Revised Welfare-to-Work questions and answers

Signed letter (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL15-01.pdf)

U. S. Department of Labor
Employment and Training Administration
Washington, D.C. 20210
CLASSIFICATION: WtW
CORRESPONDENCE SYMBOL: OAS
DATE: March 22, 2002

TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 15-01

TO: STATE WELFARE-TO-WORK CONTACTS
STATE WORKFORCE LIAISONS

/S/
FROM: EMILY STOVER DeROCCO
Assistant Secretary

SUBJECT: Set of Revised Welfare-to-Work Questions and Answers

1. Purpose. To transmit a set of revised Welfare-to-Work (WtW) Questions and Answers
   (Qs & As) as official policy to the system; provide guidance and clarifying information to WtW grantees regarding the need for the revisions; describe how the Qs & As are organized and can be accessed electronically; and highlight those Qs & As of particular importance.

2. Authorities and References.
   • Title IV-A and Title IV-D of the Social Security Act (SSA)
   • Personal Responsibility and Work Opportunity Reconciliation Act of
   1996 (Pub. L. 104-193)
   • Balanced Budget Act of 1997 (Pub. L. 105-33) amending Title IV-A of
   the SSA
   • WtW Regulations, 20 CFR Part 645, Final/Interim Final Rule published
   at 66 Fed. Reg. 2690 (Jan. 11, 2001), effective date: April 13, 2001.
   • Department of Labor Appropriations Act, 2001 (Pub. L. 106-554)
   • Omnibus Consolidated and Emergency Supplemental Appropriations Act,
   1999 (Pub. L. 105-277)
   • Title VIII of H.R. 3424, enacted as part of the Consolidated Appropriations
   Act of FY 2000 (Pub. L. 106-113), which contains the WtW and Child Support
   Amendments of 1999
   • Workforce Investment Act (WIA) of 1998 (Pub. L. 105-220)
   • WIA Regulations, 20 CFR 667.220 (published at 65 Fed. Reg. 49294 (Aug. 11,
   2000))

RESCISSIONS EXPIRATION DATE
TEGL 5-98 Continuing

3. Background. Throughout the start-up and implementation phases of the WtW program, a
   number of policy questions were raised by WtW formula and competitive grantees, as well as the system’s Federal, State, regional, and local partners. Many of these questions and their answers were posted and maintained on the WtW website on an ongoing basis.

The 1999 Amendments changed the WtW program significantly, primarily in the areas of eligibility, allowable activities, and reporting requirements. In order to reflect the changes brought about by the enactment of the 1999 Amendments, all the Qs & As on the WtW website were recently reviewed by an ETA team, and, where appropriate, revised both in content and format. In addition, new Qs & As were developed.

NOTE: The attached revised Qs & As will be posted on the WtW website at http://wtw.doleta.gov on or about the same date as this Training and Employment Guidance Letter (TEGL) is published. At the website’s homepage, click on “Policy” and click on “Questions and Answers” in order to access the Qs & As.

4. Information regarding how the Qs & As are organized. The revised Qs & As are formatted
   in much the same order as they were originally on the website. The subject areas are as follows:

           Section I       General Program (GP)
   
           Section II      Administration and Fiscal (AF)
                             • General
                             • Pertaining to Match (AFM)
                             • Pertaining to Reporting (AFR)
   
           Section III     Eligibility (E)
           Section IV      Allowable Activities (AA)
           Section V       Technical Assistance (TA)
           Section VI      WtW and WIA (W/W)
   

This TEGL supercedes TEGL No. 5-98 and its attachments, and replaces, in its entirety, the array of questions and answers that, until now, were available and posted on the website. As a result of this revision process, readers will notice that a number of the original Qs & As have been consolidated or moved to other areas so that they are logically grouped with questions and answers of a related topic. Qs & As that continue to contain accurate, albeit outdated, information on the WtW program have been archived, but are

available on the website. Finally, those Qs & As that contain information that is inaccurate in light of the 1999 Amendments have been removed from the website. A master index, which identifies the changes made to the original Qs & As, has been developed, and may be accessed by contacting your Grant Officer’s Technical Representative (GOTR).

In addition to the Qs & As that address all of the sweeping changes brought about in the WtW program as a result of the 1999 Amendments, readers are encouraged to give particular attention to and review the following Qs & As that were newly developed or substantially revised and have significant impact on WtW policy. They are:

Section II: Revised 70% minimum/30% maximum expenditure requirement (AF1) Guidance for developing a termination policy (AFR 11)

Section III: Expanded definition of “TANF assistance” (E3) Providing WtW services to families sanctioned off TANF (E14) Documentation of eligibility for noncustodial parents (E20)

Section IV: Requirement that Local Boards provide certain services through contract or voucher (AA2)
50% hold-back requirement on unsubsidized job placement contracts (AA3) Use of WtW funds for capacity-building (AA6) Use of WtW funds to provide cash payments to participants (AA13) Continued prohibition on using WtW funds for direct cash incentives (AA14 and AA15)
Use of WtW funds for transportation and related services (AA21) Use of WtW funds for outreach and recruitment (AA28) Serving youth with WtW funds (AA34)

The WtW Qs & As will be updated on an ongoing basis. Most supplemental Qs & As added to the website subsequent to this posting will be transmitted via a TEGL and all will be individually annotated with the date of entry, to distinguish them from this attached set of revised Qs & As.

5. Action Required. Disseminate the attached Qs & As to appropriate individuals responsible
   for administering and operating the WtW program.

6. Inquiries. Inquiries on this policy guidance should be addressed to your Grant Officer’s Technical
   Representative.

7. Attachments. Set of WtW Questions & Answers - Revised November 2001.

General Program Questions (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL15-01_GP.pdf)

GENERAL PROGRAM QUESTIONS

GP1: What are Welfare-to-Work grants?

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 are used to equip long-term welfare recipients and noncustodial parents -- 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 have the flexibility to design programs that fit their particular needs.

GP2: What is the total funding level?

The original total funding level for WtW grants was $3 billion, $1.5 billion each in Fiscal Years 1998 and 1999. There were two types of grants awarded: formula grants to States and competitive grants to local communities. Less certain set-asides, seventy-five percent of the WtW funds were distributed as grants to States according to a formula and the remaining twenty-five percent of the WtW funds were distributed through a competitive process to various entities.

GP3: How are WtW grant funds distributed?

Seventy-five percent of the WtW funds were distributed to States according to a formula set by the WtW statute and implementing regulations. The States then distributed at least 85 percent of what they received to local Private Industry Councils, which have become Local Workforce Investment Boards (Local Boards) under WIA. The funding 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 Local Boards.

The Department of Labor distributed the other 25 percent of the WtW funds (through a competitive process) in grants to Local Boards, political subdivisions and other entities (such as community-based organizations) who applied in conjunction with a Local Board or political subdivision. Special consideration was given to rural areas and cities with large concentrations of poverty.

Finally, there were small set-asides from the FY 1998 and 1999 appropriations for special purposes such as for Indian tribes (1% of funds each year for a total of $30 million), for program evaluations (.6% or $18 million) and for performance bonuses for the States ($100 million). However, the set-aside for performance bonuses was eliminated by later legislation.

GP4: How can the funds be used?

Grantees have flexibility in designing welfare-to-work strategies geared to the needs of their own labor markets and economies. Allowable WtW grant activities may include job readiness; short-term pre-employment vocational educational training and job training; 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 be assessed on workplace skills, prior work experience, and employability. In addition, an individualized strategy for transition to unsubsidized employment must be in place.

GP5: What role do employers have in WtW?

First and foremost, employers play a critical role in hiring welfare recipients. The WtW program strongly advises its State, local and competitive grantees to conduct regular meetings with business partners in their communities to learn how WtW participants can fit into their future business plans. Additionally, with the knowledge gained from those meetings, WtW services such as job readiness activities, job placement or occupational skills training can be customized to meet the specific workforce needs of the employer. Those employers who wish to find out more about how companies are working together nationwide to encourage and assist private sector businesses with hiring people on public assistance may contact the business-led WtW Partnership at (202) 955-3005 or at http://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 (WOTC) and the WtW Tax Credit for employers, which may be found online at: http://workforcesecurity.doleta.gov/employ/WOTC.asp

GP6: How can nonprofit, faith-based, and other community-based organizations participate in WtW grants?

As subrecipients of WtW formula grant funds and as recipients of competitive grant awards, non-profit, faith-based, and other community-based organizations are key providers of services to welfare recipients under WtW grants. In particular, the Charitable Choice provision of the federal welfare law allows the use of WtW funds to enter into contracts with faith-based and community-based organizations. 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 can provide key resources -- in conjunction with Local Boards and political subdivisions -- for ensuring that child care, transportation, mentoring, housing, and other crucial supports are available to welfare recipients and noncustodial parents.

GP7: States and local communities already offer WtW programs. Why are these grants needed?

In creating the 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 and noncustodial parents.

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 and dislocated workers who are generally not disadvantaged.

The 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 program, the Department of Labor has also attempted to foster new partnerships between and among public and private organizations that have traditionally served welfare recipients and noncustodial parents. The formation of these collaborative relationships among a variety of service organizations in local communities to place and support welfare recipients in jobs constitutes a key strategy for reducing welfare dependency in the long-term.

GP8: Do the WOTC and WtW tax credits follow the participant, or are they employer-based?

The WOTC and WtW tax credits are incentives to employers, not benefits that follow participants. Since these tax credits are not tied to individual participants, any new employer may be eligible for a full tax credit for an eligible employee. In other words, the duration and/or level of the tax credit is not diminished by the WtW participant's former employer receiving the tax credit. Additional information on these tax credits may be found online at http://workforcesecurity.doleta.gov/employ/updates.asp.

GP9: Must participants in WtW employment activities be paid the minimum wage?

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 are most likely employees in many of the work activities listed in TANF and WtW, including work experience and community service. The Department of Labor encourages grantees to place participants in jobs paying the minimum wage or higher whenever possible, whether or not the employer is covered by the minimum wage requirements. 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,” available on the WtW website at http://www.dol.gov/dol/asp/public/w2w/welfare.htm. For additional guidance on other applicable workplace laws please see Q&A TA7.

GP10: Would the Secretary of Labor approve waivers on a state-wide or county-wide basis rather than on a local workforce level?

State-wide or county-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 local workforce areas within the State. The Secretary would approve a waiver request covering all of the local workforce areas within a State only if the Governor established on a local workforce area-by-area basis that it was appropriate to do so.

GP11: Are faith-based organizations eligible to contract to provide job readiness training?

Yes. The Charitable Choice provision of federal welfare law allows the use of WtW funds to enter into contracts with faith-based and community-based organizations to operate WtW activities; all applicable state and local procedures must be followed. Note: The OMB circulars require that an entity’s procurement procedures must require that all procurement transactions shall be conducted, as practical, to provide free and open competition.

GP12: 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?

No. Job readiness does not meet the definition of “assistance” under TANF. For a comprehensive explanation of what constitutes “TANF assistance” and “WtW cash assistance,” please see Q&A E3.

GP13: Can a State establish a WtW reallotment process to move funds from one Local Board to another based on a Local Board’s expenditure levels or other circumstances?

No. A State cannot take funds from one Local Board and move funds to another. Since the WtW funds provided to the State are formula-based, such funds are meant to serve the residents of a certain area. A number of situations may arise at the local workforce area level such that the funds cannot be used as intended. The Local Board (or alternate administering agency) may have difficulty operating the program itself for administrative or technical reasons and therefore may enter into a contractual arrangement with another service provider to deliver the services in that area. A local workforce area might find that the eligible population is well below what was estimated. Lack of performance may be another reason for funds not being utilized. There is, however, no provision for redistribution of funds from one area to another under the WtW statute.

A Governor may seek a waiver from the Department of Labor to designate an alternate administering agency to replace an under-performing Local Board. The WtW Regulations provide for the designation of alternate administering agencies at 20 CFR '645.400. Although waiver requests are usually included with the submission of the annual State WtW plan, a modification requesting a waiver may be made at any time. The review/approval process should ensure that all parties are aware of the proposed change. The intent of a waiver is to “improve the effectiveness or efficiency of the amounts distributed....for the benefit of the area or areas.” (Section 403(a)(5)(vii)(III) of the Act). A justification should be submitted that documents the lack of performance and how the proposed alternate administering agency will improve the effectiveness or efficiency of the administration of WtW funds in the area. Note that the WtW statute (Section (403(a)(5)(A)(vii)(II)) and regulations (20 CFR '645.400(a)(2)) state that waivers can be sought when the Governor determines that the Local Board or other alternate administering agency has not coordinated its expenditures with the expenditure of TANF funds. The non-expenditure of formula funds would appear to satisfy the criteria for such a waiver.

It should be noted that under the Workforce Investment Act (WIA), each local workforce area develops a five-year WIA plan with WtW as a required partner. Please also note that States cannot deny funds to or remove funds from a local workforce area because that local workforce area is unable to provide any match. States are responsible for coming up with matching funds. The formula funds are to serve a particular area, and they cannot be taken back or redistributed by the State due to lack of match at the local workforce area level.

GP14: If a Local Board 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?

The funds will revert to the Department of Labor at the end of the grant period as unobligated funds. There is nothing in the Act that would allow the Governor to add the unclaimed funds to his/her 15% funds or to distribute them to other Local Boards through the formula distribution process.

GP15: What are the roles and responsibilities of the State(s) versus the Local Boards or alternate administering agencies under the WtW program?

Federal WtW regulations provide clear and distinct definitions of the roles and responsibilities of the State(s) and Local Boards or alternate administering agencies at 20 CFR 645.425.

GP16: What is the Code of Federal Domestic Assistance Number (CFDA) for the WtW Competitive grants?

The CFDA number for the WtW Competitive grants is 17-253, the same as for the overall WtW program.

GP17: Must a State receiving formula funds obtain a waiver in order to designate an entity other than the Local Board to operate the WtW program in a local workforce area?

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

Administrative and Fiscal: General Questions (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL15-01_AFG2.pdf)

ADMINISTRATIVE AND FISCAL QUESTIONS
GENERAL

AF1: Does the primary eligibility cost limitation (which replaces the 70% provision) and the “other eligibles” cost limitation (which replaces the 30% provision) apply to the total amount of grant funds awarded or actual expenditures?

Only the 30% cost limitation still applies. With the 1999 Amendments, the eligibility requirements for hard-to-employ individuals and non-custodial parents were altered and the language referring to any mandatory minimum expenditure level of 70 percent was eliminated for these groups. Since the statute does specify that no more than 30 percent of grants funds may be spent on individuals served under the “other eligibles” category, the Employment and Training Administration interprets that to mean that all other expended funds allotted to or awarded to the grantee will be expended on individuals who meet the primary eligibility requirements.

In the past, with a the minimum expenditure level of 70 percent, if an operating entity spent up to 30% of its funds on individuals with characteristics associated with long-term welfare dependence, but was only able to spend 69 percent (or less) of the total funds on the hard-to-employ under the 70% category, it could be penalized with disallowed costs for failure to expend at least 70% of its funds on hard-to-employ individuals. Unfortunately, since such disallowed costs would have to be identified from otherwise allowable expenditures under the 30% category, this policy, enacted in the name of program compliance, appeared arbitrary and punitive. Therefore, although operating entities are not absolved of the underlying requirement that spending is to be targeted to the hardest-to-serve under the primary eligibility category, they will remain in compliance with the program expenditure requirements even if their expenditure ratio falls slightly below 70%, as long as their expenditure rate for other eligibles does not exceed 30% of the total grant funds allotted. Formula-funded operating entities that are concerned that their final expenditure rate may fall more than slightly below the 70% (less than 69%) level by the end of the grant period should immediately discuss their anticipated level and its acceptability with their state WtW contacts. In like manner, competitive grantees should contact their Grant Officer’s Technical Representative (GOTR). For more complete discussion on changes to the mandatory minimum expenditure level language, please refer to 20 CFR 645.211 and the Preamble to the Final Rule, 2690, p. 2703, (66 Fed. Reg. 2690 (Jan.11, 2001)). Finally, under 20 CFR 645.211, the calculation of the 30 percent maximum expenditure limitation (services to those eligible under the “other eligibles” provision found at 20 CFR 645.213), is applied against a base of the total amount of funds allotted or awarded to the WtW operating entity. This calculation is NOT made against a base of the total amount of funds expended by the operating entity. This calculation method applies to both formula and competitive grant awards. For additional information, please see Training and Employment Guidance Letter (TEGL) No. 4-00, located under Policy/Laws, Regulations and Directives

on the WtW website: http://wtw.doleta.gov/linkpages/tegltein.asp

AF2: Does the 15% administrative cost limitation apply to the total amount of grant funds awarded or actual expenditures?

Under 20 CFR 645.235 (a)(1) and (2), which limits the expenditure of WtW funds for administrative purposes to no more that 15 percent of the grant award, the base to which the administrative cost limitation is applied is the total amount of grant funds awarded. This calculation method applies to both formula and competitive grant awards. For additional information, please refer to the TEGL No. 4-00, located under Policy/Laws, Regulations and Directives on the WtW website: http://wtw.doleta.gov/linkpages/tegltein.asp

AF3: What constitutes a valid obligation for purposes of satisfying ' 403(a)(5)(A)(iv)(II) of the Act and 29 CFR 97.3? Are the criteria for valid obligations satisfied by written interagency agreements between two entities within the State government? What sources of funds are available to a State for financing staff costs and similar costs which cannot be charged to WtW grants within the period of availability?

DOL regulations at 29 CFR 97.3 define obligations as “the amounts of orders placed, contracts and subgrants awarded, goods and services received, and similar transactions during a given period that will require payment by the grantee during the same or a future period.” ETA considers obligations by the State grantee which satisfy these criteria as meeting the statutory requirement.

