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References: ETA Handbook No. 376, Guidelines for Internal Security in UI Operations; UIPL No. 12-95, Risk Analysis Project; Unemployment Insurance Program Letter (UIPL) No. 08-97, Risk Analysis Training. Background: Since fiscal year 1982, the Department of Labor (DOL) has allocated resources for the Internal Security program. In concert with the Internal Security program, the Employment and Training Administration (ETA) has recommended through UIPLs that SESAs complete a risk analysis of Unemployment Insurance (UI) program operations whenever major system changes occur, but not less than once every three years. The primary purpose of Internal Security is to reduce fraud, waste, and abuse in the UI program. Risk analysis is a specific activity to be performed under the overall Internal Security function. Each SESA is allocated resources to maintain an Internal Security Unit (ISU). The ISU is responsible for reviewing the adequacy of existing controls, and for recommending to management the institution of controls where none exist, and/or the strengthening of controls where they are weak. Along with its other internal security activities, the ISU is required to perform a risk analysis to determine an economic balance between the affect of threats and the costs of protective measures. In performing a risk analysis, the ISU must identify assets, threats to the system (both program and computer related), vulnerabilities, and cost effective safeguards. Risk Analysis Training: Four fundamental/intermediate risk analysis training classes have been held. National Office and Regional Office (RO) personnel attended these classes along with SESA staff including internal auditors, information security officers, investigators, and other internal security personnel responsible for the performance of the DOL required SESA risk analysis. A total of 59 individuals (51 SESA participants and 8 DOL participants) attended the risk analysis training. UIPL No. 08-97 provided information concerning Advanced Training and User Group Forums. Some information is repeated here. a. Advanced Training Course. The advanced training is a two-day course that will build on the combined fundamental and intermediate risk analysis training courses. One class will be held February 24-25, 1998, in Sacramento, California, and the other will be held March 3-4, 1998, in Annapolis, Maryland. Information on logistics for the sessions will be distributed closer to the training dates. The California Employment Development Department's (EDD) Unemployment Insurance Risk Analysis Project staff will develop and distribute to SESA personnel who attended one of the fundamental/intermediate risk analysis training sessions a survey to identify specific topics for discussion at the advanced training. Speakers will then be selected to lead discussions on the topics given the highest priority by the survey respondents. Through these presentations, as well as through group discussions, participants will learn to identify, review and resolve advanced level risk analysis issues and concerns. b. Participation Requirements. Participants in the advanced training course should have an understanding of the risk analysis process and methodology, and should have completed, or be in the process of completing, a full or partial risk analysis using the RiskWatch software prior to attending training. Solicitation of nominations for participation will be made closer the training date. c. User Group. Information concerning the scheduling of UI User Group Forums will be provided later. RiskWatch Software Upgrades: RiskWatch version 6.4 was distributed to most SESAs that attended the fundamental/ intermediate risk analysis training. Version 7.1 should be available prior to September 30, 1997; however, SESAs should continue to use version 6.4 if 7.1 is delayed. Lack of the latest software version should not delay beginning and/or conducting a risk analysis. Action: SESA Administrators are requested to: a. Ensure that the advanced training survey is completed and returned to EDD by November 15, 1997. EDD will send the survey early in October 1997 to SESA personnel who attended the fundamental/intermediate risk analysis training. b. Determine the status of efforts to conduct a risk analysis including the development of a risk analysis action plan that includes the scope of the review, resources to be used in conducting the risk analysis, and anticipated date of completion. c. Ensure that a full or partial risk analysis is completed using the automated RiskWatch Software. d. Consider who will be attending the up-coming advanced training based on their understanding of the risk analysis process and methodology and participation in completing risk analyses. e. Provide copies of this UIPL to appropriate Internal Security staff.

