Plans for spending the Recovery Act $500 million UI distribution

Accessible letter PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2012/TEGL_32_11_acc.pdf

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                 Unemployment Insurance
               ADVISORY SYSTEM                            CORRESPONDENCE SYMBOL
                                                          OUI/DFAS
          U.S. DEPARTMENT OF LABOR
                                                          DATE
             Washington, D.C. 20210                       June 1, 2012

ADVISORY:         TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 32-11

TO:               STATE WORKFORCE ADMINISTRATORS
                  UNEMPLOYMENT INSURANCE DIRECTORS

FROM:             JANE OATES /s/
                  Assistant Secretary

SUBJECT:          $500 Million Special Distribution Provided Under the American Recovery
                  and Reinvestment Act of 2009 (Recovery Act)

1. Purpose. To request states to submit spending plans for their shares of the $500 million
   Special Distribution provided under the Recovery Act.

2. References.
      • Assistance for Unemployed Workers and Struggling Families Act, Title II of Division
         B of Public Law (P.L.) No. 111-5, enacted February 17, 2009;
      • Unemployment Insurance Program Letter No. 14-09, Special Transfers for
         Unemployment Compensation Modernization and Administration and Relief from
         Interest on Advances;
      • Office of Inspector General (OIG) Report 18-10-012-03-315, Recovery Act: More
         Than $1.3 billion in Unemployment Insurance Modernization Incentive Payments Are
         Unlikely to Be Claimed By States, issued September 30, 2010;
      • Training and Employment Guidance Letter No. 12-11, $500 Million Special
         Distribution under the American Recovery and Reinvestment Act (Recovery Act); and
      • Employment and Training Administration (ETA) Form 8403, Summary of Financial
         Transactions for Title IX Funds, OMB Control No. 1205-0154.

3. Background. Section 2003(g) under Subtitle A of the Assistance for Unemployed Workers
   and Struggling Families Act provided each state a share of $500 million based on a state’s
   proportionate share of Federal Unemployment Tax Act taxable wages paid in 2007. States
   were to use the funds for the following purposes:

       •   Implementing and administering the provisions of state law that qualify the state for
           Unemployment Compensation (UC) Modernization incentive payments;
       •   Improving outreach to individuals who might be eligible by virtue of these
           provisions;
       •   Improving UC benefit and tax operations, including responding to increased demand
           for UC; and
       •   Staff-assisted reemployment services for UC claimants.


 RESCISSIONS                                             EXPIRATION DATE
 None                                                    June 1, 2013

4. Discussion. Critical objectives of the Recovery Act were to preserve and create jobs,
   promote economic recovery, and assist those most impacted by the recession. To achieve
   these objectives, expenditure of the funds made available under the Recovery Act is
   necessary, and, as a result, expenditures have been closely tracked and reported to the Office
   of the Vice President for assessment of their economic impact. States received their shares of
   the $500 million distribution approximately three years ago; as of May 5, 2012,
   approximately $232.9 million (about 47 percent) had been expended. Nine states, however,
   have not expended any of the funds. The slow rate of expenditure concerns the Office of
   Management and Budget (OMB), the Office of the Vice President, and the Department of
   Labor (Department) since it signals the funds are not being actively used to promote
   economic growth. Hence there is great interest in states’ plans for expenditure of the funds.

   In its report dated September 30, 2010, the OIG raised concerns about expenditure of these
   funds as it found that 22 states had no specific time frame for using the funds or the time
   frame was not determinable. One of the recommendations of the report was for the
   Department to:

       Request detailed spending plans from the states for the $500 million of administrative
       funds, and for those states without adequate plans, provide assistance, as appropriate, to
       help ensure these funds are spent as intended.

   In order to understand when the remaining funds from the $500 million distribution will be
   expended thereby promoting economic recovery and job creation, and to comply with the
   OIG recommendation, states must submit plans for expenditure using the attached OMB
   approved (Approval No.: 1205-0154) ETA 8403A form as the collection instrument for the
   plans. We have established a target date of September 30, 2013 for expending the funds
   remaining from the $500 million distribution. Plans not meeting the target date should
   include reasons for passing that date; such plans will be evaluated for acceptability on a case-by-case basis. States not adhering to expenditure plans based on Treasury data related to
   withdrawals from state accounts established for the $500 million distribution may be
   requested to submit revised plans. Department staff are available to provide assistance to
   states needing help to ensure the funds are expended as intended.

