[Federal Register Volume 59, Number 40 (Tuesday, March 1, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-4587]


[[Page Unknown]]

[Federal Register: March 1, 1994]


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Part V





Department of Labor





_______________________________________________________________________



Employment and Training Administration



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Job Training Partnership Act; Notice
DEPARTMENT OF LABOR

Employment and Training Administration

 

Job Training Partnership Act; Proposed Revisions to the 
Performance Management System, and Proposed Performance Standards for 
Program Years (PY's) 1994 and 1995

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice of proposed revisions to the performance management 
system, and proposed revisions to the secretary's performance 
standards; request for comments.

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SUMMARY: To comply with the statutory requirements in the Job Training 
Partnership Act, as amended in 1992, the Department of Labor is 
proposing changes to State incentive and sanction provisions for 
programs operated under Title II of the Job Training Partnership Act. 
Also being introduced are two new performance standards for job 
training programs serving older workers funded under Section 204.

DATES: These changes to the performance management system will be 
effective for programs in PY's 1994 and 1995 (July 1, 1994-June 30, 
1996).

COMMENTS: Written comments are invited from the public. Comments must 
be submitted on or before March 31, 1994.

ADDRESSES: Written comments shall be addressed to the Assistant 
Secretary for Employment and Training, U.S. Department of Labor, room 
N5631, 200 Constitution Avenue NW., Washington, DC 20210, Attention: 
Steven Aaronson, Chief, Adult and Youth Standards Unit.

PAPERWORK REDUCTION ACT: Information collection related to this 
regulation has been approved previously by the Office of Management and 
Budget, No. 1205-0321. No further information collections or other 
paperwork requirements of the public are needed.

FOR FURTHER INFORMATION CONTACT: Steven Aaronson, Chief, Adult and 
Youth Standards Unit. Telephone: 202 219-5487, extension 107 (this is 
not a toll-free number).

SUPPLEMENTARY INFORMATION:

Introduction

    The Job Training Reform Amendments of 1992 (Amendments) introduced 
significant changes in the way job training programs are designed and 
operated at the local levels. These statutory changes, combined with 
recent legislative and administrative initiatives to promote high-
quality, results-driven, customer-oriented services throughout the 
Federal Government, are reshaping national and State policy and 
practices.
    Under Section 106 of the amended Job Training Partnership Act 
(JTPA), the Secretary of Labor is required to set standards for 
programs serving: (1) Adults and youth under Title II-A and Title II-C; 
(2) dislocated workers under Title III; and (3) older workers under 
section 204(d). The Secretary may modify these performance standards no 
more than every two years, and such modifications cannot be 
retroactive.
    National job training objectives have remained unchanged since 1990 
and focus on enhancing the long-term employability and economic self-
sufficiency of those most at risk of becoming or remaining unemployed. 
Current adult measures reflect this emphasis on employment retention 
and earnings; for youth, employment and skill enhancements are 
stressed. For this reason, the Secretary's performance measures will be 
retained for PY's 1994 and 1995.
    Numerical levels for these core standards, however, have been 
updated to reflect the most recent JTPA program experience.
    Programs serving older workers were not previously subject to 
performance standards. Under section 204(d) of JTPA, as recently 
amended, these programs are now subject to performance standards that 
are to be focused on increasing employment and earnings including 
hourly wages, similar to those programs serving other disadvantaged 
adults. In developing requirements for these performance standards, the 
special needs and circumstances of this population group were 
considered. Because field evidence suggests that older workers are much 
more likely to remain employed once they are placed in jobs, employment 
at program completion is a fundamental priority. The employment and 
wage measures together underscore the employment focus of the program, 
particularly in jobs that are higher paying.
    To comply with the new legislative provisions, the Department 
considered adding specific outcome measures for hard-to-serve 
participants, and separate outcomes for in-school and out-of-school 
youth. However, in the interest of avoiding a proliferation of 
performance measures and limiting local flexibility in programming, 
additional measures for these three separate groups were not proposed.
    States will need to consider, however, the quality of service to 
out-of-school youth and placements in jobs with employer-assisted 
benefits when judging service delivery area (SDA) performance and 
awarding incentive funds. The Department requests comments on whether 
these proposals adequately address statutory requirements for promoting 
service to the hard-to-serve population and improving service to out-
of-school youth through its existing performance standards and revised 
incentive award criteria.
    Since the Department is undertaking a comprehensive review of its 
Title III programs, changes in outcome measures will be deferred until 
this critical assessment is completed. Governors will continue to be 
required to set an entered employment rate standard for their Title III 
programs and encouraged to establish an average wage at placement goal. 
At the same time, the Department will be exploring ways to maximize 
post-program wages, to better measure skills acquisition and customer 
satisfaction, and to improve the quality of services provided to 
dislocated workers.
    Financial information will continue to be collected for program 
management purposes; however, the policy of excluding cost measures 
from incentive awards will remain unchanged.

Statutory Basis of Performance Standards

    Section 106 of JTPA directs the Secretary of Labor to establish 
performance standards for major job training programs funded under 
separate JTPA statutory provisions: Title II-A (adult programs), Title 
II-C (youth programs), and Title III (dislocated worker programs). 
Section 204(d)(6)(A) of JTPA, as recently amended, for the first time 
subjects older worker programs to performance standards. Performance 
standards serve the purpose of assuring Congress that the basic 
statutory objectives (increased earnings and employment, skills 
acquisition, and reduced welfare dependency) are being met (29 U.S.C. 
1516). On the basis of the Secretary's performance standards, Governors 
must set performance standards for each of their SDA's and substate 
areas (SSA's).
    The proposed issuance appended to this notice contains revised 
performance standards levels and implementation instructions to conform 
the Title II performance management system with the Job Training Reform 
Amendments of 1992.

