2018 fidelity bonding demonstration grants

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                 Federal Bonding Grants
               ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                        OWI/DYS
             Washington, D.C. 20210                       DATE
                                                          March 26, 2019

ADVISORY: TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 15-18

TO:             STATE WORKFORCE AGENCIES
                STATE WORKFORCE ADMINISTRATORS
                STATE WORKFORCE ADMINISTRATORS WAGNER-PEYSER

FROM:           MOLLY E. CONWAY /s/
                Acting Assistant Secretary

SUBJECT:        Fidelity Bonding Demonstration Grants to State Workforce Agencies to Support
                Employment Opportunities for Ex-Offenders, Including Ex-Offenders
                Recovering from Opioid and Other Drug Addictions

1. Purpose. To announce the availability of up to $5 million for Fidelity Bonding
   Demonstration Grants for Program Year 2018. These grants will enable states to expand
   their use of fidelity bonds to help persons with criminal records, including ex-offenders
   recovering from opioid and other drug addictions, obtain employment.

2. Action Requested. State Workforce Agencies should consider applying for the grants
   described in this TEGL. The application deadline is May 1, 2019.

3. Summary and Background.

        a. Summary - The Department of Labor (DOL or Department) is committed to helping
           those involved in the criminal justice system, including ex-offenders recovering from
           opioid and other drug addictions, obtain employment in family-sustaining jobs; better
           informing employers about the knowledge, skills, and abilities of this population; and
           advancing strategies to address the barriers to reemployment. Through the Federal
           Bonding Program (FBP), the Department provides fidelity bonds to employers to help
           reduce the risks of hiring individuals whose criminal backgrounds pose barriers to
           securing employment.

        b. Background - FBP is authorized under Section 169 of the Workforce Innovation and
           Opportunity Act (WIOA). Over the years, FBP has remained a small program,
           currently serving an estimated 934 ex-offenders a year. The Department wishes to
           increase the use of fidelity bonds by providing funds to states to purchase fidelity
           bonds over a four-year period through this new funding opportunity. State Workforce
           Agencies will apply for the grant on behalf of their respective states. States will
           operate this new grant in the same manner they operate their current FBP. States that
           do not currently operate a FBP must designate a staff person to serve as the state
           bonding coordinator for this grant. States will use their own procurement policies and

 RESCISSIONS                                              EXPIRATION DATE
 None                                                     May 1, 2019

           procedures to select an insurance provider to purchase bonds or may continue to
           purchase fidelity bonds through the Department of Labor’s FBP contractor, as long as
           they comply with state contracting procedures. State bonding coordinators may
           certify bonds or delegate the authority to certify bonds to other staff.

4. Demonstration Goals. The goals of this demonstration include:
     Improving employment outcomes, which in turn decreases recidivism, for persons with
      criminal records by encouraging states and workforce development partners to provide
      fidelity bonds to employers as a hiring tool for persons with criminal records;
     Educating employers and the public on the availability and benefits of fidelity bonds for
      persons with criminal records; and
     Providing outreach to employers to encourage them to hire persons with criminal records.

5. Funds Availability. ETA is making up to $5 million in funding available under this TEGL
   for demonstration grants as authorized by Section 169(b) of WIOA. ETA anticipates
   awarding up to 57 grants, with an anticipated funding amount of up to $100,000 per grant.
   The maximum amount of funding each state can receive under this demonstration is up to
   $100,000. The final amount of each grant award will depend on the number of applicants
   and the availability of Federal funds; if the total amount requested by all applicants exceeds
   the total available amount of $5 million, DOL will determine how to equitably distribute the
   funds across all applicants.

6. Eligible Applicants. Eligible applicants for funding under this opportunity are the State
   Workforce Agencies, which include the 50 states, Puerto Rico, the District of Columbia, the
   Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana
   Islands, and Palau.

7. Eligible Participants. The funds for this demonstration come from an appropriation
   designated for serving persons with criminal records. Therefore, only persons with criminal
   records, including those involved with the criminal justice system by virtue of their history of
   opioid or other drug addictions, are eligible for coverage under the bonds purchased with
   these funds. States that wish to provide bonds for at-risk individuals who are not ex-
   offenders must purchase bonds with funds other than those provided in this demonstration
   project.
8. Allowable Activities.
     The grant’s principal allowable activity is purchasing fidelity bonds to assist persons with
      criminal records, including individuals recovering from opioid and other drug addictions,
      obtain employment. A minimum of 85 percent of grant funds must be used specifically
      for the purchase of bonds.