This includes all awards by the State grantee to subrecipients in accordance with '403(a)(5)(A)(vi) of the Act (85% funds) and all other awards by the State grantee to third parties in the form of grants, subgrants, contracts, purchase orders, and similar written agreements requiring payment for expenditures made during the period WtW funds are available for expenditure.

Under the referenced definition, ETA considers third parties to include other units of State government if this is consistent with State law. Accordingly, a valid obligation may arise from an award to another unit of State government if the award instrument specifies the activities, products, and services to be provided by the other unit in exchange for grant funds received. The other unit may be at the same level of government, e.g., a department whose highest official has the same job title as the grantee department's highest official, or at a different level, e.g., a bureau within another department.

ETA does not consider the following actions to result in valid obligations: actions within the grantee department, e.g., a transfer or delegation of budget authority or authority to enter into agreements to another headquarters unit or local office of the grantee; or transactions between two entities of

government which purportedly transfer authority and responsibility from one to another and back again but whose real purpose is only to create an appearance of an award action without effecting any actual change of position between the entities.

AF4: Why is profit not allowed for WtW competitive grants?

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 of Labor feels it is reasonable to disallow the earning of profit on competitive grant funds.

AF5: Are grantees required to ope rate using an indirect cost rate?

No, an indirect cost rate is not required. Grantees should direct charge wherever possible. However, if a grantee has more than one funding source, including more than one grant from the same agency, it should request an indirect cost rate. For additional information and clarification of the rules governing indirect cost rates, contact Steve Garfinkel, Department of Labor, Office of Administrative Services and Management, Division of Cost Determination, at [email protected] or 202-693-4102.

AF6: How are indirect costs allocated between administration and program costs?

Because of the revised WtW administrative cost definition, many more WtW costs are considered to be for the direct provision of WtW activities and can be classified as a program cost; therefore, they can be directly charged to the program. That said, there remain circumstances for indirect cost charging, and where an indirect cost pool is maintained. When specific costs charged to an overhead or indirect cost pool can be identified directly as program costs, they may be charged as program costs. For additional information on the revised WtW administrative cost definition and what types of WtW activities are subject to the administrative cost limit, please refer to 20 CFR 645.235.

AF7: A person is found eligible based on information provided by the TANF agency (e.g., at least 30 months receiving assistance or within 12 months will become ineligible for TANF), and WtW provides services. Thereafter, it is determined that the person was not eligible. Which agency, TANF or WtW, is liable for any disallowed costs?

The WtW grantee is ultimately responsible for any disallowed costs associated with the WtW grant. It is

up to the grantee to establish procedures that will limit the liability when dealing with subcontractors and that comply with section 645.214 of the WtW Regulations.

AF8: May WtW grantees enter into a fixed unit price (a.k.a. single unit price) contract with subrecipients for training or services?

A grantee may enter into a fixed unit price contract or any other type of contract or agreement as long as the appropriate competitive procurement procedures are followed, and costs are properly reported on the appropriate line(s) of the Quarterly Financial Status Report. As feasible, grantees are encouraged to utilize performance-based contracting, which bases payment upon desired outcomes. Be advised that regarding charges to administrative costs, the regulatory definition at 20 CFR 645.235 has been revised especially with regard to subrecipients and vendors. Using a single unit price contract does not absolve the grantee from adherence to the WtW regulations at '645.230, and the respective OMB Cost Principle Circulars. The latter require in general that costs be allocated to a particular cost objective in accordance with the relative benefits received.

AF9: May performance-based contracts be used in the WtW Program?

Yes. Grantees (and subgrantees) may use performance-based contracting. Cost reimbursement contracts, fixed price agreements, and fixed unit price performance-based contracts are among the options available to the contracting entity. 20 CFR 645.230(a)(3) requires that contracts or vouchers for job placement services must include a provision to require "that at least one-half (2) of the payment occur after an eligible individual placed in the workforce has been in the workforce for six (6) months.” This requirement under WtW would lend itself to performance-based contract methods. Generally, a performance-based contract is focused on specific, measurable outcomes upon which payment is based, e.g., placements, retentions. Essentially, under WtW, grantees determine the contracting method that best meets their needs in accordance with the grantee's procurement procedures.

For reporting purposes, WtW expenditures must be categorized as administrative, program or federal technology expenditures regardless of the contracting method(s) used. Relatedly, the definition of a WtW administrative cost has been revised. The WtW regulations characterize costs of administration as the allocable portion of necessary and allowable costs associated with those specific functions identified in paragraph (c)(1) of section 645.235 for the administration of the WtW Program and which are not the general management and administration of the WTW related to the direct provision of services to participants. Accordingly, at 20 CFR 645.235(d)(1), only that portion of the WtW grantee’s costs that are associated with the performance of the administrative functions described in the list at 20 CFR 645.235(c)(1) and awards to subrecipients or vendors that are solely for the performance of these administrative functions are classified as administrative costs. All other costs are considered to be for the direct provision of WtW activities and are classified as program costs.

Audit requirements relating to performance-based contracts at the Federal level provide that governmental and non-profit contractors are covered by the Single Audit Act requirements (OMB circular A-133). Commercial organizations which are WtW subrecipients may choose to have an organization-wide audit or a program-specific financial and compliance audit when expenditures are above the threshold amount of $300,000 specified in Circular A-133. Organizations other than the Federal government which provide funding for WtW activities may have audit requirements of their own.

AF10: If in preparing its grant proposal, an applicant for a competitive grant gets commitments from various partners to provide certain activities/services and names those partners in its grant application, is it then necessary for the applicant to go through a procurement process to select the providers subsequent to grant award?

ETA’s selection of an applicant does not constitute a blanket endorsement of the listed partners/providers or the process by which they were selected. ETA in its evaluation and selection process assumes that the partners/providers listed in the applicant’s submission were or will be selected in accordance with the applicable procurement rules and other requirements. Listing the names of partners/providers in its grant application does not relieve an applicant from compliance with these requirements.

Administrative and Fiscal: Match Questions (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL15-01_AFM.pdf)

ADMINISTRATIVE AND FISCAL QUESTIONS
MATCH

AFM1: What matching funds are required of WtW formula and competitive grant recipients?

For the formula grant portion of the program, States must spend $1 of non-Federal funds for every $2 they receive in Federal funds.

Applicants for competitive grants are not required to match Federal funds, but collaboration with other organizations and the leveraging of outside resources was strongly encouraged in the application process. Competitive grant applicants had to indicate, in the project narrative of the application, what resources they would be contributing to their projects so that ETA could determine how well competitive grant funds would "leverage" local resources.

AFM2: How much of the State match expenditures can be in the form of third party in-kind contributions?

As of April 13, 2001, the date that the WtW Regulations became effective, no more than 75% of the total match expenditures may be in the form of third party in-kind contributions. Before that date, no more than 50% of the total match expenditures could be in the form of third party in-kind contributions. (20 CFR 645.300(b)(3))

AFM3: If a foundation, faith-based organization, etc. gives money to a program participant to pay for supportive services, is that cash or an in-kind match? What if such a group provided 10 free slots for WtW participants in a class that attendees normally pay? Since the training has a dollar value, could that be considered a cash contribution?

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 CFR 645.300. If a third party donates time (e.g. a 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, the local workforce investment area, or other WtW sub-recipient - and it would also be a cash match. Please see question and answer AFM1 above regarding the limitation on expenditures of in-kind contributions.

AFM4: Does the 15 percent administrative cost limitation apply to expenditures of matching funds?

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.

AFM5: Do the expenditures of a local entity/service provider, other than the expenditures of the local workforce investment board, count as cash or as an in-kind match?

If a local entity is a WtW subgrantee or subcontractor of the local workforce investment board, 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 local workforce investment board, 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 local workforce investment board and the local entity's program - for example, the costs incurred on behalf of individuals for which the local workforce investment board 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 local workforce investment board. While the primary records for these costs may be the records of the local entity, the local board 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.

AFM6: Does a State have to assert that it will provide at least the minimum required match amount to qualify to get its full planning estimate? Or, can it advise DOL that it has only a portion of its required minimum available for expenditure during Fiscal Year (FY) 98 and assure that it will try to obtain the rest for expenditure during the full period in which both the Federal and the match funds may be expended?

In order to get its full FY 98 grant amount, a state had to assert that it would provide at least the minimum required match amount (e.g. $2.5 million in match for its $5 million grant amount). It did not have to assert that it would expend this level of match in the year of the award, but it did need to promise this amount of match for the period over which it would spend the federal funds. Through the Department of Labor Appropriations Act of 2001 (PL-106-554), grantees were able to request an

extension of up to two years to the period of time they could expend WtW grant funds, affording the grantee additional time to accumulate the required amount of matching expenditures.

AFM7: Can WtW matching requirements be met by using non-federal matching funds in excess of the 25% minimum required under the Adult Education Act?

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.

AFM8: 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?

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, when the employer provides benefits and/or supportive services to WtW eligible individuals that are in addition to those which are customarily provided to its employees, these costs may be counted toward the match.

AFM9: If a WtW program receives a fee for a service provided, can it count as cash match for the formula WtW program?

No. It would be considered WtW program income.

AFM10: The Community Development Block Grant (CDBG) program, at 42 U.S.C. 5305 (a)(9), permits the use of CDBG funds to pay the non-federal share of a federal grant program undertaken as part of activities assisted under the CDBG program. Other federal grant programs may have similar provisions. Can costs paid for with CDBG funds for CDBG activities that would be allowable WtW activities be counted as match for the WtW formula grants?

No. States are expressly prohibited from using other federal funds as sources of WtW matching funds, despite the general authority in the CDBG program or similar authority in other laws. The Act, at '403(a)(5)(A)(i)(I), specifies that a State's entitlement to WtW funds cannot exceed, "2 times the total of [match] expenditures by the State (excluding qualified State expenditures [TANF MOE] and any expenditures described in subclause (I), (II), or (IV) of Section 409(a)(7)(B)(iv)." Subclause (I) excludes "any expenditures from amounts made available by the Federal Government.” This prohibition would cover everything from funds provided by the

Appalachian Regional Commission to grants awarded by the National School-to-Work Office.

AFM11: The Job Access and Reverse Commute Program has a 50% match requirement. WtW is listed as one of the Federal programs that can be used to meet this match. How can this be true when WtW has a specific provision preventing it from being used as match for any other Federal program?

The Social Security Act specifically prohibits the use of WtW grant funds and State WtW matching funds to fulfill match requirements under TANF or any other Federal law (Section 403(a)(5)(C)(vi) of the Social Security Act). However, when Congress passed the Transportation Equity Act for the 21st Century (TEA-21), the law that created the new Job Access and Reverse Commute Program, they specifically indicated that the prohibition on WtW as match did not apply to the Job Access Program, (Section 3037(h)(2)(B) of the TEA-21, as amended by section 9009(w) of the TEA-21 Restoration Act).

Training and Employment Guidance Letter (TEGL) No.13-99 (5/26/00) available at http://wtw.doleta.gov/linkpages/tegltein.asp was published jointly by the Departments of Labor, Transportation and Health and Human Services. The document provides guidance on the use of TANF, Job Access and Reverse Commute and WtW funds for transportation services to welfare recipients and other TANF and WtW eligible individuals.

AFM12: Since passage of the technical amendments that allow match to be spent over the same five year period as the federal grant funds, will the annual reconciliation and grant adjustment process described at 20 CFR 645.315 still occur?

No. The requirements at 20 CFR 645.315(a) were removed from the Final Rule. However, ETA plans to review the financial reports submitted by States to assess whether or not the rate of match expenditure in relation to the 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.

Administrative and Fiscal: Reporting Questions (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL15-01_AFR.pdf)

ADMINISTRATIVE AND FISCAL QUESTIONS
REPORTING

AFR1: Is the State required to report expenditures paid for with the Governor’s 15% funds separately from expenditures paid for with 85% funds distributed to Local Boards?

Yes, they must be reported separately.

AFR2: What reporting requirements will apply to third-party cash match at the Local Board level?

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

AFR3: If a State chooses to award more than 85% of its funds to Local Boards 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?

The Act requires States to allocate NOT LESS THAN 85% to the Local Boards by formula. Where a State passes through more than 85% BY FORMULA to the Local Boards, 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 Local Boards (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.

AFR4: If a State has a Local Board(s) that would receive less than $100,000 under the formula distribution process and the State decides to award that amount to the Local Board rather than use it for other purposes, should these funds be reported as formula 85% funds or as non-formula 15% funds?

Local Boards which would receive less than $100,000 by formula cannot be awarded funds under the 85% formula distribution process. 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 Local Boards that could not receive them through the formula distribution process, said funds must be tracked and reported as Governor’s 15% funds.

AFR5: What kind of data does the Department require on the WtW Cumulative Quarterly Financial Status Report?

The WtW Formula Grant Cumulative Quarterly Financial Status Report requires the following data:

(1) Data for the grant as a whole on total match expenditures and the third-party in-kind portion of match (75% maximum); total Federal, administrative, information technology, and program expenditures; a breakout of Federal expenditures for the primary eligibles and other eligibles (30% maximum); and lines for unliquidated and unobligated funds;

(2) Expenditures of the Governor’s 15% funds, including a breakout for expenditures for the Federal special rule distribution for Local Areas’ allocations which fall below the $100,000 threshold; and administrative, information technology, and program expenditures;

(3) Expenditures of the formula pass-though funds (85% minimum), including a breakout for administrative, information technology, and program expenditures;

(4) Program income earned and expended;

(5) Total number of participants served in the primary eligibles and other eligibles (30% maximum of grant award) categories, with breakouts for eligibility sub-categories; total number of participants terminated in the primary eligibles and other eligibles (30% maximum of grant award) categories; total number of participants placed in unsubsidized employment after entering WtW, employed in unsubsidized employment when entering WtW, and placed in subsidized employment after entering WtW, with breakouts for participants working greater than or equal to 30 hours per week and participants working less than 30 hours per week at placement or program entry; total number of participants retained 6 months (2 quarters) in unsubsidized employment; and earnings gained in 6 months (2 quarters) following placement in unsubsidized employment; and

(6) Gender, age, race/ethnicity, and voluntary disability data for participants served.

The WtW Competitive Grant Cumulative Quarterly Financial and Participant Status Report requires all of the same data elements required on the WtW Formula Grant Cumulative Quarterly Financial and Participant Status Report, with the exception of data elements about expenditures for match, Governor’s 15% funds, and formula pass-though funds (85% minimum).

WtW reporting formats and instructions, which became effective in the quarter ending June 30, 2001, are available on the WtW web site at http://wtw.doleta.gov/linkpages/tegltein.asp.

AFR6: How is retention defined for WtW reporting purposes?

Retention is defined as when an eligible individual is placed in unsubsidized employment and remains in the workforce for six months with earnings in the two consecutive quarters following the quarter in which the participant was either placed in unsubsidized employment or entered the WtW program already employed in unsubsidized employment. Participants can hold different jobs during these three

quarters as long as they can demonstrate a six-month attachment to the workforce, with earnings from unsubsidized work in the base/placement quarter and each of the two subsequent retention quarters.

AFR7: How should the costs for computer hardware and software be reported?

Generally, computer hardware and software costs should be reported either as administrative costs or program costs depending upon their function under the new administrative cost definition at 20 CFR 645.235. Administrative hardware or software costs might include information technology systems for personnel, procurement, purchasing, payroll, etc. Programmatic hardware or software costs might include information technology systems for job readiness, case management, training activities, etc.

However, under 20 CFR 645.235(a)(3), the costs of computer hardware and software needed for tracking and monitoring of WtW program, participant, or performance requirements are reported separately from administrative and program costs. These tracking and monitoring costs should be reported on the “Federal Technology Computerization Expenditures” line, not on the program or administrative lines, and are excluded from the 15% administrative cost limit calculation.

In all cases, the costs of computer technology must be allocated to the primary eligibles and other eligibles (30% maximum) cost categories.

AFR8: How do multi-site competitive grantees report information on subgrantees?

Each grantee is required to submit one single report per grant award. For multi-site grants, this report should be a roll-up of their individual site reports. Although grantees are not required to submit subgrantee reports under the terms of the grant, Grant Officer Technical Representatives may request that grantees submit paper copies of site-specific reports as well.

AFR9: Can a WtW participant be served with both WtW formula and competitive funds? Can the person be counted in the WtW formula management information system (MIS) and in the WtW competitive MIS?

Yes, a participant may be enrolled in multiple WtW formula and/or competitive grants, as well as in other programs, at the same time. The purpose for co-enrollment should be to avoid unnecessary duplication of services in a particular locale. If the individual is eligible for, enrolled in, and being served by both programs, then they should be counted in both MIS systems, as appropriate. For instance, if two WtW grantees each contributed funds/services toward a participant’s placement in unsubsidized employment, both grantees should report that participant’s placement on their reports.

AFR10: If a competitive grantee hires a WtW participant as a program employee, and the salary is paid from the grantee’s competitive grant, is this placement counted as subsidized or unsubsidized employment?

The situation described above is a direct hire of a new employee, and is therefore considered an unsubsidized placement, presuming the WtW participant is treated the same as other employees by the employer.

AFR11: Please provide a definition for “termination.”

The WtW legislation and regulations do not provide a definition for “termination,” because the concept of termination is not central to the WtW program design or intent. The goal of the WtW program is to provide an extensive array of long-term services to individuals to enable them to obtain and retain employment and to achieve self-sufficiency, and WtW grantees are encouraged to keep participants in their programs for as long as is feasible, necessary, and helpful for participants.

