual immediate disbursement needs in carrying out the
JTPA program.
(c) Advance payments. To the maximum extent feasible, each
subrecipient shall be provided advance payments via electronic funds
transfer, following the procedures of the awarding agency.
(d) Reimbursement. (1) Reimbursement is the preferred method when
the requirements in paragraph (b) of this section are not met.
(i) Each recipient shall submit requests for reimbursement in
accordance with the provisions at 31 CFR part 205.
(ii) Each subrecipient shall submit requests for reimbursement in
accordance with requirements established by the awarding agency.
(2) Each subrecipient shall be paid as promptly as possible after
receipt of a proper request for reimbursement.
(e) Working capital advance payments. If a subrecipient cannot meet
the criteria for advance payments described in paragraph (b) of this
section, and the awarding agency has determined that reimbursement is
not feasible because the subrecipient lacks sufficient working capital,
the awarding agency may provide cash on a working capital advance
payment basis. Under this procedure, the awarding agency shall advance
cash to the subrecipient to cover its estimated disbursement needs for
an initial period, generally geared to the subrecipient's disbursing
cycle. In no event may such an advance exceed 20 percent of the award
amount. Thereafter, the awarding agency shall reimburse the
subrecipient for its actual cash disbursements. The working capital
advance method of payment shall not be used by recipients or
subrecipients if the reason for using such method is the unwillingness
or inability of the recipient or subrecipient to provide timely
advances to the subrecipient to meet the subrecipient's actual cash
disbursements.
(f) Effect of program income, refunds, and audit recoveries on
payment. Each recipient and subrecipient shall disburse cash received
as a result of program income, rebates, refunds, contract settlements,
audit recoveries, and interest earned on such funds before requesting
additional cash payments.
(g) Cash depositories. (1) Consistent with the national goal of
expanding the opportunities for minority business enterprises, each
recipient and subrecipient is encouraged to use minority-owned banks (a
bank which is at least 50 percent owned by minority group members).
Additional information may be obtained from the Minority Business
Development Agency, Department of Commerce, Washington, DC 20230.
(2) A recipient or subrecipient shall not be required to maintain a
separate bank account but shall separately account for Federal funds on
deposit.
(h) Interest earned on advances. (1) An interest liability shall
accrue on advance payments between Federal agencies and State
governments, as provided by the Cash Management Improvement Act (31
U.S.C. 6501, et seq.) and implementing regulations at 31 CFR part 205.
(2) Each recipient and subrecipient shall account for interest
earned on advances of Federal funds as program income, as provided at
Sec. 627.450 of this part, Program income.
Sec. 627.435 Cost principles and allowable costs.
(a) General. To be allowable, a cost shall be necessary and
reasonable for the proper and efficient administration of the program,
be allocable to the program, and, except as provided herein, not be a
general expense required to carry out the overall responsibilities of
the Governor or a governmental subrecipient. Costs charged to the
program shall be accorded consistent treatment through application of
generally accepted accounting principles appropriate to the JTPA
program, as determined by the Governor.
(b) Whether a cost is charged as a direct cost or as an indirect
cost shall be determined in accordance with the descriptions of direct
and indirect costs contained in the OMB Circulars identified in DOL's
regulations at 29 CFR 97.22(b).
(c) Costs allocable to another Federal grant, JTPA program, or cost
category may not be shifted to a JTPA grant, subgrant, program, or cost
category to overcome fund deficiencies, avoid restrictions imposed by
law or grant agreements, or for other reasons.
(d) Applicable credits such as rebates, discounts, refunds, and
overpayment adjustments, as well as interest earned on any of them,
shall be credited as a reduction of costs if received during the same
funding period that the cost was initially charged. Credits received
after the funding period shall be returned to the Department as
provided for at Sec. 627.490(b).
(e) The following costs are not allowable charges to the JTPA
program:
(1) Costs of fines and penalties resulting from violations of, or
failure to comply with, Federal, State, or local laws and regulations;
(2) Back pay, unless it represents additional pay for JTPA services
performed for which the individual was underpaid;
(3) Entertainment costs;
(4) Bad debts expense;
(5) Insurance policies offering protection against debts
established by the Federal Government;
(6) Contributions to a contingency reserve or any similar provision
for unforeseen events;
(7) Costs prohibited by 29 CFR part 93 (Lobbying Restrictions) or
costs of any salaries or expenses related to any activity designed to
influence legislation or appropriations pending before the Congress of
the United States; and
(8) Costs of activities prohibited in Sec. 627.205, Public service
employment prohibition; Sec. 627.210, Nondiscrimination and
nonsectarian activities; Sec. 627.215, Relocation; Sec. 627.225,
Employment generating activities; and Sec. 627.230, Displacement, of
this part.
(f)(1) The cost of legal expenses required in the administration of
grant programs is allowable. Legal expenses include the expenses
incurred by the JTPA system in the establishment and maintenance of a
grievance system, including the costs of hearings and appeals, and
related expenses such as lawyers' fees. Legal expenses does not include
costs resulting from, and after, the grievance process such as fines
and penalties, which are not allowable, and settlement costs, which are
allowable to the extent that such costs included in the settlement
would have been allowable if charged to the JTPA program at the time
they were incurred.
(2) Legal services furnished by the chief legal officer of a State
or local government or staff solely for the purpose of discharging
general responsibilities as a legal officer are unallowable.
(3) Legal expenses for the prosecution of claims against the
Federal Government, including appeals to an Administrative Law Judge,
are unallowable.
(g) Costs of travel and incidental expenses incurred by volunteers
are allowable provided such costs are incurred for activities that are
generally consistent with section 204(c)(6) of the Act.
(h) Contributions to a reserve for a self-insurance program, to the
extent that the type and extent of coverage and the rates and premiums
would have been allowed had insurance been purchased to cover the
risks, are allowable.
(i) The Governor shall prescribe and implement guidelines on
allowable costs for SDA, SSG, and statewide programs that are
consistent with the cost principles and allowable costs provisions of
paragraphs (a) through (h) of this section and that include, at a
minimum, provisions that specify the extent to which the following cost
items are allowable or unallowable JTPA costs and, if allowable,
guidelines on conditions or the extent of allowability, documentation
requirements, and any prior approval requirements applicable to such
cost items:
(1) Compensation for personal services of staff, including wages,
salaries, supplementary compensation, and fringe benefits;
(2) Costs incurred by the SJTCC, HRIC, PIC's, and other advisory
councils or committees;
(3) Advertising costs;
(4) Depreciation and/or use allowances;
(5) Printing and reproduction costs;
(6) Interest expense;
(7) Expenditures for transportation and travel;
(8) Payments to OJT employers, training institutions, and other
vendors;
(9) Fees or profits;
(10) Insurance costs, including insurance coverage for injuries
suffered by participants who are not covered by existing workers'
compensation, and personal liability insurance for PIC members;
(11) Acquisitions of capital assets;
(12) Building space costs, including rent, repairs, and
alterations;
(13) Pre-agreement costs;
(14) Fund-raising activities;
(15) Professional services, including organizational management
studies conducted by outside individuals or firms; and
(16) Taxes.
Sec. 627.440 Classification of costs.
(a) Allowable costs for programs under title II and title III shall
be charged (allocated) to a particular cost objective/category to the
extent that benefits are received by such cost objective/category.
Joint and similar types of costs may be charged initially to a cost
pool used for the accumulation of such costs pending distribution in
due course to the ultimate benefitting cost objective/category. The
classification of costs for programs under title III of the Act are set
forth at Sec. 631.13 of this chapter, Classification of costs at State
and substate levels.
(b) For State-administered programs under Title II, the State is
required to plan, control, and charge expenditures against the
following cost objectives/categories:
(1) Titles II-A and II-C (combined)--capacity building and
technical assistance (sections 202(c)(1)(B) and 262(c)(1)(B) of the Act
to carry out activities pursuant to sections 202(c)(3)(A) and
262(c)(3)(A) of the Act);
(2) Titles II-A and II-C (combined)--8 percent coordination
(sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry out
activities pursuant to section 123(d)(2)(A) of the Act);
(3) Titles II-A and II-C (combined)--8 percent services/direct
training (sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to carry
out activities pursuant to section 123(d)(2)(B) of the Act);
(4) Titles II-A and II-C (combined)--8 percent services/training-
related and supportive services (sections 202(c)(1)(C) and 262(c)(1)(C)
of the Act to carry out activities pursuant to section 123(d)(2)(B) of
the Act);
(5) Titles II-A and II-C (combined)--8 percent services/
administration (sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to
carry out activities pursuant to section 123(d)(2)(B) of the Act);
(6) Titles II-A and II-C (combined)--8 percent services to
disadvantaged (section 202(c)(1)(C) and 262(c)(1)(C) of the Act to
carry out activities pursuant to section 123(d)(2)(C) of the Act);
(7) Title II-A--older individuals/direct training (section
202(c)(1)(D) of the Act to carry out activities pursuant to section
204(d) of the Act);
(8) Title II-A--older individuals/training-related and supportive
services (section 202(c)(1)(D) of the Act to carry out activities
pursuant to section 204(d) of the Act);
(9) Title II-A--older individuals/administration (section
202(c)(1)(D) of the Act to carry out activities pursuant to section
204(d) of the Act); and
(10) Title II--administration (sections 202(c)(1)(A) and
262(c)(1)(A) of the Act to carry out activities pursuant to Title II of
the Act, including Title II-B).
(c)(1) SDA grant recipients and their subrecipients shall plan,
control, and charge expenditures, excluding incentive funds received
pursuant to sections 202(c)(1)(B) and 262(c)(1)(B) of the Act, against
the following cost objectives/categories:
(i) Title II-A--direct training services;
(ii) Title II-C--direct training services;
(iii) Title II-A--training-related and supportive services;
(iv) Title II-C--training-related and supportive services;
(v) Title II-B--training and supportive services;
(vi) Title II-A--administration;
(vii) Title II-B--administration; and
(viii) Title II-C--administration.
(2) Incentive funds received pursuant to sections 202(c)(1)(B) and
262(c)(1)(B) of the Act, may be combined and accounted for in total,
without regard to cost categories or cost limitations.