Rationale for Retaining Adult Measures

    Data on post-program employment and earnings provide the most 
direct measure of long-term employability. Currently, measures for 
programs serving adults and adult welfare recipients capture a 
participant's employment status and earnings three months after program 
completion.
    The Amendments, however, envision longer periods of employment 
retention--beyond six months--to measure a job training program's 
success in preparing its adult participants for long-term employment. 
Looking toward the feasibility of developing such measures, the 
Department has awarded grants to 16 States to compare alternative 
approaches, measures using Unemployment Insurance (UI) wage records 
versus follow-up survey data, as a basis for assessing and rewarding 
local program performance. Information on the operational problems of 
using alternative measures, such as timing for incentive awards and 
addressing uncovered or out-of-State employment, will be an important 
part of the pilot project report due in Fall 1994. The Department, in 
conjunction with State and local staff, will use the results of these 
State case studies and other information to introduce, where feasible, 
alternative post-program measures in FY 1995.

Rationale for Retaining Youth Measures

    Youth measures have undergone the most refinements since JTPA's 
inception and now more fully reflect the dual goals of programs serving 
youth who are enrolled in school, as well as those who are out of 
school and seeking employment. Additionally, all the required program 
outcomes in the newly revised youth provisions at Section 106(b)(4), 
including employment, attainment of employment competencies, dropout 
prevention and recovery, secondary and post-secondary school 
completion, and enrollment in advanced training, are encompassed in the 
current two measures. To address a longstanding concern that employment 
may not be an appropriate outcome for all youth, the Department will 
continue its practice of excluding in-school youth--those enrolled in 
dropout prevention or dropout recovery programs--from the base used to 
compute the Youth Entered Employment Rate.
    Although separate performance measures for in-school and out-of-
school youth are not specifically called for in Section 106(b)(4)(B), 
the Department has carefully examined the implications of a dual 
performance management system for youth programs. Separate performance 
measures are not preferred for a number of reasons. One objection to 
separate performance measures is that they lead to a proliferation of 
measures, creating confusion at the local level among conflicting 
policy priorities. In addition, separate measures for in-school and 
out-of-school youth limit flexibility in program design by penalizing 
SDA's that do not choose to balance enrollments between in-school and 
out-of-school youth. In programs serving only small numbers of in-
school youth, each terminee would represent a large percentage of in-
school terminations. Individual outcomes would therefore have a 
relatively larger impact on overall performance.

Rationale for New Older Worker (Section 204(d)) Performance Measures

    Section 204(d)(6)(A) of JTPA imposes performance standards on State 
programs serving older workers. Quality employment is a primary goal of 
these programs and the Department believes that, in the absence of 
postprogram data, measures surrounding job placements at termination 
are appropriate at this time. As postprogram information becomes 
available on the section 204(d) program, the Department will reconsider 
the possibility of follow-up employment and earnings measures. However, 
for PYs 1994 and 1995, the Department is proposing to assess programs 
operated under section 204(d) using an Entered Employment Rate and an 
Average Wage at Placement measure.

    Note: Programs operated under section 204(d) are State programs, 
even though they may be operated by various local entities. 
Therefore, the two performance measures will be applied to all older 
worker programs statewide.

Rationale for Not Establishing Separate Hard-to-Serve Performance 
Measures

    Section 106(b)(7) of JTPA states that Governors shall award 
incentive grants to SDA's that, in addition to meeting other criteria, 
``exceed the performance standards established by the Secretary * * * 
with respect to services to populations of hard-to-serve individuals * 
* *''. This provision could be interpreted as requiring the addition of 
separate hard-to-serve performance measures to the current JTPA 
performance standards system.
    However, additional performance measures for the hard-to-serve 
population, per se, do not appear to be the best approach for 
implementing this requirement. The four current adult measures provide 
critical evaluative data which would preclude their exclusion from the 
performance standards system. Therefore, additional hard-to-serve 
performance measures merely would add to the complexity of the system 
and lead to an unwanted proliferation of measures. In fact, past 
experience with 12 performance measures provided solid evidence of the 
pitfalls of introducing such complexity.
    Moreover, with the addition of hard-to-serve measures, the core set 
of performance standards is redundant and, thus, not a useful 
management tool. It is estimated that over 60 percent of adults and 
youth currently served in JTPA qualify for one or more hard-to-serve 
categories. Therefore, it can be argued that the current measures 
adequately reflect the program goals of increased employment and self-
sufficiency among those most in need of JTPA's services, because these 
individuals constitute a majority of the program's participants. In 
fact, welfare recipients are already double counted in the current 
measures; adding outcomes for hard-to-serve groups will result in 
welfare recipients being counted three times (as adults, as welfare 
adults, and as hard-to-serve adults).
    The Department considered several strategies for avoiding the 
proliferation of measures while, at the same time, maintaining 
Congressional intent. The most expedient way to approach the statutory 
requirement was from a State incentive policy perspective. Therefore, 
in order for an SDA to be considered eligible to receive any incentive 
award, the Department is proposing that 65 percent of their terminees 
(i.e., both 65 percent of Title II-A terminees and 65 percent of Title 
II-C terminees) receiving services beyond objective assessment (i.e., 
training and/or job search assistance) must be from the legislatively 
defined hard-to-serve categories.
    This requirement serves as a ``gate'' in determining an SDA's 
eligibility for incentive awards, thus ensuring the Congressional 
objective that program be rewarded on the basis of both high levels of 
service to the hard-to-serve and good performance. In the absence of 
such a gate, both State and local administrators expressed concerns 
that local programs could exceed their performance standards and thus 
be rewarded, even if service levels to the hard-to-serve fall below the 
legislatively required floor of 65 percent.
    Excluding individuals participating in the program, but receiving 
only objective assessment, from the determination of eligibility for 
incentive awards is consistent with existing Department policy of 
excluding such individuals from the performance standards universe.

