Welfare-to-Work formula and competitive grant questions and answers

Training and Employment Guidance Letter No. 5-98

Official letter: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/1998/TEGL5-98.pdf

U.S. Department of Labor
Employment and Training Administration
Washington, D.C. 20210

Classification: WtW
Correspondence symbol: TD
Date: August 28, 1998

TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 5-98

TO: ALL STATE WELFARE-TO-WORK CONTACTS; ALL STATE JTPA LIAISONS

FROM: DAVID HENSON, Director, Office of Regional Management

SUBJECT: Questions and Answers on the Welfare-to-Work Program Formula and Competitive Grants

1. Purpose. To provide States with information and policy guidance on the Welfare-to-Work (WtW) program in order to better address the needs of moving people from welfare to work.

2. Authorities and References. Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public L. 104-193) and Balanced Budget Act of 1997 (Public L. 105-33) amending Title IV-A of the Social Security Act. WtW Interim Final Rule, 20 CFR 645 (62 Federal Register No. 61588 (Nov. 18, 1997)). Planning Guidance and Instructions for Annual State Plans for Fiscal Year (FY) 1998 dated March 1998, and Training and Employment Guidance Letter (TEGL) No. 3-98, dated July 30,1998.

3. Background. The Balanced Budget Act of 1997, which was signed by President Clinton on August 5, 1997, authorizes the Department of Labor to provide WtW grants to States and local communities for transitional employment assistance to move hard-to-employ Temporary Assistance to Needy Families recipients with significant employment barriers and certain noncustodial parents into unsubsidized jobs offering long-term employment opportunities. These grants are designed to provide many welfare recipients with the job placement services, transitional employment, job retention and support services to achieve the goal of economic self-sufficiency.

Seventy-five percent of WtW funds (less small set-asides for specific statutory purposes) are available to States in amounts based on the statutory formula set forth in Section 403 (a)(5)(A)(v) of the Social Security Act. States must provide one dollar of non-Federal matching funds for every two dollars of Federal WtW funds. States are required to pass through at least 85 percent of the money to local Private Industry Councils (PICs) (unless the Secretary approves a waiver to permit an alternate entity to administer funds in a particular area) and may retain up to 15 percent of the funds for WtW projects that focus on helping long-term welfare recipients enter unsubsidized employment.

The 25 percent of funds not allocated by formula will be used for competitive grants directly to local governments, PICs, and private entities (such as community corporations, community-based organizations, community action agencies, and organizations) who apply in conjunction with a PIC or local government.

4. WtW Questions and Answers. Individuals have raised questions relating to the implementation of the WtW program. A number of responses to inquiries have been provided in the form of Questions and Answers (Q's and A's) which have periodically been posted on the WtW website in order to give timely guidance. The address for this site is http://wtw.doleta.gov.

The Q's and A's have been grouped into the following categories:

I. General Program Questions
II. Administration and Fiscal Questions
III. Competitive Grants-Solicitation for Grant Applications

As other questions and answers are developed, we will post them on the website and issue them through additional TEGLs.

5. Action Required. Copies of the attachment should be distributed to the appropriate State and local staff.

6. Inquiries. Please direct all inquiries to your Regional Office.

7. Attachments. WtW Questions and Answers: I. General Program Questions; II. Administration and Fiscal Questions; III. Competitive Grant-Solicitation for Grant Applications.

Rescissions: None
Expiration date: Continuing

Attachment I: General Program Questions

Official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/1998/TEGL5-98_AttachI.pdf

General Program Questions

GP1: What are the new welfare-to-work grants?

A: The new welfare-to-work (WtW) grants to States and local communities are intended to help hard-to-employ welfare recipients move into lasting, unsubsidized jobs. The grants will be used to equip long-term welfare recipients -- generally those with poor education, low skills, and little job experience -- with the resources and support they need to find and keep good jobs. Local communities will have the flexibility to design programs that fit their particular needs.

GP2: What is the total funding level?

A: The total funding level for WtW grants is $3 billion, $1.5 billion each in Fiscal Years 1998 and 1999. There are two types of grants. There are formula grants to States and competitive grants to local communities. Seventy-five percent of the WtW funds will be distributed as grants to States according to a formula and the remaining twenty-five percent of the WtW funds will be distributed through a competitive process to various entities.

GP3: What matching funds are required of grant recipients ?

A: For the formula grant portion of the program, States must spend $1 of non-Federal funds for every $2 they receive in Federal funds. In-kind contributions can constitute one-half of matching funds. Applicants for competitive grants are not required to match Federal funds, but applications must indicate what resources the applicants will be contributing to their projects so that ETA can determine how well competitive grant funds will "leverage" local resources.

GP4: How are welfare-to-work grant funds distributed?

A: Seventy-five percent of the WtW funds will be distributed to States according to a formula set by the WtW statute and implementing regulations. The States then distribute at least 85 percent of what they receive to local Private Industry Councils (PICs) (sometimes called Workforce Development Boards). The formula focuses funding on high poverty areas. The States can use the remaining 15 percent of the formula funds to operate their own WtW projects or to provide additional support for projects operated by the PICs.

The Department of Labor will distribute the other 25 percent of the WtW funds (through a competitive process) in grants to PICs, political subdivisions and private entities (such as community based organizations) who apply in conjunction with a PIC or political subdivision. Special consideration will be given to rural areas and cities with large concentrations of poverty.