However, the WtW reporting instructions (see http://wtw.doleta.gov/linkpages/tegltein.asp ) do provide a definition for what constitutes “participant served” status, and we use this definition to understand what constitutes a termination. A WtW participant is considered an active participant being served so long as (s)he is receiving one or more of the WtW allowable services (job readiness, vocational educational training or job training, community service, work experience, job creation through public or private sector employment wage subsidies, on-the-job training, job placement, post-employment services, job retention or support services, and individual development accounts). Other services which also constitute participant served status are in-depth assessment (e.g., assessment beyond that which is required for intake and eligibility determination purposes), development of an individualized service strategy, and case management services. Intake, initial assessment, and eligibility determination are not services which constitute participant served status.

Participants may cease to receive services which constitute participant served status for a number of reasons. An individual may voluntarily leave the program and not remain in touch with the grantee, despite the grantee’s repeated efforts to contact and retain him/her in the program, or an individual may successfully complete his/her program of services and graduate from the WtW program. An individual may be asked to leave the WtW program due to disciplinary issues or other severe problems. In any of these scenarios, if the participant is no longer actively engaged in one or more of the allowable WtW activities, or is no longer receiving in-depth assessment, development of an individualized service strategy, or case management services, the grantee is required to have a written termination policy in place and should terminate the participant according to that policy. For example, grantees could establish a termination policy which provides that if an individual has not returned for services or responded to follow-up attempts for ninety days, then the individual will no longer be reported as a participant served, and will be counted on the appropriate quarterly report as a termination. Ninety days is merely a suggested time frame; grantees may establish shorter or longer time frames before reporting an individual as a terminee. Keep in mind, however, that shorter time frames may be disadvantageous, as grantees must re-determine eligibility for terminated individuals who later return for services. Longer time frames may also be disadvantageous, as large numbers of inactive or non-responsive individuals overburden caseworkers’ caseloads, and unreasonably lengthy inactive status periods before reporting individuals as terminees may also raise concerns during reviews or audits.

Eligibility Questions (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL15-01_E.pdf)

ELIGIBILITY QUESTIONS

E1: What are the current eligibility criteria under the primary eligibility provision (which replaces the 70% provision) that must be met in order to serve individuals with WtW funds?

An individual may be served under this provision if :
• S(he) is currently receiving TANF assistance under a State TANF program, or its predecessor program, for at least 30 months, although the months don’t have to be consecutive; or • S(he) will become ineligible for assistance within 12 months due to either Federal or State-imposed time limits on the receipt of TANF assistance. This criterion includes individuals (as well as children of noncustodial parents) exempted from the time limits due to hardship under 408(a)(7)(C) of the Act or due to a waiver because of domestic violence under section 402(a)(7) of the Act, who would become ineligible for assistance within 12 months without the exemption or waiver; or
• S(he) is no longer receiving TANF assistance because s(he) has reached either the Federal five-year limit or a State-imposed time limit on receipt of TANF assistance (section 403(a)(5)(C) of the Act); or
• S(he) is a noncustodial parent of a minor child and is:
• Unemployed, underemployed, or having difficulty paying child support; and
• In compliance with the terms of a written or oral personal responsibility contract; and
• At least ONE of the following applies:
• the minor child (or custodial parent) meets the long-term recipient of TANF requirements; or
• the minor child is receiving or eligible for TANF benefits and services; or
• the minor child received TANF benefits and services during the preceding year; or
• the minor child is receiving or eligible for assistance under the Food Stamp Program, Supplemental Security Income Program, Medicaid, or Children’s Health Insurance Program.

Please refer to 20 CFR 645.212, 645.214 and 645.215, (published at 66 Fed. Reg. 2690 (Jan.11, 2001)) for all primary eligibility criteria information and related topics.

E2: In the current WtW Regulations, the 30% category is now referred to as the “other eligibles” provision. What is the criteria for eligibility under this provision?

Any individual may be served under this provision if s(he):

• Is currently receiving TANF assistance (as described in 645.212(d) and either:
o has characteristics associated with, or predictive of, long-term welfare dependence, such as having dropped out of school, teenage pregnancy, or having a poor work history (States in consultation with the operating entity, may designate additional characteristics associated or predictive, of long-term welfare dependence); or has significant barriers to self-sufficiency, under criteria established by the local board or alternate administering agency;

• was in foster care under the responsibility of the State before 18 years of age and is between the ages of 18-24 at the time of applying for the WtW program. Eligible individuals include those who were recipients of foster care maintenance payments as defined in section 475(4) under part E of the Social Security Act;

• is a custodial parent with income below 100 percent of the poverty line, determined in accordance with the most recent HHS Poverty Guidelines established under section 673(2) of the Omnibus Budget Reconciliation Act of 1981(Pub. L. 97-35), including any revisions required by such section, applicable to a family of the size involved; or

• is a custodial parent with a disability whose own income is below 100 percent of the poverty line but who is a member of a family whose income does not fall below 100 percent of the poverty line.

At 20 CFR 645.213(c)(2), income is defined as total family income for the last six months, exclusive of unemployment compensation, child support payments, and old-age and survivors benefits received under section 202 of the Social Security Act.

Please refer to 20 CFR 645.213 [published at 66 Fed. Reg. 2690 (Jan. 11, 2001)] for more complete information regarding the “other eligibles” provision.

E3: What constitutes “TANF assistance” for the purposes of determining an individual eligible for WtW? How do we apply this definition under the primary eligibility provision at 20 CFR 645.212(a)(1) and (a)(2), and for the purposes of eligibility under the other eligibles provision at 20 CFR 645.213(a)(1) and (a)(2)? Additionally, what WtW services does the TANF program consider to be “WtW cash assistance,” and how does receipt of these services in a WtW program affect a WtW participant’s TANF time limit?

a. What constitutes “TANF assistance” for the purposes of determining an individual eligible for WtW? How do we apply this definition under the primary eligibility provision at 20 CFR 645.212(a)(1) and (a)(2), and for the purposes of eligibility under the other eligibles provision at 20 CFR 645.213(a)(1) and.(a)(2)?

HHS has issued a definition of the term “TANF assistance” for use in the TANF program, at 45 CFR 260.31, published in the Federal Register on April 12, 1999 (64 FR 17720). HHS defines the term “TANF assistance” generally to mean cash payments, vouchers, and other forms of benefits to meet a family’s basic needs for food, clothing, shelter, etc. Transportation and child care services for unemployed families are also considered TANF assistance under the HHS definition. Receipt of TANF assistance as defined by HHS for the TANF program is what triggers the applicability of TANF time limits and work requirements. HHS excludes the following benefits and services from their definition of “TANF assistance”: non-recurrent short-term benefits, wage subsidies to employers, supportive services for employed families, child care for employed families, transportation for employed families, counseling services, case management services, and other job retention and employment-related services that do not provide basic income support.

However, for the purposes of determining an individual eligible for WtW either as a long-term TANF recipient under 20 CFR 645.212(a)(1) and (a)(2), or as a TANF recipient with characteristics associated with or predictive of long-term welfare dependence, or with significant barriers to self-sufficiency as established by the Local Workforce Investment Board, under 20 CFR 645.213(a), we have chosen not to adopt HHS’ definition of “TANF assistance” at 45 CFR 260.31. Rather, for the purposes of determining if a person is receiving TANF assistance as a condition of WtW eligibility under 20 CFR 645.212(a) or 645.213(a), we consider the phrase “TANF assistance” to mean any TANF benefits and services for the financially needy according to the appropriate income and resource criteria (if applicable) specified in the State TANF plan (see the WtW regulations at 20 CFR 645.212(d)). The funding sources for the TANF benefits and/or services an individual receives may be either Federal TANF funds or State Maintenance of Effort (MOE) funds expended in the State TANF program. Funds expended from a State’s separate State program (i.e., outside of the requirements of the primary State TANF program) are not considered TANF assistance for the purposes of determining an individual eligible for WtW. However, for all WtW eligibility categories related to TANF receipt, individuals who are receiving TANF diversion payments and/or diversion services are considered recipients of TANF assistance and may be determined eligible for WtW if they meet all other applicable eligibility criteria.

Please note that the WtW program considers “TANF recipient” to mean both the head-of-household on the TANF case as well as any additional persons listed by the TANF agency as recipients on the head-of-household’s case.

Thus, our definition of “TANF assistance” for WtW eligibility is broader in scope than the HHS

definition for the TANF program. The intended result of our broader definition is that more individuals will qualify as eligible for WtW, as the receipt of TANF services (e.g., case management or child care), in addition to receipt of TANF benefits (e.g., recurrent cash payments) now counts toward our definition of TANF assistance receipt, and toward our calculation of an individual’s length of TANF receipt. For instance, a current TANF recipient who received twenty months of TANF cash payments, and who subsequently received ten months of TANF child care while no longer receiving TANF cash payments, is now eligible to be served as a long-term TANF recipient under 20 CFR 645.212(a)(1) of our general eligibility provision, because we consider them to have received TANF for a total of thirty months. Similarly, current TANF recipients who are receiving only TANF services (e.g., case management or child care), but no TANF benefits (e.g., recurrent cash payments), may now meet the TANF receipt criterion under 20 CFR 645.213(a).

It should be noted that if an individual receives both TANF benefits and services concurrently, WtW grantees may not count the time receiving benefits and the time receiving services separately. For instance, if an individual received TANF cash payments and TANF case management concurrently for ten months, the individual has received TANF assistance according to our definition for a total of ten, not twenty, months. However, as noted above, if an individual receives TANF services after the termination of his/her receipt of TANF cash benefits, the months s(he) received TANF services alone may be considered in addition to the months s(he) received TANF cash benefits for the purposes of calculating his/her total length of receipt of TANF assistance.

Typically, when TANF offices provide WtW grantees with data on an individual’s length of TANF receipt, they provide only the number of months of TANF cash benefits that the individual has received. Therefore, when WtW grantees ask TANF offices for this data, they should request the number of months an individual has received cash benefits, and the number of months the individual has received TANF services while not concurrently receiving TANF cash benefits.

Lastly, it should be noted that HHS measures TANF receipt in months, and we have adopted this method for the WtW program. Therefore, an individual need not receive TANF assistance every day of a month to qualify as having received a month of TANF assistance. Rather, if an individual received two weeks of child care in a month, or received one week of TANF cash payments in a month, we consider both scenarios to constitute one month of TANF assistance receipt. Similarly, there is sometimes a lag in time between when an individual first applies for TANF and when they are enrolled in the TANF program. Some States provide individuals with TANF assistance retroactive to the date of their application to TANF, rather than beginning the provision of assistance as of the month of the individual’s actual enrollment. In this scenario, for instance, an individual who applied for TANF in January may not have been determined eligible and enrolled in the TANF program until March. States which choose to provide TANF assistance retroactively will provide such individuals with assistance for the months of January, February, and March in the month of their enrollment (March). For the purposes of determining length of TANF assistance receipt for WtW eligibility, this individual has received TANF assistance for three months, not one month, regardless of the fact that the three months’

worth of assistance was provided in one month. WtW grantees should consult with their State TANF contacts to determine if a retroactive payment policy applies in their State.

For additional information on this topic, please review the WtW desk tool entitled “Defining and Calculating TANF Assistance for Determining WtW Eligibility,” available on the WtW web site at http://wtw.doleta.gov.

b. What WtW services does TANF consider to be “WtW cash assistance,” and how does receipt of these services in a WtW program affect a WtW participant’s 60-month time limit on the receipt of federally-funded TANF assistance?

HHS has issued a definition of the term “WtW cash assistance” for use in the TANF program, at 45 CFR 260.32, published in the Federal Register on April 12, 1999 (64 FR 17720). The WtW-funded benefits and services defined as “WtW cash assistance” under TANF have an impact on the accrual of months by WtW participants against the 60-month time limit on the receipt of federally-funded TANF assistance. Benefits and services not included in the definition of “WtW cash assistance” do not affect participants’ TANF time limits. As defined in the TANF rules at 45 CFR 260.32, WtW cash assistance includes the following WtW-funded benefits which are directed at basic needs: cash payments, vouchers, and other forms of benefits to meet a family’s basic needs for food, clothing, shelter, etc. WtW-funded benefits are considered WtW cash assistance under TANF when they are provided in the form of cash payments, checks, reimbursements, electronic fund transfers, or any other form that can be legally converted to cash.

Benefits and services which are excluded from HHS’ definition of “TANF assistance” are also excluded from its definition of “WtW cash assistance” (see part (a) of this question, above, for a list of benefits and services excluded from the HHS definition of “TANF assistance”). For instance, HHS would not consider income earned from a job that meets the Fair Labor Standards Act (FLSA) definition of “employment” as “TANF assistance” or “WtW cash assistance.” In addition, while supportive services (such as transportation and child care) provided to unemployed families are included in HHS' definition of TANF assistance, they are excluded from the HHS definition of WtW cash assistance. Thus, receipt of such WtW-funded services will not affect a participant's TANF time limit.

WtW benefits and services which would likely be considered “WtW cash assistance” under the HHS definition include: (1) training support payments paid to individuals engaged in pre- or post-employment training activities (see Q&A AA13 for further discussion of training support payments); and (2) payments to individuals conditioned on their participation in activities such as work experience or community service (which might be called “wages” even though the activities do not meet the FLSA standards for “employment”).

Please note that if a WtW participant is receiving TANF assistance (as it is defined by HHS for the

purposes of the TANF program) from a TANF agency, and is concurrently receiving WtW cash assistance from a WtW grantee, there is not a “double-count” against the participant’s TANF time limit. For example, if a participant receives six months of TANF cash payments from a TANF agency, and concurrently receives six months of training wage payments from a WtW grantee, the TANF program considers the participant to have received six, not twelve, months of assistance as it relates to the participant’s TANF time limit. If, however, the participant receives six months WtW cash assistance in the form of training wage payments from a WtW grantee while not concurrently receiving benefits or services defined as “TANF assistance” from the TANF agency, the participant's receipt of the six months of training wages would count against his/her TANF time limit.

Additionally, please note that 45 CFR 264.1(a)(3) of the TANF regulations affirms that a State may use WtW funds to provide WtW cash or non-cash assistance to a family that is ineligible for TANF solely because it has reached the 60-month time limit. This is permitted by section 403(a)(5)(C)(v) of the Social Security Act.

For additional information about definitions of the terms “TANF assistance” and “WtW cash assistance” as they apply to the TANF and WtW programs, please see the preamble to the WtW regulations (66 FR 2695, 1/11/01, pages 2692 and 2693), as well as the regulations themselves at 20 CFR 645.212(d). In addition, please see the TANF regulations at 45 CFR 260.31 and 260.32 and the applicable preamble language at 64 FR 17754-17763.

E4: When is a TANF exhaustee eligible for WtW? Does the exhaustee have to go through a process that verifies that s(he) would otherwise be eligible for TANF?

Under the primary eligibility provision (which replaces the 70% provision), 20 CFR 645.212(b), an individual, who would otherwise be eligible for TANF but is no longer receiving TANF because s(he) has reached either the Federal five-year limit or a State-imposed time limit on receipt of TANF assistance, is eligible for WtW services.

There is no specific time frame in which a TANF exhaustee must be found eligible for the WtW program. However, for determining eligibility under 645.212(b), the WtW grantee must verify that the individual would otherwise be eligible for TANF.

In addition, a TANF exhaustee may be eligible to receive WtW services under the “other eligibles” provision (formerly the 30% provision) if s(he) was in foster care under responsibility of the state before s(he) attained age 18 and is between the ages 18 and 24 when applying for WtW; is a custodial parent with income below 100 percent of the poverty line or is a custodial parent with a disability whose own income falls below 100 percent of the poverty line but who may be a member of a family whose income does not fall below 100 percent of the poverty line. Since the eligibility criteria at 645.213(c)(1) and (c)(3) described here are not incumbent upon TANF receipt, the WtW grantee would not be required

to verify that the individual would otherwise be eligible for TANF.

For more detailed information about the WtW eligibility requirements for TANF exhaustees under the primary eligibility provision, please refer to Question and Answer E1 of this section; and Question and Answer E2 for the eligibility requirements under the “other eligibles” provision. Additionally, please refer to 20 CFR 645.212, 645.213 and 645.214 (66 Fed. Reg. 2690 (Jan. 11, 2001)).

E5: Does a WtW grantee have to target services (according to the 30 maximum expenditure provision/all other expended funds) when expending matching funds?

No. Match needs only to be expended for WtW allowable activities for any WtW eligible individuals.

E6: Does there need to be a TANF custodial parent in order for a noncustodial parent to be eligible under the primary eligibility provision, or is a child-only TANF case sufficient?

Under the primary eligibility provision (which replaces the 70% provision) at 20 CFR 645.212, the status of the custodial parent as a long-term TANF recipient is not the only way in which the noncustodial parent may be determined eligible for WtW services. However, in accordance with 645.215(a), operating entities must give preference to those noncustodial parents who establish their eligibility on the basis of the custodial parent’s or the minor child’s status as a long-term TANF recipient over other noncustodial parents.

Please refer to Question and Answer E1 of this section for what eligibility criteria must be met in order to serve a noncustodial parent with WtW funds and 20 CFR 645.212, 645.214 and 645.215 (66 Fed. Reg. 2690 (Jan. 11, 2001)). Note that noncustodial parents are no longer served under the “other eligibles” provision at 20 CFR 645.213 (which replaces the 30% category).

E7: Does the barrier "requires substance abuse treatment for employment" include individuals in recovery who continue to require on-going treatment?

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

E8: Can a Workforce Investment Board or alternate administering entity serve an individual who resides within the geographical boundaries of another Workforce Investment Board or alternate administering entity of the same State?

The law and regulations do not specify that individuals served by WtW in a certain State must reside within the geographical boundaries of a specific Workforce Investment Board or alternate administering entity. The manner in which this is accomplished is at the discretion of the local entities involved.

E9: Can a Workforce Investment Board or alternate administering entity serve an individual who resides in another State?