Rationale for Including Improved Service to Out-of-School Youth and 
Employer-Assisted Benefits Incentive Award Criteria

    Section 106(b)(7) of JTPA includes, among other required criteria 
for awarding incentive grants to SDA's, improved service to out-of-
school youth and job placements that provide employer-assisted 
benefits. Governors will be required to reward model out-of-school 
youth programs either identified by the Department of Labor or 
recognized by the State or SDA as having a demonstrated record of 
success. Considerable flexibility will be given to Governors in 
establishing a method for doing so.
    The Act is not at all directive with regard to rewarding employment 
in jobs offering fringe benefits. In the absence of any data on what 
constitutes a reasonable national estimate of job placements with 
employer-assisted benefits in JTPA, the Department has given States 
considerable flexibility in establishing incentive policies that 
promote such placements. Once relevant data become available from 
JTPA's management information system, the Department will be able to 
offer more guidance to States.
    Because numerous types of employer-assisted benefits are available 
which are more or less typically provided, the Department needs to 
ensure some degree of uniformity. It is proposed that the States use a 
standardized definition. The definition used in JTPA's newly instituted 
Standardized Program Information Report (SPIR) provides this 
comparability. This definition requires that the job offer employer-
assisted health benefits; but the individual does not have to actually 
receive such benefits. Again, in the absence of firm data with which to 
establish a credible benchmark, the Department is offering States 
maximum flexibility in measuring the provision of employer-assisted 
benefits and determining an appropriate incentive policy emphasis.

Rationale for New Numerical Levels

    The Secretary's national numerical standards for PY's 1994-1995 are 
set on the basis of the most recent JTPA performance data available (PY 
1992). The numerical values of the standards are generally set so that 
if SDA's/SSA's continue to perform in the same manner as they did in 
the most recent program year, 75 percent of the system should exceed 
their standards. This means that the proposed numerical standards for 
five of the six core measures and the Title III Entered Employment Rate 
measure are set at the 25th percentile of PY 1992 performance. Revising 
the numerical standard for the youth entered employment rate (YEER) in 
the same way would lead to reduced standards for SDAs. However, 30 
month results from the recent National JTPA Study suggest that outcomes 
experienced by out-of-school youth in JTPA fall short of acceptable 
levels. Therefore, to encourage improved services to out-of-school 
youth, the numerical standard for the YEER will remain at its current 
level of 41 percent. The Secretary's standards for the new older worker 
measures are derived from a combination of data obtained from Job 
Training Quarterly Survey data and the JTPA Annual Status Report.

Rationale for New Sanction Policy Provisions

    The amended JTPA states in Section 106(j)(1) that the Department is 
to establish uniform criteria for determining whether an SDA fails to 
meet performance standards and the circumstances under which remedial 
action shall be taken. This provision shifts responsibility for 
defining ``failure'' to meet standards from the States to the 
Department.
    In determining the new sanction policy provisions, the Department 
sought uniformity and, thus, comparability across the JTPA system. This 
is clearly in line with Congressional intent. Furthermore, the 
Department believes that, to minimize confusion, the meaning of 
``failure'' in one year should be consistent with the meaning of 
``failure'' for a second year, since failure for two consecutive years 
triggers reorganization. States and local areas should clearly 
understand the meaning of failure, and it should be consistent from one 
program year to the next. Use of the Secretary's standards for the 
purpose of imposing sanctions on SDA's is consistent with past 
practices.
    Another issue related to imposing sanctions on SDA's concerns the 
definition of ``failure'', specifically, defining an appropriate 
``level of failure''. Consistent with the intent of the amended 
legislation, the Department has specified the number of ``standards not 
met'' as constituting failure. It was noted that the lack of 
specificity in the past led to confusion and inconsistency across the 
JTPA system. In addition, to make the definition more explicit and to 
properly consider the goals of the youth program, the Department added 
a stipulation that an SDA which does not meet at least one of the two 
youth standards will be considered as failing.
    ``Meeting Performance Standards'' is defined as meeting at least 
four of the six core standards, one of which must be a youth standard. 
Conversely, ``Failure'' is defined as: Failing to meet three (3) or 
more of the core standards or failing to meet both youth standards. For 
the first year, failure will require a State to provide technical 
assistance to an SDA and will preclude that SDA from receiving any 
incentive award. (This is explicitly stated, since an SDA which passes 
through the eligibility gate could conceivably qualify for an incentive 
award based on meeting other criteria.) For the second year, failure 
will trigger the reorganization of the SDA and preclude receipt of any 
incentives in that year.

Public Comment and Participation

    The Department is committed to a participatory process in the 
development of performance standards through periodic meetings with 
State, SDA, and Private Industry Council (PIC) representatives to 
address performance standards issues. Such a meeting was held in July 
1993 to provide the Department with field input critical to the 
development of these standards. This request for comment, which 
incorporates that input, is another important part of the participatory 
process.
    The Secretary especially requests comments on the following issues:

General

    Does the system proposed in this notice adequately deal with 
legislated requirements for promoting service to the hard-to-serve 
through performance standards and related incentive award criteria?

Retaining Current Adult and Youth Measures as the Secretary's Core 
Measures

    Given currently available data, do the six adult and youth measures 
proposed as the Secretary's core measures adequately and appropriately 
reflect the program's overall goals of increased employment and 
earnings, reduced welfare dependency, long-term economic self-
sufficiency, and increased educational attainment and occupational 
skills?

