Emergency benefit administration costs excluded from state funding model

UIPL29-08acc.pdf (https://www.dol.gov/sites/dolgov/files/ETA/advisories/UIPL/2008/UIPL29-08acc.pdf)

                                                           CLASSIFICATION
     EMPLOYMENT AND TRAINING ADMINISTRATION                UI
                 ADVISORY SYSTEM                           CORRESPONDENCE SYMBOL
            U.S. DEPARTMENT OF LABOR                       OWS/DFAS
               Washington, D.C. 20210                      DATE
                                                           October 8, 2008

ADVISORY: UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 29-08

TO:            STATE WORKFORCE AGENCIES

FROM:          BRENT R. ORRELL /s/
               Deputy Assistant Secretary

SUBJECT:       Exclusion of Emergency Unemployment Compensation (EUC08) Administrative
               Funds from Resource Justification Model (RJM) Data Submissions

1.      Purpose. To provide guidance on the treatment of EUC08 administrative funds in the RJM
        submission.
2.      References. Supplemental Appropriation Act, 2008, Title IV—Emergency Unemployment
        Compensation, Public Law 110-252; Unemployment Insurance Program Letter (UIPL) No.
        23-08; OMB Circular A-87, Cost Principles for State, Local, and Indian Tribal Governments;
        and ET Handbook 410, 4th Ed.
3.      Background. UIPL 23-08 advised state workforce agencies (SWAs) to establish a
        separate fund ledger and submit a separate financial status report (ETA 9130) for
        administrative grants and costs associated with the EUC08 program.
        In addressing a question that arose during the implementation of the Temporary
        Emergency Unemployment Compensation program in 2002, the Department determined
        that a portion of temporary Federal emergency program funds could be charged for use of
        existing UI program infrastructure/overhead (i.e., non-personal services, Administrative
        Staff and Technical Services, and Support) following OMB Circular A-87, cost allocation
        principles. Consequently, administrative costs of the EUC08 program for which funding
        can be claimed are not limited to variable costs, such as additional staff hired to process
        EUC08 claims, but may include infrastructure and overhead costs that can be legitimately
        associated with the EUC08 program. For example, a share of facilities and computer
        costs that support the EUC08 program, normally part of the regular UI program, can be
        charged as administrative costs of the EUC08 program. In determining charges, OMB
        Circular A-87, cost allocation principles must be adhered to, and administrative charges
        should not exceed obligational authority.
4.      Rationale. Although the portion of infrastructure and overhead costs associated with the
        EUC08 program may continue after the temporary Federal program expires, inclusion of
        these expenditures in the SWAs annual RJM submissions would distort the Federal




 RESCISSIONS                                               EXPIRATION DATE
 None                                                      October 8, 2009


     expenditures associated with the regular UI program. The distortion would occur because
     the portion of UI program infrastructure and overhead costs funded by the EUC08 grant
     allows for the regular UI funds that would have been spent on these costs to be spent
     elsewhere within the regular UI program. Hence, inclusion of the EUC08 funded
     expenditures would result in inflating regular program administrative costs reported on the
     RJM.
5.   RJM Instructions. SWAs may not include in the expenditure data collected in the RJM
     any administrative costs funded by the EUC08 grant and accounted for on separate ETA
     9130 reports.
6.   Action. SWAs are asked to provide this information to appropriate staff.
7.   Inquiries. Questions should be addressed to the respective Regional Office.