Finally there are small set-asides from the FY 1998 and 1999 appropriations for special purposes such as for Indian tribes ($30 million), for program evaluations ($18 million) and for performance bonuses for the States ($100 million).

GP5: How soon will grantees receive funds and begin to run programs.

A: For the most part, grantees will begin to receive funds early in calendar year 1998. For States to receive formula-grant funds, they must submit State plans. These plans will be reviewed by the Department of Labor for overall compliance with provisions of the authorizing statute. For competitive grants, recipients will receive awards after they have submitted an application and been selected through a competitive process. For formula grants, awards are expected to commence in January; competitive grants are expected to be awarded beginning in early Spring.

GP6: How can the funds be used?

A: Grantees will have great flexibility in designing welfare-to-work strategies geared to the needs of their own labor markets and economies. Possible grant activities may include job readiness; community service or work experience; job creation through public-sector or private-sector employment wage subsidies; on-the-job training; job placement services; post-employment services; or job retention and support services.

Although a variety of activities are authorized, program services need to be viewed overall as employment-based developmental steps to help individuals get and keep unsubsidized employment. To this end, each participant must receive an assessment of skills, prior work experience, and employability. In addition, an individualized strategy for transition to unsubsidized employment must be in place.

GP7: Which welfare recipients can receive assistance under this grant program?

A: At least 70 percent of grant funds must be spent for those welfare recipients who will have the most difficulty moving from welfare to employment. Essentially these are long-term welfare recipients who have two of three specified barriers to employment -- (1) holds no high school diploma or GED and has low reading or math skills, (2) requires substance abuse treatment for employment, or (3) has a poor work history.

Up to 30 percent of the funds may be spent on welfare recipients who have characteristics that are predictive of long-term welfare dependence, such as school dropout and teen pregnancy.

GP8: What role do employers have in welfare-to-work?

A: First and foremost, employers will play a critical role in hiring welfare recipients. Employers should contact their local PIC, elected officials, public employment service or welfare agency to find out more about how to participate in welfare-to-work efforts in their communities. Employers can find out more about how companies are working together nationwide to encourage and assist private sector businesses with hiring people on public assistance by contacting the business-led Welfare-to-Work Partnership at 202-955-3005; www.welfaretowork.org. If you are an employer who is interested in the tax benefits of hiring welfare recipients, ETA has information available on the Work Opportunity Tax Credit for employers.

GP 9: How can nonprofit, faith-based, and other community-based organizations participate in welfare-to-work grant efforts?

A: As subrecipients of formula grant funds and as recipients of competitive grant awards, nonprofit, faith-based, and other community-based organizations can be key providers of services to welfare recipients under the new WtW grants. One of the major challenges welfare recipients face in the "work first" strategy is not only finding a job, but also keeping a job. The nonprofit, service-provider community are key resources -- in conjunction with PICs and political subdivisions -- for ensuring child care, transportation, mentoring, housing, and other crucial supports are available to welfare recipients.

GP10: States and local communities already offer welfare-to-work programs. Why are these new grants needed?

A: In creating the Welfare-to-Work (WtW) program, Congress emphasized the need for strong relationships between public and private organizations in order to provide the most effective services to the hard-to-employ welfare population.

Traditionally, social service agencies have provided case management and supportive services, including cash assistance, to welfare recipients, while workforce development agencies have provided employment and training services to a more general economically-disadvantaged population. The new WtW program forges a stronger partnership between these two service delivery systems to better meet the needs of the hardest-to-employ population, providing transitional employment assistance to move welfare recipients into permanent unsubsidized employment and economic self-sufficiency.

In implementing this new program, the Department has also attempted to foster new partnerships between and among public and private organizations who have traditionally served welfare recipients. The formation of these collaborative relationships among a variety of service organizations in local communities to implement creative strategies to place and support welfare recipients in jobs constitutes our Nation's best hope for reducing welfare dependency in the long-term.

Attachment II: Administration and Fiscal Questions

Official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/1998/TEGL5-98_AttachII.pdf

Administration and Fiscal Questions

AF1: If a foundation, faith-based organization, etc., gives money to a program participant to pay for supportive services, is that cash or in-kind match? What if such a group provided 10 free slots for WtW participants in a class for which attendees normally pay? Since the training has a dollar value, could that be considered a cash contribution?

A: When a third party makes a program contribution that does not involve giving cash to the program, then an in-kind contribution exists. This could involve providing allowable WtW services/activities to WtW participants at no cost to the program, volunteering time to the program, or making a contribution of supplies and/or equipment. If a third party provides services for WtW participants - like 10 free slots in a class for which other attendees pay - the match is in-kind valued in accordance with 20 C.F.R. 645.300. If a third party donates time - e.g. volunteer mentor - it is an in-kind match. If a third party donates supplies or equipment, it is an in-kind match. If a recipient or sub-recipient provides the same things, what is chargeable are the actual costs incurred by the entity in providing the service, and it is a cash match. A third party (one that does NOT receive WtW funds) may make a cash contribution to the program - to the State, an SDA, or other WtW sub-recipient - and it would also be a cash match.

AF2. Does the 15 percent administrative cost limitation apply to expenditures of matching funds?

A: No. The limit applies only to the federal funds and not to the match. Neither the act nor the regulations impose any such limit on the use of matching funds.

AF3. Do the expenditures of a local entity/service provider, other than the SDA, count as cash or as in-kind match?