(d) States and subrecipients shall use the following definitions in
assigning costs to the cost categories contained in paragraphs (b) and
(c) of this section:
(1) Direct training services--title II-A. Costs for direct training
services that may be charged to the title II-A program are:
(i) The personnel and non-personnel costs directly related to
providing those services to participants specified in section 204(b)(1)
of the Act and which can be specifically identified with one or more of
those services. Generally, such costs are limited to:
(A) Salaries, fringe benefits, equipment, supplies, space, staff
training, transportation, and other related costs of personnel directly
engaged in providing training; and
(B) Salaries, fringe benefits, and related non-personnel costs of
program component supervisors and/or coordinators as well as clerical
staff, provided such staff work exclusively on activities or functions
specified in section 204(b)(1) of the Act or allocations of such costs
are made based on actual time worked or other equitable cost allocation
methods;
(ii) Books, instructional materials, and other teaching aids used
by or for participants;
(iii) Equipment and materials used in providing training to
participants;
(iv) Classroom space and utility costs;
(v) Costs of insurance coverage of participants as specified at
Sec. 627.315(b) of this part, Benefits and Working Conditions;
(vi) Payments to vendors for goods or services procured for the use
or benefit of program participants for direct training services,
including:
(A) Payments for commercially available training packages purchased
competitively pursuant to section 141(d)(3) of the Act;
(B) Tuition charges, entrance fees, and other usual and customary
fees of an educational institution when such tuition charges, entrance
fees, or other fees are not more than the educational institution's
catalogue price, necessary to receive specific training, charged to the
general public to receive the same training, and are for training of
participants; and
(C) Payments to OJT employers, but not brokering contractors. Costs
incurred under brokering arrangements shall be allocated to all of the
benefitting cost categories, and
(vii) Payments to JTPA participants that represent hours spent in a
direct training activity (e.g., wages, work-based training payments,
training payments for combined activities), including work experience,
vocational exploration, limited internships, and entry employment.
(2) Direct training services--title II-C. Costs for direct training
services that may be charged to the title II-C program are the costs
identified in paragraph (d)(1) of this section as well as costs
directly related to providing those services to participants specified
in section 264(c)(1) of the Act and which can be specifically
identified with one or more of those services.
(3) Training-related and supportive services--title II-A. Costs for
training-related and supportive services that may be charged to the
title II-A program are:
(i) The personnel and non-personnel costs directly related to
providing outreach, intake, and eligibility determination, as well as
those services to participants specified in section 204(b)(2) of the
Act, and which can be specifically identified with one or more of those
services. Generally, such costs are limited to:
(A) Salaries, fringe benefits, equipment, supplies, space, staff
training, transportation, and other related costs of personnel directly
engaged in providing training-related and/or supportive services; and
(B) Salaries, fringe benefits, and related non-personnel costs of
program component supervisors and/or coordinators as well as clerical
staff, provided such staff work exclusively on activities or functions
specified in section 204(b)(2) of the Act or allocations of such costs
are made based on actual time worked or another equitable allocation
method.
(ii) Needs-based payments, cash incentives and bonuses, other
financial assistance and supportive services to participants and
applicants, where applicable.
(4) Training-related and supportive services--title II-C. Costs for
training-related and supportive services that may be charged to the
title II-C program are the costs identified in paragraph (d)(3) of this
section, as well as costs directly related to providing those services
to participants specified in section 264(c)(2) of the Act and which can
be specifically identified with one or more of those services.
(5) Administration. The costs of administration are those portions
of necessary and allowable costs associated with the overall management
and administration of the JTPA program and which are not directly
related to the provision of services to participants or otherwise
allocable to the program cost objectives/categories in paragraphs
(b)(1)-(8) or (c)(1) (i)-(v) of this section. These costs can be both
personnel and non-personnel and both direct and indirect. Costs of
administration shall include:
(i) Except as provided in paragraph (e)(1) of this section, costs
of salaries, wages, and related costs of the recipient's or
subrecipient's staff or PIC staff engaged in:
(A) Overall program management, program coordination, and general
administrative functions, including the salaries and related costs of
the executive director, JTPA director, project director, personnel
officer, fiscal officer/bookkeeper, purchasing officer, secretary,
payroll/insurance/property clerk and other costs associated with
carrying out administrative functions;
(B) Preparing program plans, budgets, schedules, and amendments
thereto;
(C) Monitoring of programs, projects, subrecipients, and related
systems and processes;
(D) Procurement activities, including the award of specific
subgrants, contracts, and purchase orders;
(E) Providing State or local officials and the general public with
information about the program (public relations);
(F) Developing systems and procedures, including management
information systems, for assuring compliance with program requirements;
(G) Preparing reports and other documents related to the program
requirements;
(H) Coordinating the resolution of audit findings;
(I) Evaluating program results against stated objectives; and
(J) Performing such administrative services as general legal
services, accounting services, audit services; and managing purchasing,
property, payroll, and personnel;
(ii) Costs for goods and services required for administration of
the program, including such goods and services as rental or purchase of
equipment, utilities, office supplies, postage, and rental and
maintenance of office space;
(iii) The costs of organization-wide management functions; and
(iv) Travel costs incurred for official business in carrying out
program management or administrative activities, including travel costs
incurred by PIC members.
(e) Other cost classification guidance. (1) Personnel and related
non-personnel costs of the recipient's or subrecipient's staff,
including project directors, who perform services or activities that
benefit two or more of the cost objectives/categories identified in
this section may be allocated to the benefitting cost objectives/
categories based on documented distributions of actual time worked or
other equitable cost allocation methods.
(2) Indirect or overhead costs normally shall be charged to
administration, except that specific costs charged to an overhead or
indirect cost pool that can be identified directly with a JTPA cost
objective/category other than administration may be charged to the JTPA
cost objective/category directly benefitted. Documentation of such
charges shall be maintained.
(3) Where an award to a subrecipient is for a "commercially
available off-the-shelf training package," as defined at Sec. 626.5 of
this chapter, the subrecipient may charge all costs of such package to
the direct training services cost category.
(4) Profits, fees, and other revenues earned by a subrecipient that
are in excess of actual costs incurred, to the extent allowable and
consistent with the guidelines on allowable costs prescribed by the
Governor in accordance with Sec. 627.435(i). Cost principles and
allowable costs, may be allocated to all three cost categories based on
the proportionate share of actual costs incurred attributable to each
category.
Sec. 627.445 Limitations on certain costs.
(a) State-administered programs.--(1) Services for older
individuals. Of the funds allocated for any program year for section
202(c)(1)(D) of the Act to carry out activities pursuant to section
204(d) of the Act--
(i) Not less than 50 percent shall be expended for the cost of
direct training services; and
(ii) Not more than 20 percent shall be expended for the cost of
administration.
(2) State education services. Of the funds allocated for any
program year for sections 202(c)(1)(C) and 262(c)(1)(C) of the Act to
carry out activities pursuant to section 123(d)(2)(B) of the Act--
(i) Not less than 50 percent shall be expended for the cost of
direct training services; and
(ii) Not more than 20 percent shall be expended for the cost of
administration.
(3) The limitations specified in paragraph (a)(2) of this section
shall apply to the combined total of funds allocated for sections
202(c)(1)(C) and 262(c)(1)(C) of the Act.
(b) SDA allocations. (1) In applying the title II-A and II-C cost
limitations specified in section 108(b)(4) of the Act, the funds
allocated to a service delivery area shall be net of any:
(i) Transfers made in accordance with sections 206, 256, and 266 of
the Act; and
(ii) Reallocations made by the Governor in accordance with section
109(a) of the Act.
(2) The limitations specified in paragraph (b)(1) of this section
shall apply separately to the funds allocated for title II-A and title
II-C programs.
(3) The title II-B administrative cost limitation of 15 percent
shall be 15 percent of the funds allocated for any program year to a
service delivery area, excluding any funds transferred to title II-C in
accordance with section 256 of the Act (section 253(a)(3)).
(c)(1) The State shall establish a system to regularly assess
compliance with the cost limitations including periodic review and
corrective action, as necessary.
(2) States and service delivery areas shall have the 3-year period
of fund availability to comply with the cost limitations in section 108
of the Act and paragraphs (a) and (b) of this section (section 161(b)).
(d) Administrative costs incurred by a community-based organization
or non-profit service provider shall not be included in the limitation
described in section 108(b)(4)(A) of the Act if:
(1) Such costs are incurred under an agreement that meets the
requirements of section 141(d)(3)(C) (i) and (ii) of the Act;
(2) The total administrative expenditures of the service delivery
area, including the administrative expenditures of such community-based
organizations or non-profit service providers, do not exceed 25 percent
of the funds allocated to the service delivery area for the program
year of allocation; and
(3) The total direct training expenditures of the service delivery
area, including the direct training expenditures of such community-
based organizations or non-profit service providers, is equal to or
exceeds 50 percent of the funds allocated to the service delivery area
for the program year less one-half of the percentage by which the total
administrative expenditures of the service delivery area exceeds 20
percent. For example, if the total administrative expenditures of the
service delivery area is 24 percent, then the total direct training
expenditures of the service delivery area must be at least 48 percent.
(e) The provisions of this section do not apply to any title III
programs.
(f) The provisions of this section do not apply to any designated
SDA which served as a concentrated employment program grantee for a
rural area under the Comprehensive Employment and Training Act (section
108(d)).
Sec. 627.450 Program income.
(a) Definition of program income. (1) Program income means income
received by the recipient or subrecipient that is directly generated by
a grant or subgrant supported activity, or earned only as a result of
the grant or subgrant. Program income includes:
(i) Income from fees for services performed and from conferences;
(ii) Income from the use or rental of real or personal property
acquired with grant or subgrant funds;
(iii) Income from the sale of commodities or items fabricated under
a grant or subgrant;
(iv) Revenues earned by a governmental or non-profit service
provider under either a fixed-price or reimbursable award that are in
excess of the actual costs incurred in providing the services; and
(v) Interest income earned on advances of JTPA funds.
(2) Program income does not include:
(i) Rebates, credits, discounts, refunds, etc., or interest earned
on any of them, which shall be credited in accordance with
Sec. 627.435(d), Cost principles and allowable costs;
(ii) Taxes, special assessments, levies, fines, and other such
governmental revenues raised by a recipient or subrecipient; or
(iii) Income from royalties and license fees for copyrighted
material, patents, patent applications, trademarks, and inventions
developed by a recipient or subrecipient.
(3) Property. Proceeds from the sale of property shall be handled
in accordance with the requirements of Sec. 627.465 of this part,
Property management standards.
(b) Cost of generating program income. Costs incidental to the
generation of program income may be deducted, if not already charged to
the grant, from gross income to determine program income.
(c) Use of program income. (1)(i) A recipient or subrecipient may
retain any program income earned by the recipient or subrecipient only
if such income is added to the funds committed to the particular JTPA
grant or subgrant and title under which it was earned and such income
is used for that title's purposes and under the terms and conditions
applicable to the use of the grant funds.
(ii) A State may use interest it earns on JTPA funds, deposited by
the United States to the State's account, to satisfy the requirement at
31 U.S.C. 6503(c) that the State pay interest on such deposits.
(iii) The classification of costs in Secs. 627.440 and 631.13 shall
apply to the use of program income.
(iv) The administrative cost limitation in Secs. 627.445 and 631.14
shall apply to the use of program income, except that program income
used in accordance with paragraph (c)(1)(ii) of this section shall be
exempt from the administrative cost limitations.
(2) Program income generated under title II may also be used to
satisfy the matching requirement of section 123(b) of the Act.
(3) Program income shall be used prior to the submission of the
final report for the funding period of the program year of funds to
which the earnings are attributable.
(4) If the subrecipient that earned program income cannot use such
income for JTPA purposes, the recipient may permit another entity to
use the program income for JTPA purposes.