According to the Social Security Act, an entity that operates with WtW funds must expend funds for the benefit of recipients of assistance of the State in which the entity is located. States may enter into agreements to facilitate the provision of services to eligible WtW participants of other States, especially noncustodial parents who may not live in the same State as their children.

E10: How is participant eligibility determined in community saturation projects?

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.

E11: Does the primary eligibility provision for hard-to-employ individuals have a minimum expenditure requirement? If yes, does it apply to competitive grants?

The WtW regulations, at 20 CFR 645.211 describe that both formula and competitive operating entities may not spend more than 30 percent of the WtW funds allotted to or awarded them to assist individuals who meet the “other eligibles” provision at 20 CFR 645.213. The statute no longer specifies a 70 percent minimum expenditure requirement for the primary eligibility provision. DOL interprets the statute to mean that all other funds (other than the 30 percent) expended by either formula or competitive grantees must be spent on individuals enrolled under the primary eligibility category. Thus, operating entities are still required to target WtW funds to those who meet the primary eligibility criteria, but there is not a 70% minimum level.

Please see further details on this topic in the Preamble discussion to 20 CFR 645.211, (66 Fed. Reg. 2690, pages 2690 and 2713 (Jan.11, 2001)) and to Question and Answer AF1 of the Administrative and Fiscal (General) section.

E12: What does the phrase “certain individuals who appear likely to become long-term recipients are also eligible” mean with regard to eligibility?

In some summaries of the WtW program, the phrase "certain individuals who appear likely to become long-term recipients are also eligible" has been used to refer to the individuals eligible for the program under the 30% provision of the regulations. This provision of the regulations outlined the eligibility criteria for "individuals with characteristics associated with long-term welfare dependence.” The WTW regulations at 20 CFR 645.213 now describes the current requirements for serving those individuals as the “other eligibles” criteria.

E13: If a person qualifies for WtW, is enrolled, then leaves the program, and wants to return

to the program, is an eligibility redetermination required?

Yes. If a participant terminates from WtW, the eligibility of the individual would need to be redetermined for him/her to enroll again under WtW.

E14: Individuals may be sanctioned by the TANF agency for a variety of reasons including failure to participate in a work activity. Can individuals who have been sanctioned by the TANF agency at the time they apply for WtW be deemed eligible for WtW?

Yes, under some circumstances. Prior to the new definition of TANF assistance at 645.212(d), family members who were no longer receiving cash assistance due to a sanction were not eligible to participate in the WtW program. Now, under the expanded WtW definition of “TANF assistance” that applies to WtW eligibility, if any member of the family receives some type of TANF benefit, the family member may be served under the “other eligibles” category at 20 CFR 645.213(a). Additionally, the family member may be eligible to be served under the primary eligibility category at 20 CFR 645.212(a)(1) if (s)he meet the 30-month requirement at 645.212(a)(1), even if the family no longer receives ongoing TANF cash assistance due to a sanction. This includes child-only cases.

Conversely, if the sanction results in the termination of all TANF benefits and services for the family, then the individual would not be eligible, under the criteria at 20 CFR 645.212(a)(1) or 20 CFR 645.213(a), to enroll in the WtW program. However, the family may still be eligible for WtW services if it meets the requirements at 645.213(c)(1) (a custodial parent with income below the poverty level), since the eligibility criteria at 645.213(c)(1) is not dependent upon TANF receipt.

For more detailed information about the expanded WtW definition of TANF assistance, please consult Question and Answer E3 of this section and the Federal Regulations Preamble language, 2690, p. 2692. For information on the eligibility requirements under the primary eligibility provision, please refer to Question and Answer E1 of this section; and Question and Answer E2 for the eligibility requirements under the “other eligibles” provision. Additionally, please refer to 20 CFR 645.212 and 645.213 (66 Fed. Reg. 2690 (Jan. 11, 2001)).

E15: Do the months that a minor child receives TANF benefits and services while on her mother's case count toward the 30 months of TANF receipt for the purposes of eligibility determination under section 645.212(a)(3) the regulations?

Yes, under the following circumstance: a young mother is on her mother's case and then she establishes her own case when she becomes 18 years of age. The number of months when she received nonconcurrent TANF benefits and services as a minor child, from the date of birth of her own child, may be included in the calculation of the 30 month criteria. For purposes of WtW eligibility, recipients of

assistance are interpreted to be the person who is the caretaker, or head of the case. This exception noted above is made as a young mother would normally have begun to establish her own eligibility at the birth of the child.

E16: Is self-attestation acceptable as an eligibility and verification requirement to establish the existence of significant barriers to self-sufficiency and/or characteristics associated with or predictive of long-term welfare dependence?

The mechanism through which a State and/or local area determines whether a potential WtW participant has barriers to self-sufficiency and/or characteristics of long-term welfare dependence is prescribed neither in the WtW statute or regulation nor is it determined by the Department of Labor. The design of such a mechanism is at the discretion of the individual States and/or local areas. Certainly, whenever documents are made available that can verify eligibility determinations made in accordance with 645.213 (a)(1) and (2), states and/or local operators are encouraged to incorporate such documents as part of the case file. At the same time, we acknowledge that requiring excessive documentation and verification, particularly from the potential participant and her/his family, can become unduly burdensome and could present a significant deterrent to enrolling participants and providing services to families. Self-attestation has been used with success by some WtW operating entities for identifying and documenting the following conditions: teen pregnancy, paternity of a minor child, family size, unemployment status, underemployment status, and disability status.

Please see Question and Answer E17 below which speaks to the use of self-attestation when establishing receipt and length of time on TANF and Question and Answer E20 that describes scenarios involving the determination of eligibility for NCPs in which the use of self-attestation has been beneficial for some local operating entities.

E17: In cases where there is delay or difficulty in verifying the receipt/length of TANF assistance, can an operating entity enroll an individual based on self-attestation?

The regulations at 20 CFR 645.214(b)(1) state that an operating entity "must include arrangements with the TANF agency to ensure that a WtW eligibility determination is based on information, current at the time of the WtW eligibility determination, about whether an individual is receiving TANF assistance, the length of receipt of TANF assistance, and when an individual may become ineligible for assistance, pursuant to 20 CFR 645.212 and 645.213 of this part (section 403(a)(5)(I)(A)(ii)(dd)).” An individual’s receipt of TANF assistance is at the core of determining their eligibility for WtW services at 645.212(a)(1) and (2) and 213(a). For many operating entities, most individuals are still determined eligible for WtW according to these two criteria. Because of that, in cases where there is difficulty or delay in receiving verification of TANF status from the TANF agency for a particular individual, a State or operating entity is not encouraged to use self-attestation without a written policy that includes

the type of documentation that will be used to verify receipt of TANF until actual verification is received from the TANF agency, along with documentation of the steps taken to request such information. It is the responsibility of States and operating entities to ensure that funds are spent on eligible persons, and to document such determinations. States and operating entities should be aware that in situations where the verification received after enrollment does not support the eligibility determination, the expectation is that the participant would be de-enrolled from the WtW program. Additionally, the costs spent on the participant in this circumstance could be disallowed.

E18: If a WtW participant is taking part in an employment activity, and then loses his/her placement in the employment activity (due to lack of skills, substance abuse problems, lack of child care, transportation issues, etc.), can this person continue to receive WtW-funded post-employment, job retention, and supportive services?

Yes. This participant has been determined eligible for WtW and has been enrolled in an employment activity under WtW; the loss of employment status does not alter the participant’s eligibility for other WtW services. However, in this scenario, the WtW grantee should give special attention to determining and addressing the underlying reasons for the participant’s inability to retain his/her employment activity. If appropriate, the grantee should work to place the participant in another employment activity. If it is determined that a subsequent employment placement is not an appropriate immediate goal, then the grantee should focus on addressing the participant’s needs through job readiness activities, pre-employment vocational educational or job training, and/or job retention and support services. The grantee may also wish to provide the participant with these types of services in combination with participation in a subsequent, part-time employment activity.

E19: Is the noncustodial parents’ eligibility based on the number of months that the custodial parent has received TANF benefits and services or the number of months the child has received TANF benefits and services?

Under the primary eligibility provision at 645.212 (which replaces the 70% provision), the time on- TANF requirement could be applied to either the custodial parent or the minor child. For more detailed information about the primary eligibility provision and what other requirements must be met by noncustodial parents, please refer to Question and Answer E1 of this section. Additionally, please refer to 20 CFR 645.212 (66 Fed. Reg. 2690 (Jan. 11, 2001)).

E20: What kinds of documentation are needed to ascertain eligibility for noncustodial parents?

Section 645.214(c) of the WtW regulations holds the operating entity accountable for ensuring that WtW funds are spent only on individuals eligible for WtW services and to ensure that they have mechanisms in place to determine WTW eligibility for individuals who are receiving TANF. Moreover,

when serving non-custodial parents (NCPs), operating entities are required, under 645.215(a), to give service preference to those noncustodial parents of minor children who are, or whose custodial parents are, long-term TANF recipients. Since the eligibility of noncustodial parents is often contingent on the determination of TANF receipt or eligibility of the custodial parent or minor child, programs operators serving noncustodial parents must ensure that they have adequate mechanisms in place for making NCP eligibility determinations and have developed the kinds of documentation and verification methods that are sufficient to support these determinations.

Although the Department hasn’t developed standards for gathering and maintaining adequate documentation to support determinations of WtW eligibility, it is aware of various effective documentation and verification practices used by States and local entities nationwide and the Department’s WtW staff have observed some of these practices while conducting grantee monitoring visits in the field. A number of these practices that have been developed for documenting the eligibility determinations of noncustodial parents are shared below, incorporated in the following guidance to States and operating entities.

The first requirement in determining an NCP eligible for WtW services, as provided in 645.212 (c)(1)(i), (ii) or (iii), is that s(he) be unemployed, underemployed or having difficulty making child support payments. For purposes of adequately documenting an individual’s unemployment status, an applicant could self-attest that s(he) does not have a job and is able and available for work. Depending on the State’s definition of “underemployed,” an applicant could self-attest to that condition or the operating entity could craft appropriate questions on an application for purposes of determining that condition. Finally, the local office of Child Support Enforcement may be able to assist in providing documentation that an applicant is having difficulty paying child support obligations.

Secondly, for adequately documenting that the noncustodial parent (NCP) applicant meets at least one of the criteria in 645.212(c)(2) (i), (ii), (iii) or (iv), the operating entity could obtain confirmation from the TANF agency, in accordance with an established agreement between the agencies, about the TANF status of the child and/or the custodial parent and the number of months of nonconcurrent TANF benefits and services received; or the types of TANF benefits and services that the minor child is receiving or is eligible for; or those TANF benefits and services received by the minor child in the preceding year. Many WtW operating entities have developed a one-page form that captures all the pertinent information needed from TANF that is completed by both offices and becomes the documentation of eligibility for an NCP’s case file. If an agreement for sharing information has been established, the same method of documentation could be used with the Food Stamp, the Social Security Income (SSI), Medicaid or the Children’s Health Insurance Program (CHIP) offices. Also, the custodial parent may be able to provide current information about her/his family’s receipt of TANF, Food Stamp, SSI, Medicaid or CHIP benefits and services, for purposes of establishing the eligibility of a non-custodial parent. However, in accordance with 645.215(b), operating entities are strongly advised that in order to protect the safety of the custodial parent and minor children, custodial parents are not to be required to cooperate in this regard nor is their cooperation to be a condition for the

NCP’s participation in the program. If this method is pursued, an interview between the case manager and custodial parent is usually held, a similar form is completed (as discussed above) and becomes the NCP’s file record for establishing eligibility. Additionally, and also in accordance with 645.215(b), entities that operate noncustodial parent projects are required to consult with domestic violence prevention and intervention organizations. The dates and contents of such consultations should be documented by the operating entity and maintained for their records. Finally, if none of the above scenarios are an option, the operating entity may employ a method of presumptive eligibility of the NCP. A full explanation of the method used by the operating entity (e.g., an objective standard such as an income test from a program used as proxy) must be well documented in the case file. The WtW program has identified the child health assistance under title XXI of the Social Security Act, SCHIP, as a suitable proxy, as it has the simplest eligibility requirement, requiring only an income determination, and has the highest minimum income level for eligibility purposes of the four programs.

The third factor in the eligibility determination process for NCPs is their participation in a personal responsibility contract no later than 90 days after being enrolled in the WtW program. In accordance with 645.212(c)(3), this contract is not required to be in writing. For purposes of documenting the establishment of an oral personal responsibility contract in the NCP’s case file, States and operating entities are strongly encouraged to record the date the NCP enrolled in the WtW program (this date starts the 90-day clock); the date the contract was developed; all parties of the contract and the terms of the contract, including the four required elements: (1) the NCP’s commitment to establish paternity of the minor child, (2) the NCP’s commitment to cooperate in the payment of child support, (3) the NCP’s commitment to participate in the WTW program in order to meet child support obligations, and (4) a description by the operating entity of the services to be provided by the WtW program.

A written personal responsibility contract document for the NCP’s file should contain the date the NCP enrolled in the WtW program; the date the contract was signed; the signatures of the NCP, the WtW operating entity and a representative of the Child Support Enforcement Office or IV-D agency; and the terms (including the four required elements listed above) of the contract.

Please note that similar personal responsibility agreements that are in place at the time of the NCP’s application to the WtW program can be used as documentation in the file in lieu of a new written or oral personal responsibility contract, as long as the agreement is adapted (if necessary) to contain the four required elements listed above.

Any decisions, events and activities of note associated in carrying out the terms of the personal responsibility contract, such as the voluntary acknowledgment of paternity (if applicable), establishment of the NCP’s ability to pay child support, a record of child support arrearages, the IV-D agency’s modification of the child support order, etc. should be fully documented in the NCP’s file.

Of course, once the NCP is enrolled in the program, all services and outcomes, including supporting documentation and verification, should be fully recorded and are a vital part of the individual case file.

This would include but not be limited to: all pre-employment services such as in-depth assessment and counseling notes, skills test results, referrals to partner agencies to address barriers, and pre-employment training services, all employment activities and job placement actions, and all post-employment as well as job retention and support service interventions. For tracking and reporting purposes, operating entities should maintain all source documents that support the quarterly programmatic and financial data reported to the Department, including placement, six month retention and earnings gain documentation.

For more detailed information about the primary eligibility provision for determining WtW eligibility of a noncustodial parent, please refer to Question and Answer E1 of this section. Additionally, please refer to 20 CFR 645.212, 645.214 and 645.215 (66 Fed. Reg. 2690 (Jan. 11, 2001)), and related Preamble discussions, including documentation requirements, pp. 2704 – 2707. In particular, please see preamble discussion of the use of SCHIP as a program proxy, p. 2705.

E21: Does a "60 month clock" under TANF start for noncustodial parents who receive WtW services with monetary value (such as subsidized employment)?

No. The TANF time-limit clock pertains to TANF recipients only, and therefore does not specifically apply to noncustodial parents.

E22: An individual is determined eligible for, and enrolled in, the “other eligibles” (formerly the 30% eligibility provision) of the WtW program. At a later time, the individual is determined to be eligible to be served under the primary eligibility category. Can that individual be transferred from the “other eligibles” category of the program and enrolled in the primary eligibility category?

Yes. An individual enrolled currently in the “other eligibles” category may later become eligible for the primary eligibility category due to the individual's change in classification. Below we have provided four scenarios which illustrate the ways an individual's classification can change and what can be done or not done regarding primary eligibility/“other eligibles” classification. Each is followed by a section which describes how to report the changes that such a scenario may cause.

Please note that in all four scenarios, it is never necessary to terminate the individual from the program and re-determine eligibility. This is because the individual has already been determined eligible for the WtW program. Nevertheless, if the operating entity chooses to transfer an individual from the “other eligibles” category to the primary eligibility category, the following guidance is applicable. In all scenarios, operating entities must document and explain the transfer of participants in the “Remarks” section of their Quarterly Financial Status Report (QFSR), and participants' files should be documented to explain the reason for the transfer. Also, financial records should be adjusted accordingly so there is a clear audit trail to substantiate the action.

SCENARIO #1

TANF RECIPIENT/EXHAUSTEE WAS ORIGINALLY ENROLLED IN FORMER 30% CATEGORY. AFTER ENACTMENT OF 1999 AMENDMENTS, QUALIFIES FOR THE PRIMARY ELIGIBILITY CATEGORY.

The first scenario addresses situations where a TANF recipient or TANF exhaustee who was originally enrolled in the “other eligibles” category prior to the effective date of the Welfare-to-Work and Child Support Amendments of 1999 (the 1999 Amendments) would be eligible under the new criteria for the primary eligibility category due to the eligibility changes enacted by the 1999 Amendments. For example, prior to the effective date of the 1999 Amendments, a TANF recipient or TANF exhaustee may have been enrolled under the “other eligibles” category, due to the fact that while (s)he possessed the requisite 30 months of TANF receipt, (s)he did not have the required two of three barriers to employment. The 1999 Amendments eliminated the requirement that TANF recipients and TANF exhaustees enrolled under the primary eligibility category must meet the criteria for barriers to employment; now, under the 1999 Amendments, individuals served as long-term TANF recipients in the primary eligibility category must only meet the TANF receipt criteria outlined at '645.212(a) or (b). Due to this individual's length of time on TANF, (s)he is now eligible to be served under the primary eligibility category and may be transferred from the “other eligibles” category.

