One-Stop grant carry-in policy for third-year funding

Training and Employment Guidance Letter No. 12-98

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

Classification: One-Stop
Correspondence symbol: OS
Issue date: March 18, 1999
Rescissions: [blank in source]
Expiration date: Continuing

TO: All State JPTA Liaisons; All State Employment Security Agencies; All State Worker Adjustment Liaisons; All One-Stop Career Center System Leads

FROM: David Henson, Director, Office of Regional Management

SUBJECT: One-Stop Grant Third Year Carry-In Policy for All States

Purpose. To clarify ETA policy on carry-in of unobligated Year One and Two One-Stop grant funds into Year Three.

Reference. Training and Employment Information Notice (TEIN) No. 5-96, "PY 1996 Funding Strategy for the One-Stop System".

Background. TEIN 5-96, announced as part of the One-Stop 1996 Funding Strategy that implementation grantees entering their third year of funding would be allowed to carry-in 15% (15% Rule) of any unobligated funds from the first and second year. The remaining 85% of unobligated funds would not be de-obligated from the grant; rather, the State's third year allocation would be reduced by that amount. The TEIN noted that funds set aside in the grant for the Talent Bank were exempt from this calculation. This exception was subsequently amended to exempt all ALMIS related funding since these technology-related investments are intended for the life of the grant, and are not funded incrementally for each year's operations. In 1996, the 15% Rule was addressed to "Round I and Round II" States, since they would soon enter the third year of operations under their One-Stop grants and the balance of the States had not yet received their Implementation grants. The TEIN was not explicit that the 15% Rule would apply to all States as they reached their third year of funding.

Our overall interest is to assure that grantees are funded at a level sufficient to support each year's operations under the grant, without running a surplus. States should attempt to obligate 100% of annual operating funds to support the roll-out of those activities identified in the annual operating plan, as specified in the grant documents. The 15% Rule was established as a prudent fiscal measure to encourage timely obligation of funds, and to discourage the carry-over of "surplus" funding from year to year.

Policy. One-Stop State Implementation grantees may carry-in a maximum of 15% of any unobligated, non-ALMIS related, Year One and Year Two funds to their third year of operations under the One-Stop Implementation grant. A State's Third Year One-Stop Implementation grant allocation for operations will be reduced by the remaining 85% of unobligated, non-ALMIS funds. Example: If a State's Third Year grant allocation was $1.5 M and the State had $1.0 million in unobligated, non-ALMIS funds at the beginning of Year Three, the third year allocation would be reduced by $850,000 (85% of $1M). In this example, the State would receive only $650,000 for it's third year of operations. If the State had $0 in unobligated, non-ALMIS funding, it would receive the full $1.5 million for Year Three. The objective is to reduce or eliminate non-ALMIS carry-in, so that all of the grant funds are used timely, in accordance with the State's yearly operating plan as reflected in the grant documents.

Action Required. States are requested to discuss this policy with their One-Stop GOTRs in the Region to ensure a thorough understanding of its implications; and to assure that the very limited One-Stop appropriations are managed in a fiscally sound manner.

Inquiries. Questions on this policy should be directed to the State's One-Stop GOTR in the Regional Office.