A: If a local entity is a WtW subgrantee or subcontractor of the SDA, then the funds that it spends on a project for WtW eligible individuals would be a cash match. Under such circumstances, the entity expending the funds would be required to obtain and maintain the documentation to support the match expenditures.

However, if the local entity is not a subgrantee or a subcontractor of the SDA, then the costs that it incurs for its own welfare-to-work project(s) may be a third party in-kind match. It is

likely that there would have to be some link between the SDA and the local entity's program - perhaps something like the notion that only costs incurred on behalf of individuals for which the SDA has made a WtW eligibility determination. Third party in-kind contributions can only count toward meeting the match requirement when they would be allowable WtW grant costs if paid for by the SDA. While the primary records for these costs may be the records of the local entity, the SDA would have to obtain and maintain records for these costs in order for them to be counted as match.

Documentation requirements for costs incurred as match are the same as those for costs paid for with grant funds. For third party in-kind contributions that are valued on some basis other than actual costs incurred, the documentation must be adequate to show how the value of the in-kind contribution was established.

AF4: What are the allowable activities permitted under the WtW program? Which of these activities/services may be provided directly by the PIC or alternate administrative entity and which must be provided through contracts or vouchers?

A: The Act and regulations provide operating entities with a comprehensive list of allowable services which the entities may provide to eligible WtW participants to help move the participants from welfare dependency to lasting unsubsidized employment and economic self-sufficiency. These activities are as follows: The conduct and administration of community service or work experience programs; job creation through public or private sector employment wage subsidies; on-the-job training; contracts with public or private providers of readiness, placement and post-employment services; job vouchers for readiness, placement and post-employment services; and job retention or support services if such services are not otherwise available.

An operating entity may not itself operate a program solely to provide job readiness, placement or post-employment services. In other words, an operating entity that wishes to run a stand-alone job placement program or a program to provide world-of-work training or other job readiness or post-employment services to WtW participants, must do so through contracts or vouchers.

However, an operating entity may directly operate a community service program, a work experience program, an on-the-job training program or a program to develop jobs through public or private employment wage subsidies. In the course of operating such programs or engaging in these activities it may be necessary that the operating entity provide job readiness, placement or post-employment services as part of a comprehensive program to move the participants from welfare to work. In such circumstances, an operating entity would not be prohibited from providing such services itself, rather than through contracts or vouchers, if the services are a reasonable and necessary component of the permissible program activities. The express authority to operate such programs and engage in such activities would include authority to provide the necessary services needed to do so successfully. Moreover, it would seem to be inefficient to read the statute as requiring that a PIC which is operating a comprehensive

program, under express statutory authority, must nonetheless provide certain necessary services only through contracts or vouchers, even when the PIC is in a position to provide these services to the participants. Finally, this reading of the statute is consistent with the legislative history. In adopting the final version the WtW statute, Congress expressly dropped a provision that prohibited PICs from using WtW funds to provide direct services. H. Conf. Rep. No. 217, 105th Cong., 1st Sess., 931 (7/30/97).

However, if these services are not a reasonable and necessary component of the permissible program activities, or if the operating entity provides these component services through a third party, the Act and regulations require that these job readiness, placement or post-employment services be provided for by contract or voucher. Moreover, in the case of placement services, a contract for placement of participants into unsubsidized employment is subject to the 50% hold-back provision at 20 C.F.R. §645.230(a)(3). That is, each contract or voucher must provide that at least one half of the total payment will occur only after the individual placed into the workforce has been in the workforce for six months.

AF4a. Can a PIC award funds to a subrecipient for a comprehensive program which includes job placement services without including the 50% six-month holdback provision? (3/32/98)

A. Yes. When a subrecipient of a PIC receives an award to provide a comprehensive community service program, work experience program, and/or on-the-job training program, it is to be treated in the same manner as a PIC or alternate administrative entity which provides the same type of comprehensive program. When placement services are provided as a reasonable and necessary part of such a comprehensive program, the 50% holdback provision does not apply.

AF4b. Can a PIC or a subrecipient which is operating a comprehensive program also provide stand alone job readiness, job placement or post employment services for participants who will not be participating in a community service program, a work experience program, or an on-the-job training program? (3/23/98)

A. The Act requires that stand alone job readiness, job placement and post employment services be provided through means of a contract or voucher. Therefore, a PIC may not directly provide such services but must use contracts or vouchers. A PIC may award a separate contract for stand alone job readiness, job placement and/or post employment services to a subrecipient which also has an award to operate a comprehensive program. Such a contract would have to include the 50% six-month holdback provision for job placement.

AF5: What is the purpose of the requirement in §645.410(a)(7) that "The State shall distribute SDAs' allocations in a timely manner, but no later than 30 days from receipt of the State's fund allotment." What does "receipt of the State's fund allotment" mean?

What does "distribute SDAs' allocations in a timely manner" mean? Is this obligating funds to the PICs or something else?

A: The purpose of this provision is to ensure that States make WtW funds available to local entities shortly after the effective date of the State's WtW grant. The requirement responds to concerns that States might otherwise "hold on to" WtW funds at the State level for extended periods of time rather than quickly pass them through to PICs/SDAs. Such delays would adversely effect the PICs' ability to implement programs and could limit the period during which funds are available at the local level to significantly less than the full three years provided under the Act.