       In selecting an insurance provider for the bonds, states must follow the Uniform
        Administrative Requirements, Cost Principles, and Audit Requirements for Federal
        Awards, including 2 CFR 200.317, which states: “When procuring property and services
        under a Federal award, a state must follow the same policies and procedures it uses for
        procurements from non-Federal funds.” States may choose any insurance company,

        broker, or agency, including the FBP provider contracted by the Department, consistent
        with the state’s procurement policies and procedures.

       At a minimum, the specifications of bonds purchased with these grant funds must include
        the following:
           o Bonds must reimburse employers for losses due to the illegal acts of their
              employees, such as, theft, forgery, and embezzlement;
           o Bonds must provide at least $5,000 of coverage;
           o Bonds must be allowed to be used in multiples to cover an individual employee,
              totaling up to $25,000 of coverage per employee; and
           o Bonds must provide coverage for at least six months.

        States may require additional specifications, such as increasing the dollar amount of
        coverage or lengthening the duration of coverage.

       States may operate this new grant in the same manner that they operate their current
        FBP. States that do not currently operate a FBP must designate a staff person to serve as
        the state bonding coordinator for this grant. The state bonding coordinator implementing
        this demonstration in the state may have other responsibilities beyond operating this
        demonstration; this does not need to be a full-time position. A primary function of this
        position will be to certify bonds with the insurance provider. State bonding coordinators
        may also delegate the authority to certify bonds to local staff.

       Grant funds may be spent on educating employers and the public about the benefits of
        fidelity bonds for persons with criminal records, including individuals recovering from
        opioid and other drug addictions. Employer and public education may include, but is not
        limited to, the development and distribution of written materials, virtual and in-person
        information sharing, and meetings.

       Grant funds may be spent on administrative costs associated with operating this
        demonstration.

9. Use of Funds.
   The following cost limitations apply:

     At least 85 percent of grant funds must be used specifically for the purchase of bonds;
     The remaining grant funds may be used for education, outreach, and administrative cost;
      and
     These demonstration grants are subject to the Uniform Guidance: Uniform
      Administrative Requirements, Cost Principles, and Audit Requirements for Federal
      Awards at 2 CFR Part 200 and OMB’s approved exceptions for the Department at 2 CFR
      Part 2900.

   ETA will execute grant awards on or before June 30, 2019, and grant funds will be available
   for expenditure during a four-year period of performance.

10. Instructions for Submitting Applications.
    Application Narrative. Applicants must submit an Application Narrative not longer than four
    double-spaced pages. The Narrative must be divided into three components, and the
    requirements for each are outlined below under the following headings: 1) Impact/Need
    Statement; 2) Project Implementation; and 3) Fiscal Integrity:

    1. Impact/Need Statement: Describe the need in your state for the grant. Identify the
       number of ex-offenders your state expects to serve in its Employment Services (ES) and
       WIOA adult formula program over the next four years. That number may be higher or
       lower than the number shown for your state in the table in Attachment 1, which provides
       the estimated number of ex-offenders served by each state’s ES and WIOA adult
       formula programs over four years based on Program Year 2016 data. This information
       will be used to verify that there are enough individuals in your service area to meet the
       participation level you are requesting in your application. The use of this data does not
       mean that all workers bonded under this demonstration project must be enrolled in
       WIOA or ES services. Identify the total amount of the request.
    2. Project Implementation: Describe how your state currently administers FBP and what
       adjustments, if any, will be made to your state’s current FBP to operate this grant. If
       your state does not currently participate in FBP, describe how your state will administer
       the fidelity bonding demonstration. Identify the costs to educate employers and the
       public about fidelity bonding for ex-offenders, including individuals recovering from
       opioid and other drug addictions, and administrative costs that will be charged to the
       grant. Describe your plan to expend the funds requested within four years.
    3. Fiscal Integrity: Describe the procedures you will implement to ensure the fiscal
       integrity of the project, track funding, and ensure a clear and concise audit trail.
        Applicants are not expected to identify an insurance provider in their application.