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Reference: Training and Employment Information Notice (TEIN) No. 10-97. Background: As the nature of work changes with new technological advances, employers will have a greater demand for workers with higher skills to meet the demands of the information age. The Employment and Training Administration, in partnership with State, local, business, labor, and community organizations, is committed to building a new and better workforce by keeping in tune with new technologies as they become available. JETT*CON '97 will provide opportunities to learn more about how technology can enhance skills, improve the quality of programs and customer service. Technology vendors will be on-hand to demonstrate new information systems. TEIN No. 10-97, which is attached, provides additional information on Jett*Con '97. Action Requested: Please share this information with interested parties.

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References: The Trade Act of 1974, as amended (the Trade Act); 20 CFR Part 617; the Higher Education Act (HEA) of 1965, as amended by the Higher Education Amendments of 1992; and General Administration Letter (GAL) No. 1-88. Background: GAL No. 1-88, issued December 2, 1987, provided program guidance to SESAs on the payment of TRA when a worker receives financial assistance such as a Pell Grant, a Supplemental Educational Opportunity Grant, or a similar grant or training allowance under any Federal law other than the Trade Act. Because of the subsequent Higher Education Amendments of 1992, the revised program guidance in this new GAL supersedes the program guidance in GAL No. 1-88 by providing that Pell Grants and other Federal student financial assistance shall not be deducted from payment of TRA and subsistence and transportation allowances. Other Federal student financial assistance includes benefits under Supplemental Educational Opportunity Grants, Federal educational loan programs, Presidential Access Scholarships, Federal student work-study programs, and Bureau of Indian Affairs Student Assistance. This revised policy on reducing TRA by Pell Grants and other Federal student financial assistance results from a conflict between the provisions of the Trade Act and implementing regulations, which require that payment of TRA be reduced by the amount of a training allowance received pursuant to a Pell Grant or other Federal student financial assistance, and Section 479B of the HEA, as amended by Section 471 of the Higher Education Amendments of 1992, which prohibits the reduction of any Federally financed benefit or assistance based upon the receipt of such student financial assistance. Section 479B of the HEA, as amended, also prohibits the reduction of the amount of training payments due to the receipt of Federal student financial assistance. Conflict between this provision and the non-duplication provision of Section 236(a)(4) of the Trade Act may be avoided through funding pre-arrangements under Section 617.25(b) of the regulations. The Department is preparing additional guidance on this matter. When a State awards Trade Act benefits to a person receiving Federal student financial assistance, the State will notify the appropriate State educational officials consistent with State laws including the Privacy Act requirements. Section 471 of the Higher Education Amendments took effect on July 1, 1993. The justification for the revised policy on reducing TRA by Pell Grants and other Federal student financial assistance is provided in the Attachment to this GAL. Revised Program Guidance on the Payment of TRA: This GAL revises the program guidance provided to SESAs in GAL No. 1-88 on the payment of TRA when a worker who qualifies for TAA also receives a Pell Grant or other Federal student financial assistance from the U.S. Department of Education. GAL No. 1-88, which was issued prior to the Higher Education Amendments of 1992, provided the U.S. Department of Labor's position at that time on Section 236(a)(3)(C) (presently Section 236(a)(4)(C)) of the Trade Act, as implemented by Section 617.13(c)(2) and Section 617.25(b)(4)(ii)(C)(1) of the regulations, as follows: When Pell Grant funds are disbursed to the worker by the training institution, and the worker is responsible for paying the costs of training and other related, costs, under Section 236(a)(3)(C) of the Act the funds are not for the purpose of the "direct payment of the costs" of training. The Pell Grant funds disbursed to the worker may be used to pay the costs of training or retained for personal maintenance costs. Such funds are categorized as a training allowance under Section 232(c) of the Act (Section 617.13(c)(2)) and are deductible from the weekly TRA payments on a pro rata basis over the term of the training. (Underlining added.) The purpose for citing the above paragraph in GAL No. 1-88 is to emphasize that the regulations previously considered a payment of a Pell Grant to the worker to be an "indirect" payment of training costs and therefore was deductible from TRA. However, because of the amendment to the HEA made by Section 471, no payment of TRA made to a worker for any week beginning after the date of this GAL shall be reduced due to receipt of a Pell