[Federal Register Volume 64, Number 80 (Tuesday, April 27, 1999)]
[Notices]
[Pages 22770-22773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-10473]
[[Page 22769]]
_______________________________________________________________________
Part VI
Department of Labor
_______________________________________________________________________
Employment and Training Administration
_______________________________________________________________________
Consultation Paper on Awarding Incentive Grants and Applying Sanctions
for Title I Programs Under Sections 503 and 136 of the Workforce
Investment Act; Notice
Federal Register / Vol. 64, No. 80 /Tuesday, April 27, 1999 /
Notice
[[Page 22770]]
DEPARTMENT OF LABOR
Employment and Training Administration
Consultation Paper on Awarding Incentive Grants and Applying
Sanctions for Title I Programs Under Sections 503 and 136 of the
Workforce Investment Act (WIA)
AGENCY: Employment and Training Administration, Labor.
ACTION: Notice.
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SUMMARY: The purpose of this notice is to disseminate a consultation
paper for interested parties on the awarding of Incentive Grants and
application of Sanctions pertaining to the Performance Accountability
Measurement System for Title I of WIA. This is the third of a series of
consultation papers on the implementation of the Performance
Accountability System under Title I of WIA. On March 24, 1999 two
consultation papers were published in the Federal Register, the
framework for Core Performance and Customer Satisfaction Measures and
the framework for Negotiating State Adjusted Levels of Performance.
Interested parties have 30 days to provide comments on this paper.
DATES: Comments must be received by May 27, 1999.
ADDRESSES: Send comments to Mr. Eric Johnson, Workforce Investment
Implementation Taskforce Office, U.S. Department of Labor, 200
Constitution Avenue, NW, Room S-5513, Washington, DC 20210.
FOR FURTHER INFORMATION CONTACT: Mr. Eric Johnson, Workforce Investment
Implementation Taskforce Office, U.S. Department of Labor, 200
Constitution Avenue, NW, Room S5513, Washington, DC, Telephone: (202)
219-0316.(voice) (This is not a toll-free number), or 1-800 326-2577
(TDD). Information may also be found or comments provided, at the
website--http://usworkforce.org.
SUPPLEMENTARY INFORMATION: The Workforce Investment Act , Pub. L. 105-
220 (August 7, 1998) provides the framework for a reformed National
workforce and employment system designed to meet the needs of the
Nation's employers, job seekers and those who want to further their
careers.
The Workforce Investment Act requires that a performance and
accountability system be developed and implemented. The system must
include certain core measures regarding performance and customer
satisfaction. Adjusted levels of performance must be negotiated between
the Governor and the Secretary of Labor for each core and customer
satisfaction measure, and applicable incentives or sanctions applied.
The U.S. Department of Labor in establishing this performance
accountability system and is interested in comments and suggestions
concerning the process for awarding Incentive Grants and applying
Sanctions. Some of the questions on which the Department of Labor is
seeking input are the following:
Whether a ``range'' vs. a single value should be used to
differentiate between being eligible for an incentive award and
application of sanctions;
How the bottom of such a ``range'' should be determined
(ie. a nationally determined percentage from the negotiated State
Adjusted Level of Performance, different percentages based on specific
factors, etc.);
The proposed methodology for determining when a State
should be considered eligible for an incentive grant;
The factors to be used in determining the level of
monetary sanctions; and
The proposed methodology for calculating failure to meet
the adjusted levels.
Please consider these issues as you review this consultation paper,
and provide comments.
Signed at Washington, D.C., this 21st day of April 1999.
Raymond L. Bramucci,
Assistant Secretary of Labor, Employment and Training Administration.
Attachment
I. Incentives and Sanctions Under WIA
WIA contains performance accountability provisions intended to
hold States accountable for the results obtained by their workforce
programs and system. Performance accountability revolves around the
planning, assisting, rewarding and sanctioning performance measured
by agreed-upon levels for a set of core and customer satisfaction
indicators.
WIA requires that the Secretary reach agreement with each State
on the expected levels of performance for core indicators of
performance. Section 136(b)(3)(A)(iv)(III) of WIA requires that the
agreement between the Secretary and the State take into account the
extent to which the levels for years 1, 2 and 3 of the 5 year
strategic State plans (and subsequently years 4 and 5) promote
continuous improvement and ensure optimal return on investment.