Hard-to-Serve ``Gate'' for Incentive Award Eligibility

    The Department proproses to require for eligibility to receive 
incentive awards that SDA's ensure that 65 percent of their terminees 
receiving training or other services beyond objective assessment 
represent one of the statutorily defined hard-to-serve categories. Does 
establishing this requirement fully address the need to emphasize this 
population in the performance standards system? Would additional 
outcome measures for hard-to-serve create confusion or undue complexity 
at the local level? In assessing compliance with the eligibility gate 
for incentive awards, should the 65 percent targeting provision be 
applied to those enrolled in JTPA or those completing the program? 
Also, should the eligibility gate be comprised of total individuals 
served (i.e., adults and youth combined), or should appropriate 
separate adult and youth gates be identified?

Failure To Meet Performance Standards

    Is the definition of failure to meet standards reasonable, fair, 
and consistent with the intent of the amended JTPA?

Older Worker (Sec. 204(d)) Performance Measures

    Is it appropriate to limit performance assessment to outcomes at 
termination, or does the reintroduction of termination-based measures 
create a perverse effect? Once postprogram data on 204(d) programs 
become available from the SPIR beginning in PY 1994, should any 
postprogram measures be considered? Do the standards adequately address 
the needs of individuals who participate in older worker programs?

    Signed at Washington, DC, this 18th day of February 1994.
Doug Ross,
Assistant Secretary of Labor.

Appendix--Revisions to the Performance Management System, and 
Performance Standards for Program Years (PY's) 1994 and 1995

Training and Employment Guidance Letter ________
Training and Employment Guidance Letter No. ________

From: Barbara Ann Farmer, Administrator for Regional Management
Subject: Job Training Partnership Act (JTPA) Title II and Title III 
Performance Standards for PY's 1994-1995

    1. Purpose. To transmit guidance on the Secretary's required 
performance measures and the Secretary's implementing instructions 
for performance standards provisions for Program Years (PY's) 1994 
and 1995 (July 1, 1994-June 30, 1995; July 1, 1995-June 30, 1996).
    2. Background. Sec. 106 of JTPA, as amended, directs the 
Secretary to establish performance standards for adult, youth, and 
dislocated worker programs. These standards are updated every two 
years based on the most JTPA program experience and on program 
emphases and goals established by the Department of Labor. The 
Secretary also issues instructions for implementing standards and 
parameter criteria for States to follow in adjusting the Secretary's 
standards for service delivery areas (SDA's) and substate areas 
(SSA's).
    The Job Training Reform Amendments (JTRA) of 1992 mandated 
significant changes in the design and operation of local job 
training programs, as well as the criteria used to assess their 
performance. The revised Section 106 requires that performance 
standards reflect job placements that are a minimum of 20 hours per 
week, and that programs be rewarded based not only on high 
performance, but also on increased service to the ``hard-to-serve,'' 
and on quality job placements that are both high paying and offer 
employer-assisted benefits. Incentive and sanction policies are to 
be structured around more explicit criteria and guidelines, and 
criteria for failure to achieve program objectives are to be 
clarified and made more uniform. Section 204(d) mandates performance 
measures for the older worker program.
    To assist the Department in responding to the substantive 
changes required in the Section 106 amendments, a Technical 
Workgroup was convened in Washington, DC, in mid-July, 1993. The 
workgroup had representatives from State and local JTPA programs; 
public interest groups including the Partnership for Training and 
Employment Careers, the U.S. Conference of Mayors, the National 
Association of Counties, the National Governors' Association, and 
the National Council on the Aging; and staff from the Department of 
Labor (DOL) Office of the Inspector General. This Guidance Letter 
incorporates, to a large extent, the workgroup's findings.
    3. Performance Management Goals for PY's 1994-1995. PY 1994 will 
begin the sixth two-year cycle of the performance management system 
under JTPA. Departmental goals, initially established for PY 1990 in 
anticipation of the amendments, remain unchanged:
     Targeting services to a more at-risk population;
     Improving the quality and intensity of services that 
lead to skills acquisition, long-term employability and increased 
earnings;
     Placing greater emphasis on basic skills acquisition to 
qualify for employment or advanced education or training; and
     Promoting comprehensive, coordinated human resource 
programs to address the multiple needs of at-risk populations.
    In addition, with the passage of the Amendments in 1992, the 
performance management system has been tasked, through performance 
incentive award policies, to improve service to out-of-school youth 
and also foster employment in better quality jobs which offer high 
wages and employer-assisted benefits
    These goals are reflected in the Secretary's six Title II-A and 
Title II-C (core) measures, national numerical standards for these 
measures, new incentive award criteria, and associated reporting 
requirements. Governors still retain authority to establish 
additional standards which reflect State policy and to develop the 
specific approach to determining incentive awards.
    This issuance specifies the national standards for PY's 1994-
1995 and introduces the new criteria which must be a part of State 
incentive grant policies. Data to support additional non-cost 
measures will continue to be reported and Governors may use those in 
incentive policies. Cost data are to be used for purposes of program 
oversight and fiscal management only. Numerical levels for the core 
standards are identified in Section 7 of this Guidance Letter.

    Note: The Department has identified two additional goals for 
which Title II measures/standards have not yet been established:

     Establishing a strong customer focus and orientation 
and improving the responsiveness of services to the individual needs 
of participants; and
     Improving access to labor market information and 
obtaining feedback from customers and employers on the quality of 
program services.
    Various options for collecting and analyzing customer feedback 
will be explored. In the meantime, States and SDA's are encouraged 
to begin on their own to focus on improving the quality of program 
services and using customer feedback as a management tool.
    4. Title II-A and Title II-C Core Performance Measures. Four 
performance measures will be used for Title II-A for PY's 1994 and 
1995. These are:

--the Adult Follow-Up Employment Rate;
--Adult Weekly Earnings at Follow-Up;
--the Welfare Follow-Up Employment Rate; and
--Welfare Weekly Earnings at Follow-Up.