(5) Program income not used in accordance with the requirements of
this section shall be remitted to the Department of Labor.
(d) Program and other income after the funding period. Rental
income and user fees on real and personal property acquired with JTPA
funds shall continue to be JTPA program income in subsequent funding
periods. There are no Federal requirements governing the disposition of
all other income that is earned after the end of the funding period.
Sec. 627.455 Reports required.
(a) General. The Governor shall report to DOL pursuant to
instructions issued by DOL. Reports shall be submitted no more
frequently than quarterly, in accordance with section 165(f) of the
Act, and within 45 calendar days after the end of the report period.
Additional reporting requirements for title III are set forth at
Sec. 631.15 of this chapter.
(b) A recipient may impose different forms or formats, shorter due
dates, and more frequent reporting requirements on subrecipients,
however, the recipient is required to meet the reporting requirements
imposed on it by DOL.
(c) DOL may provide computer outputs to recipients to expedite or
contribute to the accuracy of reporting. DOL may accept the required
information from recipients in electronically reported format or
computer printouts instead of prescribed forms.
(d) Financial reports. (1) Financial reports for programs under
titles I, II, and III shall be submitted to DOL by each State quarterly
and by program year of appropriation.
(2) Each recipient shall report program outlays on an accrual
basis. If the recipient's accounting records are not normally kept on
the accrual basis, the recipient shall develop such accrual information
through an analysis of the documentation on hand.
(3) A final financial report is required 90 days after the
expiration of a funding period (see Sec. 627.485 of this part,
Closeout).
(4) Pursuant to section 104(b)(13) of the Act, the SDA shall
annually report to the Governor. Among other items, this report shall
include information on the extent to which the SDA has met the goals
for the training and training-related placement of women in
nontraditional employment.
Sec. 627.460 Requirements for records.
(a) Records, including the records identified in section 165(g) of
the Act, shall be retained in accordance with section 165(e) of the
Act. In establishing the time period of record retention requirements
for records of subrecipients, the State may either:
(1) Impose the time limitation requirement of section 165(e) of the
Act; or
(2) Require that subrecipient records for each funding period be
retained for 3 years after the subrecipient submits to the awarding
agency its final expenditure report for that funding period. Records
for nonexpendable property shall be retained for a period of three
years after final disposition of the property.
(b) The Governor shall ensure that the records under this section
shall be retained beyond the prescribed period if any litigation or
audit is begun or if a claim is instituted involving the grant or
agreement covered by the records. In these instances, the Governor
shall ensure that the records shall be retained until the litigation,
audit, or claim has been finally resolved.
(c) In the event of the termination of the relationship with a
subrecipient, the Governor or SDA or title III SSG shall be responsible
for the maintenance and retention of the records of any subrecipient
unable to retain them.
(d) Record storage. Records shall be retained and stored in a
manner which will preserve their integrity and admissibility as
evidence in any audit or other proceeding. The burden of production and
authentication of the records shall be on the custodian of the records.
(e) Federal and awarding agencies' access to records--(1) Records
of recipients and subrecipients. The awarding agency, the Department of
Labor (including the Department of Labor's Office of Inspector
General), and the Comptroller General of the United States, or any of
their authorized representatives, have the right of timely and
reasonable access to any books, documents, papers, computer records, or
other records of recipients and subrecipients that are pertinent to the
grant, in order to conduct audits and examinations, and to make
excerpts, transcripts, and photocopies of such documents. This right
also includes timely and reasonable access to recipient and
subrecipient personnel for the purpose of interview and discussion
related to such documents.
(2) Expiration of right of access. The right of access in this
section is not limited to the required retention period but shall last
as long as the records are retained.
Sec. 627.463 Public access to records.
(a) Public access. Except as provided in paragraph (b) of this
section, records maintained by recipients or subrecipients pursuant to
Sec. 627.460 shall be made available to the public upon request,
notwithstanding the provisions of State or local law.
(b) Exceptions. This requirement does not apply to:
(1) Information, the disclosure of which would constitute a clearly
unwarranted invasion of personal privacy; or
(2) Trade secrets, or commercial or financial information, obtained
from a person and privileged or confidential.
(c) Fees. For processing of a request for a record under this
section, a fee may be charged to the extent sufficient to recover the
cost applicable to processing such request (section 165(a)(4)).
Sec. 627.465 Property management standards.
(a) States and governmental subrecipients. Real property,
equipment, supplies, and intangible property acquired or produced after
July 1, 1993, by States and governmental subrecipients with JTPA funds
shall be governed by the definitions and property requirements in the
DOL regulations at 29 CFR part 97, except that prior approval by the
Department of Labor to acquire property is waived.
(b) Nongovernmental subrecipients. Except as provided in paragraph
(c) of this section, real and personal property, including intangible
property, acquired or produced after July 1, 1993, by nongovernmental
subrecipients with JTPA funds shall be governed by the definitions and
property management standards of OMB Circular A-110, as codified by
administrative regulations of the Department of Labor in 29 CFR Part
95, except that prior approval by the Department of Labor to acquire
property is waived.
(c) Special provisions for property acquired under subgrants to
commercial organizations.--(1) Scope. This paragraph (c) applies to
real and personal property other than supplies that are acquired or
produced after July 1, 1993, under a JTPA subgrant to a commercial
organization.
(2) Property acquired by commercial subrecipients. Title to
property acquired or produced by a subrecipient that is a commercial
organization shall vest in the awarding agency, provided such agency is
a governmental entity or nongovernmental organization that is not a
commercial organization. Property so acquired or produced shall be
considered to be acquired or produced by the awarding agency and
paragraph (a) or (b) of this section, as appropriate, shall apply to
that property. If the awarding agency is also a commercial
organization, title shall vest in the higher level, non-commercial
awarding agency that made the subaward to the commercial subrecipient.
(3) Approval for acquisition. A subrecipient that is a commercial
organization shall not acquire property subject to this section without
the prior approval of the awarding agency.
(d) Notification to the Secretary of real property acquisitions.
Recipients shall notify the Secretary immediately upon acquisition of
real property with JTPA funds, including acquisitions by subrecipients.
Such notification shall include the location of the real property and
the Federal share percentage.
(e) Property procured before July 1, 1993. (1) Personal or real
property procured with JTPA funds or transferred from programs under
the Comprehensive Employment and Training Act must be used for purposes
authorized by the Act. Subject to the Secretary's rights to such
property, the Governor shall maintain accountability for property in
accordance with State procedures and the records retention requirements
of Sec. 627.460 of this part.
(2) The JTPA program must be reimbursed the fair market value of
any unneeded property retained by the Governor for use in a non-JTPA
program. The proceeds from the sale of any property or transfer of
property to a non-JTPA program must be used for purposes authorized
under the Act.
Sec. 627.470 Performance standards.
(a) General. The Secretary shall prescribe performance standards
for adult programs under title II-A, for youth programs under title II-
C, for dislocated worker programs under title III, and for older worker
programs under section 204(d) of the Act. Any performance standards
developed for employment competencies shall be based on such factors as
entry level skills and other hiring requirements.
(b) Pursuant to instructions and time lines issued by the
Secretary, the Governor shall:
(1) Collect the data necessary to set performance standards
pursuant to section 106 of the Act; and
(2) Maintain records and submit reports required by sections
106(j)(3), 165(a)(3), (c)(1), and (d) and 121(b)(6) of the Act.
(c) Title II performance standards. (1) The Governor shall
establish SDA performance standards for title II within the parameters
set by the Secretary pursuant to sections 106(b) and (d) of the Act and
apply the standards in accordance with section 202(c)(1)(B) of the Act.
(2) The Governor shall establish incentive award policies pursuant
to section 106(b)(7) of the Act, except for programs operated under
section 204(d) of the Act. Pursuant to section 106(b)(8) of the Act,
Governors may not consider standards relating gross program
expenditures to performance measures in making such incentive awards.
(3) The Governor shall provide technical assistance to SDA's
failing to meet performance standards established by the Secretary for
a given program year (section 106(j)(2)).
(4)(i) If an SDA fails to meet a prescribed number of the
Secretary's performance standards for 2 consecutive years, the Governor
shall notify the Secretary and the service delivery area of the
continued failure and impose a reorganization plan (section 106(j)(4)).
(ii) The number of standards deemed to constitute failure shall be
specified by the Secretary biennially and shall be based on an
appropriate proportion of the total number established by the Secretary
for that performance cycle. In determining failure, the specified
proportion shall be applied separately to each year of the two year
cycle.
(iii) A reorganization plan shall not be imposed for a failure to
meet performance standards other than those established by the
Secretary.
(iv) A reorganization plan shall be considered to be imposed when,
at a minimum:
(A) The problem or deficiency is identified,
(B) The problem is communicated to the SDA, and
(C) The SDA is provided an initial statement of the actions or
steps required and the timeframe within which they are to be initiated.
A final statement of required steps and actions is to be issued within
30 days.
(d)(1) If the Governor does not impose a reorganization plan,
required by paragraph (c)(4) of this section, within 90 days of
notifying the Grant Officer of an SDA's continued failure to meet
performance standards, the Grant Officer shall develop and impose such
a plan (section 106(j)(5)).
(2) Before imposing a reorganization plan, the Grant Officer shall
notify the Governor and SDA in writing of the intent to impose the plan
and provide both parties the opportunity to submit comments within 30
days of receipt of the Grant Officer's notice.
(e) An SDA subject to a reorganization plan under paragraphs (c)(4)
or (d) of this section may, within 30 days of receiving notice of such
action, appeal to the Secretary to revise or rescind the reorganization
plan under the procedures set forth at Sec. 627.471 of this subpart,
Reorganization plan appeals (section 106(j)(6)(A)).
(f) Secretarial action to recapture or withhold funds. (1) The
Grant Officer shall recapture or withhold an amount not to exceed one-
fifth of the State administration set-aside allocated under sections
202(c)(1)(A) and 262(c)(1)(A) of the Act when:
(i) The Governor has failed to impose a reorganization plan under
paragraph (c)(4) of this section, for the purposes of providing
technical assistance under a reorganization plan imposed by the
Secretary (section 106(j)(5)(B)); or
(ii) The Secretary determines in an appeal provided for at
paragraph (e) of this section, and set forth at Sec. 627.471 of this
subpart, that the Governor has not provided appropriate technical
assistance as required at section 106(j)(2) (section 106(j)(6)(B)).
(2)(i) A Governor of a State that is subject to recapture or
withholding under paragraph (f)(1) of this section may, within 30 days
of receipt of such notice, appeal such recapture or withholding to the
Secretary.
(ii) The Secretary may consider any comments submitted by the
Governor and shall make a decision within 45 days after the appeal is
received.
(g) Title III performance standards. (1) The Governor shall
establish SSG performance standards for programs under title III within
the parameters set annually by the Secretary pursuant to section 106(c)
and (d) of the Act.