HOW TO REPORT

Where a WtW operating entity has transferred an individual to the primary eligibility category because (s)he meets the new eligibility requirements enacted by the 1999 Amendments, the entity should report him or her on the QFSR as a participant under the primary eligibility category for the quarter in which (s)he became eligible for the primary eligibility category (i.e., the first quarter in which the eligibility changes under the 1999 Amendments are in effect for the operating entity). The entity must remove him or her from the participant count under the “other eligibles” category in the same quarter, in order to avoid having a "double-count" for that participant. Reported expenditures made on behalf of the individual prior to his/her transfer into the primary eligibility category, for the period for time when (s)he was reported as an individual in the “other eligibles” category, must remain in the “other eligibles” expenditure category. After his or her transfer to the primary eligibility category, the operating entity should report all expenditures attributable to the participant from the date of the transfer forward in the primary eligibility expenditure category.

Operating entities should transfer eligible participants in the first quarter after the eligibility changes under the 1999 Amendments are in effect for them. For competitive grantees, the 1999 Amendments were effective January 1, 2000, so the transfer of eligible individuals should have happened and should have been reported in the quarter ending March 31, 2000. For formula grantees, 1999 Amendments took effect July 1, 2000, so the transfer of individuals should have taken place and should have been

reported in the quarter ending September 30, 2000. If operating entities did not transfer eligible individuals in the first quarter after the 1999 Amendments took effect for them, they may transfer these individuals in a later quarter, retroactive to the first quarter after the 1999 Amendments took effect for them. Nonetheless, operating entities should transfer eligible participants as quickly as possible after the eligibility changes under the 1999 Amendments took effect for them.

Please note that in this scenario, the operating entity need not re-determine an individual's eligibility after the effective date of the 1999 Amendments in order to transfer the individual from the “other eligibles” category to the primary eligibility category. That is, operating entities in this scenario will rely upon the information collected at the time of the individual's initial enrollment into WtW to make the determination that the individual is now classified under the primary eligibility category due to the eligibility changes under the 1999 Amendments.

SCENARIO #2

NONCUSTODIAL PARENT ORIGINALLY ENROLLED UNDER FORMER 30% CATEGORY. AFTER ENACTMENT OF 1999 AMENDMENTS QUALIFIES FOR THE PRIMARY ELIGIBILITY CATEGORY.

The second scenario includes situations where a noncustodial parent who was originally enrolled in the “other eligibles” category prior to the effective date of the 1999 Amendments would be eligible under the new criteria for the primary eligibility category due to the eligibility changes enacted by the 1999 Amendments. The 1999 Amendments eliminated the noncustodial parent category from the “other eligibles” category for enrollments which take place after the effective dates of the 1999 Amendments (January 1, 2000, for competitive grantees, and July 1, 2000, for formula grantees). As a result, operating entities now have the option to transfer noncustodial parents who were enrolled under the “other eligibles” category prior to the effective dates of the 1999 Amendments into the primary eligibility category after the effective date of the 1999 Amendments, if those noncustodial parents meet the new noncustodial parent criteria and requirements at '645.212(c).

HOW TO REPORT

Operating entities should report a noncustodial parent who was originally enrolled in the “other eligibles” category prior to the effective date of the 1999 Amendments and who is thereafter eligible under the new criteria for the primary eligibility category as a participant under the primary eligibility category for the quarter in which the noncustodial parent meets all of the eligibility requirements outlined at '645.212(c).

When the noncustodial parent is transferred into the participant count under the primary eligibility category, (s)he must be removed from the participant count under the “other eligibles” category in the same quarter, in order to avoid having a “double-count” for that participant. Reported expenditures

made on behalf of the noncustodial parent prior to his/her transfer into the primary eligibility category, for the period for time when (s)he was reported as an individual in the “other eligibles” category, must remain in the “other eligibles” expenditure category. All expenditures attributable to this noncustodial parent since his/her transfer to the primary eligibility category should be reported under the primary eligibility expenditure category beginning in the quarter in which (s)he becomes eligible for transfer into the primary eligibility category.

Please note that in this scenario, aside from meeting the requirements of the personal responsibility contract, the operating entity need not re-determine a noncustodial parent's eligibility after the effective date of the 1999 Amendments in order to transfer the individual from the “other eligibles” category to the primary eligibility category. That is, under this scenario, operating entities will rely upon the information collected at the time of the noncustodial parent's initial enrollment into WtW, rather than eligibility information available at the time of the individual's transfer from the “other eligibles” category to the primary eligibility category.

Please also note that the transfer of eligible noncustodial parents from the “other eligibles” category to the primary eligibility category is optional. Operating entities may continue to serve noncustodial parents, who were originally enrolled under the “other eligibles” category prior to the effective date of the 1999 Amendments, in the “other eligibles” category, without transferring them to the primary eligibility category after the effective date of the 1999 Amendments.

SCENARIO #3

INDIVIDUAL ORIGINALLY ENROLLED IN THE “OTHER ELIGIBLES” PORTION HAS CHANGE IN PERSONAL CIRCUMSTANCES. NOW QUALIFIES TO BE COUNTED IN THE PRIMARY ELIGIBILITY CATEGORY.

The third scenario includes situations where an individual enrolled in the “other eligibles” category becomes eligible for the primary eligibility category after a change in circumstances. For example, at the time of enrollment into WtW under the “other eligibles” category, the individual might have received TANF for only 25 months. Yet, if this individual continues on TANF for another 5 months and is still enrolled in WtW, (s)he may be reclassified and enrolled under the primary eligibility category, having met the requirement under '645.212(a)(1) at that time. Likewise, an individual enrolled under the “other eligibles” category may, after time, come within 12 months of becoming ineligible for assistance as specified in '645.212(a)(2). This individual may also be transferred into the primary eligibility category at that time. Such transfers are optional and not required.

HOW TO REPORT

Where the transfer to the primary eligibility category is because of a change in the participant's circumstances, the operating entity should report the participant on the QFSR as a participant under the

primary eligibility category in the quarter that the operating entity determines that the individual meets the primary eligibility criteria. Under this circumstance, in order to avoid having a "double-count" for that participant, the individual must be removed from the “other eligibles” category participant count that same quarter. Reported expenditures made on behalf of the individual prior to his/her transfer into the primary eligibility category, for the period for time when (s)he was reported as an individual in the “other eligibles” category, must remain in the “other eligibles” expenditure category. Expenditures attributable to this participant after the operating entity determined it was appropriate to transfer him or her to the primary eligibility category should be reported under the primary eligibility expenditure category.

SCENARIO #4

INDIVIDUAL ORIGINALLY MISCLASSIFIED

The fourth type of scenario is where some individuals may have been misclassified at initial enrollment because one or more of the eligibility criteria were not known at the time of initial processing. For example, individuals enrolled in the “other eligibles” category may not have been enrolled under the primary eligibility category because of a miscalculation of their total time receiving TANF. In this instance, an individual actually may have met the criteria for long-term TANF receipt under '645.212(a)(1) or (2) at the time of enrollment, but the WtW operating entity may have classified the individual as a participant in the “other eligibles” category because of the miscalculation. If the operating entity later determines that the individual did in fact meet the criteria for long-term TANF receipt at the time of initial eligibility determination, the operating entity may retroactively consider that individual as a participant under the primary eligibility category of the program as of the date of the individual's initial enrollment.

HOW TO REPORT

Individuals enrolled in the “other eligibles” category who are later identified as having been eligible for enrollment into the primary eligibility category from the time of their initial enrollment in WtW, may be transferred to the primary eligibility category. In this case, the operating entity should retroactively adjust the QFSR(s) to move the participant and the associated participant costs from the “other eligibles” to the primary eligibility category as of the date of initial enrollment in WtW.

E23: If a WtW participant ceases to re ceive TANF assistance, can they continue to receive WtW services?

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.

Allowable Activities Questions (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL15-01_AA.pdf)

ALLOWABLE ACTIVITIES QUESTIONS

AA1: What are the allowable Welfare-to-Work (WtW) activities?

The WtW allowable activities are listed at 20 CFR 645.220. Grantees may use WtW funds for the following activities:
(a) Job readiness activities, subject to the contracting/vouchering requirements for Local Boards, at 20 CFR 645.221;
(b) Up to six calendar months of pre-employment vocational educational training or job training;
(c) Employment activities consisting of any of the following:
(1) Community service programs;
(2) Work experience programs;
(3) Job creation through public or private sector employment wage subsidies; and (4) On-the-job training;
(d) Job placement services, subject to the contracting/vouchering requirements for Local Boards, at 20 CFR 645.221;
(e) Post-employment services which are provided after an individual is placed in one of the employment activities, or in any other subsidized or unsubsidized job, subject to the contracting/vouchering requirements for Local Boards, at 20 CFR 645.221.
Post-employment services include such services as:
(1) Basic educational skills training;
(2) Occupational skills training;
(3) English as a second language training; and (4) Mentoring.
(f) Job retention services and support services that are provided after an individual is placed in a job readiness activity, in vocational education or job training, in one of the employment activities, or in any other subsidized or unsubsidized job. WtW participants who are enrolled in WIA activities may also receive job retention and support services funded with WtW monies while they are participating in WIA activities. Job retention and support services can be provided with WtW funds only if they are not otherwise available to the participant. Job retention and support services include such services as:
(1) Transportation assistance;
(2) Substance abuse treatment (except that WtW funds may not be used to provide medical treatment);
(3) Child care assistance;
(4) Emergency or short term housing assistance; and (5) Other supportive services.
(g) Individual development accounts that are established in accordance with Section 404(h) of the Social Security Act.
(h) Outreach, recruitment, intake, assessment, eligibility determination, development of an individualized service strategy, and case management may be incorporated in the design of any of the allowable activities listed above.

REVISED
Please note that this Question and Answer replaces and supersedes all guidance previously provided in former WtW Allowable Activities Question and Answers #AA1, #AA2a, and
#AA2b.

AA2: Can local Workforce Investment Boards (Local Boards) provide WtW job readiness, job placement, and post-employment services directly?

No, in most cases. Sections 403(a)(5)(C)(i)(IV) and 403(a)(5)(C)(i)(V) of the Social Security Act, as originally enacted, required that job readiness, job placement, and post-employment services be provided through contracts or vouchers with public or private providers. This requirement is incorporated at 20 CFR 645.220 of the WtW regulations, and for Local Boards, was not changed by recent WtW Amendments. Section 803 of Title VIII of the Welfare-to-Work and Child Support Amendments of 1999 ("WtW 1999 Amendments") amended Sections 403(a)(5)(C)(i)(IV) and 403(a)(5)(C)(i)(V) of the Social Security Act to allow entities other than Private Industry Councils (PICs) and Local Boards to provide job readiness, job placement, and post-employment services directly, without the use of contracts or vouchers. However, the WtW 1999 Amendments retained the prohibition against PICs and Local Boards providing these specific services directly. The original intent of this prohibition in the Social Security Act, which is supported by the retention of the prohibition which remains in the WtW 1999 Amendments, was to have PICs and Local Boards focus on strategic planning and oversight responsibilities, rather than on the direct delivery of services.

While Local Boards may not, in the vast majority of cases, provide job readiness, job placement, and post-employment services directly, the WtW law and regulations do permit Local Boards to provide other WtW services directly (such as pre-employment vocational educational training or job training, community service or work experience programs; job creation through public or private sector employment wage subsidies; on-the-job training; and job retention or support services if such services are not otherwise available).

The enactment of the Workforce Investment Act of 1998 (WIA) strengthened the emphasis on the role of the Local Board as the "board of directors" of the local area. It was intended that this role would free Local Boards from the day-to-day functioning of the local workforce system and allow the Local Boards to focus on strategic planning, policy development and oversight of the system. Thus, system-wide limits on the direct provision of services by Local Boards were implemented, with certain very limited exceptions. In keeping with their strategic planning, policy development and oversight responsibilities, Local Boards may only provide core and intensive services under Title I of WIA with the agreement of the chief elected official (CEO) and the Governor. Local Boards may only provide training services funded by Title I of WIA if they obtain a waiver from the Governor. Details on these restrictions are outlined in section 117(f) of WIA and 20 CFR 661.310. Further information is available on the WIA Questions and Answers page at http://usworkforce.org/asp/qanda.asp.

The WIA restrictions on Local Boards' roles as direct service providers have, in part, caused significant

changes in the overall workforce delivery system. Primarily, local boards set policy and provide program service oversight in a One-Stop system. Local Boards and One-Stop partners, including Welfare-to-Work, develop and execute agreements in the form of Memoranda of Understanding (MOUs), stipulating, in part, what services will be provided within a local area. The Local Board also selects One-Stop operators which are responsible for administering the One-Stop Centers. The One-Stop operator's role, specified in an agreement with the Local Board, may range from simply coordinating service providers within the center to being the primary provider of services within the center, to coordinating activities throughout the One-Stop system. One way in which a Local Board may meet its responsibility to provide for job readiness, job placement, and post-employment services is to contract with the local One-Stop operator where the One-Stop operator is itself a service provider. The Local Board, as the policy-setting board for the WIA program and the WtW grant recipient, may enter into an agreement or amend an existing agreement with the designated One-Stop operator to provide WtW job readiness, job placement, and post-employment services through the One-Stop center. The agreement must also be described in the MOU for the WtW program. If the One-Stop operator is selected through a competitive process, the procurement announcement must specify the requirement to provide these WtW services. If the requirement to provide WtW services is not part of the procurement specifications, it may be difficult to amend the contract to add new duties without either incurring considerable cost or possibly, triggering a requirement for new competition. In all situations, States and local entities must act in accordance with their own procurement procedures, as long as these procedures meet the minimum Federal requirements in 29 CFR Parts 95 or 97.

The Department recognizes, however, that there are exceptional situations which may necessitate that Local Boards have the ability to provide WtW job readiness, job placement, and post-employment services directly. Local Boards may only provide these services directly on a limited exception, case-by-case basis. Local Boards are urged to consult with appropriate State and Department staff to ensure that their direct provision of these services is indeed reasonable and necessary.

Exceptional situations which may require that a Local Board provide WtW job readiness, job placement, and post-employment services directly may include:

1. The job readiness, job placement, or post-employment service activity is an inextricable component of one of the participant’s other allowable WtW activities. For example, an employer may wish to hire participants who have successfully completed a community service or work experience activity operated by the Local Board. In this example, it would be unreasonable to require the Local Board to contract out for a participant's job placement when the participant successfully completed a community service or work experience activity, as the completion of that component is inextricably linked with the employer's wish to hire the participant. In this scenario, the participant's job placement is an inextricable component of his/her work experience or community service activity, and the Local Board would be able to directly place this participant. Please note, however, that this exception to the contracting and vouchering requirement applies on a participant and/or activity basis, not on an overall WtW program basis. That is, if the Local Board has a participant who is job-ready, without first
needing a work experience or community service activity, the Local Board would have to utilize a contract or voucher for this participant's job placement. Please note, however, that the Department does not expect Local Boards to arrange individual placement contracts to accommodate these situations. Rather, the Department encourages Local Boards to have standing job placement contracts with providers who can accept and place these referrals as necessary.

2. The Local Board has attempted to meet the contract or voucher provision for job readiness, job placement, and post-employment services for WtW participants, but there are no other public or private entities in the area available and qualified to provide these services. This scenario may be most common in rural areas. Local Boards must first determine whether the local One-Stop operator is available to provide these services. If the Local Board can document that there are no other appropriate services providers within the local area, including the One-Stop operator, or that the service providers that operate in the local area are not qualified to provide these services, then the Local Board may be allowed to provide these services directly. In this situation, the Local Board should follow its applicable State and local procurement standards for full and open competition. The Local Board would only be able to provide services directly in this scenario if the Local Board's own procurement standards permit it to do so after having exhausted all other competitive contracting or vouchering options.

Again, the Department expects that the exceptional circumstances described above will occur infrequently and that the vast majority of Local Boards will not be providing any WtW or WIA services directly. Local Boards that believe that their situations necessitate limited exceptions to the requirement to provide all job readiness, job placement, and post-employment services through contracts or vouchers should seek appropriate State and Departmental guidance before beginning to provide such services directly. Improper implementation of this limited exception allowance could result in audit findings and/or disallowed costs.

The WtW Final Rule and Interim Final Rule provided relief to those Local Boards which may unintentionally have violated the contract/voucher requirement because of a misunderstanding of DOL guidance. However, Local Boards were required to come into compliance with the requirement to provide job readiness, job placement, and post-employment services by contract or voucher by February 12, 2001, the original effective date of the WtW Final Rule and Interim Final Rule.

The WtW Final Rule and Interim Final Rule, which was published in the Federal register on January 11, 2001, is available on the Internet at http://wtw.doleta.gov/documents/wtw_regs1_01.txt (text format) and http://wtw.doleta.gov/documents/wtw_regs1_01.pdf (PDF format).

AA3: What are the requirements of the 50% hold-back on contracts and vouchers for unsubsidized job placement? How does the 50% hold-back provision apply to contracts and vouchers which include other WtW services in addition to unsubsidized job placement services?

20 CFR 645.230(a)(3) requires that all contracts and vouchers for unsubsidized job placement services must include a provision to require that at least one-half of the payment occur after an eligible individual placed into the workforce has remained in the workforce for six months.

Additionally, grantees are advised that the 50% hold-back requirement also applies to all contracts and vouchers which include job readiness services, pre-employment vocational educational or job training, post-employment services, and/or job retention and support services in addition to unsubsidized job placement services. Ideally, a contract for unsubsidized placement which also includes one or more of these other services should be structured so that the portion allocable to the unsubsidized placement activities can be “separated out,” with 50% of that portion being paid at the time of the placement, and the remaining 50% of that portion being paid after the participant is retained for six months. If the grantee does not have the capacity to separate and hold back only the portion of the contractual payment allocable to the unsubsidized placement activities, the grantee could choose to hold back 50% of the entire payment amount (i.e., choose not to separate the payment amounts associated with the other services and the unsubsidized placement activities) until the participant has been retained for six months. This would meet the requirements of the 50% hold-back provision in the WtW statute and regulations, but might be a less feasible arrangement for contractors.