    Two performance measures will be used for Title II-C for PY's 
1994 and 1995. These are:

--the Youth Entered Employment Rate; and
--the Youth Employability Enhancement Rate.

    The adult and welfare measures are being retained because post-
program outcomes are the most direct measure of long-term 
employability. The current measures send an explicit policy signal 
that JTPA, as a value-added program, promotes employment retention 
for its participants, as measured by an individual's employment 
status and earnings three months after leaving the program. Since 
earnings are also a critical factor in reducing welfare dependency, 
the welfare earnings measure is the best proxy currently available 
for identifying reduced dependency.

    Note: The Amendments suggest that adult program measures should 
address longer periods of employment retention than the current 13 
weeks. The Department has awarded grants to 16 States that will 
examine the merits of using Unemployment Insurance (UI) wage records 
for such longer-term measures. Preliminary data indicate that 
comparable performance measures can be developed from UI wage 
records. Applying the results of longer-term measures to ongoing 
program management and annual incentive award determinations raises 
technical and operational issues which will need to be examined by 
the pilot sites. The Department will use the results of these States 
studies and other available data to introduce, where feasible, 
longer-term measures in PY 1995.
    Youth measures are unchanged because they fully reflect 
Departmental priorities and the required performance standards 
factors listed in section 106(b)(4) of JTPA (employment, attainment 
of employment competencies, dropout prevention and recovery, 
secondary and post-secondary school completion, and enrollment in 
other training programs). Acknowledging that employment may not be 
an appropriate outcome for all youth, those individuals who are 
enrolled in dropout prevention programs and successfully remain in 
school, and those who are enrolled in dropout recovery programs and 
successfully return to school will not be included in the Youth 
Entered Employment Rate.
    5. Performance Standards Provisions for Older Workers Programs. 
Except for incentive award and sanctions provisions, section 204 
(d)(6) of JTPA identifies requirements, including performance 
standards, for the operation of older worker programs. In response 
to this new provision, two performance measures have been 
established to take into account program goals for this segment of 
the population. Starting in PY 1994, there will be an Entered 
Employment Rate performance measure as well as an Average Wage at 
Placement performance measure for older worker programs. As 
postprogram information becomes available on the section 204(d) 
program, the Department will reconsider the possibility of follow-up 
employment and earnings measures.
    Note: Programs operated under section 204(d) are State programs 
even though they may be operated by various local entities. 
Therefore, performance standards will be applied to the total older 
worker programs State-wide.

    6. Performance Standards Provisions for Title III. Governors are 
required to set an entered employment rate standard for Title III 
programs and are encouraged to establish an average wage at 
placement goal. Performance standards for Title III will be applied 
to the following programs funded under section 302: all of section 
302(c)(1) State activities, and sections 302(c)(2) and 302(d) 
substate area activities. Performance outcomes will be reported for 
programs operated under section 302(a)(2), Secretary's National 
Reserve, in lieu of applying performance standards, because these 
funds are typically used for one-time projects rather than ongoing 
programming.
    While rewards and the imposition of sanctions are not required 
for title III programs, Governors may use a portion of the 40 
percent funds reserved for State activities under section 302(c)(1) 
for rewarding substate area performance, particularly lengthier, 
substantive training that will better ensure the long-term 
employability of participants. Although no statutory requirement 
exists for monetary incentives, Congress requires State plans to 
include incentives to ensure that long-term training is provided to 
those who need it.
    7. Secretary's National Numerical Standards for PY's 1994-1995. 
The title II-A and II-C numerical standards are derived from PY '92 
performance data reported on the JTPA Annual Status Report (JASR) 
and are generally set at a level that approximately 75% of the SDA's 
are expected to exceed. Revising the numerical standard for the 
youth entered employment rate (YEER) in the same way would lead to 
reduced standards for SDAs. However, 30 month results from the 
recent National JTPA Study suggest that outcomes experienced by out-
of-school youth in JTPA fall short of acceptable levels. Therefore, 
to encourage improved services to out-of-school youth, the numerical 
standard for the YEER will remain at its current level of 41 
percent. Earnings have been adjusted to account for expected future 
inflation. Finally, an additional special adjustment has been made 
to the Adult and Welfare Follow-Up Employment Rates and the Youth 
Entered Employment Rate to account for the requirement in section 
106(k) that for performance standards purposes ``. . . `employment' 
means employment for 20 or more hours per week.''
    The Secretary's standards for title II-A for PY's 1994-1995 are 
as follows:

Adult Follow-up Employment Rate: 59%
Adult Weekly Earnings at Follow-up: $245
Welfare Follow-up Employment Rate: 47%
Welfare Weekly Earnings at Follow-up: $223

    The Secretary's standards for title II-C for PY's 1994-1995 are 
as follows:

Youth Entered Employment Rate: 41%
Youth Employability Enhancement Rate: 40%

    No national data on older worker program performance are 
currently available to assist in setting national standards. 
However, the Job Training Quarterly Survey (JTQS) has detailed 
employment and wage data on older workers served by regular title 
II-A programs. Based on these data, and adjusting for the 20 hours 
per week employment requirement, the Secretary's standards for older 
worker programs are as follows:

Entered Employment Rate: 62%
Average Hourly Wage at Placement: $5.45

    The title III standard is derived from PY '92 performance data 
reported on the Worker Adjustment Program Annual Program Report 
(WAPR). This standard is at a level that approximately 75 percent of 
the substate areas are expected to exceed. As with the employment 
measures for title II-A and II-C, an adjustment has been made to 
take into account the 20 hour per week employment requirement. The 
Secretary's standard for title III is:

Entered Employment Rate: 67%

    8. Implementing Provisions. The following implementing 
requirements must be followed:
    A. Required Standards. For titles II-A and II-C, Governors are 
required to set, for each SDA, a numerical performance standard for 
each of the six Secretary's measures; for the older worker program, 
Governors are required to set numerical Entered Employment Rate and 
Average Wage at Placement standards for programs operated under 
section 204(d); for title III, Governors are required to set for 
each substate area a numerical performance standard for the Entered 
Employment Rate and are encouraged to establish an average wage at 
placement goal.
    B. Setting the Standards. Consistent with new legislative 
provisions, Governors are now required to adjust the Secretary's 
performance standards to reflect local area circumstances (section 
106(d)). Such adjustments must conform to the Secretary's parameters 
described below:
    1. Procedures must be:
     Responsive to the intent of the Act,
     Consistently applied among the SDA's/SSA's,
     Objective and equitable throughout the State,
     In conformance with widely accepted statistical 
criteria;
    2. Source data must be:
     Of public use quality,
     Available upon request;
    3. Results must be:
     Documented,
     Reproducible; and
    4. Adjustment factors must be limited to:
     Economic factors,
     Labor market conditions,
     Geographic factors,
     Characteristics of the population to be served,
     Demonstrated difficulties in serving the population 
(this adjustment factor is new), and
     Type of services to be provided.
    The Department offers an adjustment methodology that conforms to 
these parameter criteria for Governors to use in making required 
adjustments. Should the Governor choose to use an alternate 
methodology, or make adjustments not addressed by the Departmental 
model, it must conform to the parameter criteria and be documented 
in the Governor's Coordination and Special Services Plan (GCSSP) 
prior to the program year to which it applies.
    The State Job Training Coordinating Council and, where 
appropriate, the State Human Resources Investment Council, must have 
an opportunity to consider adjustments to the Secretary's standards 
and to recommend variations. To determine whether an SDA has met/
exceeded a performance standard, Governors must use actual, end-of-
year program data to recalculate the performance standards.
    C. Performance Standards Definitions. Governors must calculate 
the performance of their SDA's, SSA's, and Section 204(d) programs 
according to the definitions included in the attachments.
    D. Titles II-A and II-C Incentive and Sanction Policies. 
Performance standards are to be established for programs funded 
under Titles II and III of the Act. In applying the Secretary's 
standards for Titles II-A and II-C, Governors must use the six core 
measures and also consider criteria relating to model programs 
successfully serving out-of-school youth and placement in jobs 
providing employer-assisted benefits. Governors may select 
additional non-cost measures to form the basis of incentive policies 
as long as the following criteria are met:
    1. As the basis for making incentive awards, the Governors must 
use all (i.e., cannot ``zero weight'' any) of the six Secretary's 
core measures. Governors will also be required to reward model out-
of-school youth programs either identified by the Department of 
Labor or recognized by the State or SDA as having a demonstrated 
record of success. Considerable flexibility will be given to 
Governors in establishing a method for doing so. Likewise, in the 
absence of firm data with which to establish a credible benchmark, 
States have total flexibility in how to measure the provision of 
employer-assisted benefits. Decisions regarding the relative weight 
or emphasis of each core measure (e.g., the Youth Entered Employment 
Rate) and incentive criterion (e.g., placement in jobs with 
employer-assisted benefits) in a State's incentive award formula 
rest with the Governor. The core measures will be the basis for 
identifying SDA's that are candidates for technical assistance and 
for imposing sanctions. At least 75 percent of the funds set aside 
for performance incentives must be related to these measures and the 
out-of-school and employer-assisted benefits criteria, in accordance 
with Section 106(b)(7)(E).
    2. Cost standards cannot be used for incentive award purposes.
    3. Incentive policies may include adjustments to incentive award 
amounts based upon factors such as grant size, additional services 
to the hard-to-serve, intensity of service, and expenditure level.
    4. A Secretary's standard for service to the hard-to-serve, as 
required by Section 106(b)(7)(B) of the amended JTPA, has been 
established in the form of a stand-alone eligibility criterion 
(``gate'') for incentive awards. In order for an SDA to be eligible 
to receive any incentive award, at least 65 percent of both the 
SDA's (a) Title II-A and (b) title II-C (in-school and out-of-school 
combined) terminees receiving training and/or other services beyond 
objective assessment must be hard-to-serve. The definitions of hard-
to-serve are to be consistent with the definitions in Sections 
203(b), 263(b), and 263(d) of the Act.
    5. For those SDA's that successfully ``pass through'' the gate, 
three criteria (in addition to any funds set aside for Governors' 
standards) will determine the amount of the incentive award: 
Exceeding the Secretary's standards; providing quality service to 
out-of-school youth and placing participants in employment that 
provides employer-assisted benefits.

--The definition of ``employer-assisted benefits'' is to be 
consistent with the SPIR definition (Item 35c). Thus, State 
incentive policies will be structured to include benefit information 
for those participants who entered employment at termination, and 
Governors will have considerable latitude in implementing this 
incentive policy requirement.

    6. Consistent with present DOL policy, SDA's that exceed all six 
of the Secretary's Titles II-A and II-C standards must receive an 
incentive award (if the ``gate'' is successfully attained).
    7. Determination of an SDA's failure to meet standards and 
consequent imposition of technical assistance and reorganization 
requirements, under Section 106(j), will be based only on the 
Secretary's title II-A and Title II-C core measures.

--``Meeting Performance Standards'' is defined as meeting at least 
four of the six core standards, one of which must be a youth 
standard. Conversely, ``Failure'' is defined as failing to meet 
three (3) or more of the core standards or failing to meet both 
youth standards.
--Failure for the first year precludes an SDA from receiving any 
incentive awards and requires Governors to provide technical 
assistance to the underperforming SDA.
--Failure for the second year precludes an SDA from receiving any 
incentive award and requires Governors to impose a reorganization 
plan.