In response to the specific questions: (1) The term "receipt of the State's fund allotment" means the effective date of the State's WtW grant -- the date when the State is authorized to begin to expend WtW funds. (2) The term "distribute SDAs' allocations in a timely manner" may be satisfied by obligating formula funds to the PIC (or alternate administering agency) within 30 days after the effective date of the State's WtW grant.

AF6: Does a State have to assert/promise that it will provide at least the minimum required match amount to qualify to get its full planning estimate? Or, can it advise us that it has only a portion of its required minimum available for expenditure during FY 98 and assure that it will try to obtain the rest for expenditure over the remaining two years during which both the Federal and the match funds must be expended?

A: In order to get its full FY 98 grant amount, a state would have to assert/promise that it will provide at least the minimum required match amount (e.g. $2.5 million in match for its $5 million grant amount). It does not have to assert or promise to expend this level of match in the year of the award, but it does need to promise this amount of match for the period over which it will spend the federal funds - up to the three year maximum. If a State cannot raise or promise to provide the amount of match to qualify for its full planning estimate amount, the State will get an award in an amount commensurate with the level of match it can raise.

AF7: What happens to the funds that are not awarded to States because they proposed a lower level of matching funds than that required to receive their full planning estimate award? Likewise, what happens to funds that are reserved for States which do not submit a FY 98 plan?

A: States that have not applied for all of their formula funds by June 30, 1998 will lose access to those dollars. The funds will go into next year's pool of funds available for a second allocation in FY 99. The second pool will include: (1) funds reserved for States that do not submit a FY 98

plan, (2) funds not awarded to States because they propose a lower level of matching than required to receive their full FY 98 allocation, and (3) funds recaptured from States that fail to obligate 100% of the FY 98 funds awarded to them.

Initial planning estimates for FY 99 will be issued based only the amount of funds ($1.5 billion) that the statute identifies as authorized to be appropriated for FY 99. However, ETA plans to ask States that think they can raise more of a match than is required by their FY 99 planning estimates to include the higher amount in their plan. States that promise a higher-than-required level of matching funds may be eligible to receive additional formula funds from the additional pool of funds identified above, i.e., funds that were not obligated by the Department in FY 98. The maximum amount that a State may be eligible to receive will be determined by applying the entitlement formula required by §403(a)(5)(A)(iii) of the statute to the total amount of funds that comprise the additional pool of funds. (Revised 2/20/98)

AF8: When may a State begin to incur costs against its WtW formula grant?

A: A State may begin to incur costs against its WtW formula grant only upon execution of the grant by the Department of Labor Grant Officer. Pre-grant costs are not authorized. Costs incurred after DOL notifies a State that the State plan is complete and in compliance but before the DOL Grant Officer executes the grant may not be charged against the grant.

AF9a: Can the Governors' 15% funds [funds that may be retained at the State level in accordance with 20 CFR 645.410(b)] be used only for special projects that appear likely to help long-term welfare recipients enter unsubsidized employment? (2/20/98)

A: No, these funds are not limited to use for special projects.

AF9b: What are the allowable uses for the Governors' 15% funds? (2/20/98)

A: The Governors' 15% funds may be used to pay for: (1) the costs of allowable activities at 20 CFR 645.220 [(a) job readiness activities, (b) employment activities consisting of : community service programs, work experience programs, job creation through public or private sector employment wage subsidies, and on-the-job training, (c) job placement services, (d) post employment services including but not limited to: basic educational skills training, occupational skills training, English as a second language training, and mentoring, (e) job retention and support services including but not limited to: transportation assistance, substance abuse treatment which is not medical treatment, child care assistance, emergency or short term housing assistance, and other supportive services, (f) individual development accounts, (g) intake,

assessment, eligibility determination, development of an individualized service strategy, and case management]; (2) the costs of administration of the WtW program; and (3) the costs of information technology --computer hardware and software -- needed for monitoring or tracking.

AF10: May the Governors' 15% funds be distributed by States to PICs (or alternate administrative entities) as incentives (e.g., for exceptional performance in serving the target population or for promising to contribute a substantial portion of the State's required match)? (2/20/98)

A: Yes, as long as such funds distributed to PICs are used to pay for the allowable costs of WtW activities.

AF11: May the Governors' 15% funds be used for capacity building? (2/20/98)

A: Yes. However, such funds may only be charged to administration because capacity building is not a specifically identified WtW program activity.

AF12: Is the State required to report expenditures paid for with the Governors' 15% funds separately from expenditures paid for with 85% funds distributed to PICs? (2/20/98)

A: Yes, they must be reported separately.

AF13: What procedures must a State use in making awards for the Governors' 15% funds? (2/20/98)

A: A State is required to use the same policies and procedures it uses for procurements made with non-Federal funds, in accordance with 29 CFR 97.36 (procurements) or 29 CFR 97.37 (grants/subgrants) as appropriate.

AF14: Is it necessary to obligate all of the WtW formula-grant funds (both the 85% being distributed to local areas and the Governors' 15% funds) in the year of award, regardless of when the funds are awarded during the year? (2/20/98)

A: Yes, it is necessary for a State to obligate 100 percent of the funds it receives by the end of the fiscal year in which the award is made. With respect to the "85 percent funds," this is easily accomplished by the award of the funds to substate areas within the 30 days required by the regulation at 20 CFR 645.410(a)(7). States need to ensure that all of their 15 percent special projects funds also are obligated before the end of the fiscal year or risk recapture and

reallotment of those funds. The regulations at 20 CFR 645.320(d) states that all funds that become available as a result of ... failure to obligate 100 percent of the funds by either State or substate entities by the end of the fiscal year of the grant will be reallotted among qualifying States. The related preamble text indicates that funds are fully obligated by States when they are awarded to the substate entities. This provision is based on the provision at §403(a)(5)(A)(iv)(II) of the statute which states that any available amount for the immediately preceding fiscal year that has not been obligated by a State or a substate entity is to be part of the "amount available" for allotments to Welfare to Work States.