The 50% hold-back requirement does not apply to contracts and vouchers which include community service, work experience, job creation, or on-the-job training services (i.e., those employment activities listed at 20 CFR 645.220(c)) in addition to unsubsidized job placement services, as these employment activities are considered inextricably linked to the ultimate goal of unsubsidized placement.

We acknowledge that the Department’s previous guidance on the application of the 50% hold-back provision has not been entirely clear. In particular, the December 2000 publication of revised Q&A AA1, which referenced the 50% hold-back as applying to all multi-service contracts, caused significant confusion, and may have caused some operating entities to immediately begin renegotiating existing contracts and vouchers and/or modifying their procurement policies in order to come into compliance with this policy. We hope that the publication of this Q&A AA3 significantly clarifies the application of the 50% hold-back in a number of contracting/vouchering scenarios.

We are not requiring that existing contracts or vouchers be immediately renegotiated to come into compliance with this clarified 50% hold-back requirement. However, all new and renewed contracts and vouchers entered into after the publication date of the TEGL which issues these Questions and Answers must be in compliance with the terms of the 50% hold-back provision as outlined above.

AA4: Can the Governor’s 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?

No, these funds are not limited to use for special projects. Allowable uses for the Governor’s 15%

funds include: (1) the costs of allowable activities at 20 CFR 645.220; (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.

AA5: May the Governor’s 15% funds be distributed by States to Local Boards (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)?

Yes, as long as such funds distributed to Local Boards are used to pay for the allowable costs of WtW activities.

AA6: May WtW funds be used for capacity building?

WtW funds may be expended for capacity-building activities. Capacity-building activities can be either programmatic or administrative in function, and must be charged to the WtW program accordingly. WtW grantees must determine whether the capacity-building activity is administrative in function and not related to the direct provision of WtW activities, or is related to the direct provision of WtW activities and therefore programmatic in function. Functions identified as administrative in nature are listed in detail at 20 CFR 645.235(c).

For example, if a WtW grantee obtains case management training for its staff, the capacity-building costs should be charged as program costs because the training is considered to be for the direct provision of WtW services to participants. However, if a grantee’s fiscal staff attends a symposium to learn about financial and cash management principles, because financial and cash management is defined as an administrative function (see 20 CFR 645.235(c)), the costs incurred for providing this capacity-building activity must be charged to administration.

Please refer to 20 CFR 645.235 and the preamble discussion at 66 Fed. Reg. 2697 (Jan. 11, 2001) for more complete information regarding the types of activities that are subject to the 15% administrative cost limit on WtW grants.

AA7: Can WtW funds be used for building classrooms?

No. Construction and purchase of buildings are not allowable costs per the WtW regulations at 20 CFR 645.230(e).

AA8: May WtW funds be used to pay for medical services? What is the definition of “medical services?” May WtW funds be used for drug testing?

As indicated in the Preamble to the WtW Final Regulations (66 Fed. Reg. 2695, Jan. 11, 2001), Section 408(a)(6)(A) of the Social Security Act, which prohibits the use of any TANF funds for medical services, also applies to WtW funds.

Services performed by a member of the medical profession are considered medical services. However, services performed by those not in the medical profession, such as counselors, technicians, social workers and psychologists, and services not provided in a hospital or clinic, including 24-hour care programs, may be considered non-medical.

Consequently, WtW funds may be used for drug testing, but only where existing resources are not otherwise available to the participant, and only if the drug testing is not a medical service as defined above. Additionally, as discussed in the WtW Regulations at 20 CFR 645.220(f)(2), WtW funds may be used for substance abuse treatment services to the extent that such services are not medical and are not otherwise available to the participant. In many, but not all, instances, the treatment of alcohol and drug abuse involves not just “medical services,” but also other kinds of social and support services, as well. Allowing States to use Federal WtW funds for substance abuse treatment is programmatically sound, as it addresses the need of a particular target group and may help clients make successful transitions to work. States and localities are encouraged to look at the range of services available in their area and differentiate between medical and non-medical services.

WtW funds may also be used to pay for medical equipment such as eyeglasses, hearing aids, and prostheses for eligible WtW participants to make them more job-ready. As long as the medical services involved, such as eye examinations, rendered by medical professionals, are paid for under some other funding source, the items themselves may be purchased for participants as supportive services provided other funds are not available, and provided the participant is otherwise eligible to receive supportive services. Such items must be directly related to obtaining and/or retaining employment for the participant.

Please note that the prohibition against the provision of medical services applies to all Federal WtW funds. States may, however, use their own funds or other funds to provide these services as long as they do not commingle State and Federal funds. Medicare and Medicaid funds may provide another source of funding for medical substance abuse treatment.

AA9: May WtW funds be used to pay medical expenses that are not covered by Medicaid? May WtW funds be used to pay for health insurance for working WtW participants who do not have Medicaid or any other health insurance?

No, WtW funds may not be used to pay for medical expenses that are not covered by Medicaid. As indicated in the Preamble to the WtW Final Regulations (66 Fed. Reg. 2695, Jan. 11, 2001, page 2695), Section 408(a)(6)(A) of the Social Security Act, which prohibits the use of any TANF funds for medical services, also applies to WtW funds. This prohibition applies to all WtW funds, and to all programmatic scenarios.

Similarly, WtW may not be used to pay for health insurance for working WtW participants who do not have Medicaid or any other health insurance. We consider health insurance premiums to be a medical service subject to the Section 408 prohibition, and therefore, they are not allowable. This interpretation is consistent with how TANF interprets the Section 408 provision with regard to health insurance.

DHHS’s Administration for Children and Families has made available on their web site a publication entitled, “Supporting Families in Transition: A Guide to Expanding Health Coverage in the Post-Welfare Reform World.” The web site address is http://www.acf.dhhs.gov/news/welfare/welfare.htm. This publication describes a program directed at maintaining health coverage for those who leave TANF assistance and for other low-income families. The publication states that, “States must provide extended Medicaid benefits (‘transitional Medicaid’) to families who, because of hours of work or income from employment (or loss of the earned income disregard), lose their eligibility for Medicaid under the Section 1931 group.”

PLEASE NOTE: There is no longer an “automatic link” between eligibility for cash assistance (TANF) and eligibility for Medicaid. Individuals and families not receiving TANF for various reasons (have not applied, diverted from TANF, no longer eligible due to increased income as a result of working, etc.) MAY be eligible for transitional Medicaid. States have their own guidelines for the program, which may be a valuable resource for WtW participants entering the workforce. Grantees should ensure that staff working with WtW participants are aware of this source of health insurance coverage and how individuals may apply in their State.

AA10: Is transportation of a WtW participant to a drug treatment facility an allowable cost?

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

AA11: If unavailable from other sources, can participants begin receiving job retention and support services at the point of their enrollment in the WtW program? If not, what WtW activities do participants need to be involved in in order to receive job retention and support services? Is there a minimum number of hours per week WtW participants must be involved in WtW activities in order to qualify for job retention and/or support services?

According to the WtW regulations at 20 CFR 645.220(f), job retention and support services can be provided as soon as a participant is placed in an allowable WtW activity, including job readiness activities, pre-employment vocational educational training or job training, one of the employment activities at 20 CFR 645.220(c), or in any other subsidized or unsubsidized job, whichever comes first. Prior to enrollment in WtW allowable activities, job retention and support services cannot be provided. WtW participants who are enrolled in WIA activities may also receive WtW-funded job retention and support services while they are participating in WIA activities. There is not a required minimum number of hours per week of participation in other WtW activities in order for participants to receive job retention and support services.

AA12: Can WtW formula and competitive funds be used in individual development accounts (IDAs)? Can Local Boards and competitive grantees contribute WtW funds for matching purposes in an IDA?

Yes, WtW funds may be used for IDAs. IDAs must be established and operated in accordance with Section 404(h) of the Social Security Act and all DHHS regulations. Other asset-building accounts, similar to IDAs but not established under section 404(h), may be used for purposes in addition to those authorized for section 404(h) IDAs (such as automobile purchase), and are discussed in Allowable Activities Question and Answer AA21.

Section 403(a)(5)(C)(v)(I) of the Social Security Act provides that WtW funds may be used under a State program to fund IDAs. An IDA is an account established by or on behalf of a TANF recipient to enable the recipient to accumulate funds for one of the “qualified purposes,” i.e., post-secondary educational expenses, first home purchase, or business capitalization. The account must be a trust, created or organized in the U.S., and funds may be withdrawn only for a qualified purpose.

The IDA is funded through periodic individual contributions, which must be from earned income as defined in section 911(d)(2) of the Internal Revenue Code, and through matching funds by a “qualified entity.” Section 404(h)(3)(B) of the Social Security Act defines “qualified entity” as either a 501(c)(3) non-profit organization or a state or local government agency acting in cooperation with such a non-profit.

A WtW grantee may participate in the State IDA program, but must conform to the requirements stated above.

If the WtW grantee is organized as a 501(c)(3) non-profit, it may use WtW grant funds to match individual contributions.

If the WtW grantee is not a 501(c)(3) non-profit, WtW funds can be used for matching IDA funds, by way of other qualified entities which have contracted with the WtW grantee to operate a WtW program.

Finally, if the WtW grantee is treated as a state or local government agency, then it may match IDA contributions in cooperation with a 501(c)(3) non-profit.

For more information on IDAs, see the final TANF regulations at 45 CFR 263.20.

For additional guidance on the contribution of WtW funds to other asset-building accounts not established under section 404(h), which may be used for purposes in addition to those authorized for section 404(h), please see Allowable Activities Question and Answer AA21.

AA13: May WtW funds be used to provide cash payments to participants?

Yes, in the three carefully defined situations described below, WtW funded supportive services and IDA contributions may be made in the form of cash payments. Subsections (a), (b) and (c) below describe the specific conditions under which WtW-funded cash payments to participants are allowable.

(a) Matching payments for Individual Development Accounts (IDAs) or other asset-building accounts

WtW grantees may use their grant funds to match contributions made to a participant’s IDA or other IDA-type asset-building account. Such cash payments are not made directly to the participant, but are made to the account on behalf of the participant. Contributions to IDAs established in accordance with section 404(h) of the Social Security Act must conform to the requirements at 45 CFR 263.20 of the TANF regulations. Contributions made to other IDA-type asset-building accounts established under the state TANF program, similar to IDAs but not established under section 404(h), must be consistent with the purposes of the WtW program. For additional information on contributing WtW funds to IDAs, please also see Q&A AA12. For additional requirements relating to the contribution of WtW funds to other IDA-type asset-building accounts, please see Q&A AA21.

(b) Training support payments to participants engaged in pre-employment vocational educational training, pre-employment job training, and/or post-employment services

Entities operating WtW projects may use WtW funds to provide up to six calendar months of pre-employment vocational education or job training, and to provide unlimited post-employment services, as appropriate. These pre- and post-employment services may include, but are not limited to, basic educational skills training, occupational skills training, English as a second language training, and mentoring.

WtW participants engaged in pre- or post-employment education and training activities may be provided with a training support payment that is tied to their participation in those activities. This may be an hourly payment. This policy reflects the fact that certain participants (such as noncustodial parents who are not receiving TANF assistance, and others) may need some additional support, either while participating in stand-alone pre-employment education and training activities, or while participating in part-time post-employment activities concurrent with part-time subsidized or unsubsidized employment activities.

Program operators must be mindful of their responsibilities under minimum wage and other workplace laws when providing these payments. In many situations, it appears that participants engaged in such education and training, particularly on a pre-employment basis, could be considered trainees for the time spent in those activities, rather than as employees. Where a participant is a bona fide trainee, the hours spent in pre-or post employment training and education would not need to be compensated under the Fair Labor Standards Act (FLSA). A training support payment equal to or above the minimum wage level may be paid if the grantee desires, but again, such support payments would not be subject to FLSA requirements if the participant is not an employee. Because the application of workplace law requirements vary according to individual circumstances, grantees using WtW funds to provide training subsidies to participants should confirm that appropriate payments according to the situation are being made by:

• Consulting guidance provided in the publication How Workplace Laws Apply to Welfare Recipients (revised February 1999), available on the DOL web site at http://www.dol.gov/asp/w2w/welfare.htm, and/or

• Contacting the appropriate regional U.S. Department of Labor Wage and Hour Specialist (also identified at the end of the above-mentioned publication).

The parameters of any grantee’s training support payment system must be articulated in written policies issued by the grantee.

Operating entities providing training support payments to TANF recipients should be aware that such subsidies would likely be considered “WtW cash assistance” under TANF, and thus would count against participants’ durational time limits for receiving TANF cash benefits. Operating entities should check with the TANF agency in the State to find out how such training subsidies affect the amount and distribution of participants’ TANF grants. For additional information on what WtW services constitute WtW cash assistance for the purposes of TANF time limits, please see the preamble discussion of 20 CFR 645.120 of the WtW regulations at 66 Fed. Reg. 2690, 2692, in addition to Q&A E3.

(c) Retention-related work support payments for participants who have been placed in unsubsidized employment

WtW funds may be used to provide retention-related work support payments to participants who have been placed in unsubsidized employment. The decision to allow the use of WtW funds in this manner is based upon a recent Department of Health and Human Services (DHHS) TANF interpretation that permits cash supportive service payments under specific circumstances.

Some states, with the approval of the DHHS, have allowed the implementation of supplemental work support payments. These payments, using TANF funds, provide monthly cash support (limited in both amount and duration) to individuals who agree to continue to maintain employment while gaining experience and improving their earning potential. TANF funds used for this purpose must conform to specific criteria set by the state assuring continuous work, and to other stipulations, such as voluntary termination from the benefits portion of the TANF case. DHHS does not consider these supplemental work support payments as ATANF assistance,” but rather as a “support service” under the exception in 45 CFR 260.31(b)(3) of the TANF regulations. Since they are not considered “TANF assistance,” such supplemental work support payments do not count against an individual’s durational time limit for receiving TANF cash benefits. In order to clearly distinguish a work support payment from an income support payment (which is considered “TANF assistance”), states which have implemented such a program have had to explain, through the state TANF plan amendment process, and through written policies, what the monthly payment represents.

In order to be congruent with DHHS’ interpretation on this matter, the Department has now determined that it will also allow WtW funds to be used for supplemental work support payments which are linked to participants’ retention and career advancement. To distinguish work support payments from the non-cash employment incentives described in Q&A AA14, WtW envisions these payments to be cash resources provided over a longer period of time in order for the participant to purchase the services and products necessary to retain a job until a pattern of progressive wage gains begins to supplant these payments. For instance, such payments could enable a newly employed participant to cover the costs of uniforms, meals at work, tools for the job, transportation-related costs, or other immediate needs that arise in connection with employment. Such job retention/support service payments will be excluded from DHHS’ definition of “WtW cash assistance,” and thus will not count against participants’ durational time limits for receiving TANF cash benefits. The Department of Labor will not require state WtW plan or competitive grant document modifications in order to implement a WtW-funded work support payment program. However, states and competitive grantees wishing to use WtW funds for this purpose must develop and articulate criteria and conditions under which such payments will be made, and must document these in their official written policy. In developing this policy, states and competitive grantees should refer to the job retention/support service guidelines that are provided in Q&A AA36. We expect that the official written policy will identify the circumstances under which work support payments will be allowable and appropriate (not otherwise available) and what constitutes reasonableness when covering the costs of this support service. The policy should articulate parameters such as the probable duration of payments, dollar amounts, hours worked per week, and whether, in mirroring TANF, states and competitive grantees will require participants to voluntarily terminate receipt of TANF benefits in order to qualify for WtW-funded work support payments.

Please note that this Q&A does not rescind the prohibition against using WtW funds to provide participants with direct cash incentives. For additional information on this prohibition, please see Q&A AA14. For information about the definitions of the terms “TANF assistance” and “WtW cash assistance” as they apply to the TANF and WtW programs, please see Q&A E3, the preamble to the WtW regulations (66 Fed. Reg. 2690, pages 2692 and 2693 (Jan. 11, 2001)), and the regulations themselves at 20 CFR 645.212(d). In addition, please see the TANF regulations at 45 CFR 260.31, with particular attention to 260.31(b)(3) and 260.32, as well as the applicable preamble language at 64 Fed. Reg. 17754-17763. For information about allowable WtW job retention and supportive services, please refer to the regulations at 20 CFR 645.220(f). In addition, please see Q&A AA36 for further discussion on determining the appropriateness and allowability of using WtW funds for job retention and support services.

AA14: May WtW funds be used to provide participants with direct cash incentives?

No, WtW participants may not receive direct cash incentives under the WtW grant. Please note that although that The Department of Labor now allows the provision of retention-related work support payments to participants who have been placed in unsubsidized employment, this does not change the prohibition from providing direct cash incentives. WtW grantees may, however, provide participants with employment-related incentives only in the form of increased wages or non-cash job retention/support services, such as make-overs (haircuts, manicures, etc.) or new clothing. In an effort to distinguish such non-cash incentives from the retention-related work support payments described in Q&A AA13(c) that provide needed cash support service payments to cover ongoing,

anticipated work-related expenses, these employment-related incentives would not be based on need, would be short term and more episodic in nature, and would most effectively be used to acknowledge or reward discrete accomplishments, milestones reached or exemplary job performance. In addition, unlike work support payments, these incentives are not designed to eventually be replaced by wages. The types of non-cash incentives an operating entity decides to award participants should be related to obtaining or retaining subsidized or unsubsidized employment.

For information about the specific conditions under which retention-related work support payments may be made, please see Q&A AA13.

Please note that the provision of WtW-funded cash incentives to employers is also prohibited. For information on more appropriate employer incentives, please see Q&A AA15.

AA15: Can a WtW grantee provide employers cash incentives with WtW funds?