    8. Section 106(j)(3) requires each State to report to the 
Secretary, not later than 90 days after the end of each program 
year, the actual performance and performance standards for each SDA 
within that State. Within the same timeframe, technical assistance 
plans for each SDA ``failing'' for the first year are required. A 
90-day timeframe also applies to the imposition of a reorganization 
plan, which is mandatory when an SDA ``fails'' for a second 
consecutive year.
    Specific procedures for the formal performance standards report 
and required State action will be provided under separate cover. 
However, in addition to the formal annual process, there should be 
ongoing oversight of SDA performance and continuous technical 
assistance and capacity-building aimed at addressing areas where 
program performance can be improved.
    9. Governors must specify in the GCSSP their incentive award 
policy under Section 202(c)(1)(B) and 202(c)(3)(A) and imposition of 
sanctions policy under Section 106(j).
    10. In PY 1994 and 1995, Governors will continue to have the 
discretion to exclude pilot projects serving ``hard-to-serve'' 
individuals, particularly out-of-school youth, funded from the 5 
percent incentive fund set-aside in computing their standards and 
actual performance. States and SDA's are encouraged to use such 
funds to develop or replicate model programs serving out-of-school 
youth, particularly those based on contextual learning models.

    Note. For those SDA's in which ``incentive projects'' are 
indistinguishable from those that provide general training, these 
programs would not be considered exempt from performance standards.

    9. State Action. States are to distribute this Guidance Letter 
to all officials within the State who need such information to 
implement the new performance standards policies and requirements 
for PY 1994-1995. It is especially critical that States, State 
Councils, Private Industry Councils and SDA operational staff become 
thoroughly familiar with the new provisions concerning incentive and 
sanctions policies.
    A copy of this Guidance Letter is also being sent to your State 
JTPA Liaison, the State Wagner-Peyser Administering Agency, and the 
State Worker Adjustment Liaison.
    10. Inquiries. Questions concerning this issuance may be 
directed to Steven Aaronson at (202) 219-5487, extension 107.
    11. Attachments:
    1. Definitions for Performance Standards
    2. Youth Employability Enhancement Definitions

Attachment 1--Definitions for Performance Standards

    Those terminees who receive only objective assessment (or only 
objective assessment and entered employment) are to be excluded from 
the calculation of performance outcomes for Title II-A, Title II-C, 
and Section 204(d) older worker programs. Participants in special 5-
percent-funded projects may, at the discretion of the Governor, also 
be excluded from the calculation of performance outcomes for Title 
II-A and Title II-C.
    The following defines the Title II-A performance standards:
    1. Adult Follow-Up Employment Rate--Total number of adult 
respondents who were employed (for at least 20 hours per week) 
during the 13th full calendar week after termination, divided by the 
total number of adult respondents (i.e., terminees who completed 
follow-up interviews).
    2. Adult Follow-Up Weekly Earnings--Total weekly earnings for 
all adult respondents who were employed (for at least 20 hours per 
week) during the 13th full calendar week after termination, divided 
by the total number of adult respondents employed (for at least 20 
hours per week) at the time of follow-up.

Welfare

    3. Welfare Follow-Up Employment Rate--Total number of adult 
welfare respondents who were employed (for at least 20 hours per 
week) during the 13th full calendar week after termination, divided 
by the total number of adult welfare respondents (i.e., terminees 
who completed follow-up interviews).
    4. Welfare Follow-Up Weekly Earnings--Total weekly earnings for 
all adult welfare respondents employed (for at least 20 hours per 
week) during the 13th full calendar week after termination, divided 
by the total number of adult welfare respondents employed (for at 
least 20 hours per week) at the time of follow-up.

    Note: If the response rates for those employed at termination 
and those not employed at termination in an SDA differ by more than 
5 percentage points in either the adult or welfare samples, then the 
calculations of the follow-up outcomes for that group must be 
modified to adjust for nonresponse bias.

    The following defines the Title II-C performance standards:
    5. Youth Entered Employment Rate (YEER)--Total number of youth 
who entered employment at termination (for at least 20 hours per 
week), divided by the total number of youth who terminated, 
excluding those potential dropouts who are reported (on the 
Standardized Program Information Report [SPIR]) as remained-in-
school and dropouts who are reported (on the SPIR) as returned-to-
school.

    Note: As in past practice, youth terminees who remain-in-school 
or return-to-school and who also enter employment will not be 
excluded from the termination pool reflected in the denominator of 
the Youth Entered Employment Rate. In effect, SDA's would ``receive 
credit'' for these individuals twice--in the YEER and in the YEEN. 
However, only employment of at least 20 hours per week satisfies the 
requirement for ``employment.''

    6. Youth Employability Enhancement Rate (YEEN)--Total number of 
youth who attained one of the employability enhancements at 
termination, whether or not they also obtained a job, divided by the 
total number of youth who terminated.
     Youth Employability Enhancements include:
    a. Attained (two or more) PIC-recognized Youth Employment 
Competencies.
    b. Completed major level of education following participation of 
at least 90 calendar days or 200 hours in JTPA activity.
    c. Entered and retained for at least 90 calendar days or 200 
hours in non-Title II training or received a certification of 
occupational skill attainment.

    Note: It is expected that the ultimate result of this outcome 
will be the attainment of a job-specific skill competency on the 
part of the terminee.

    d. Returned to and retained in full-time school for one semester 
or at least 120 calendar days (dropouts only), attained a basic or 
job-specific skill, and made satisfactory progress.