   Section 2142(a) of P.L. No. 112-96 requires that states provide reemployment services and
   reemployment and eligibility assessments (RES/REA) to certain individuals receiving
   emergency UC. Section 2142(c)(2)(C) authorizes funding in the amount of $85 for activities
   listed under Section 2142(a)(2) and included in the list of activities are staff-assisted
   reemployment services. Hence states with funds remaining from the $500 million
   distribution may use those funds to supplement the $85 per individual being provided for
   RES/REA activities.

5. Action Required. State administrators should distribute this advisory, and the attached
   form, to appropriate staff and submit the ETA 8403A through the appropriate Regional
   Office to the National Office by June 30, 2012. Plans must reflect the status of the $500
   million as of May 31, 2012, and should include: 1) a description of the goods and services
   acquired for amounts already expended and the amount expended; 2) the amount obligated

   but not expended, a description of the goods and services for which the funds have been
   obligated, a time line for expenditure; and, 3) the amount of funds unobligated and
   unexpended, a description of the goods and services to be acquired with these funds, and a
   timeline showing the plan for obligation and expenditure. For those states that have
   expended all of the funds, a description of the goods and services purchased is all that is
   required and that information should be entered in the “Funds Expended to Date” section of
   the ETA 8403A form. Administrators should ensure plans reflect proper and expeditious use
   of the funds and clearly address any current or prospective issues that might affect the
   timeline for expenditure of these funds.

6. Inquiries. Questions should be addressed to your Regional Office.

7. Attachment. Form ETA 8403A

Attachment: Form ETA 8403A and reporting instructions (https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2012/TEGL_32_11_att.pdf).

ETA 8403A Acquisition Report and Spending Plan

           State                     Total Distribution             Remaining Unexpended                         Date
                                                                            Funds


Funds Expended to Date

Funds Obligated but Not Expended

State Spending Plan and Timeline for Unobligated and Unexpended Funds.

OMB No.: 1205-0154           OMB Expiration Date: 09/30/2012            Average Estimated Response Time: 30 Minutes

OMB Burden Statement: These reporting instructions have been approved under the Paperwork Reduction Act of 1995. Persons
are not required to respond to this collection of information unless it displays a valid OMB control number. Public reporting
burden for this collection of information includes the time for reviewing instructions, searching existing data sources, gathering
and maintaining the data needed, and completing and reviewing the collection of information. Submission is required to obtain
or retain benefits under SSA 303(a)(6). Respondents have no expectation of confidentiality. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the U.S.
Department of Labor, Office of Workforce Security, Room S-4524, 200 Constitution Ave., NW, Washington, DC, 20210.

                      Reporting Instructions for Special Addendum to the 8403A

State: Enter your state name or two letter Federal Information Processing Standard (FIPS) abbreviation

Total Distribution: Insert the amount (in dollars) of funds provided by Public Law No. 111-5 to the state
under the special $500M distribution. These values can be found in the first column of the table at the
following link: http://wdr.doleta.gov/directives/attach/UIPL/UIPL14-09g.pdf.

Remaining Unexpended Funds: Insert the amount (in dollars) of funds that have not been expended.
Include funds that have been obligated but not spent.

Date: Enter the date on which the remaining unexpended funds are reported. This should be the last
business day of the month.

Funds Expended to Date: Provide a description of the total amount of funds expended to date and the
goods and services obtained for those funds as of the date provided on the report.

Funds Obligated but Not Expended: Provide the total amount of funds obligated but not expended and
describe the goods and services that will be obtained. In addition, provide a timeline for completion
including any known obstacles to expending the obligated funds.

State Spending Plan for Unobligated and Unexpended Funds: Provide a narrative description of how
the state plans to spend the remaining unexpended funds. This narrative should include a timeline of
when funds will be spent as well as the goods and services the state expects to receive in expending the
funds.