No, WtW funds may not be used to provide employers with cash incentives. Employers can be reimbursed for the cost of hiring and training a WtW participant through OJT or job creation through a public or private wage subsidy. Additionally, grantees may educate employers about the availability of the WtW and Work Opportunity Tax Credits. However, cash incentives to employers are not an allowable cost under WtW.

AA16: Can I provide skills training to participants prior to placing them in employment activities?

Yes. As indicated in the WtW regulations (20 CFR 645.220(b)), participants may engage in up to six calendar months of vocational educational training or job training before their participation in one of the WtW employment activities (community service, work experience, job creation through public or private sector employment wage subsidies, or on-the-job training) or an unsubsidized job.

AA17: What is the relationship between WtW, the One -Stop system, and WIA programs?

Section 645.430 of the WtW regulations addresses the relationship between WtW programs, the One- Stop system, and WIA-funded programs. As provided in the WIA regulations at 20 CFR 663.620, the local WtW formula grant program operator is a required partner in the One-Stop system. 20 CFR part 662 describes the roles of such partners in the One-Stop system, and the roles of WtW formula grant program operators in particular. A Memorandum of Understanding (MOU) that meets the requirements of 20 CFR 662.300 must be developed between the Local Board and the WtW program. It must contain provisions related to the services to be provided through the One-Stop system and methods for referring individuals between the One-Stop operator and the partner WtW program.

WtW participants may also participate in WIA programs and, through appropriate linkages and referrals, these individuals will have access to a broader range of activities and services through the cooperation of the WtW and WIA programs in the One-Stop system. For example, WtW participants

who are also determined eligible for WIA, and who need occupational skills training, may be referred through the One-Stop system to receive WIA training. These participants are also eligible to receive services available under WtW, such as transportation and child care while participating in the WIA activity. WIA participants who are determined to be eligible for WtW may also be served by the WtW programs through cooperation with the WIA programs in the One-Stop system. For example, WIA participants who are also determined eligible for WtW may be referred to the WtW program for job placement and other WtW assistance.

In general, there are no Federal regulations that prevent a WtW program from using multiple funding sources to effectively serve WtW program participants as long as the participants are eligible and enrolled in all of the programs providing such services.

AA18: How do the rules in WIA governing on-the-job training (OJT) affect OJT provided under WtW?

“On-the-job training” is not defined under WtW. As indicated in the Preamble to the WtW Final Rule, (66 Fed. Reg. 2695 (Jan. 11, 2001), we have allowed States and localities the flexibility to develop definitions that fit their circumstances. However, if the grantee has established rules for other programs, such as restrictions on wages or time limits, these policies should be taken into consideration when designing an OJT activity under WtW. In establishing OJT contracts, grantees should rely on the Local Board and WIA service providers and their experience with employers in implementing effective OJT arrangements resulting in long-term employment. For additional information on State and local governance roles with regard to establishing policies, interpretations, guidelines, and definitions, please see section 645.125 of the WtW regulations.

AA19: Can a service paid for with WtW funds for use by WtW clients be used by the general public (i.e., bus service)?

Yes. However, use of such services by individuals who are not eligible for WtW must be supported or off-set by non-WtW funds. Further, the funds received (in fares, etc.) are considered program income and must be reported as such.

AA20: Clarify the difference between work experience and community service?

States usually define these terms. WtW competitive grantees, while not bound by State definitions of these terms, applied for their grants in conjunction with local entities. Therefore, definitions used by a competitive grantee should be consistent, or at least not in conflict with, those used by the local WtW formula program, as well as with the terms of the competitive grant. For additional information on State and local governance roles in establishing policies, interpretations, guidelines, and definitions, please see section 645.125 of the WtW regulations.

AA21: How can WtW funds be used to pay for transportation and transportation-related services? Have there been any changes in DOL policies on allowable uses of WtW funds for

transportation related expenses? Can WtW funds be used to buy automobiles for individual participants? Can WtW funds be contributed for asset-building accounts established for car purchases for a WtW participant?

a. How can WtW funds be used to pay for transportation and transportation-related services? Transportation services can be provided to WtW participants where such expenses are necessary for the participant to retain their job and not otherwise available to the participants. Allowable transportation services cover a broad range, including but not limited to the following examples:

• passes, tokens or vouchers to ride public transportation or taxis.
• support of extension of transit services or bus lines to serve a given business or residential area.

Note: WtW funds cannot be used to pay outstanding tickets or fines for WtW participants. For more guidance on how WtW and TANF funds can be used to pay for transportation services, please consult the joint guidance on this topic, issued by the Departments of Labor, Transportation, and Health and Human Services, which can be found at http://wtw.doleta.gov/documents/tegltein/13-99.htm.

b. Have there been any changes in DOL policies on allowable uses of WtW funds for transportation related expenses?

Yes. In the past, one-time only transportation-related services such as car registration, insurance, repair, etc. were allowable as supportive services and could be paid for with WtW funds if such expenses were necessary for the participant to retain their job and were not otherwise available to the participant. As described below, we have recently revised this policy.

At the beginning of the program, we were intentionally conservative in our scope of allowable transportation-related supportive services because of our understanding of the availability of TANF funds for these services, the more limited amount of Welfare-to-Work funds available (in comparison to TANF), and what we perceived could be a very costly, long-term supportive service if not limited. We have since determined, based on knowledge gleaned from the first three years of the program, that these transportation related services are vitally important to the job placement, retention and advancement success of WtW participants; a critical component to the operating entities’ array of services; and that in many circumstances, the one-time only expenditure limitation was too prescriptive and not practical.

Since the Department continues to believe that States and locals are in the best position to develop policies that fit their individual circumstances, we are lifting the one-time only expenditure rule regarding transportation related costs in favor of allowing the development of State and local policy regarding the extent to which these supportive services are available to the participant. However, when developing the policy, States and local areas must adhere to the following criteria:

• The cost of the supportive service is reasonable. To comply with this requirement, WtW would expect the State to attach reasonable expenditure limits to these services (e.g., a
maximum dollar limit per participant, a maximum dollar limit per participant over a discreet period of time, a maximum number of service requests per participant, etc.).

• The supportive service is necessary to the participant becoming self-sufficient, and is necessary to fulfilling the objectives and purposes of the grant.

• The cost of this supportive service is not prohibited by the Act, the regulations, the OMB circulars or DOL policy.

• The supportive service is closely related to the participant becoming job ready, or obtaining or retaining employment.

• The particular supportive service is not otherwise available to the participant.

• The supportive service cost is in accordance with the operating entity’s overall policies regarding supportive service expenditures.

Please note that this change in WtW policy is prospective from the date of this TEGL, and supercedes the assurance regarding the one-time expenditure limit that was signed by the State signatory authority and is contained in the official WtW formula grant file.

c. Can WtW program operators use WtW funds to buy automobiles for individual participants?

No. Department of Labor policy dictates that WtW programs cannot be used to purchase a car for an individual participant. Purchase of cars or vans for the WtW program to use in providing transportation for participants is an allowable cost, as long as the program operator follows appropriate procurement procedures (e.g., competitive grantees must obtain prior approval from the ETA Grant Officer). Under TANF, car purchase for an individual may be allowable, depending on State laws and other policies.

d. Can WtW funds be contributed for asset-building accounts established for car purchases for a WtW participant?

As described in part (c) of this question and answer, the Department’s policy on the purchase of cars is that it is generally not considered an appropriate transportation cost for purposes of the WtW program. However, we have recently determined that WtW funds may be used to contribute to certain asset-building accounts established under a State's TANF program that are used to save for a car.

Under WtW and TANF, Individual Development Accounts (IDAs) are authorized for certain purposes in section 404(h) of the Social Security Act. Additionally, the Department of Health and Human Service has recently issued guidance about the establishment of other asset-building accounts, similar to IDAs but not established under section 404(h), which may be used for purposes in addition to those authorized for section 404(h) IDAs. Under this guidance, TANF funds may be used to contribute to

these IDA-type asset building accounts used for the purpose of purchasing automobiles. DHHS has issued a Q & A on this subject which may be helpful to WtW entities contemplating using IDAs towards the purchase of automobiles. This information may be found as Q&A No. 5 at http://www.acf.dhhs.gov/programs/ofa/polquest/idas.htm.

Based on this HHS guidance, we have reconsidered our policy against using WtW transportation assistance for the purchase of automobiles, and are adjusting the policy to permit operating entities to use WtW funds in these IDA-type asset-building accounts established for car purchases when the purpose is consistent with the purposes of the WtW program. Because transportation is very often a vital need to enable a WtW participant to obtain and retain a job, the purchase of a car through the structured savings of one of these IDA-type asset-building accounts is consistent with the purposes of WtW. Participants and the WtW program (and often the TANF agency) must be contributing towards the purchase of the car to help the participant obtain and retain employment. State and local operating entities may determine the purpose for the savings, the appropriate match rate and other conditions under which it will match savings.

It is important to note that only funds in an IDA account under section 404(h) are disregarded in determining benefits under Federal law [404(h)(4) of the Act]. Thus, operating entities are cautioned that funds in an IDA-type asset-building account in a program not established under Section 404 (h) may not necessarily be disregarded in determining Federal benefits in such programs as Food Stamps, and Medicaid. Therefore we recommend that WtW operating entities who wish to consider establishing an IDA-type asset-building program for the purchase of an automobile contact the State TANF and/or related benefit agencies to determine if there is already such a program in place in the State and what determination has or would be made about disregard of these funds for benefit purposes.

Additionally, State funds used to contribute to an IDA-type asset building program, as mentioned above, established for the purpose of purchasing an automobile, may be counted towards a State's WtW matching requirement.

Finally, grantees are still prohibited from using WtW funds for the outright purchase of or for down payments on automobiles for participants. Under TANF, a car purchase for an individual is allowed, in accordance with State laws and other policies.

Please see Q&A AA12 for an extended discussion about IDAs.

AA22: Under WtW, is there a maximum time limit or funding amount for pre-employment services? Are we bound by the State's TANF policies on limits, i.e., length of allowable activities?

Short-term, pre-employment vocational educational training and job training are limited to a maximum of six calendar months. For additional information on the six-month time limit for this activity, please see the discussion in the preamble to the WtW regulations (66 Fed. Reg. 2690, 2709 (January 11, 2001)), and the regulations at 20 CFR 645.220(b).

There is no maximum time limit or funding restriction for other pre-employment services under WtW. However, such services should be tied to an assessment of the services necessary for the individual to become self-sufficient. Further, WtW programs are not bound by TANF restrictions on the length of job readiness activities. Under TANF, there is a six-week time limit on job readiness activities, but that time limit does not apply to WtW funds. To the extent possible and appropriate, competitive grantees are encouraged to use the definitions and restrictions that are being used by their local administering agency under the WtW formula program.

AA23: Job retention and supportive services, such as transportation, child care, substance abuse treatment, and emergency housing assistance, may be provided with WtW funds if those services are not otherwise available to the participant. Who determines whether services are “not otherwise available?”

The grantee or service provider will make this determination according to their own written policy, and should set up procedures for documenting “not otherwise available” in participants’ files. For additional guidance on determining the appropriateness and allowability of particular job retention and support services, please see Q&A AA36.

AA24: Can an individual who has been placed in unsubsidized employment through TANF (or any other program) receive post-employment and/or job retention/supportive services through WtW?

Yes. However, the individual must meet the WtW eligibility requirements, and must be enrolled in the WtW program prior to receiving any WtW services. In determining eligibility for an individual, the grantee must determine that the individual meets the eligibility criteria at the time of enrollment into WtW.

For more detailed information about the WtW eligibility requirements, please refer to Question and Answers E1 (primary eligibility) and E2 (other eligibles) in the Eligibility section. Additionally, please refer to 20 CFR 645.212, and 645.213 of the WtW regulations (66 Fed. Reg. 2650 (Jan. 11, 2001)).

AA25: If a competitive grant proposal did not include an allowable activity, such as IDAs, can the operating entity still provide those services/activities without modifying the grant?

If the WtW competitive grant document does not specifically prohibit an activity that is an allowable activity under WtW, then a modification of the grant would not be necessary, except as dictated by the terms and conditions of the executed grant document, the WtW law and regulations, and the applicable Uniform Administrative Requirements for grant changes (29 CFR Part 95.25 for non-profit grantees and 29 CFR Part 97.30 for governmental entities).

AA26: An individual is determined eligible, is enrolled in WtW, is assessed, and an individual service strategy is developed. Can this participant - who is being case-managed under WtW - be served by other funding streams? If yes, can this participant receive more than six

calendar months of pre-employment vocational educational training or job training, if the training is funded by other sources? Can this participant, at a later point, be provided with post-employment, job retention and/or supportive services supported with WtW funds?

Yes. In general, the WtW regulations permit a WtW program to use multiple funding sources to effectively serve WtW program participants, as long as the participants are eligible for all of the programs providing such services. A WtW participant may receive services that are supported by other appropriate funding sources, such as WIA, TANF, etc. The WtW restriction does not limit the provision of more than six calendar months of pre-employment vocational educational training or job training, if this training is supported by another funding source. Nevertheless, in a situation of jointly-funded activities, where WtW funds are used to support post-employment, job retention and/or supportive services, all statutory and regulatory provisions continue to apply to the use of the WtW funds. This means that:

1. Local Boards must provide WtW-funded post-employment services through vouchers or contracts with public or private providers. Post-employment services may only be provided once the participant is placed in one of the prescribed employment activities or in any subsidized or unsubsidized job. - AND -

2. Job retention and supportive services funded through WtW can only be provided once the participant is placed in a job readiness activity, in pre-employment vocational educational training or job training, in one of the prescribed employment activities, or in any subsidized or unsubsidized job.

AA27: How many hours must an individual work in an appropriate WtW employment?

Neither the statute nor the regulations mandate a minimum amount of hours, weekly or otherwise, that an individual must work in a WtW employment activity or unsubsidized job. The related TANF program does set out provisions for work participation which are adapted by States, with variances. For instance, some States may mandate 20 or 25 hours of work activity per week in order for an individual to receive TANF benefits.

The WtW operating entity may choose to be consistent with the number of hours required by TANF in a particular State, but this is not mandatory. The WtW regulations at 645.220 set forth the allowable activities under WtW. Please note that post-employment activities, such as basic educational skills training, occupational skills training, and English as a second language can be provided only AFTER an individual is placed in an allowable employment activity or unsubsidized job. However, participants may receive up to six calendar months of vocational educational training or job training prior to beginning their participation in an employment activity. For further discussion of pre- and post-employment training, see the WtW regulations at 20 CFR 645.220(b) and 645.220(e).

AA28: Are outreach and recruitment allowable activities under WtW? If yes, how would such costs be reported?

Under the WtW regulations at 20 CFR 645.220(h), outreach and recruitment are allowable when specifically targeted to potentially eligible individuals or groups of individuals who would benefit from WtW services and who are likely to be long-term welfare recipients, noncustodial parents of minor children, TANF recipients with characteristics of long-term welfare dependence or barriers to self-sufficiency, 18-24 year-old former foster care recipients, and custodial parents with incomes below 100% of the poverty line. Outreach and recruitment efforts may include activities targeted specifically to groups of potentially eligible individuals, and may also include public program information campaigns, such as posters on public transportation or in welfare offices. Under the WtW regulations at 20 CFR 645.235(c), costs associated with outreach and recruitment activities are not administrative costs, and thus should be reported as program costs on the line item for “Federal Program Expenditures” for reporting purposes.

AA29: Is evaluation an allowable cost under WtW?

Yes. As long as the evaluation is directly tied to the assessment of the WtW program’s performance against stated objectives, the effectiveness of WtW program activities, or WtW participant outcomes, evaluation costs are allowable program costs and are not counted against the 15% administrative cost limit. Research costs, unless specifically tied to a direct participant service to be provided in the course of the WtW grant, are not allowable under WtW as either administrative or program services costs.

AA30: Can WtW funds be used for business loans, i.e., for participants to start their own businesses?

Under the WtW regulations at 20 CFR 645.230(f), business start-up loans are not permissible. However, there are other ways to assist with entrepreneurship. Section 645.220(g) of the WtW regulations permits, “Individual development accounts which are established in accordance with the Act.” WtW funds may be used to contribute to an Individual Development Account (IDA) for an individual if the IDA is established in accordance with section 404(h) of the Social Security Act and all applicable DHHS regulations. IDAs have three purposes: (1) post-secondary educational expenses, (2) first home purchase, and (3) business capitalization. Business Capitalization is defined in the Act as “Amounts paid from an individual development account directly to a business capitalization account which is established in a federally insured financial institution and is restricted to use solely for qualified business capitalization expenses.” Please note that not all States may choose to provide for IDAs. Further discussion on IDAs is contained in WtW Q&A # AA12. For more information on IDAs, also see the final TANF regulations at 45 CFR 263.20.

In addition, pre-employment vocational educational training or job training, or post-employment activities, could include training for WtW participants to start their own businesses. However, there is no provision under any of the allowable activities to include business start-up loans as an allowable cost.

As discussed above, IDAs may provide for business capitalization expenses, which are not loans.

AA31: May WtW funds be used to pay fines that participants have incurred, for example, traffic fines?

The Cost Principles issued by OMB as Circular A-87 for States, Local Governments, and Indian Tribal Governments, and Circular A-122 for Non-profit organizations, discuss Fines and Penalties as unallowable costs based on violations of or failure of a governmental unit to comply with, Federal, State, local, or Indian tribal laws and regulations. Although the Circulars do not explicitly address the payment of fines on behalf of participants, the Department advises grantees that this prohibition may, in fact, be applied to the payment of participant fines, resulting in future audit exceptions. Legal services and fees for driving tests are, however, allowable under WtW.

AA32: Can WtW funds be used for the costs of expunging criminal records?