Grant or other Federal student financial assistance. Sections 617.27(a) and 617.28(a) of the regulations contain similar provisions reducing the payment of subsistence and transportation allowances if the worker receives similar assistance under another Federal law. Under the amendment to the HEA made by Section 471, such payments made after the date of this GAL may not be reduced on account of receipt of Federal student financial assistance. A worker whose payment of TRA, subsistence allowance, or transportation allowance was reduced due to the receipt of a Pell Grant or other Federal student financial assistance for any week beginning on or after July 1, 1993, may be entitled to reimbursement for the reduced amount, pursuant to the applicable provisions of State UI law for undertaking redeterminations as stated below. Redeterminations of prior determinations of TRA and subsistence and transportation allowance claims shall be undertaken by a State or State agency solely pursuant to the authority in Section 617.50(c) of the regulations and the applicable State UI law as it is applied in the case of regular State UI. Such provisions of the State UI law shall be the sole criterion in determining whether the State or the State agency has the authority to make a redetermination in any case. For this purpose, the State UI law includes judicial decisions of the courts of the State in comparable UI cases as well as State statutory provisions, and thus is the same as the "State law" which is relevant for conformity and compliance purposes under Title III of the Social Security Act. In other words, the authority a State agency has under the State law to make redeterminations of a State UI claim under similar circumstances, and the time limits on such authority, is the authority a State agency has to make redeterminations of TRA and subsistence and transportation allowance claims due to the revised policy in this GAL. No departure from these rules shall be undertaken in any circumstances without the prior approval of the U.S. Department of Labor. In the case of any determination made with respect to any worker whose payment of TRA or subsistence or transportation allowance was incorrectly reduced due to the receipt of a Pell Grant or other Federal student financial assistance for any week beginning on or after July 1, 1993, the State or State agency shall exercise such authority as it has under the applicable State UI law for regular State UI to undertake a redetermination of the Trade Act payment. The procedural requisites of the applicable State law and Section 617.50(c) of the regulations shall be observed in undertaking and making any redetermination, including any notice to the claimant that reconsideration is being undertaken and the issue involved, and affording the worker an opportunity to present evidence and be represented before the claims examiner. If, upon redetermination, it is decided that the worker was underpaid TRA or subsistence or transportation allowance for any week beginning on or after July 1, 1993, due to the receipt of a Pell Grant or other Federal student financial assistance, the worker will be reimbursed for the underpaid amount. However, before reimbursement of TRA is made to any worker, the SESA must make certain that the amount of reimbursement will not exceed the maximum amount of basic TRA payable to the worker as determined in Section 617.14(a) or the number of weeks of additional TRA payable as determined in Section 617.15(b). (As explained in ET Handbook No. 336, SESA UI Program and Budget Plan Handbook, SESAs should report redeterminations on line 5, Section C of the UI-3 report. The MPU value is the same as the allocated initial claims MPU.) The revised program guidance on the payment of TRA in this GAL provides unequivocally that Section 232(c) of the Trade Act and the TRA reduction requirements of Sections 617.13(c)(2) and 617.25(b)(4)(ii)(C)(1) of the regulations are not applicable to Pell Grants and other Federal student financial assistance. This is also true for Section 617.27(a) and Section 617.28(a) of the regulations relative to the payment of subsistence and transportation allowances. NOTE: Funds provided to adversely affected workers from the other above-named Federal student financial assistance programs under the HEA will be administered in the same manner as Pell Grants. Educational and Training Grants Other Than HEA Grants: Educational and training grant funds other than HEA grant funds and Bureau of Indian Affairs Student Assistance will continue to be administered in the same manner as other non-HEA grant funds as required by the Trade Act. Action Required: SESA Administrators are requested to: a. Inform appropriate staff of the revised program guidance on the payment of TRA (or payment of subsistence or transportation allowances) when workers also receive a Pell Grant or other Federal student financial assistance. b. Ensure that the applicable provisions of State UI law for undertaking redeterminations are used to reimburse workers whose TRA payment (or subsistence or transportation allowance payment) was reduced due to the receipt of a Pell Grant or other Federal student financial assistance.

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