AF15a: Must participants in WtW employment activities be paid the minimum wage? (2/20/98)

A: The minimum wage and other provisions of the Fair Labor Standards Act (FLSA) apply to working welfare recipients just as they apply to all other workers. If welfare recipients are employees under the FLSA's broad definition -- and if their job is covered by the FLSA -- they must be paid the federal minimum wage. Welfare recipients would probably be considered employees in many of the work activities listed in TANF, including work experience and community service.

AF15b: What other workplace laws apply to WtW participants? (2/20/98)

A: Other federal employment laws, such as the Occupational Health and Safety Act, Unemployment Insurance, and anti-discrimination laws, may also apply to working welfare recipients. For more information on how the FLSA and other federal laws apply in the welfare context, consult the Department's guide entitled, "How Workplace Laws Apply to Welfare Recipients."

AF16: What constitutes "poor work history"? (2/20/98)

A: The regulations at 645.212(a)(2)(iii) define "poor work history" as having worked no more than 3 consecutive months in the past 12 calendar months. For this purpose, we are further defining "worked no more than 3 consecutive months" as having worked full-time in unsubsidized employment for 13 consecutive weeks.

AF17: Must a PIC establish definitions for "poor work history" and "low skills in reading or math" to be used in determining eligibility under 10% "window" that applies to the "70% funds" (at 645.212 of the implementing regulations)? (2/20/98)

A. Yes, if a PIC wishes to use the 10% window in eligibility determinations under the 70% provisions, it must define these terms. We suggest that PICs include in their eligibility/intake forms any definitions that may apply to participants qualify under each 10% window. Participant files must document that the participant met some definition of each barrier applied in determining eligibility.

AF18: Can a State get its WtW plan approved, but delay implementation to a time of its choosing within FY 1998? (2/20/98)

A. Yes, but no later than July 31, 1998 except for unusual circumstances. The State should communicate its request for delayed implementation to the Grant Officer when it transmits its signed Grant Agreement/Assurances package. Note: These packages are express-mailed by the Grant Officer to all States who have submitted a WtW plan. Unless notified otherwise, the Grant Officer will execute the WtW Grant Agreement and Notice of Obligation within 1-2 working days of State's WtW Plan approval assuming the State has submitted a completed package. The July 31 date assumes a worst-case scenario where a State submits its plan on the last day of plan submissions --June 30, 1998 and it takes a maximum of 30 days to resolve issues and complete paperwork. States, however, should strive for timely State plan submissions to allow themselves sufficient time to obligate funds by the end of the Fiscal year. See 20 CFR 645.320 (d) regarding recapture and reallotment due to under-obligation of funds.

AF19: Can WtW matching requirements be met by using non-federal matching funds in excess of the 25% minimum required under the Adult Education Act? (2/20/98)

A. Yes. However, activities supported with matching funds that exceed the minimum required under the Adult Education Act must be used to serve individuals eligible for services under both the Adult Education and WtW programs. Further, the services provided must be allowable activities under both programs, such as job readiness, high school completion, or on-the-job instruction in basic skills needed for work.

AF20: Can employee benefits -- such as retirement contributions or health benefits -- count toward match? Can benefits that are supportive services -- such as child care and transportation assistance -- count toward match? (2/20/98)

A: Where an employer provides a package of benefits to its employees and provides the same package of benefits to WtW eligible individuals, the costs of these benefits may not be counted toward the match. However, where the employer provides benefits and/or supportive services to the WtW eligible individuals that are in addition to those which are customarily provided to its employees, these costs may be counted toward the match.

AF21: Would the Secretary of Labor approve a state-wide waiver for an alternate service delivery system, or do waiver requests need to be made on an SDA-by-SDA basis? (2/20/98)

A. State-wide waivers will not be granted. The WtW statute and implementing regulations provide that the Governor of a State may seek a waiver with respect to one or more service delivery areas within the State. The Secretary would approve a waiver request covering all of the SDAs within a State only if the Governor established on an SDA-by-SDA basis that it was appropriate to do so.

AF22: Will the Secretary approve a waiver for a program to be administered on a county level rather than on an SDA level? (2/20/98)

A. No. The WtW statute and implementing regulations provide for waivers at the SDA level only.

AF23. Can WtW funds be used for building classrooms? (3/4/98)

A: No. Construction and purchase of buildings are not allowable costs.

AF24. Can WtW funds be used for drug testing? (3/4/98)

A: Yes, where existing resources are not otherwise available to the participant.

AF25. Can WtW funds be used for medical services? (3/4/98)

A: No. Section 408(a)(6) of the Social Security Act, which bars the use of Federal TANF funds for medical services, also applies to WtW funds.

AF26. Is transportation of a WtW participant to a drug treatment facility an allowable cost? (3/4/98)

A: Yes, if the transportation services are not otherwise available to the participant.

AF27. Are faith-based organizations eligible to contract to provide job readiness training? (3/4/98)

A: Yes. Provided that the applicable State and local procedures are followed, PICs may fund faith-based organizations to operate WtW activities, such as job readiness training.