(2) Any performance standard for programs under title III shall
make appropriate allowances for the difference in cost resulting from
serving workers receiving needs-related payments authorized under
Sec. 631.20 of this chapter (section 106(c)(2)).
(3) The Secretary annually shall certify compliance, if the program
is in compliance, with the title III performance standards established
pursuant to paragraph (a) of section 322(a)(4) of the Act.
(4) The Governor shall not establish standards for the operation of
programs under title III that are inconsistent with the performance
standards established by the Secretary under provisions of section
106(c) of the Act (section 311(b)(8)).
(5) When an SSG fails to meet performance standards for 2
consecutive years, the Governor may institute procedures pursuant to
the Governor's by-pass authority in accordance with Sec. 631.38(b) of
this chapter or require redesignation of the substate grantee in
accordance with Sec. 631.35 of this chapter, as appropriate.
Sec. 627.471 Reorganization plan appeals.
(a) A reorganization plan imposed by the Governor, as provided for
at Secs. 627.470(c)(4) or 627.477(b)(2) of this part, or by the
Secretary, as provided for at Sec. 627.470(d) of this part, may be
appealed directly to the Secretary without prior exhaustion of local
remedies.
(b)(1) Appeals shall be submitted to the Secretary, U.S. Department
of Labor, Washington, DC 20210, ATTENTION: ASET. A copy of the appeal
shall be provided simultaneously to the Governor.
(2) The Secretary shall not accept an appeal dated later than 30
days after receipt of written notification from the Governor or the
Secretary.
(3) The appealing party shall explain why it believes the decision
to impose the reorganization plan is contrary to the provisions of
section 106 of the Act.
(4) The Secretary shall accept the appeal and make a decision only
with regard to determining whether or not the decision to impose the
reorganization plan is inconsistent with section 106 of the Act. The
Secretary may consider any comments submitted by the Governor or the
SDA, as appropriate. The Secretary shall make a final decision within
60 days after this appeal is received (section 106(j)).
Sec. 627.475 Oversight and monitoring.
(a) The Secretary may monitor all recipients and subrecipients of
financial assistance pursuant to section 163 of the Act.
(b) The Governor is responsible for oversight of all SDA and SSG
activities and State-supported programs. The Governor shall develop and
make available for review a State monitoring plan. The plan shall
specify the mechanism which:
(1) Ensures that established policies to achieve program quality
and outcomes meet the objectives of the Act and regulations promulgated
thereunder;
(2) Enables the Governor to determine if SDA's and SSG's have
demonstrated substantial compliance with the requirements for
oversight;
(3) Determines whether the Job Training Plan shall be disapproved
consistent with the criteria contained in section 105(b)(1) of the Act;
(4) Regularly examines expenditures against the cost categories and
cost limitations specified in the Act and these regulations;
(5) Ensures that all areas of SDA and SSG operations are monitored
onsite regularly, but not less than once annually; and
(6) Provides for corrective action to be imposed if conditions in
paragraphs (b)(1)-(4) of this section are not met.
(c) The Governor shall issue instructions to SDA's and title III
SSG's on the development of a substate monitoring plan. The
instructions for development of the monitoring plan, at a minimum,
shall address the monitoring scope and frequency, and the Secretary's
emphasis and direction. The substate monitoring plan shall be part of
the job training plan.
(d) The Governor shall establish general standards for PIC
oversight responsibilities. The required PIC standards shall be
included in the Governor's Coordination and Special Services Plan
(GCSSP).
(e)(1) The PIC, pursuant to standards established by the Governor,
shall establish specific policies for monitoring and oversight of SDA
performance which shall be described in the job training plan.
(2) The PIC shall exercise independent oversight over activities
under the job training plan which shall not be circumscribed by
agreements with the appropriate chief elected official(s) of the SDA.
(f) The PIC and chief elected official(s) may conduct such
oversight as they, individually or jointly, deem necessary or delegate
oversight responsibilities to an appropriate entity pursuant to their
mutual agreement.
Sec. 627.477 Governor's determination of substantial violation.
(a) Except as provided at paragraph (d) of this section, if, as a
result of financial and compliance audits or otherwise, the Governor
determines that there is a substantial violation of a specific
provision of this Act or the regulations under this Act, and corrective
action has not been taken, the Governor shall
(1) Issue a notice of intent to revoke approval of all or part of
the plan affected; or
(2) Impose a reorganization plan, which may include
(i) Restructuring the private industry council involved;
(ii) Prohibiting the use of designated service providers;
(iii) Selecting an alternative entity to administer the program for
the service delivery area involved;
(iv) Merging the service delivery area into 1 or more other
existing service delivery areas; or
(v) Other such changes as the Secretary or Governor determines
necessary to secure compliance (section 164(b)(1)).
(b)(1) The actions taken by the Governor pursuant to paragraph
(a)(1) of this section may be appealed to the Secretary as provided at
Sec. 628.426 of this chapter (section 164(b)(2)(A)).
(2) The actions taken by the Governor pursuant to paragraph (a)(2)
of this section may be appealed to the Secretary, as provided at
Sec. 627.471 of this part (section 164(b)(2)(B)).
(c) Allegations that the Governor failed to promptly take the
actions required under paragraph (a) of this section shall be handled
under Sec. 627.607 of this part (section 164(b)(3)).
(d) This section does not apply to remedial actions for SDA
failures to meet performance standards, which are provided for at
Sec. 627.470 of this part, and do not apply to remedial actions for the
failure to comply with procurement standards, which are provided for at
Sec. 627.703 of this part.
Sec. 627.480 Audits.
(a) Non-Federal Audits.--(1) Governments. Each recipient and
governmental subrecipient is responsible for complying with the Single
Audit Act of 1984 (31 U.S.C. 7501-7) and 29 CFR part 96, the Department
of Labor regulations which implement Office of Management and Budget
(OMB) Circular A-128, "Audits of State and Local Governments".
(2) Non-governmental organizations. Each non-governmental recipient
or subrecipient shall comply with OMB Circular A-133, "Audits of
Institutions of Higher Education and Other Nonprofit Institutions", as
implemented by the Department of Labor regulations at 29 CFR part 96.
The provisions of this paragraph (a)(2) do not apply to any non-
governmental organization that is:
(i) A commercial organization; or
(ii) A hospital or an institution of higher education for which
State or local governments choose to apply OMB Circular A-128.
(3) Commercial organizations. A commercial organization which is a
recipient or subrecipient and which receives $25,000 or more a year in
Federal financial assistance to operate a JTPA program shall have an
audit that:
(i) Is usually performed annually, but not less frequently than
every two years;
(ii) Is completed within one year after the end of the period
covered by the audit and submitted to the awarding agency within one
month after completion;
(iii) Is either:
(A) An independent financial and compliance audit of Federal funds
that includes coverage of the JTPA program within its scope, and is
conducted and prepared in accordance with generally accepted government
auditing standards; or
(B) An organization-wide audit that includes financial and
compliance coverage of the JTPA program within its scope.
(b) Federal audits. The notice of audits conducted or arranged by
the Office of Inspector General or the Comptroller General shall be
provided in advance, as required by section 165(b) of the Act.
(c) Audit reports. (1) Audit reports of recipient-level entities
and other organizations which receive JTPA funds directly from the U.S.
Department of Labor shall be submitted to the Office of Inspector
General.
(2) Audit reports of organizations other than those described in
paragraph (c)(1) of this section shall be submitted to the entity which
provided the JTPA funds.
(d) Each entity that receives JTPA program funds and awards a
portion of those funds to one or more subrecipients shall:
(1) Ensure that each subrecipient complies with the applicable
audit requirements;
(2) Resolve all audit findings that impact the JTPA program with
its subrecipient and ensure that corrective action for all such
findings is instituted within 6 months after receipt of the audit
report (where appropriate, corrective action shall include debt
collection action for all disallowed costs); and
(3) Maintain an audit resolution file documenting the disposition
of reported questioned costs and corrective actions taken for all
findings. The ETA Grant Officer may request that an audit resolution
report, as specified in paragraph (e)(2) of this section, be submitted
for such audits or may have the audit resolution reviewed through the
compliance review process.
(e)(1) Audits of recipient-level entities and other organizations
which receive JTPA funds directly from DOL and all audits conducted by
or under contract for the Office of Inspector General shall be issued
by the OIG to the Employment and Training Administration after
acceptance by OIG.
(2) After receipt of the audit report, the ETA Grant Officer shall
request that the State submit an audit resolution report documenting
the disposition of the reported questioned costs, i.e., whether allowed
or disallowed, the basis for allowing questioned costs, the method of
repayment planned or required, and corrective actions, including debt
collection efforts, taken or planned.
(f) If the recipient intends to propose the use of "stand-in"
costs as substitutes for otherwise unallowable costs, the proposal
shall be included with the audit resolution report. To be considered,
the proposed "stand-in" costs shall have been reported as uncharged
JTPA program costs, included within the scope of the audit, and
accounted for in the auditee's financial system, as required by
Sec. 627.425 of this part, Standards for financial management and
participant data systems. To be accepted, stand-in costs shall be from
the same title, and program year as the costs which they are proposed
to replace, and shall not result in a violation of the applicable cost
limitations.
(g) After receiving the audit resolution report, the ETA Grant
Officer shall review the report, the recipient's disposition, and any
liability waiver request submitted in accordance with Sec. 627.704 of
this part. If the Grant Officer agrees with all aspects of the
recipient's disposition of the audit, the Grant Officer shall so notify
the recipient. If the Grant Officer disagrees with the recipient's
conclusion on specific points in the audit, the Grant Officer shall
resolve the audit through the initial and final determination process
described in Sec. 627.606 of this part.
Sec. 627.481 Audit resolution.
(a) Federal audit resolution. When the OIG issues an audit report
to the Employment and Training Administration for resolution, the ETA
Grant Officer shall provide a copy of the report to the recipient (if
it does not already have the report), along with a request that the
recipient submit its audit resolution report as specified in
Sec. 627.480(e)(2) of this part, unless the Grant Officer chooses to
proceed directly against the recipient pursuant to Sec. 627.601 of this
part.
(1) For audits of recipient-level entities and other organizations
which receive JTPA funds directly from DOL, the Grant Officer shall
request that the audit resolution report be submitted within 60 days
from the date that the audit report is issued by the OIG.
(2) For audits of subrecipient organizations, the Grant Officer
shall provide the recipient with a 180-day period within which to
resolve the audit with its subrecipient(s), and shall request that the
audit resolution report be submitted at the end of that 180-day period.
(b) After receiving the audit resolution report, the ETA Grant
Officer shall review the report, the recipient's disposition, any
liability waiver request, and any proposed "stand-in" costs. If the
Grant Officer agrees with all aspects of the recipient's disposition of
the audit, the Grant Officer shall so notify the recipient,
constituting final agency action on the audit. If the Grant Officer
disagrees with the recipient's conclusion on specific points in the
audit, or if the recipient fails to submit its audit resolution report,
the Grant Officer shall resolve the audit through the initial and final
determination process described in Sec. 627.606 of this part. Normally,
the Grant Officer's notification of agreement (a concurrence letter) or
disagreement (an initial determination) with the recipient's audit
resolution report will be provided within 180 days of the Grant
Officer's receipt of the report.
