FY 2014 funds for EUC sequestration changes

CLASSIFICATION
   EMPLOYMENT AND TRAINING ADMINISTRATION                  UI/EUC
               ADVISORY SYSTEM                             CORRESPONDENCE SYMBOL
          U.S. DEPARTMENT OF LABOR                         DFAS/OUI
             Washington, D.C. 20210                        DATE
                                                           September 9, 2013

ADVISORY:          UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 27-13

TO:                STATE WORKFORCE AGENCIES

FROM:              GERRI FIALA /s/ for ERIC M. SELEZNOW
                   Acting Assistant Secretary

SUBJECT:           Unemployment Insurance (UI) Supplemental Funding Opportunity to Fund
                   Costs Attributable to the Implementation of the Sequestration Impacts on the
                   Emergency Unemployment Compensation (EUC) Program in Fiscal Year
                   (FY) 2014

1. Purpose. To notify State Workforce Agencies (SWAs) of the availability of funds through
   the Supplemental Budget Request (SBR) process for costs related to the implementation of
   sequestration requirements impacting the EUC program in FY 2014.

2. References.
   • Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA)
      (Pub. L. 99-177);
   • Budget Control Act of 2011 (BCA) (Pub. L. 112-25);
   • Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96);
   • American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240);
   • Unemployment Insurance Program Letter (UIPL) No. 13-13, Implementation of
      Sequestration under the Budget Control Act of 2011 for the Unemployment Insurance
      Programs for Fiscal Year 2013, and UIPL No. 13-13, Change 1;
   • UIPL No. 15-13, Unemployment Insurance (UI) Supplemental Funding Opportunity to
      Fund Costs Attributable to the Implementation of the Sequestration Impacts on the
      Emergency Unemployment Compensation (EUC) Program;
   • Sequestration Order for Fiscal Year 2014 (April 10, 2013); and
   • Sequestration Preview Report to the President and Congress for Fiscal Year 2014 and
      OMB Report to the Congress on the Joint Committee Reductions for Fiscal Year 2014
      (April 10, 2013) (Corrected Version—May 20, 2013).

3. Background. The BCA amended the BBEDCA to require reductions in budgetary authority,
   known as sequestration, beginning on January 2, 2013, unless Congress passed, and the
   President signed, a bill that reduces the deficit by at least $1.2 trillion over 10 years. Since
   no such legislation was enacted, the President issued a sequestration order on March 1, 2013.
   Emergency Unemployment Compensation (EUC) benefits were not exempted from
   sequestration and states were required to cut EUC benefits to achieve the required 5.1 percent
   savings for FY 2013.

 RESCISSIONS                                               EXPIRATION DATE
 None                                                      March 31, 2014

   Similarly, if legislation to reduce the deficit by the amount specified under BBEDCA is not
   enacted prior to October 1, 2013, BBEDCA requires that reductions to mandatory FY 2014
   funding (EUC benefits are mandatory spending) be carried out through uniform across-the-
   board percentage reductions to projected spending for each program, project and activity.

   Pursuant to BBEDCA, the President issued a Sequestration Order for Fiscal Year 2014 on
   April 10, 2013, accompanied by an OMB Sequestration Preview Report to the President and
   Congress for Fiscal Year 2014 and OMB Report to the Congress on the Joint Committee
   Reductions for Fiscal Year 2014. The required percentage reduction for mandatory programs
   for FY 2014 was determined to be 7.2 percent (see p. 28 of the report for the effect on
   funding for EUC).

   The Administration has presented a comprehensive deficit reduction plan that would
   eliminate sequestration, and hopes that Congress will act on it to avert sequestration for FY
   2014 and beyond. However, given that sequestration is current law, the U.S. Department of
   Labor (Department) recognizes that states need lead time to plan for implementing the new
   percentage cut for FY 2014 and is taking this step to allow for prudent planning.

4. Additional Sequestration Implementation Funding. Similar to the opportunity offered to
   states to submit SBRs for EUC administrative funding to implement sequestration in FY
   2013 pursuant to UIPL No. 15-13, the Department is again inviting states to submit SBRs for
   the implementation of sequestration in the EUC program for FY 2014.

   We have established a timeline for this SBR to apply for and award these EUC
   administrative funds in FY 2013 to allow states to begin to implement the required 2014
   sequestration reductions as close to the beginning of the fiscal year as possible. This SBR
   funding is available to cover the costs of: programming of reductions to EUC entitlement,
   benefit redeterminations, Web site and Interactive Voice Response systems updating, and
   claimant notification of benefit amount changes including postage. Funds are also available
   for staff training and other activities related to the implementation of the sequestration
   reduction in FY 2014. States are invited to seek funds for all administrative activities
   associated with the implementation.