AF28. Does an individual's participation in a WtW job readiness activity count against that individual's TANF five-year lifetime limit on the receipt of assistance? (3/4/98)

A: No. Job readiness does not meet the definition of "assistance" under TANF.

AF29. Can an individual receive TANF assistance and WtW services at the same time? (3/4/98)

A: Yes. Entities may provide additional WtW services to an individual who has been placed in a work activity supported with TANF funds.

AF30. If a WtW participant ceases to receive TANF assistance, can they continue to receive WtW services? (3/4/98)

A: Yes. Once an individual has begun to receive services, the operating entity is not required to redetermine WtW eligibility and may continue to provide services in accordance with assessment results and the individual responsibility plan.

AF31. Will the Department issue additional guidance concerning non-custodial parents? (3/4/98)

A: Not at this time. The Department may revisit this issue based on experience with the WtW program.

AF32. Can a State establish a WtW reallotment process and, based on a PIC's expenditure levels, move that PIC's funds from one PIC to another? (3/4/98)

A. No. A State cannot take funds from one PIC and move the funds to another.

AF33. What reporting requirements will apply to third-party cash match at the PIC level? (3/4/98)

A. The State WtW administering agency will decide on the appropriate PIC level reporting instructions that will enable the State to complete the Federal reporting requirements.

AF34. Does the 70%/30% eligibility criteria for targeting service toward the hardest to employ apply to expenditures of matching funds? (3/4/98)

A. No. The 70/30 criteria does not apply to match. Match needs to be expended for WtW allowable costs for any WtW eligible individuals.

AF35. Since the passage of the technical amendment which allows match to be spent over the same three year period as the federal grant funds, will the annual reconciliation and grant adjustment process described at 20 CFR 645.315 still occur? (3/19/98)

A. No. However, ETA plans to review the financial reports submitted by States to assess whether or not the rate of match expenditure vis a vis expenditure of federal funds is reasonably consistent. If it appears that a State may be having difficulty in the area of match expenditure, then ETA staff may consult with the State concerning this difficulty and provide guidance in an attempt to assist the State in meeting its match requirement.

AF36. Does the reallotment procedure described at 20 CFR 645.320 still apply if there will be no determination concerning the underexpenditure of funds until after the end of the grant period? (3/19/98)

A. Yes. Although the provisions in paragraphs (b) and (c) relate only to match and are no longer applicable, reallotment of funds where States fail to fully obligate by the end of the fiscal year in which the award is received will still occur in accordance with the provision of this section of the regulations.

AF37. If a State chooses to award more than 85% of its funds to PICs through the formula process, are the excess funds over the 85% [Governor's 15% funds] included for reporting purposes with the 85% funds or are they reported as 15% funds? (3/19/98)

A. The Act requires States to allocate NOT LESS THAN 85% to the PICs by formula. Where a State passes through more than 85% BY FORMULA to the PICs, all distributed funds will be reported together. However, if a State distributes 85% by formula and then uses some other basis for allocation of additional funds to PICs [e.g., incentive for an exceptional program, incentive for a match contribution, etc.], the funds not distributed by formula must be tracked and reported separately as Governor's 15% funds.

AF38. If a State has a PIC(s) that would receive less than $100,000 under the formula distribution process and the State decides to award that amount to the PIC rather than use it for other purposes, should these funds be reported as formula 85% funds or as non-formula 15% funds? (3/19/98)

A. PICs which would receive less than $100,000 by formula cannot be awarded formula funds. The State must add these amounts to the Governor's 15% funds. If the Governor then chooses to award/grant those funds back to the same PICs that could not receive them through the formula distribution process, said funds must be tracked and reported as Governor's 15% funds.

AF39. If a PIC turns down the funds that it is to receive by formula and the State is unable to find another local entity to serve as an alternate administrative entity for these funds, what happens to the funds? (3/19/98)

A. The funds will revert to DOL at the end of the fiscal year as unobligated funds. There is nothing in the Act that would allow the Governor to add the unclaimed funds to his 15% funds or to distribute them to other PICs through the formula distribution process.

AF40. Does there need to be a TANF custodial parent in order for a non-custodial parent to be eligible under 70% and/or 30% eligibility provision, or is a child-only TANF case sufficient? (3/19/98)

A. According to the Interim Final Rule, a custodial parent is required in order to complete the eligibility determination under both the 70% provision, as defined in section 645.212(b), and the 30% as defined in section 645.213(b). According to the statute, noncustodial parents of child-only TANF cases cannot meet the eligibility requirements since the custodial parent must be a TANF recipient.

AF41. Does the 70%/30% cost limitation apply to planned or actual expenditures? (3/19/98)

A. The 70%/30% cost limitation applies to actual expenditures, as determined at the end of the three year grant period.

AF42. Similarly, does the 15% administrative cost limitation apply to planned or actual expenditures? (3/19/98)

A. The 15% administrative cost limitation applies to actual expenditures, as compared with the total grant award amount, as determined at the end of the three year grant period.