(c) Non-Federal audit resolution. (1) To ensure timely and
appropriate resolution for audits of all subrecipients, including SDA
grant recipients and title III SSG's, and to ensure recipient-wide
consistency, the Governor shall prescribe standards for audit
resolution and debt collection policies and procedures that shall be
included in each job training plan in accordance with section
104(b)(12) of the Act.
(2) The Governor shall prescribe an appeals procedure for audit
resolution disputes which, at a minimum, provides for:
(i) The period of time, not less than 15 days nor more than 30
days, after the issuance of the final determination in which an appeal
may be filed;
(ii) The rules of procedure;
(iii) Timely submission of evidence;
(iv) The timing of decisions; and
(v) Further appeal rights, if any.
Sec. 627.485 Closeout.
(a) General. The Grant Officer shall close out each annual JTPA
grant agreement within a timely period after the funding period covered
by the award has expired.
(b) Revisions to the reported expenditures for a program year of
funds may be made until 90 days after the time limitation for
expenditure of JTPA funds, as set forth in section 161(b) of the Act,
has expired. The Grant Officer may extend this deadline if the
recipient submits a written request with justification. After that
time, the Grant Officer shall consider all reports received as final
and no additional revisions may be made.
(c) When closing out a JTPA grant, the Grant Officer shall notify
the recipient, by certified mail, that, since the time limitation for
expenditure of funds covered by the grant award has expired, it is the
Department of Labor's intent to close the annual grant as follows:
(1) Cost adjustment. Based on receipt of reports in paragraph (b)
of this section, the Grant Officer shall make upward or downward
adjustments to the allowable costs; and
(2) Cash adjustment. DOL shall make prompt payment to the recipient
for allowable reimbursable costs; the recipient shall promptly refund
to DOL any balance of cash advanced that is in excess of allowable
costs for the grant award being closed.
(d) The recipient shall have an additional 60 days after the date
of the notice described in paragraph (c) of this section in which to
provide the Grant Officer with information as to the reason(s) why
closeout should not occur.
(e) At the end of the 60-day period described in paragraph (d) of
this section, the Grant Officer shall notify the recipient that
closeout has occurred, unless information provided by the recipient,
pursuant to paragraph (d) of this section, indicates otherwise.
Sec. 627.490 Later disallowances and adjustments after closeout.
The closeout of a grant does not affect:
(a) The Grant Officer's right to disallow costs and recover funds
on the basis of a later audit or other review;
(b) The recipient's obligation to return any funds due as a result
of later refunds, corrections, subrecipient audit disallowances, or
other transactions;
(c) Records retention requirements in Sec. 627.460 of this part,
Requirements for records, and Sec. 627.463 of this part, Public access
to records;
(d) Property management requirements in Sec. 627.465 of this part,
Property management standards; and
(e) Audit and audit resolution requirements in Sec. 627.480 of this
part, Audits and Sec. 627.481 of this part, Audit resolution.
Sec. 627.495 Collection of amounts due.
(a) Any funds paid to a recipient in excess of the amount to which
the recipient is finally determined to be entitled under the terms of
the grant constitute a debt to the Federal Government. If not paid
within a reasonable period after demand, the Secretary may take any
actions permitted by law to recover the funds.
(b) The Secretary shall charge interest on an overdue debt in
accordance with the Federal Claims Collection Standards (4 CFR ch. II).
Subpart E--Grievances Procedures at the State and Local Level
Sec. 627.500 Scope and purpose.
(a) General. This subpart establishes the procedures which apply to
the handling of noncriminal complaints under the Act at the Governor,
the SDA, and the SSG levels. Nothing contained in this subpart shall be
deemed to prejudice the separate exercise of other legal rights in
pursuit of remedies and sanctions available outside the Act.
(b) Handling of discrimination complaints. Complaints of
discrimination pursuant to section 167(a) of the Act shall be handled
under 29 CFR part 34.
(c) Complaints and reports of criminal fraud, waste, and abuse.
Information and complaints involving criminal fraud, waste, abuse or
other criminal activity shall be reported through the Department's
Incident Reporting System, directly and immediately to the DOL Office
of Inspector General, Office of Investigations, 200 Constitution Avenue
NW., Room S5514, Washington, DC 20210, or to the corresponding Regional
Inspector General for Investigations, with a copy simultaneously
provided to the Employment and Training Administration. The Hotline
number is 1-800-347-3756. Other complaints of a noncriminal nature will
continue to be handled under the procedures set forth in this part,
subparts E and F, and through the Department's Incident Reporting
System.
(d) Non-JTPA remedies. Whenever any person, organization, or agency
believes that a recipient, an SDA, an SSG, or other subrecipient has
engaged in conduct that violates the Act and that such conduct also
violates a Federal statute other than JTPA, or a State or local law,
that person, organization, or agency may, with respect to the non-JTPA
cause of action, institute a civil action or pursue other remedies
authorized under such other Federal, State, or local law against the
recipient, the SDA, the SSG, or other subrecipient, without first
exhausting the remedies in this subpart. Nothing in the Act or this
chapter shall:
(1) Allow any person or organization to file a suit which alleges a
violation of JTPA or regulations promulgated thereunder without first
exhausting the administrative remedies described in this subpart; or
(2) Be construed to create a private right of action with respect
to alleged violations of JTPA or the regulations promulgated
thereunder.
Sec. 627.501 State grievance and hearing procedures for noncriminal
complaints at the recipient level.
(a)(1) Each recipient shall maintain a recipient-level grievance
procedure and shall ensure the establishment of procedures at the SDA
level and the SSG level for resolving any complaint alleging a
violation of the Act, regulations promulgated thereunder, grants, or
other agreements under the Act. The procedures shall include procedures
for handling complaints and grievances arising in connection with JTPA
programs operated by each SDA, SSG, and subrecipient under the Act
(section 144(a)).
(2) The procedures described in paragraph (a)(1) of this section
shall also provide for resolution of complaints arising from actions
taken by the recipient with respect to investigations or monitoring
reports.
(b) The recipient's grievance hearing procedure shall require
written notice to interested parties of the date, time, and place of
the hearing; an opportunity to present evidence; and a written
decision. For matters under paragraph (a)(2) of this section, the
notice of hearing shall indicate the nature of the violation(s) which
the hearing covers.
Sec. 627.502 Grievance and hearing procedures for noncriminal
complaints at the SDA and SSG levels.
(a) Each SDA and SSG, pursuant to guidelines established by the
recipient, shall establish procedures for resolving complaints and
grievances arising in connection with JTPA programs operated by the
SDA, the SSG, and other subrecipients under the Act. The procedures
also shall provide for resolution of complaints arising from actions
taken by the SDA or the SSG with respect to investigations or
monitoring reports of their subgrantees, contractors, and other
subrecipients (section 144(a)).
(b) Each SDA and SSG grievance hearing procedure shall include
written notice of the date, time, and place of the hearing; an
opportunity to present evidence; a written decision; and a notice of
appeal rights.
(c) The SDA and SSG procedures shall provide for a decision within
60 days of the filing of the complaint.
Sec. 627.503 Recipient-level review.
(a) If a complainant does not receive a decision at the SDA or the
SSG level within 60 days of filing the complaint or receives a decision
unsatisfactory to the complainant, the complainant shall have the right
to request a review of the complaint by the recipient. The recipient
shall issue a decision within 30 days of receipt of the complaint.
(b) The recipient shall also provide for an independent review, by
a reviewer who is independent of the JTPA program, of a complaint
initially filed at the recipient level on which a decision was not
issued within 60 days of receipt of a complaint or on which the
complainant has received an adverse decision. A decision shall be made
within 30 days of receipt by the recipient.
(c) A request for review under the provisions of paragraphs (a) or
(b) of this section shall be filed within 10 days of receipt of the
adverse decision or, if no timely decision is rendered, within 15 days
from the date on which the complainant should have received a timely
decision.
(d) With the exception of complaints alleging violations of the
labor standards under section 143 of the Act, the recipient's decision
is final unless the Secretary exercises the authority for Federal-level
review in accordance with the provisions at Sec. 627.601 of this part,
Complaints and grievances at the Federal level. Complaints alleging
violations of section 143 of the Act shall be handled under the
procedures set forth at Sec. 627.603 of this part, special handling of
labor standards violations under section 143.
Sec. 627.504 Noncriminal grievance procedure at employer level.
(a) Recipients, SDA's, SSG's, and other subrecipients shall assure
that other employers, including private-for-profit employers of
participants under the Act, have a grievance procedure relating to the
terms and conditions of employment available to their participants
(section 144(b)).
(b)(1) Employers under paragraph (a) of this section may operate
their own grievance system or may utilize the grievance system
established by the recipient, the SDA, or the SSG under this subpart,
except as provided for in paragraph (b)(2) of this section. Employers
shall inform participants of the grievance procedures they are to
follow when the participant begins employment.
(2) If an employer is required to use a certain grievance procedure
under a covered collective bargaining agreement, then those procedures
should be followed for the handling of JTPA complaints under this
section.
(c) An employer grievance system shall provide for, upon request by
the complainant, a review of an employer's decision by the SDA, or the
SSG and the recipient if necessary, in accordance with Secs. 627.501
and 627.502 of this part.
Subpart F--Federal handling of noncriminal complaints and other
allegations.
Sec. 627.600 Scope and purpose.
(a) This subpart establishes the procedures which apply to the
filing, handling, and reviewing of complaints at the Federal level.
Nothing in the Act or this chapter shall be construed to allow any
person or organization to join or sue the Secretary with respect to the
Secretary's responsibilities under JTPA except after exhausting the
remedies in subpart E of this part and this subpart F.
(b) Complaints of discrimination pursuant to section 167(a) of the
Act shall be handled under 29 CFR part 34.
Sec. 627.601 Complaints and allegations at the Federal level.
(a) The types of complaints and allegations that may be received at
the Federal level for review include:
(1) Complaints for which the recipient has failed to issue a timely
decision as required by Sec. 627.503 of this part;
(2) Alleged violations of the Act and/or the regulations
promulgated thereunder resulting from Federal, State, and/or SDA and
SSG monitoring and oversight reviews;
(3) Alleged violations of the labor standards provisions at section
143 of the Act;
(4) Alleged violations of the relocation provisions in section
141(c) of the Act; and
(5) Other allegations of violations of the Act or the regulations
promulgated thereunder.
(b) Upon receipt of a complaint or allegation alleging any of the
violations listed in paragraph (a) of this section, the Secretary may:
(1) Direct the recipient to handle a complaint through local
grievance procedures established under Sec. 627.502 of this part; or
(2) Investigate and determine whether the recipient or
subrecipient(s) are in compliance with the Act and regulations
promulgated thereunder (section 163(b) and (c)).