        Application Procedures, Requirements, and Timeline. In an effort to achieve greater
        efficiency and as part of ETA’s on-going effort to streamline the grant award process,
        grantees are required to submit the following items through Grants.gov at
        https://www.grants.gov/.
          o An electronically signed copy of an SF-424 - Application for Federal Assistance
             (OMB Control No. 4040-0004);
          o An SF-424A - Budget Information - Non-Construction Programs (OMB Control
             No. 4040-0006);
          o A Budget Narrative to explain the projected costs reflected in each line item of the
             SF-424A, demonstrating how grant funds will be used. See Attachment 2 for
             instructions on completing the Budget Narrative;
          o An Application Narrative comprised of three sections: 1) Impact/Need Statement;
             2) Project Implementation; and 3) Fiscal Integrity. Each section must address the
             questions and requirements laid out in Section 10 above. The Application Narrative
             statement must not exceed four double-spaced pages, not including attachments;
             and
          o A proposed project timeline, which includes a brief summary of planned activities
             and project milestones.

    An SF-424 electronically submitted through Grants.gov constitutes the official signed
    document and must reflect the total amount requested of no more than $100,000 in item 18,
    Estimated Funding.

    To find this TEGL on Grants.gov and submit the required documents, select “Search
    Grants.” On the left side of the page, scroll down to Agency, expand the selection “All
    Department of Labor,” and select “Employment and Training Administration.”

    If applicants encounter a problem with Grants.gov and do not find an answer in any of the
    other resources call 1-800-518-4726 or 606-545-5035 to speak to a Customer Support
    Representative or email [email protected].

    The final date for accepting applications is 11:59PM EDT on May 1, 2019. Pending
    funding availability, ETA plans to award these grants on or before June 30, 2019.

11. Award Procedures. Awards will be made to eligible applicants meeting the grant
    requirements as outlined in this TEGL. ETA may choose to provide technical
    assistance, as needed, to assist applicants that fail to meet all the requirements
    necessary for ETA to provide funding; however, this technical assistance is not an
    indication or guarantee that ETA will award the application a grant. An applicant
    will not receive a grant if it fails to demonstrate all required components prior to
    ETA exhausting all of the grant funds. The final amount of each grant award will
    depend on the number of applicants and the availability of Federal funds; if the total
    amount requested by all applicants exceeds the total available amount of $5 million,
    DOL will determine how to equitably distribute the funds across all applicants.

    ETA may elect to award a grant with or without discussions with the applicant.
    Should a grant be awarded without discussions, the award will be based on the
    applicant's signature on the SF-424, including electronic signature, which constitutes
    a binding agreement by the applicant.

    NOTE: The Department will determine if the applicant had any restriction on
    spending for any ETA grant due to adverse monitoring findings within the past
    three years. Depending on the severity of the findings, the Grant Officer may
    elect to not provide the applicant a grant award or to impose conditions on the
    award.

    All applications chosen for funding by the Grant Officer will go through a risk-
    review process before making an award; ETA will review information available
    through any OMB-designated repository of government-wide eligibility qualification
    or federal integrity information, such as the Federal Awardee Performance and
    Integrity Information System (FAPIIS), Dun and Bradstreet, and “Do Not Pay.”
    Additionally, ETA will comply with the requirements of 2 CFR Part 180
    (Government-wide Debarment and Suspension [Non-Procurement]). If ETA
    determines that an entity is responsible and an award will be made, special conditions
    that correspond to the degree of risk assessed may be applied to the award.

    Risk-related criteria that will be evaluated include:

         i.  Financial stability;
        ii.  Quality of management systems and ability to meet the management
             standards prescribed in the Uniform Grant Guidance;
        iii. History of performance: The Applicant’s record in managing awards,
             cooperative agreements, or procurement awards, if it is a prior recipient of
             such Federal awards, including timeliness of compliance with applicable
             reporting requirements, and if available, the extent to which any previously
             awarded amounts will be expended prior to future awards;
        iv. Reports and findings from audits performed under Subpart F-Audit
             Requirements of the Uniform Grant Guidance (2 CFR Sections 200.500 -
             200.520) or the reports and findings of any other available audits and
             monitoring reports containing findings, issues of non-compliance, or
             questioned costs; and
         v. The applicant’s ability to effectively implement statutory, regulatory, or
             other requirements imposed on recipients.