AF43. What kind of data does the Department plan to request on the WtW Formula Grant Cumulative Quarterly Financial Status Report? (3/19/98)

A. The Department is still awaiting final OMB approval of its proposed reporting package. Participant reporting for WtW Formula Grants will be handled through the HHS TANF reporting system. Our proposed financial reporting package would request data for the grant as a whole on total match expenditures and the in-kind portion of match; total federal expenditures, administrative expenditures, information technology expenditures; a breakout of federal expenditures between the [70%] required beneficiaries and other eligibles [30%]; expenditures of the Governor's 15% funds, including a breakout for administrative and information technology expenditures; expenditures of the formula pass through funds, including the breakout for administrative and information technology expenditures; expenditures of all funds by program activity; program income earned and expended; total number of participants served and number terminated in both the 70% required beneficiaries and the 30% other eligibles groups; and, the total number of participants placed and the number retained for six months in unsubsidized employment with a breakout between those placed in the public and the private sector.

AF44. How is retention defined for WtW reporting purposes? (3/19/98)

A. Retention is defined as in the workforce for six months with earnings in the two consecutive quarters following the quarter in which the participant was placed in unsubsidized employment?

AF45. What are the roles and responsibilities of the State(s) versus the PIC(s) under the WtW initiative? (7/02/98)

A. Federal WtW regulations provide clear and distinct definitions of the roles and responsibilities of the State(s) and PIC(s) at §645.425.

AF46. Does the barrier "requires substance abuse treatment for employment" include individuals in recovery who continue to require on-going treatment? (7/02/98)

A. Yes. Such individuals may be included in accordance with the state or local plan or practice.

AF47. Is there a minimum number of hours/week in which a WtW participant must be involved in a subsidized or unsubsidized work activity, in order to qualify for job retention and/or support services? (7/02/98)

A. No, there is no such specific requirement under the WtW statute or regulations. Such determinations should be made in accordance with the state or local plan or practice.

AF48. Can a youth (other than a teen parent) under 18, be eligible to receive services through WtW? (7/02/98)

The WtW initiative has a "work-first" thrust that seeks to empower participants by helping them achieve economic self-sufficiency. TANF recipients (as determined by the State) under 18 years of age, who meet all the eligibility criteria for WtW, could receive employment services, if full-time work is an appropriate goal for them, e.g. they are school drop-outs. In addition, children of WtW participants may benefit from WtW services through their parents in areas such as transportation, child care and/or other support services.

AF49. Must a State receiving formula funds obtain a waiver in order to designate an entity other than the JTPA administering entity to operate the WtW program in a service delivery area (SDA)? (7/13/98)

Yes, a State must obtain a waiver, if it wishes to designate an entity other than the JTPA administrative entity to operate the WtW program in an SDA. This requirement includes cases where a PIC performs an oversight role under JTPA, but does not administer the JTPA program, and chooses, in cooperation with the CEO, an entity other than the current JTPA administrative entity to operate its WtW program. It is the intent of the WtW legislation that the JTPA workforce development system is the presumptive administering entity for the WtW program.

Attachment III: Competitive Grant-Solicitation for Grant Applications

Official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/1998/TEGL5-98_AttachIII.pdf

CG1: How does a private entity apply for competitive grant funds?

A: The WtW Regulations state that a private entity may apply for a WtW competitive grant if they include a signed certification that the PIC or political subdivision was consulted in the development of the application, and that the activities proposed are consistent with and will be coordinated with the efforts of the PIC/political subdivision

CG1a: What if the PIC/political subdivision will not provide certification?

A: If the PIC/political subdivision will not agree to provide certification that the proposal was developed "in conjunction", then the applicant must describe efforts that were taken to coordinate with the PIC/political subdivision and include information indicating that the PIC/political subdivision was given a sufficient opportunity to review and comment on the proposal. Sufficient opportunity to comment means at least a 30 calendar days.

CG1b: Under what circumstances does the 30-day review and comment period apply?

A: The 30-day review and comment period applies where the applicant has adequate reason to believe that the relevant PIC/political subdivision will not certify that the applicant has consulted with them and that the proposed activities are consistent with and will be coordinated with PIC/political subdivision WtW efforts.

CG2: Can I apply for a WtW Competitive grant if I am administering a WtW formula program?

A: Yes. WtW Competitive grants to local communities are expected to complement the services and activities to be provided under the formula grant program. Private Industry Councils or other local administering entities are encouraged to apply for grant funds.

CG3: Can the 7.5 percent excess poverty rate be applied to a smaller area than the whole city?

A: Yes. WtW competitive grants are targeted to local communities and, within that, to pockets of poverty within a community. The application should demonstrate in as much detail as possible the level of need in the specific target population to be addressed.

CG3a: Where can I find information on the poverty rates in my local area?

A: Information broken down to the city and county level is available in the 1994 City/County Data Book, published by the U.S. Census Bureau. This book should be available in the reference section of all local libraries. For information at a sub-city or county level, applicants should consult with the local city or county planning agency, or State university to obtain 1990 U.S. Census data. Census information down to a census tract or block level is also available at the nearest Government Repository. Lists of government repositories can be found at http://drseuss.lib.uidaho.edu:80/govdoc/otherdep.html.

CG4: Why is profit not allowed for WtW competitive grants?

A: WtW competitive grants present an opportunity for private "for-profit" entities to collaborate with non-profit organizations as well as public agencies to provide effective services for hard-to-employ welfare recipients. To a certain extent, competitive grant funds will subsidize the research and development activities of "for-profit" entities, enabling them to test experimental employment strategies at no cost to themselves. "For-profit" entities are welcome to use the knowledge and experience they gain in profit-making enterprises funded through other sources, but the Department feels it is reasonable to disallow the earning of profit on competitive grant funds.