(3) Allegations of violations of sections 141(c) or 143 of the Act
and Sec. 627.503 of this part shall be handled under paragraph (b)(2)
of this section.
Sec. 627.602 Resolution of investigative findings.
(a)(1) As a result of an investigation or monitoring by the
Department, or of the actions specified in paragraph (b)(2) of
Sec. 627.601 of this part, the Grant Officer shall notify the recipient
of the findings of the investigation and shall give the recipient a
period of time, not to exceed 60 days, depending on the nature of the
findings, to comment and to take appropriate corrective actions.
(2) The Grant Officer shall review the complete file of the
investigation and the recipient's actions. The Grant Officer's review
shall take into account the sanction provisions of subpart G of this
part. If the Grant Officer agrees with the recipient's handling of the
situation, the Grant Officer shall so notify the recipient. This
notification shall constitute final agency action.
(3) If the Grant Officer disagrees with the recipient's handling of
the matter, the Grant Officer shall proceed pursuant to Sec. 627.606 of
this part, Grant officer resolution.
Sec. 627.603 Special handling of labor standards violations under
Section 143 of the Act.
(a) A complaint alleging JTPA section 143 violations may be
submitted to the Secretary by either party to the complaint when:
(1) The complainant has exhausted the grievance procedures set
forth at subpart E of this part, or
(2) The 60-day time period specified for reaching a decision under
a procedure set forth at subpart E of this part has elapsed without a
decision (section 144(a) and (d)(1)).
(b)(1) The Secretary shall investigate the allegations contained in
a complaint alleging violations of JTPA section 143, make a
determination whether a violation has occurred, and issue a decision
within 120 days of receipt by the Secretary of the complaint (section
144(c) and (d)).
(2) If the results of the Secretary's investigation indicate that a
decision by a recipient under a procedure set forth at subpart E of
this part requires modification or reversal, or that the 60-day time
period for decision under section 144(a) has elapsed, the Secretary
shall modify, reverse, or issue such decision.
(3) If the Secretary modifies or reverses a decision made under a
procedure set forth at subpart E of this part, or issues a decision
where the 60-day time period has elapsed without a decision, the
Secretary shall offer an opportunity for a hearing, in accordance with
the procedures under section 166 of the Act and subpart H of this part
(sections 144(d)(2) and 166(a)).
(4) If the Secretary upholds a recipient's decision, the
determination is the final decision of the Secretary (section
144(d)(3)). This decision is not appealable to the Office of
Administrative Law Judges.
(c) Except as provided in paragraph (d) of this section, remedies
available under this section to a grievant for violations of section
143 of the Act shall be limited to:
(1) Suspension or termination of payments under the Act;
(2) Prohibition of placement of a participant, for an appropriate
period of time, in a program under the Act with an employer that has
violated section 143 of the Act, as determined under section 144(d) or
(e) of the Act; and/or
(3) Appropriate equitable relief (other than back pay) (section
144(f)(1)).
(d) Available remedies for violations of section 143(a)(4), (b)(1),
(b)(3), and (d) of the Act include the remedies listed in paragraph (c)
of this section, and may include the following:
(1) Reinstatement of the grievant to the position held prior to
displacement;
(2) Payment of lost wages and benefits; and/or
(3) Reestablishment of other relevant terms, conditions, and
privileges of employment.
(e) Nothing in this section shall be construed to prohibit a
grievant from pursuing a remedy authorized under another Federal,
State, or local law for a violation of section 143 of the Act (section
144(g)).
Sec. 627.604 Alternative procedure for handling labor standards
violations under section 143 of the Act--binding arbitration.
(a) A person alleging a violation of section 143 of the Act, as an
alternative to processing the grievance under a procedure described at
section 144 of the Act, may submit the grievance to a binding
arbitration procedure, if a collective bargaining agreement covering
the parties to the grievance so provides (section 144(e)(1)).
(b) A person electing to have her/his complaint on JTPA section 143
labor standard violations processed under binding arbitration
provisions--
(1) Shall choose binding arbitration before, and in lieu of,
initiating a complaint under other grievance procedures established
pursuant to section 144 of the Act, and
(2) May not elect binding arbitration for a complaint that
previously has been or is subject to any other grievance procedure
established under the Act.
(c) Binding arbitration decisions under the provisions of section
144(e) of the Act are not reviewable by the Secretary.
(d) The remedies available to a grievant under binding arbitration
are limited to those set forth at section 144(f)(1)(C) and (f)(2) of
the Act (section 144(e)(2)).
(e) Nothing in this section shall be construed to prohibit a
grievant from pursuing a remedy authorized under another Federal,
State, or local law for a violation of section 143 of the Act (section
144(g)).
Sec. 627.605 Special Federal review of SDA- and SSG-level complaints
without decision.
(a) Should the recipient fail to provide a decision as required in
Sec. 627.503 of this part, the complainant may then request from the
Secretary a determination whether reasonable cause exists to believe
that the Act or regulations promulgated thereunder have been violated.
(b) The Secretary shall act within 90 days of receipt of a request
made pursuant to paragraph (a) of this section. Where there is
reasonable cause to believe the Act or regulations promulgated
thereunder have been violated, the Secretary shall direct the recipient
to issue a decision adjudicating the dispute pursuant to recipient and
local procedures. The Secretary's action does not constitute final
agency action and is not appealable under the Act (sections 166(a) and
144(c)). If the recipient does not comply with the Secretary's order
within 60 days, the Secretary may impose a sanction upon the recipient
for failing to issue a decision.
(c) A request pursuant to paragraph (a) of this section shall be
filed no later than 15 days from the date on which the complainant
should have received a decision as required in Sec. 627.503 of this
part. The complaint shall contain the following:
(1) The full name, telephone number (if any), and address (if any)
of the person making the complaint;
(2) The full name and address of the respondent against whom the
complaint is made;
(3) A clear and concise statement of the facts, including pertinent
dates, constituting the alleged violation;
(4) The provisions of the Act, regulations promulgated thereunder,
grant, or other agreement under the Act believed to have been violated;
(5) A statement disclosing whether proceedings involving the
subject of the request have been commenced or concluded before any
Federal, State, or local authority, and, if so, the date of such
commencement or conclusion, the name and address of the authority, and
the style of the case; and
(6) A statement of the date the complaint was filed with the
recipient, the date on which the recipient should have issued decision,
and an attestation that no decision was issued.
(d)(1) A request pursuant to paragraph (a) of this section will be
considered to have been filed when the Secretary receives from the
complainant a written statement sufficiently precise to evaluate the
complaint and the grievance procedure used by the recipient, the SDA,
or the SSG.
(2) When an imprecise request is received within the 15-day period
prescribed in paragraph (a) of this section, the Secretary may extend
the period for submission.
Sec. 627.606 Grant Officer resolution.
(a) When the Grant Officer is dissatisfied with the State's
disposition of an audit, as specified in Sec. 627.481 of this part, or
other resolution of violations (including those arising out of incident
reports or compliance reviews), with the recipient's response to
findings resulting from investigations pursuant to Sec. 627.503 of this
part, or if the recipient fails to comply with the Secretary's decision
pursuant to Sec. 627.605(b) of this part, the initial and final
determination process shall be used to resolve the matter.
(b) Initial determination. The Grant Officer shall make an initial
determination on the findings for both those matters where there is
agreement and those where there is disagreement with the recipient's
resolution, including the allowability of questioned costs or
activities. Such initial determination shall be based upon the
requirements of the Act, regulations promulgated thereunder, grants,
contracts, or other agreements under the Act.
(c) Informal resolution. The Grant Officer shall not revoke a
recipient's grant in whole or in part, nor institute corrective actions
or sanctions, without first providing the recipient with an opportunity
to present documentation or arguments to resolve informally those
matters in controversy contained in the initial determination. The
initial determination shall provide for an informal resolution period
which shall be at least 60 days from issuance of the initial
determination. If the matters are resolved informally, the Grant
Officer shall issue a final determination pursuant to paragraph (d) of
this section which notifies the parties in writing of the nature of the
resolution and may close the file.
(d) Grant Officer's final determination. (1) If the matter is not
fully resolved informally, the Grant Officer shall provide each party
with a written final determination by certified mail, return receipt
requested. For audits of recipient-level entities and other recipients
which receive JTPA funds directly from DOL, ordinarily the final
determination will be issued not later than 180 days from the date that
the OIG issues the final approved audit report to the Employment and
Training Administration. For audits of subrecipients conducted by the
OIG, ordinarily the final determination will be issued not later than
360 days from the date the OIG issues the final approved audit report
to ETA.
(2) A final determination under this paragraph (d) shall:
(i) Indicate that efforts to informally resolve matters contained
in the initial determination have been unsuccessful;
(ii) List those matters upon which the parties continue to
disagree;
(iii) List any modifications to the factual findings and
conclusions set forth in the initial determination;
(iv) Establish a debt, if appropriate;
(v) Require corrective action when needed;
(vi) Determine liability, method of restitution of funds and
sanctions; and
(vii) Offer an opportunity for a hearing in accordance with subpart
H of this part.
(3) Unless a hearing is requested, a final determination under this
paragraph (d) constitutes final agency action and is not subject to
further review.
(e) Nothing in this section shall preclude the Grant Officer from
issuing an initial determination and/or final determination directly to
a subrecipient, in accordance with section 164(e)(3) of the Act. In
such a case, the Grant Officer shall inform the recipient of such
action.
627.607 Grant Officer resolution of Governor's failure to promptly
take action.
(a) An allegation, whether arising from a complaint, from
monitoring or other information available to the Department, that a
Governor failed to promptly take remedial action of a substantial
violation of the Act or the regulations under this Act, as required by
Sec. 627.477 of this part, shall be promptly investigated by the
Department.
(b) The Grant Officer shall notify the Governor of the findings of
the investigation or monitoring and shall give the Governor a period of
time, not to exceed 30 days, to comment on the nature of the findings
and to take appropriate corrective actions.
(c) The Grant Officer shall review the complete file of the
investigation, monitoring, and the Governor's actions.
(d) If the Grant Officer determines that, (1) as a result financial
and compliance audits or otherwise, the Governor determined that there
was a substantial violation of a specific provision of the Act or the
regulations under this Act, and corrective action had not been taken
and, (2) the Grant Officer determines that the Governor has not taken
the actions required by Sec. 627.477(a), the Grant Officer shall take
such actions required by Sec. 627.477(a).
(e) The Grant Officer's determination, unless a hearing is
requested, constitutes final agency action and is not subject to
further review. (Section 164(b)(3)).
Subpart G--Sanctions for Violations of the Act.
Sec. 627.700 Purpose and scope.
This subpart describes the sanctions and appropriate corrective
actions that may be imposed by the Secretary for violations of the Act,
regulations promulgated thereunder, or grant terms and conditions
(sections 106(j)(5), 164 (b), (d), (e), (f), (g), and (h)).
Sec. 627.702 Sanctions and corrective actions.