   Costs attributable to any non-sequestration implementation activities will not be funded
   under this solicitation.

5. Application, Award, and Expenditure of Supplemental Funds. States should submit
   proposals, including appropriate cost estimates, to obtain adequate funding for any
   sequestration-related activities in one SBR package no later than September 18, 2013, and
   awards will be made by the end of September. These funds are subject to the 5.1 percent
   sequestration reduction required for FY 2013. The National Office will review each proposal
   and, if approved, apply a 5.1 percent sequestration reduction to approved costs for the funded
   activities to arrive at the award to the state. Each activity will be considered a section of the
   state’s SBR, and each activity will be evaluated individually. The SBR Outline (attached)
   will be used to evaluate the proposals. Each activity should be addressed succinctly and
   provide the specific information requested. Due to the tight timeframe for developing and
                                                 2

   submitting SBRs, states must provide only the information requested. Additional
   information such as an introductory narrative is not necessary. In addition, submission of the
   SF-424 (OMB No. 4040-0004) and SF-424A (OMB No. 4040-006) is being delayed for the
   initial submission.

   Upon approval of an SBR proposal, an award letter will be issued to each state listing all
   activities to be funded and the total funding level for “sequestration implementation.” The
   award letter will also identify the amount of the 5.1 percent reduction for sequestration.
   States must then submit an SF-424 and an SF-424A for the amount awarded for sequestration
   implementation within 15 days.

   It is expected that states will obligate and expend the funds quickly, given the immediate
   need to implement the changes required by sequestration. Any SBR funds not obligated by
   December 31, 2013, must be returned as they could not be used for their intended purpose;
   i.e., implementation of sequestration in FY 2014. Expenditures of these SBR funds must be
   reported on the Department’s Employment and Training Administration Fiscal Report (ETA
   9130) in the remarks section. States must establish time-charging codes that will allow for
   the accounting of appropriate costs.

6. Project Management. If, during the performance period, states wish to move funds among
   categories on the SF-424A and the amount to be moved exceeds 20 percent of either the
   “donating” or “receiving” category as initially funded, a new SF-424A, with a letter signed
   by the Agency Administrator and dated requesting the change to the Office of
   Unemployment Insurance Administrator, Gay M. Gilbert, must be submitted electronically
   with a copy to the appropriate Regional Office (RO). These documents will be forwarded to
   the Employment and Training Administration Grants Officer for approval of the
   modification.

   States may not elect to abandon a single activity that has been funded and move the funds to
   a different activity that has also been funded. If an approved activity is not undertaken by the
   state, the funds for that activity must be returned to the Department.

7. Action Requested. State Administrators are asked to:

   a) Inform appropriate staff of this funding opportunity;
   b) Determine activities for which the submission of SBRs would be appropriate;
   c) Work with the appropriate RO to use their knowledge and technical expertise; and
   d) Submit an electronic SBR to the National Office at [email protected] by September
      18, 2013, with a copy to the RO. The title line of the email should include the name of
      the state and the title, EUC Sequestration Implementation SBR 2014. An email response
      will be sent within 24 hours from the OWS SBR mailbox acknowledging receipt of the
      electronic document.

8. Inquiries. Inquiries should be directed to the appropriate RO.

9. Attachment. Supplemental Budget Request Outline

                                                3

Attachment 1 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2013/UIPL_27_13_Att.pdf)

ATTACHMENT

                            Supplemental Budget Request Outline

1. Name of the Project: The naming convention for this project is State Abbreviation-EUC
Sequestration Implementation SBR 2014.

2. Funding Request: Provide the total dollars requested for this submission and
delineate the total dollars requested for each activity.

3. State Contact: Provide name, telephone number and email address of the individual who can
answer questions related to this proposal.

4. Project Timeline: Provide a timeline identifying the dates of significant steps and critical
activities in this project through the projected implementation date.

5. Description of Costs: Provide an explanation of costs for each activity included in the
package.

     Staff Costs for Agency and Contract Staff: States must use the table format below to
     request funds for the costs of state or contract staff. The submission must clearly explain
     which costs are for state staff and which costs are for contractor staff and indicate the
     number of staff that will be used for each type of position.

      Type of         Number of       Number of       Cost Per        Total
      Position        Positions       Hours           Hour
      Computer        3               200             $60             $36,000
      Programmer

     Other: Identify each activity and provide the expected cost per items associated with the
     activity. Provide narrative that identifies the need for each activity/item in detail. For
     example, for postage expenditures the type of materials to be mailed per-item cost, and the
     number of items that will be mailed.

                                  Summary of All Costs Requested

      Staff
      Other
      Total