CG5: If I am in a city that has a population of less than 50,000 population, are we rural or urban?

A: In the SGA for WtW Competitive grants, a county that does not contain an urban center of more than 50,000 people is defined as rural. An applicant that is unsure of whether they are urban or rural should choose a designation based on the nature of the services to be provided in their WtW proposal. A proposal which focuses on services to a rural population should be designated as rural and should make the strongest case possible for the proposed services. If the proposal plans to target residents of an urban center, the proposal should establish that the urban center contains large concentrations of residents with income that is less that the poverty line.

CG6: Can I submit more than one application?

A: Yes. Any organization can submit multiple applications in multiple funding cycles. All applications from entities other than PICs and political subdivisions must, however, meet the requirements for consultation and coordination with the PIC/political subdivision. and must demonstrate a relationship to the corresponding WtW formula grant program at the State and local level.

CG7: Are matching funds required for WtW competitive grants?

A: No. The matching requirement for WtW funds only applies to the WtW formula grant program. Collaboration with other organizations and the leveraging of outside resources are strongly encouraged, however, as part of the WtW competitive grant program. Such leveraged resources should be reflected in both the project narrative and the budget portion of the competitive grant application.

CG8: What are "Community saturation projects"?

A: Community saturation projects are projects that propose to serve 100 percent of the eligible population within a designated service area, i.e. the community is completely "saturated" with services.

CG8a: How does community saturation apply to large cities?

A: In general, the funds available through the WtW program are not sufficient to serve the substantial numbers of participants that would be eligible within a city with a large concentration of poverty. However, projects designed to serve targeted communities, neighborhoods, or even blocks within a large city could certainly consider implementing a saturation strategy within that section of a city.

CG8b: How is participant eligibility determined in community saturation projects?

A: The eligibility requirements for community saturation projects are the same as those for other WtW projects. An application proposing to employ a community saturation strategy would provide services to 100 percent of the eligible WtW individuals in the project service area.

CG9: Can I provide skill training to participants prior to placing them in a job?

A: As indicated in the WtW Interim Final Rule (20 C.F.R. 645.220), basic educational skills training, occupational skills training, and English-as-a-second-language training are allowable activities, but only as post-employment services. On-the-job training is allowable as an employment service.

CG10: How do I find my local PIC?

A: PICs and JTPA Service Delivery Areas can be reached from the Employment and Training Administration's Welfare-to-Work Homepage. Click on the "Contacts" button at the top of the page. Identify the State you are interested in, and select "Service Delivery Areas" under Directory Name. You should be able to find the appropriate local organization from that list.

CG11: Does the 70 percent eligibility requirement apply to competitive grants?

A: Yes. As indicated in the Preamble to the WtW Interim Final Rule (62 FR 61591), at least 70 percent of WtW funds, whether distributed through formula grants or in competitive grants, must be spent to benefit hard-to-employ individuals, as described at 20 C.F.R. 645.211.

CG12: Is it allowable for WtW grants to pay medical expenses that are not covered by Medicaid?

A: No. As indicated in the Preamble to the WtW Interim Final Regulations (62 FR 61595, 11/18/97), Section 408 (a)(6) of the Social Security Act, which bars the use of Federal TANF funds for medical services, also applies to WtW funds.

CG13: Should I include letters of support from my partner organizations?

A: No. The SGA indicates in Part II of the Required Content for Welfare-to-Work Competitive Grant Applications that general letters of support should not be included. If the applicant feels that it is important to include letters of support, they should be included as attachments and will count against the 25 page count limit. In general, support from partner organizations should be indicated elsewhere in the narrative and budget portions of the proposal, rather than through letters of support. Letters of support may also be submitted under separate cover

CG14. Are States eligible to apply for competitive grants in conjunction with a political subdivision or PIC as "private entities?" (2/20/98)

A. In general, states are not able to apply for competitive grants. The definition of "private entity" in the WtW solicitation for grant applications encompasses public or private organizations other than political subdivisions and PICs. The competitive grant Solicitation for Grant Applications indicates a focus on "moving eligible individuals into unsubsidized employment in a local, community-based context." Therefore, those State entities, such as community colleges, that operate at the local level would be eligible to participate in the competitive grant program.

By contrast, a State agency operating at the State level would not be eligible to apply for a competitive grant. Further, given the consultative role assigned to the State Governors under the WtW legislation and implementing regulations, Governors and any State agencies that would be involved in the consultation process would be ineligible to apply because of the potential for conflict of interest.

CG15: What is the Code of Federal Domestic Assistance Number (CFDA) for the Welfare-to-Work Competitive grants? (3/4/98)

A: The CFDA number for the WtW Competitive grants is 17-253, the same as for the overall WtW program. It can be found in Section VII of the Preamble to the Welfare-to-Work Interim Final Rule (62 FR 61603).

CG16. What were the most common weaknesses identified in the Round One WtW Competitive Grant proposals? (5/18/98)

The most common weaknesses in Round One proposals were:

Poor understanding and implementation of the "work first" philosophy; Applicaton formatted in a manner that does not match the SGA requirements; No clear identification of the innovative elements in the proposal; Poor documentation of State and local consultations; Insufficiently demonstrated coordination with local TANF agency; and, Little evidence of leveraged resources.

Applicants for Round Two of the WtW competitive grants should read the April 15, 1998 Federal Register Solicitation for Grant Applications carefully to ensure that their applications meet the revised requirements.