(a) Except for actions under sections 106(j), 164 (b) and (f), and
167 of the Act and the funding restrictions specified at Sec. 627.423
of this part, Funding restrictions for "high-risk" recipients and
subrecipients, the Grant Officer shall utilize initial and final
determination procedures outlined in Sec. 627.606, Grant Officer
resolution, of this part to impose a sanction or corrective action.
(b) To impose a sanction or corrective action regarding a violation
of section 167 of the Act, the Department shall utilize the procedures
of 29 CFR part 34.
(c) To impose a sanction or corrective action for failure to meet
performance standards, where the recipient has not acted as required at
section 106(j)(4), the Grant Officer shall utilize the procedures set
forth at Sec. 627.470 (d) and (f).
(d) To impose a sanction or corrective action for noncompliance
with the procurement standards provisions set forth at Secs. 627.420
and 627.703 of this part, where the recipient has not acted, the Grant
Officer may utilize the procedures set forth at section 164(b) of the
Act.
(e) To impose a sanction or corrective action for the Governor's
failure to promptly take remedial action of a substantial violation as
required by Sec. 627.477 of this part, the Grant Officer shall utilize
the procedure set forth in Sec. 627.607 of this part.
(f) The recipient shall be held responsible for all funds under its
grant(s). The recipient shall hold subrecipients, including SDA's and
SSG's, responsible for JTPA funds received through the grant, and may
ultimately hold the units of local government which constitute the SDA
or the SSG responsible for such funds.
(g) Nothing in this section shall preclude the Grant Officer from
imposing a sanction directly against a subrecipient, as authorized in
section 164(e)(3) of the Act. In such a case, the Grant Officer shall
inform the recipient of such action.
Sec. 627.703 Failure to comply with procurement provisions.
(a) If, as part of the recipient's annual on-site monitoring of its
SDA's/SSG's, the recipient determines that an SDA/SSG is not in
compliance with the procurement requirements established in accordance
with the provisions at section 164(a)(3) of the Act and Sec. 627.420,
of this part, Procurement, and Sec. 627.422 of this part, Selection of
service providers, the recipient shall:
(1) Require corrective action to secure prompt compliance; and
(2) Impose the sanctions provided for under the provisions at
section 164(b) if the recipient finds that the SDA/SSG has failed to
take timely corrective action under paragraph (a)(1) of this section
(section 164(a) (4) and (5)).
(b) An action by the recipient to impose a sanction against either
an SDA or SSG, in accordance with this section, may be appealed to the
Secretary under the same terms and conditions as the disapproval of the
respective plan, or plan modification, as set forth at Sec. 628.426(e),
Review and approval (section 164(b)(2)).
(c) If, upon a determination under paragraph (a)(2) of this section
to impose a sanction under section 164(b) of the Act, the recipient
fails to promptly take the actions required under paragraph (a)(2) of
this section, the Secretary shall take such actions against the
recipient or the SDA/SSG as appropriate (section 164(b)(3)).
Sec. 627.704 Process for waiver of State liability.
(a) A recipient may request a waiver of liability as described in
section 164(e)(2) of the Act.
(b)(1) When the debt for which a waiver of liability is desired was
established in a non-Federal resolution, such requests shall be
accompanied by a resolution report.
(2) When the ETA Grant Officer is resolving the finding(s) for
which a waiver of liability is desired, such request shall be made no
later than the informal resolution period described in Sec. 627.606(c)
of this part.
(c) A waiver of the recipient's liability can only be considered by
the Grant Officer when the misexpenditure of JTPA funds:
(1) Occurred at a subrecipient level;
(2) Was not a violation of section 164(e)(1) of the Act, or did not
constitute fraud; or
(3) If fraud did exist, it was perpetrated against the recipient/
subrecipient; and:
(i) The recipient/subrecipient discovered, investigated, reported,
and prosecuted the perpetrator of said fraud; and
(ii) After aggressive debt collection action, it can be documented
that there is no likelihood of collection from the perpetrator of the
fraud.
(4) The recipient has issued a final determination which disallows
the misexpenditure, the recipient's appeal process has been exhausted,
and a debt has been established; and
(5) The recipient requests such a waiver and provides documentation
to demonstrate that it has substantially complied with the requirements
of section 164(e)(2)(A), (B), (C), and (D) of the Act.
(d) The recipient shall not be released from liability for misspent
funds under the determination required by section 164(e) of the Act
unless the Grant Officer determines that further collection action,
either by the recipient or subrecipient, would be inappropriate or
would prove futile.
Sec. 627.706 Process for advance approval of a recipient's
contemplated corrective actions.
(a) The recipient may request advance approval from the Grant
Officer for contemplated corrective actions, including debt collection
actions, which the recipient plans to initiate or to forego. The
recipient's request shall include a description and an assessment of
all actions taken by the subrecipient to collect the misspent funds.
(b) Based on the recipient's request, the Grant Officer may
determine that the recipient may forego certain collection actions
against a subrecipient where:
(1) The subrecipient was not at fault with respect to the liability
criteria set forth in section 164(e)(2)(A), (B), (C), and (D) of the
Act;
(2) The misexpenditure of funds:
(i) Was not made by that subrecipient but by an entity that
received JTPA funds from that subrecipient;
(ii) Was not a violation of section 164(e)(1) of the Act, or did
not constitute fraud; or
(iii) If fraud did exist, it was perpetrated against the
subrecipient, and:
(A) The subrecipient discovered, investigated, reported, and
prosecuted the perpetrator of said fraud; and
(B) After aggressive debt collection action, it can be documented
that there is no likelihood of collection from the perpetrator of the
fraud.
(3) A final determination which disallows the misexpenditure and
establishes a debt has been issued at the appropriate level;
(4) Final action within the recipient's appeal system has been
completed; and
(5) Further debt collection action by that subrecipient or the
recipient would be either inappropriate or futile.
Sec. 627.708 Offset process.
(a) In accordance with section 164(d) of the Act, the primary
sanction for misexpenditure of JTPA funds is repayment.
(b) A recipient may request that a debt, or a portion thereof, be
offset against amounts allotted to the recipient, and retained at the
recipient level for administrative costs, under the current or a future
JTPA entitlement.
(1) For title II grants, any offset shall be applied against the
recipient level 5 percent administrative cost set-aside only and may
not be distributed by the recipient among its subrecipients.
(2) For title III grants, any such offset must be applied against
that portion of funds reserved by the recipient for recipient level
administration only and may not be distributed by the recipient among
its subrecipients.
(c) The Grant Officer may approve an offset request, under section
164(d) of the Act, if the misexpenditures were not in violation of
section 164(e)(1) of the Act.
(d) If offset is granted, the debt shall not be fully satisfied
until the Grant Officer reduces amounts allotted to the State by the
amount of the misexpenditure.
(e) The recipient shall not have the authority to reduce
allocations to an SDA or SSG for misexpenditure of JTPA funds under
section 164(d) of the Act.
Subpart H--Hearings by the Office of Administrative Law Judges
Sec. 627.800 Scope and Purpose.
(a) The jurisdiction of the Office of the Administrative Law Judges
(OALJ) extends only to those complainants identified in sections
141(c), 144(d), 164(f), and 166(a) of the Act.
(b) Actions arising under section 167 of the Act shall be handled
under 29 CFR part 34.
(c) All other disputes arising under the Act shall be adjudicated
under the appropriate recipient or subrecipient grievance procedures or
other applicable law.
Sec. 627.801 Procedures for filing request for hearing.
(a) Within 21 days of receipt of a final determination imposing a
sanction or corrective action or denying financial assistance, the
applicant, the recipient, the SDA, the SSG, or other subrecipient, or a
vendor against which the Grant Officer has imposed a sanction or
corrective action may appeal the Grant Officer's determination to the
OALJ. A request for a hearing shall be transmitted by certified mail,
return receipt requested, to the Chief Administrative Law Judge, U.S.
Department of Labor, 800 K Street, NW., Suite 400, Washington, DC
20001, with one copy to the departmental official who issued the
determination.
(b) The 21-day filing requirement in paragraph (a) of this section
is jurisdictional. Failure to timely request a hearing acts as a waiver
of the right to hearing.
(c) A request for a hearing under this section shall state
specifically those issues of the final determination upon which review
is requested. Those provisions of the final determination not specified
for review, or the entire final determination when no hearing has been
requested within the 21 days, shall be considered resolved and not
subject to further review. Only alleged violations of the Act,
regulations promulgated thereunder, grant or other agreement under the
Act fairly raised in the determination and the request for hearing are
subject to review.
(d) The procedures set forth in this subpart apply in the case of a
complainant who has not had a dispute adjudicated under the alternative
dispute resolution process set forth in Sec. 627.805 of this part
within 60 days, except that the request for hearing before the OALJ
must be filed within 15 days of the conclusion of the 60-day period. In
addition to including the final determination upon which review is
requested, the complainant shall include a copy of any Stipulation of
Facts and a brief summary of proceedings.
Sec. 627.802 Rules of procedure.
(a) The rules of practice and procedure promulgated by the OALJ, at
subpart A of 29 CFR part 18, shall govern the conduct of hearings under
this section, except that a request for hearing under this section
shall not be considered a complaint to which the filing of an answer by
DOL or a DOL agency or official is required. Technical rules of
evidence shall not apply to hearings conducted pursuant to this part;
however, rules or principles designed to assure production of the most
credible evidence available and to subject testimony to cross-
examination shall apply.
(b) Prehearing procedures. In all cases, the ALJ should encourage
the use of prehearing procedures to simplify and to clarify facts and
issues.
(c) Subpoenas. Subpoenas necessary to secure the attendance of
witnesses and the production of documents or things at hearings shall
be obtained from the ALJ and shall be issued pursuant to the authority
contained in section 163(b) of the Act, incorporating 15 U.S.C. 49.
(d) Timely submission of evidence. The ALJ shall not permit the
introduction at the hearing of any documentation if such documentation
has not been made available for review by the other parties to the
proceeding either at the time ordered for any prehearing conference,
or, in the absence of such an order, at least 3 weeks prior to the
hearing date.
(e) Burden of production. The Grant Officer shall have the burden
of production to support her or his decision. To this end, the Grant
Officer shall prepare and file an administrative file in support of the
decision which shall be made part of the record. Thereafter, the party
or parties seeking to overturn the Grant Officer's decision shall have
the burden of persuasion.
Sec. 627.803 Relief.
In ordering relief, the ALJ shall have the full authority of the
Secretary under section 164 of the Act.
Sec. 627.804 Timing of decisions.
The ALJ should render a written decision not later than 90 days
after the closing of the record.
Sec. 627.805 Alternative dispute resolution.
(a) Parties to a complaint under Sec. 627.801 of this part,
Procedures for filing a request for hearing, may choose to waive their
rights to an administrative hearing before the OALJ by choosing to
transfer the settlement of their dispute to an individual acceptable to
all parties for the purpose of conducting an informal review of the
stipulated facts and rendering a decision in accordance with applicable
law. A written decision will be issued within 60 days after the matter
is submitted for informal review.