    Selection of a recipient does not constitute approval of the grant application as
    submitted. Before grant award, the Department may enter into negotiations about items
    such as program components, staffing and funding levels, and administrative systems in
    place to support grant implementation. If the negotiations do not result in a mutually
    acceptable submission, the Grant Officer may terminate the negotiations and decline to
    fund the application.

12. Required Reporting.
     Quarterly Fiscal Reports – Grantees must submit the quarterly Basic ETA-9130 financial
      report until funds are expended or the grant period has expired. Quarterly financial
      reports are due 45 days after the end of each calendar year quarter. Grant recipients must
      submit the ETA-9130 using the Department’s Online Electronic Reporting System.
     Quarterly Progress Report – Grantees must submit a one-page narrative report
      summarizing the progress of their grant within 45 days of the end of each quarter to their
      assigned Federal Project Officer.
     State bonding coordinators or designated staff must track every bond at the time it is
      issued and report certain information, including the occupation, industry, hourly wage,
      and hours of work per week of the position; gender, race, and ethnicity of the ex-offender
      who is being insured; number of employees of the employer; and whether the employer is
      for-profit, not-for-profit, or a government agency. ETA expects grantees to reach out to
      the bonded employee to explain services available at the American Job Center, and unless
      the bonded employee opts out to enroll participants in the Wagner-Peyser Employment
      Service as an employed individual. States would then track employment outcomes using
      administrative data available to that program. Applicants must also describe their process
      for obtaining information about recidivism from the relevant law enforcement,
      correctional and/or community corrections agencies. ETA will issue subsequent guidance
      on the information that must be tracked and reported.

13. OMB Information Collection. OMB Information Collection No 1225-0086, Expires
    May 31, 2019.
    According to the Paperwork Reduction Act of 1995, no persons are required to respond to a
    collection of information unless such collection displays a valid OMB control number.
    Public reporting burden for this collection of information is estimated to average 20 hours
    per response, including time for reviewing instructions, searching existing data sources,
    gathering and maintaining the data needed, and completing and reviewing the collection of
    information.

    Send comments about the burden estimated or any other aspect of this collection of
    information, including suggestions for reducing this burden, to the U.S. Department of
    Labor, to the attention of the Departmental Clearance Officer, 200 Constitution Avenue
    NW, Room N1301, Washington, DC 20210. Comments may also be emailed to
    [email protected].

   PLEASE DO NOT RETURN YOUR GRANT APPLICATION TO THIS ADDRESS.
   ONLY SEND COMMENTS ABOUT THE BURDEN CAUSED BY THE
   COLLECTION OF INFORMATION TO THIS ADDRESS. SEND YOUR GRANT
   APPLICATION TO THE SPONSORING AGENCY AS SPECIFIED IN THIS
   ANNOUNCEMENT.

   This information is being collected for the purpose of awarding a demonstration grant.

14. Inquiries. Questions regarding this guidance should be directed to Linda Forman at
    [email protected] in the ETA Office of Grants Management.

15. References.
     Section 169(b) of the Workforce Innovation and Opportunity Act (WIOA), Pub. L. 113-
      128;
     Consolidated Appropriations Act, 2018, Pub. L. 115-141;
     ETA Form 9130 (Office of Management and Budget (OMB) Control No. 1205-0461);
      and
     Federal Bonding Program website, www.bonds4jobs.com.

16. Attachments.
     Attachment I: Estimated Number of Offenders Served by Each State’s Employment
       Service and WIOA Adult Formula Program Over Four Years Based on Program Year
       2016 Data
     Attachment II: Instructions for Completing Budget Narrative

Attachment (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2019/TEGL_15-18_Attachment-1_Acc.pdf)