Because legal services can be performed on behalf of participants as a support/job retention service, expunging criminal records can be a support/job retention service under WtW where not otherwise available.

AA33: Can Individual Development Accounts (IDAs) be set up for or by noncus todial parents deemed eligible for WtW if this is not mentioned in the State TANF plan? Can IDAs be set up for the noncustodial parent’s child?

The WtW program allows IDAs to be established as an allowable WtW activity in accordance with section 404(h) of the Social Security Act. Section 404(h) of the Act provides in general that a State to which a grant is made under section 403 may use the grant to carry out a program to fund individual development accounts established by individuals eligible for assistance under the State program funded under SSA, Title IV-A. Noncustodial parents are considered eligible for assistance under the WtW program which is funded under this part. Therefore, IDAs may be established for such eligible noncustodial parents under either competitive or formula grants.

IDAs may be set up for a noncustodial parent's child if the child meets the eligibility criteria for WtW and/or TANF (e.g., they have their own case) and the purpose for which the IDA is set up is appropriate and in accordance with the Act's requirements (post-secondary education, purchase of a home, or business startup), and the grantee deems this to be an appropriate and reasonable use of WtW funds. It is expected that such instances would be limited.

AA34: Can a youth under age 18 be eligible to receive services through WtW?

Yes, as described below, youth under age 18 may be eligible to receive WtW services.

The legislative intent for the WtW program is to place long-term welfare recipients, TANF exhaustees, certain noncustodial parents and other disadvantaged individuals, (including individuals from 18 to 24

years of age who have been in foster care), into unsubsidized jobs that lead to wage gains and economic self-sufficiency. While WtW participants may receive up to six calendar months of pre-employment vocational educational or job training in accordance with 20 CFR 645.220(b), WtW is generally considered a “work first” program. The primary focus is to place individuals into a work activity as soon as possible, and concentrate resources on post-employment and job retention/supportive services to ensure that the individuals remain in the labor market with the support and skills development they need to achieve economic independence.

If a WtW grantee determines that the goals and structure of the WtW program are appropriate for assisting youth under the age of age 18 attain their educational and employment goals, such youth may be served by the grantee in two ways:

1. The youth himself/herself may be determined eligible for WtW, under 20 CFR 645.212 or 645.213
   of the WtW regulations, and may be enrolled in and served by a WtW program; or

2. As part of a “whole family” approach, the youth may be served as the child of a parent who is
   himself/herself eligible for the WtW program under either the provisions at 20 CFR 645.212 or at 645.213 of the WtW regulations, and who is enrolled in and being served by a WtW program.

In either scenario, WtW grantees must ensure that all funds expended to serve youth under age 18 are used only for those activities allowable under 20 CFR 645.220 of the WtW regulations.

AA35: Can WtW funds be used to help provide youth activities authorized under WIA (including summer employment opportunities) to disadvantaged youth?

Yes, as described below, WtW funds may be used to help provide youth activities authorized under WIA (including summer employment opportunities) to disadvantaged youth.

To the extent that WIA youth activities (including summer employment opportunities) can be viewed as part of a continuum of out-of-school youth services with the goal of placing an individual into an unsubsidized job with potential for wage gains, and/or a better job, WtW funds may be used. WtW funds used to help provide such youth employment activities must, however:

(1)(a) serve those WIA participants who also qualify as eligible for the WtW program under 20 CFR 645.212 or 645.213 of the WtW regulations, or

(1)(b) as part of a “whole family” approach, serve those WIA participants who are the children of parents who are themselves eligible for the WtW program under either the provisions at 20 CFR 645.212 or at 645.213 of the WtW regulations, and who are enrolled in and being served by a WtW program, and

(2) be used only for those activities allowable under 20 CFR 645.220 of the WtW regulations.

AA36: What guidelines can be used by an operating entity to determine if a particular job retention/supportive service would be an appropriate and allowable use of WtW funds?

The following guidance is provided to assist operating entities in determining if a job retention/support service would be appropriate and allowable:

1. The cost of the supportive service is reasonable, is necessary to the participant becoming self-sufficient, and is necessary to fulfilling the objectives and purposes of the grant;

2. The cost of this supportive service is not prohibited by the Act, the regulations, the OMB circulars or
   DOL policy;

3. The supportive service is closely related to a participant becoming job ready, or obtaining or retaining
   employment;

4. The particular supportive service is not otherwise available to the participant; and

5. The supportive service cost is in accordance with the operating entity's policy covering support
   service expenditures.

Directly impacting decisions made about what supportive services are appropriate and allowable is the Social Security Act restriction at Section 408 (a)(6) which specifically bars the use of Federal TANF funds for medical services, which also applies to WtW funds. Additionally, when determining whether a supportive service is closely related to a participant becoming job ready or obtaining or retaining employment, the primary purpose of the WtW grants, which is to place and retain individuals in lasting unsubsidized employment, should be considered, as well as whether the supportive service enables the participant to participate in post-employment activities, as described at 20 CFR 645.220(e).

Technical Assistance Questions (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL15-01_TA.pdf)

TECHNICAL ASSISTANCE QUESTIONS

TA1: Where can I find information on the poverty rates in my local area?

Poverty data, 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://www.lib.uidaho.edu:80/govdoc/otherdep.html. Additional census-related poverty data is available on the U.S. Census Bureau website at http://www.census.gov/hhes/www/poverty.html.

TA2: How do I find my Workforce Investment Act (WIA) local workforce investment area?

WIA local workforce investment areas can be found at http://wdr.doleta.gov/contacts/. Identify the State you are interested in and select "WIA Service Delivery Areas/Sub-State Areas" from the category listings. You should be able to find the appropriate local contact person from that list.

TA3: Where can I find resources to test non-English speakers for developmental disabilities, mental health issues, and learning disabilities?

The Administration on Developmental Disabilities (ADD), within the Administration for Children and Families at the Department of Health and Human Services, has a variety of resources relating to the identification of and providing services for people with developmental disabilities. Contact ADD at (202) 690-6590, or visit their website at http://www.acf.dhhs.gov/programs/add/. A variety of information on disability issues, including screening, is also available at http://www.disability.gov.

TA4: Where can I find information concerning effective programs serving rural areas?

The National Rural Development Partnership, through 36 State Rural Development Councils and a National Rural Development Council, brings together Federal, State, local and tribal governments, as well as the private for-profit and non-profit sectors, to work in partnership for the improvement of America’s rural communities. The National Rural Development Partnership can be contacted at the U.S. Department of Agriculture, 1400 Independence Avenue, SW, Room 4225-S, Mail Stop 3205, Washington, DC 20250-3205, Phone: (202) 690-2394, Fax: (202) 690-1262, or on their website at http://www.rurdev.usda.gov/nrdp/index.html. The WtW Rural Information Page, hosted by the Welfare Information Network, also maintains a wide array of information on rural welfare issues. It may be found at http://www.welfareinfo.org/rural.htm.

TA5: Is there a target date for the final WtW regulations?

The WtW Final Rule and Interim Final Rule were published in the Federal Register on January 11, 2001, at 66 Fed Reg. 2690. You can find the WtW Final Rule and Interim Final Rule on the WtW website at http://wtw.doleta.gov/documents/wtw_regs1_01.txt. The effective date for the Final WtW Rule and Interim Final Rule was April 13, 2001. We expect to finalize this rulemaking in early 2002.

TA6: What resources are available to help a grantee set up administrative systems and procedures (e.g. sample Memorandum of Understandings (MOUs), information on voucher systems, etc.)?

Grantees should seek assistance from their local workforce investment board, One-Stop Career Center or other local administrative agency. These agencies should have experience in setting up such systems and may have samples and procedures to share. Grantees should check Chapter 3 of the WtW Financial Management Technical Assistance Guide, which may be found online at http://wtw.doleta.gov/techassist/tag/default.asp. Grantees may also contact their Grant Officer Technical Representative for advice on grant implementation.

TA7: Besides the Fair Labor Standards Act (FLSA), what other work place laws apply under WtW?

All work place laws apply to WtW in the same way that they apply to other programs. 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,” available on the WtW website at http://www.dol.gov/dol/asp/public/w2w/welfare.htm. For specific questions relating to Occupational Safety and Health programs, contact OSHA Regional Offices at http://www.osha-slc.gov/html/RAmap.html. For questions about the Americans with Disabilities Act, contact the Equal Employment Opportunity Commission at http://www.eeoc.gov/facts/howtofil.html, as well as visit the ETA disAbility Online page at http://wdsc.doleta.gov/disability/.

TA8: How can a grantee gain access to a participant's confidential information from other local agencies?

A signed waiver from a participant is likely to be the best mechanism for an agency to access an individual's confidential information. MOUs with partner organizations will help in clarifying exactly what steps will be taken to protect the confidentiality of any data that might be shared.

WtW and WIA Questions (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL15-01_WW.pdf)

WtW/WIA QUESTIONS

Welfare-to-Work and WIA Implementation

The Workforce Investment Act (WIA), which became fully effective July 1, 2000, mandates the formation of Local "Workforce Investment Boards" (Local Boards) to provide strategic planning and oversight for the system of workforce investment programs within a specific local area and to oversee a One-Stop service delivery system designed to provide quality information and services for customers. The following key questions have been posed about the impact of WIA legislation on WtW program operations.

W/W1: Is the Local Workforce Investment Board (Local Board) the successor entity to the Private Industry Council (PIC)?

Yes. The Local Board has assumed the role previously held by the PIC as the administrative entity for Welfare-to-Work (WtW). (Section 403(a)(5)(D)(ii)of the Social Security Act was amended in October 1998 to expand the definition of "private industry council" to read as follows: "private industry council" means, with respect to a service delivery area, the private industry council or local workforce investment board established for the service delivery area pursuant to the Job Training Partnership Act or Title I of the Workforce Investment Act of 1998, as appropriate." (Pub. L. 105-277). This change in the WtW authorizing legislation makes it clear that local workforce investment boards (local boards) were intended as successor entity to PICs for purposes of the WtW program. The Workforce Investment Act (WIA) of 1998 authorized the creation of Local Boards in Section 117. The Job Training Partnership Act (JTPA), which authorized the establishment of PICs, was no longer in effect after July 1, 2000.

W/W2: How will WtW fit into the local workforce investment system?

Section 622.220 of the WIA regulations defines which entities serve as partners in the One-Stop system. Under WIA, the WtW program is a required partner in the One-Stop service delivery system. We interpret this requirement, in 645.430 of the WtW Regulations, to mean that the WtW formula program operator must undertake the responsibilities of the One-Stop partner. Title I of WIA and its regulations require a Memorandum of Understanding (MOU) between each partner and the Local Board. MOUs must include information about what services each partner will provide, including coordination of referrals and use of resources. Information on the responsibilities of One-Stop partners, including specific information on MOUs, may be found in 20 CFR Part 662. Technical assistance and samples of MOUs may be found at http://usworkforce.org/resources/mou.htm.

While the relationship between the WtW competitive grantees and the Local Boards may not be as formal as that of the WtW formula grantee, a partnership with the local One Stop system can enhance

participant services Therefore, we suggest that competitive grantees discuss the possibility of entering into cooperative arrangements with the Local Board.

W/W3: Are all WtW competitive grantees required to be individually represented on the Local Board?

No. The Chief Elected Official (CEO) must appoint a representative for each One-Stop partner program in the local area. Thus, the Local Board must contain at least one member who represents the WtW program. One representative may represent multiple grantees, but the CEO may also select more than one representative. For example, the CEO may appoint a representative from multiple grantees of the same program to facilitate more effective representation of the program on the Local Board.

W/W4: If PICs were providing WtW services directly to participants, can the Local Boards (former PICs) do so under WIA and under WtW?

Under WIA, one of the key reform principles is focusing local, business-led workforce investment boards on strategic planning and oversight. As a result, Local Boards may only directly provide core and intensive services under Title I of WIA with the agreement of the chief elected official and the Governor. Local Boards may only directly provide training services funded by Title I of WIA if they obtain a waiver from the Governor. Details on these restrictions are outlined in section 117(f) of WIA and 20 CFR 661.310. The Question and Answers page at http://usworkforce.org/asp/qanda.asp provides general information on PICs and their transition to Local Boards under WIA.

Under WtW, Local Boards are required to provide job readiness, job placement and post-employment services through contracts and vouchers. While the WtW 1999 Amendments permit grantees that are not Local Boards to provide these services directly, the prohibition on providing these specific services directly still exists for Local Boards. The WtW law and regulations permit Local Boards to provide other WtW services directly (such as outreach, recruitment, assessment, employment activities and job retention/support services), although the Department encourages Local Boards to focus on their strategic planning and oversight responsibilities as described under WIA.

In some cases, PICs were providing prohibited services directly under WtW due to a misinterpretation of a policy clarification issued by the Department. Sec. 645.221 of the WtW Final Rule and Interim Final Rule, published in the Federal Register January 11, 2001, clarifies the activities and services which must be provided through vouchers or contracts with public or private providers and provided relief to those PICs and Local Boards which, due to the misinterpretation, inadvertently violated the contract/voucher limitations. Local Boards were required to be in compliance with the law and regulation on this issue no later than February 12, 2001. Please refer to WtW Q&A AA2, which addresses this issue in greater detail, for additional guidance on this topic.

W/W5: Did the agreement with the WtW State administrative entity have to be modified as a

result of a former PIC's transition into a Local Board?

Yes. Some form of a transaction had to occur to transfer fiscal authority and liability for WtW grant funds. Such a transaction ensured that the State formula grant remained in compliance with the "Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments," codified in the DOL regulations at 29 CFR part 97. These requirements are intended to ensure the sound management of Federal funds and are incorporated by reference in both WtW and WIA regulations. However, it was up to each State to determine the nature and extent of the required modifications to local agreements. In some cases the modification may have only consisted of changing the name of the local entity. In other cases, where substantial changes were taking place in the mode of service delivery, a more extensive modification was likely to be required by the State.

If there was no change in geography, the State should have arranged for or facilitated "novation agreements" (see the Federal Acquisition Regulation at 48 CFR Section 42.12). This document, found online at http://www.arnet.gov/far/, exists between the outgoing PIC and the Local Board taking its place. This agreement establishes that all parties are in agreement with the terms and will allow the new entity (the Local Board) to administer the WtW funds as the successor entity.

W/W6: What procedure was followed if the geographic configuration of the local workforce investment areas under WIA was different from the geographic configuration of the service delivery areas under JTPA?

If the local geographic configurations changed when WIA was implemented, the State entity that administers the WtW grant was required to ensure that funds were appropriately redistributed among local workforce investment areas. Based on the elements in the State's distribution formula outlined in the WtW State Formula Plan, the State determined what, if any, adjustments to local area allocations were necessary. States should have reapplied their original WtW formula to the new areas, based on the data used at the time of the initial allocation, if possible. Adjustments, to the extent needed, should have been made only out of funds that were unexpended or unobligated at the local level.

W/W7: Did the approved WtW State formula plan require modification in order to reflect this geographical change?

Yes. If the geographic configurations of local areas and WtW formula allocations were different than those provided by the State in the approved FY 98 and/or FY 99 WtW formula plan, then the State should have submitted a modification to the Department. The modification would have reflected the newly designated local workforce investment areas and the adjusted amount of WtW funds allocated to those areas. Please see Training & Employment Guidance Letter (TEGL) 15-00 for instructions on how to modify the WtW State Formula Plan to reflect geographical changes. TEGL 15-00 may be found at http://wtw.doleta.gov/documents/tegltein/15-00.htm.

W/W8: If the State does not have a WtW formula grant, can competitive grantees represent the WtW program on the State Board?

Yes. WIA requires the representation of each One-Stop partner program on the State Workforce Investment Board by the lead State agency official with responsibility for the partner program. Where no lead State agency is responsible for a partner program, the partner program is represented by a person with expertise relating to the partner program, and with optimum policy-making authority within the entity (s)he represents. For WtW, a competitive grantee may be designated as the representative with expertise relating to WtW, although the Governor may choose to designate some other representative.

W/W9: Since competitive grantees that are Local Boards (formerly PICs) must contract out job retention, job placement and post-employment services to the local One -Stop operator, or do a novation agreement to make the One -Stop operator the WtW grantee, did the transition to WIA require a modification to the competitive grant document?

No. The WtW requirement that a Local Board must contract out certain services did not necessarily change a competitive grantee's scope of work, as originally funded. If it was not clear in the original grant document how services were going to be provided (directly or through subrecipients), then a change in the mode of service delivery may not have required a modification to the grant document. However, if a change in the mode of service delivery significantly affected the grant's scope of work, then a modification would have been necessary. Lack of clarity in the grant document does not relieve a competitive grantee, which is a Local Board, from the requirements of the WtW statute - providing job readiness, job placement and post-employment services through contracts or vouchers.

If a Local Board has a WtW competitive grant and is providing services in compliance with WtW, but WIA requires them to make other changes in their mode of service delivery, the same standard would apply. A modification would be necessary if the changes in service delivery are different than those expressly stated in the WtW competitive grant document.

W/W10: When a PIC phased out, how were the funds transferred to the Local Board? Did the change take place when the geographic configurations for the local workforce investment areas changed?

If the geographic areas were the same, the parties could have entered into a "novation agreement" which, in essence, established that all parties were in agreement and transferred funds and the responsibility and liability for those funds over to the new administrative entity (See the Federal Acquisition Regulation at 48 CFR Section 42.12). If the geographical areas changed when the Local Board was established, the State was responsible for redistributing funds on an equitable

basis, using the elements in the State's distribution formula outlined in the WtW State Formula Plan, to ensure that the appropriate funding amounts were available to each local area after transformation to WIA. Presumably, this redistribution took place through new grant agreements with the reconfigured local areas.

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