WIA section 503 provides that the Secretary shall award an
incentive grant to each State that exceeds the State adjusted levels
of performance for WIA Titles I and II and the Vocational and
Applied Technology Education Act (Perkins Act). States that exceed
the performance levels for WIA Titles I and II and the Perkins Act
may apply for an incentive award for the purpose of carrying out an
innovative program consistent with the requirements of any one or
more of the programs within WIA Title I, WIA Title II, or the
Perkins Act. The application must assure that the State legislature
was consulted and that the Governor and the cognizant adult
education and post-secondary vocational education agencies approved
the application.
WIA section 136(g)(1)(B) provides that the Secretary may reduce
the Title I grant by not more than 5 percent for a State's failure
to meet adjusted performance levels under Title I for a second
consecutive year or for failure to submit the annual performance
progress report required under section 136(d).
State responsibilities for providing incentive grants to local
areas are described under WIA section 134(a)(2)(B). Sanctions for
local areas failing to meet local performance measures are discussed
under section 136(h).
Some of the key issues for developing incentives and sanctions
policy include:
(a) The nature of the WIA Title I state adjusted levels of
performance;
(b) The definition or standard for exceeding the WIA Title I
adjusted levels;
(c) The measures to be included for determining incentive
awards;
(d) The criteria for qualifying for incentive grants;
(e) the amount of the incentive award;
(f) The definition or standard for failing to meet the adjusted
levels;
(g) the criteria for receiving monetary sanctions;
(h) The amount of the monetary sanction; and
(i) sanctions for failing to submit annual performance progress
reports.
A. The Nature of the WIA Title I State Adjusted Levels of Performance
WIA provides for establishment of state adjusted levels of
performance which become the baseline performance levels for
subsequent decisions related to incentives and sanctions. States
that exceed the agreed-upon performance levels may receive incentive
awards; and States that fail to meet the agreed upon levels may be
sanctioned. A strict reading of the law might lead to the conclusion
that the planned performance level is a single number or point,
which is either exceeded or failed. If planned levels are driven
high through negotiation, then fewer States will exceed the level
and more states will fail it. If the planned levels are allowed to
be low through negotiation, then just the opposite will occur and
many States will be rewarded, some for quite low performance.
Stakeholders have suggested that incentives be awarded for high
performance and that sanctions be reserved for truly low
performance. These ideas suggest that a range of performance should
be established so that only performance that exceeds the top of the
range will receive incentive grants and only performance that falls
below the bottom of the range will be subject to sanctions. States
with performance within the range will neither qualify for
incentives nor be subject to sanctions.
The state adjusted levels of performance constitute the top of
the range and will be
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arrived at through negotiation between the State and Department of
Labor. As part of negotiation process, and in consideration of the
factors described in WIA section 136(b)(3)(A)(iv), it is expected
that the levels will assist the State to attain high levels of
customer satisfaction, promote continuous improvement, and ensure
optimal return on investment. The bottom of the range will be set
initially by multiplying the State adjusted levels of performance by
some appropriate percentage (e.g. 80 percent). This will be
necessary in the initial years of WIA operation due to the lack of
comparable performance data under WIA. However, establishment of the
bottom of the range will be periodically reviewed as more comparable
performance data under WIA becomes available and in the future the
bottom of the range will be based on experience.
The use of a range acknowledges that performance can vary over
time due to random events that cannot always be anticipated or
necessarily prevented. The range could be expressed as a percentage
or value; and it generally would not be the same for each measure,
depending on the degree of variation of performance under each
measure nationally. There are many possibilities for creating an
appropriate ``range.'' Once national WIA performance data becomes
available, the breadth of the range can be refined and calibrated to
assure that the lower limit is set at a level that reasonably
represents unacceptable performance.
B. The Definition or Standard for Exceeding the Title I Adjusted Levels
of Performance
WIA section 503 provides that the Secretary must award a grant
to each State that exceeds the State adjusted levels of performance
for WIA Titles I and II and the Perkins Act. WIA Title I will
operate with 15 core and 2 customer satisfaction performance
indicators. The determination for whether the adjusted levels of
performance were exceeded will be based on the State's cumulative
achievement across all measures. This will be done by calculating
the percent of the State adjusted level achieved for each measure;
and then averaging the percentages achieved across all measures.
When the cumulative average across all measures exceeds 100 percent,
the State will be determined to have exceeded the adjusted
indicators overall. There is no minimum number of measures that must
be exceeded; however, both customer satisfaction measures must be
exceeded and a State may not fall below the bottom of the ``range''
for any measure. See Table A for an example as to how the cumulative
averaging would work.