Attachment I
  ESTIMATED OFFENDERS SERVED BY STATES OVER 4 YEARS BASED ON PY 2016 DATA

                       PY 2016 OFFENDERS                         ESTIMATED
                                           ESTIMATED EXITED
      STATE              EXITED OVER 9                        OFFENDERS SERVED
                                           OVER 12 MONTHS
                            MONTHS                              OVER 4 YEARS
      Alabama                 1,664              2,218                    8,872
        Alaska                1,219              1,625                    6,500
       Arizona                1,819              2,425                    9,699
      Arkansas                 648                864                     3,455
      California              1,883              2,510                   10,040
      Colorado                 299                399                     1,594
    Connecticut                262                349                     1,397
      Delaware                 767               1,022                    4,090
District of Columbia           37                 49                        197
       Florida                1,473              1,964                    7,854
       Georgia                 293                391                     1,562
        Guam                   31                 41                        165
       Hawaii                  19                 25                        101
        Idaho                  75                 100                       400
        Illinois               527                702                     2,810
       Indiana                 674                898                     3,594
         Iowa                  40                 53                        213
       Kansas                 2,116              2,821                   11,283
      Kentucky                 376                501                     2,005
      Louisiana                154                205                       821
        Maine                  58                 77                        309
      Maryland                 265                353                     1,413
      Michigan                 384                512                     2,047
     Minnesota                 70                 93                        373
     Mississippi              1,397              1,862                    7,449
      Missouri                 60                 80                        320
      Montana                  27                 36                        144
      Nebraska                 97                 129                       517
       Nevada                 1,004              1,338                    5,353
  New Hampshire                15                 20                         80
     New Jersey                226                301                     1,205
    New Mexico                 34                 45                        181
      New York                2,333              3,110                   12,440
  North Carolina              3,746              4,993                   19,974
   North Dakota                25                 33                        133
         Ohio                  545                726                     2,906
     Oklahoma                 1,677              2,235                    8,942
       Oregon                10,368             13,821                   55,282
    Pennsylvania              6,304              8,403                   33,613
    Rhode Island               97                 129                       517
   South Carolina              375                500                     2,000
   South Dakota                925               1,233                    4,932
     Tennessee                 393                524                     2,095
         Texas               43,949             58,584                  234,336
         Utah                 7,791             10,385                   41,542
      Vermont                  707                942                     3,770
       Virginia                365                487                     1,946
    Washington                3,078              4,103                   16,412
    West Virginia             1,409              1,878                    7,513
     Wisconsin                1,035              1,380                    5,519
      Wyoming                  24                 32                        128


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Attachment (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2019/TEGL_15-18_Attachment-2_Acc.pdf)

ATTACHMENT II


         General Instructions for the Completion of Budget Information Narrative
The Budget Information Narrative provides an explanation of each line item on the SF-424A,
including a breakout of the relevant component costs. The total of the breakout must equal the
amount listed on the corresponding line item of the SF-424A. This narrative reflects projected
costs incurred by the recipient, with the exception of the Contractual line item. Please note that a
separate breakout of the recipient’s administrative costs must also be provided.
1.Personnel: List all staff positions by title. Indicate the annual salary of the position, the
percentage of each position’s time devoted to the project, the amount of each person’s salary
charged to the grant, and the total personnel cost for the period of performance.
2.Fringe Benefits: Provide the overall fringe benefit percentage which reflects the recipient’s
organizational fringe, and list the components included, such as health insurance, FICA,
retirement, etc. Provide the fringe benefit calculation for each staff position listed under the
Personnel line item, as well as the collective total charged to the grant.
3.Travel: Specify the type and purpose of the travel, the number of travelers, approximate
mileage, per diem rates, estimated number of trips, and other associated travel costs.
4.Equipment: Identify each item of equipment to be purchased that has an estimated acquisition
cost of $5,000 or more per unit and a useful lifetime of more than one year. List the quantity and
unit cost per item. Items with a unit cost of less than $5,000 are supplies.
5.Supplies: Supplies include all tangible personal property other than “equipment.” Identify
supply categories (e.g. office supplies, cell phones, etc.). List the cost associated with each
category.
6.Contractual: Identify each contracted entity, the funding allocation made to the organization,
and the anticipated number of participants served by each.
7.Construction: Construction costs are not allowed and this line must be left as zero.
8.Other: List each item in sufficient detail for reviewers to determine whether the costs are
reasonable or allowable. Costs included under “Other” should not fit into any other line item
category.
9.Indirect Charges: If charging indirect costs to the grant, this line item must be populated.
Include the current approved Negotiated Indirect Cost Rate Agreement, signed by the Federal
cognizant agency, as an attachment to the grant application.


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