    Note: For the purposes of this outcome, and the remained in 
school outcome described below, ``school'' includes alternative 
schools, defined as a specialized, structured curriculum offered 
inside or outside of the public school system which may provide 
work/study and/or General Educational Development (GED) test 
preparation.

    e. Remained in school for one semester or at least 120 calendar 
days (for youth at risk of dropping out of school), attained a basic 
or job-specific skill competency, and made satisfactory progress.

    Note: For youth aged 14 and 15, the acceptable competencies will 
be basic skills or pre-employment/work maturity.

    The following defines Section 204(d) Older Worker performance 
standards:
    1. Entered Employment Rate--Total number of individuals who 
entered employment of at least 20 hours per week at termination, 
divided by the number of total terminations.
    2. Average Wage at Placement--Total hourly wage rate of all 
terminees who entered employment of at least 20 hours per week at 
termination, divided by the number of terminees who entered 
employment of at least 20 hours per week at termination.
    The following defines the Title III performance standard:
    1. Entered Employment Rate--Total number of individuals who 
entered employment of at least 20 hours per week at termination, 
excluding those who were recalled or retained by the original 
employer after receipt of a layoff notice, divided by the total 
terminations, excluding those who were recalled or retained by the 
original employer after receipt of a layoff notice.

Attachment 2--Youth Employability Enhancement Definitions

    ``Youth Employability Enhancement'' means an outcome for youth, 
other than entered unsubsidized employment, which is recognized as 
enhancing long-term employability and contributing to the potential 
for a long-term increase in earnings and employment. Outcomes which 
meet this requirement shall be restricted to the following:
    (1) Attained PIC-Recognized Youth Employment Competencies (two 
or more);
    (2) Returned to Full-Time School;
    (3) Remained in School;
    (4) Completed Major Level of Education; or
    (5) Entered Non-Title II Training.
    1. Attained PIC-Recognized Youth Employment Competencies--The 
total number of youth who demonstrated proficiency as defined by the 
PIC in two or more of the following three skill areas in which the 
terminee was deficient at enrollment: pre-employment/work maturity; 
basic education; or job-specific skills. Competency gains must be 
achieved through program participation and be tracked through 
sufficiently developed systems that must include: quantifiable 
learning objectives, related curricula/training modules, pre- and 
post-assessment, employability planning, documentation, and 
certification.
    The completely detailed definition for Youth Employment 
Competency systems is located in the Standardized Program 
Information Reporting System (SPIR) instructions, transmitted in 
TEIN No. 5-93, dated July 30, 1993.
    2. Returned to Full-Time School--The total number of youth who: 
(1) had returned to full-time secondary school (e.g., junior high 
school, middle school and high school)--including alternative 
school--if, at the time of intake, the participant was not attending 
school (exclusive of summer school) and had not obtained a high 
school diploma or equivalent; and (2) prior to termination had been 
retained in school for one semester or at least 120 calendar days.
    Alternative School--A specialized, structured curriculum offered 
inside or outside of the public school system which may provide 
work/study and/or GED preparation.

    Note: To obtain credit for Returned to Full-Time School and 
Remained in School (described below), SDA's must be prepared to 
demonstrate that retention results from continuing, active 
participation in JTPA activities and the youth must: (1) Be making 
satisfactory progress in school; and (2) (for youth aged 16-21) 
attain a PIC-approved Youth Employment Competency in Basic Skills or 
Job-Specific Skills; or (3) (for individuals aged 14-15) attain a 
PIC-approved Youth Employment Competency in Pre-employment/Work 
Maturity or Basic Skills.
    Satisfactory Progress in School--An SDA, in cooperation with the 
local school system, must develop a written policy that defines an 
individual standard of progress that each participant is required to 
meet. Such a standard should, at a minimum, include both a 
qualitative element of a participant's progress (e.g., performance 
on a criterion-referenced test or a grade point average) and a 
quantitative element (e.g., a time limit for completion of the 
program or course of study). This policy may provide for exceptional 
situations in which students who do not meet the standard of 
progress are nonetheless making satisfactory progress during a 
probationary period because of mitigating circumstances.
    3. Remained in School--The total number of youth who, prior to 
termination, had been retained in full-time secondary school, 
including alternative school, for one semester or at least 120 
calendar days. A youth may be reported as Remained-in-School only if 
he/she was attending school at the time of intake, had not received 
a high school diploma or its equivalent, and was considered ``at 
risk of dropping out of school,'' as defined by the Governor in 
consultation with the State Education Agency.
    4. Completed Major Level of Education--The total number of 
adults/youth who, prior to termination, had completed, during 
enrollment in the program, a level of educational achievement which 
had not been reached at entry. Levels of educational achievement are 
secondary and post-secondary. Completion standards shall be governed 
by State standards and shall include a high school diploma, GED 
Certificate or equivalent at the secondary level, and shall require 
a diploma or other written certification of completion at the post-
secondary level.

    Note: To obtain credit, completion of a major level of education 
must result primarily from active JTPA program participation of at 
least 90 calendar days or 200 hours, usually prior to the completion 
of the major level of education.

    5. Entered Non-Title II Training--The total number of adults/
youth who, prior to termination, had entered an occupational skills 
employment/training program not funded under Title II of the JTPA, 
that builds upon and does not duplicate training received under 
Title II.

    Note: To obtain credit, the participant must have been retained 
in that program for at least 90 calendar days OR 200 hours or must 
have received a certification of occupational skill attainment. 
During the period the participant is in non-Title II training, he/
she may or may not have received JTPA services. It is expected that 
the ultimate result of this outcome will be the attainment of a job-
specific skill competency on the part of the terminee.

[FR Doc. 94-4587 Filed 2-28-94; 8:45 am]
BILLING CODE 4510-30-M