(b) The waiver of the right to request a hearing before the OALJ
may 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 shall
be treated as a final decision of an Administrative Law Judge pursuant
to section 166(b) of the Act.
Sec. 627.806 Other authority.
Nothing contained in this subpart shall be deemed to prejudice the
separate exercise of other legal rights in pursuit of remedies and
sanctions available outside the Act.
Subpart I--Transition Provisions
Sec. 627.900 Scope and purpose.
(a) Regulations set forth at parts 626, 627, 628, 629, 630, 631,
and 637 of 20 CFR chapter V (1993) were amended, effective December 29,
1992, and were published as an interim final rule to provide planning
guidance for States and SDA's on the changes made to the JTPA program
as a result of the 1992 JTPA amendments (See 57 FR 62004 (December 29,
1992)). The transition provisions of the regulations were amended on
June 3, 1992 (see 58 FR 31472, June 3, 1993). Those regulations and the
statutory amendments were effective for the program year beginning July
1, 1993 (PY 1993), and succeeding program years. For PY 1992, JTPA
programs and activities shall continue under the regulations set forth
at 20 CFR parts 626, 627, 628, 629, 630, 631, and 637 (1992).
(b) In order to provide for the orderly transition to and
implementation of the provisions of JTPA, as amended by the 1992
amendments, this subpart I applies to the use of JTPA title II and
title III funds allotted by formula to the States. Additional guidance
on transition matters may be provided in administrative issuances. The
provisions in this subpart are operational during the transition period
for implementing the 1992 JTPA amendments.
Sec. 627.901 Transition period.
The transition period ended June 30, 1993 unless otherwise stated.
The intent of the transition period is to complete, to the extent
possible, activity begun on or before June 30, 1993 under current
policy and regulations and to ensure that all requirements mandated by
the 1992 JTPA amendments have been implemented.
Sec. 627.902 Governor's actions.
The following are actions required to be taken prior to July 1,
1993:
(a) Review current policies, practices, procedures, and delivery
systems to ensure that they conform to the requirements of the
amendments;
(b) Modify the Governor's coordination and special services plan in
accordance with instructions issued by the Secretary;
(c) Ensure that SDAs modify job training plans as necessary;
(d) Execute a new Governor/Secretary agreement and a new grant
agreement;
(e) Issue procurement standards that comply with the Act and these
regulations, as described in Sec. 627.420 of this part, Procurement;
(f) Issue instructions necessary to implement program year 1993
cost categories pursuant to Sec. 627.440 of this part, Classification
of costs;
(g) Issue instructions necessary for SDAs to report program
expenditures by year of appropriation pursuant to Sec. 627.455 of this
part, Reports required;
(h) Certify private industry councils pursuant to Sec. 628.410 of
this chapter, Private Industry Council.
Sec. 627.903 Actions which are at the discretion of the Governor.
(a) Establish a State Human Resource Investment Council (HRIC);
(b) Issue instructions to "grandparent" participants in JTPA
programs as of June 30, 1993 for purposes of completing training;
(c) Issue instructions for use of PY 1992 and prior year 6 percent
performance standards incentive funds to further develop and implement
data collection and management information systems to track the program
experience of participants. PY 1993 and subsequent performance
standards incentive funds may not to be used for this purpose;
(d) Of the Title II and Title III unobligated balance of funds
available as of June 30, 1993, any amount may be reprogrammed into PY
1993 activity. The Department believes these amounts will be minimal
and not represent a significant proportion of the funds available. Such
reprogrammed funds will be subject to requirements contained in JTPA
regulations effective July 1, 1993.
Sec. 627.904 Transition and implementation.
(a) Review. The Governor shall conduct a comprehensive review of
the current policies, procedures, and delivery systems relating to
programs authorized under the Job Training Partnership Act for the
purpose of ensuring the effective implementation of the amendments.
Such a review shall include consideration of the appropriateness of
current SDA designations, the representation on current State and local
councils, the adequacy of current administrative systems, the
effectiveness of current outreach, service delivery, and coordination
activities, and other relevant matters.
(b) Governor's Coordination and Special Services Plan (GCSSP). The
GCSSP requires modification to assure conformance to the requirements
of the amendments. The plan was to be modified pursuant to instructions
issued by the Secretary and shall be submitted to the Secretary for
review by May 15, 1993.
(c) Job training plans. Service delivery area job training plans
will require modification to comply with Sec. 628.420 of this chapter,
Job training plan.
(d) Governor/Secretary agreement and grant agreement. A new
Governor/Secretary agreement is required to assure that the State shall
comply with JTPA, as amended, and the applicable rules and regulations;
the Wagner-Peyser Act, as amended, and the applicable rules and
regulations. A new grant agreement is needed to provide the basis for
Federal obligation of funds for programs authorized by Titles I, II,
and III, and such other funds as the Secretary may award under the
grant.
(e) Procurement standards. In order to ensure fiscal accountability
and prevent waste, fraud, and abuse in programs administered under
JTPA, as amended, the Governor shall prescribe and implement
procurement standards meeting the requirements of Sec. 627.420 of this
part, Procurement. All procurements initiated on or after July 1, 1993
shall be governed by and follow the requirements in Sec. 627.420 of
this part. Initiation of procurement means any sole source or small
purchase awarded on or after July 1, 1993 and any Invitation for Bid or
Request for Proposal issued on or after July 1, 1993.
(f) Participants. In order to have the least possible disruption to
program participants, during PY 1993, Governors and SDAs have the
flexibility to grandfather participants already enrolled in JTPA
programs up to and including June 30, 1993 under existing rules and
regulations. All participants in programs on June 30, 1993, will be
eligible for transfer to programs operated under the new provisions at
any time beginning on July 1, 1993. "Hard to serve" barriers to
participation, assessment and Individual Service Strategy provisions of
the amendments will not apply to participants enrolled prior to July 1,
1993 or to 1993 Title II-B participants.
(g) Cost categories. (1) Cost categories applicable to PY 1992 and
earlier funds will be subject to prior regulations either until the
funds have been exhausted or program activity has been completed. In
order to assist the orderly transition to and implementation of the new
requirements of the 1992 JTPA amendments, an increase is allowed in the
administrative cost limitation for PY 1992 funds from 15 percent to 20
percent, with a corresponding adjustment to cost limitations for
training and participant support. Specifically, not less than 80
percent of the title II-A funds shall be expended for training and
participant support, and not less than 65 percent shall be expended for
training.
(2) Any prior year's carryover funds made available for use in PY
1993 will be subject to the reporting requirements and cost categories
applicable to PY 1993 funds.
(3) In determining compliance with the JTPA cost limitations for PY
1992, Governors may either:
(i) Determine cost limitation compliance separately for funds
expended in accordance with paragraphs (g)(1) and (g)(2) of this
section; or
(ii) Determine compliance for each cost category against the total
PY 1992 funds, whether expended in accordance with the Act and
regulations in effect prior to the 1992 amendments to JTPA or in
accordance with the amended Act and these regulations. Using this
option, the total combined funds expended for training and direct
training should be at least 65 percent of PY 1992 SDA allocations.
(4) In addition to the institutions specified in
Sec. 627.440(d)(1)(vi)(B), the costs of tuition and entrance fees of a
postsecondary vocational institution specified at section 481(c) of the
Higher Education Act (20 U.S.C. 1088(c)) may be charged to direct
training services through June 30, 1995, when such tuition charges or
entrance fees are not more than the educational institution's catalog
price, are necessary to receive specific training, are charged to the
general public to receive such training, and are for the training of
participants.
(h) Financial reporting. Notwithstanding reprogramming,
expenditures must be recorded separately by year of appropriation.
(i) Private Industry Council. The private industry councils shall
be certified pursuant to Sec. 628.410 of this chapter, Private Industry
Council.
(j) Grievances, investigations, and hearings. Generally, all
grievances, investigations and hearings pending on or before June 30,
1993 should be resolved and settled under prior rules and procedures.
Grievances, investigations, and hearings occurring on or after July 1,
1993 will be governed by the procedures described in subparts E, F, and
H of this part 627.
(k) Summer program. (1) The Title II-B Summer Youth Employment
Program for 1993 shall be governed by the Act and regulations in effect
prior to the Amendments (prior to September 7, 1992).
(2) Up to 10 percent of the 1993 title II-B funds available may be
transferred to the title II-C program.
(l) SDA designation. At the Governor's discretion, SDA's designated
prior to July 1, 1992 need not be subject to the provisions of
Sec. 628.405, Service delivery areas.
(m) Program implementation. The implementation by the States and
SDA's of certain new program design requirements, particularly
objective assessment and development of individual service strategies
(ISS), may require additional time to fully implement beyond July 1,
1993. Reasonable efforts to implement the provisions of Secs. 628.515,
628.520, and 628.530. as soon as possible after July 1, 1993, are
expected to be made. However, it is not expected that every new
participant will initially receive objective assessment, ISS, and
referral to non-title II services for a period of 6 months, or until
January 1, 1994.
(n) Out-of-school youth ratio. The 50-percent out-of-school
participants requirement for title II-C will be phased in during PY
1993 and will not be the subject of compliance review until PY 1994,
beginning July 1, 1994. During PY 1993, however, SDA's must show
significant improvement in the proportion of out-of-school youth being
served and performance in increasing the service ratio will be
monitored by the States and DOL during this implementation period.
(o) Administrative issuances. Other implementation issues may be
handled by administrative issuance. ETA will transmit such guidance
directly to all Governors via a Training and Employment Guidance Letter
(TEGL). Such TEGL's will be published as Notices in the Federal
Register (section 701(i)).
Sec. 627.905 Guidance on contracts and other agreements.
The Department does not intend for contracts, agreements, inter-
agency agreements, retainers, and similar arrangements to be negotiated
and/or entered into for the sole purpose of applying previously
existing rules and regulations. The 1992 JTPA amendments were effective
July 1, 1993. The Department intends that contracts, awards and
agreements entered into on or before June 30, 1993 are to be used to
serve and/or train participants enrolled on or before June 30, 1993,
unless the contracts and agreements are modified to comply with the new
amendments and regulations.
Sec. 627.906 Determinations on State and SDA implementation.
(a) The Department expects that the States and SDA's will fully
implement the provisions of the Act and these regulations regarding
procurement, cost principles, cost categories, cost limitations,
participant service requirements and eligibility beginning July 1,
1993.
(b) The Department expects that the implementation by the States
and SDA's of the program design features in these regulations,
particularly objective assessment and development of the ISS, may
require additional time beyond July 1, 1993 to fully implement.
(c) In deciding to allow or disallow questioned costs related to
the implementation of the provisions described in paragraph (b) of this
section, the Grant Officer will consider the extent to which the
State's and SDA's have made good faith efforts in properly implementing
such provisions in the period July 1, 1993 through June 30, 1994.
[click on "Back" to return to Index to continue]