C. The Measures to be Included for Considering Incentive Awards
In addition to the core indicators of performance, WIA Titles I
and II and the Perkins Act each allows States to identify additional
indicators of performance which are subsequently defined to be part
of the State adjusted levels of performance. Section 503 directs the
Secretary to award incentives to states exceeding the state adjusted
levels of performance. In order to promote equity and uniformity for
award of incentive funds, only the Federally required core and
customer satisfaction indicators will be considered in the
methodology for determining eligibility for incentive awards.
D. The criteria for qualifying for incentive grants
WIA section 503 provides that the Secretary must award a grant
to each State that exceeds the State adjusted levels of performance
for WIA Title I, the expected levels of performance for WIA Title
II, and the levels of performance under the Perkins Act. Qualifying
for award of an incentive grant is dependent upon exceeding levels
of performance for all three programs. To arrive at the decision to
award incentive funds, DOL and DoED will determine if performance
was exceeded for its respective programs; however, DOL and DoED will
cooperate towards the development and use of a similar methodology
to define what it means to exceed planned performance levels. In
order to receive an incentive grant, performance must exceed planned
performance in each of the three program areas.
E. The Amount of the Incentive Award
WIA section 503 indicates that incentive grants will be awarded
in an amount that is not less than $750,000 and not more than
$3,000,000. The primary issues related to determining the amount of
award concern the equity of the size of the award among the states
and the incentive power of the award. WIA section 503(c)(2) requires
a proportionate reduction in the minimum and maximum amounts when
total available funds are insufficient. Based upon achieved
performance levels for Titles I and II of WIA and the Perkins Act,
the DOL and DoED will publish a list of States qualifying for
incentive grants along with the maximum amount of the grant based
upon available funds. The methodology for determining award amounts
will be developed at a later time. Section 666.230 of the interim
final regulations for WIA Title I provides factors that may be
considered in the determination.
F. The Definition or Standard for Failing to Meet the Adjusted Levels
Section 136(g) addresses sanctions for State failure to meet
State performance measures for the core indicators or the customer
satisfaction indicators under Title I of WIA. The Act indicates that
failure should be defined as failing to meet levels established for
each separate program or for the customer satisfaction indicators.
Failure will be defined using a calculation methodology similar
to that used for defining exceeding; that is, calculating across
relevant indicators the cumulative average achieved of the lower
limit of the range. This will be done by calculating the percentage
achieved of the lower limit of the range established for each
measure; and then calculating the average achieved across all
measures. When the cumulative average across relevant program
measures falls below 100 percent of the lower limit, the State will
be determined to have failed to meet the adjusted levels of
performance. See Table B for an example of how the calculation of
failure would work.
Determinations of failure will be established separately for
each program (adult, dislocated workers, and youth) and for the
program overall considering customer satisfaction measures. States
that fail for any program year to achieve an average of at least 100
percent of the lower limit of the range for the relevant indicators
for any single program, or the overall program measured by customer
satisfaction, may request and receive technical assistance for the
Secretary.
G. The Criteria for Receiving Monetary Sanctions
Section 136(g)(1)(B) provides that the Secretary may reduce the
grant by not more than 5 percent of the amount payable under a
program should the State fail to meet adjusted performance levels
for a program for a second consecutive year. The failure must occur
for the same program area for two consecutive years; in other words,
the State must achieve an average below 100 percent of the lower
limit of the range for two consecutive years for either the adult
measures, the dislocated worker measures, the youth measures, or the
customer satisfaction measures. The sanction system will be totally
objective and will automatically invoke monetary sanctions when a
State fails to achieve the minimum average performance for the same
program for a second consecutive year. The grant may also be reduced
by up to 5 percent for failure to submit the annual performance
progress report required under section 136(d).
Since data will not be available in sufficient time to actually
determine that there was a failure for a second consecutive year,
the monetary sanction will be invoked with respect to the funding
allocation for the next full program year following the year in
which data about ``the second consecutive year'' became available.
This approach assures that funding is not affected after-the-fact.
H. The Amount of the Monetary Sanction
Section 136(g)(1)(B) provides that the Secretary may reduce the
grant by not more than 5 percent of the amount that would be payable
under the program; and the penalty shall be based on the degree of
failure to meet State adjusted levels of performance. Using the
average percent achieved across relevant indicators for each
program, and for the overall program based on customer satisfaction,
there will be a one percent monetary sanction for every three
percent below 100 percent cumulative attainment of the lower limit
of the ranges established. As an example, achievement between 97.0
and 99.99 percent of the lower limit would result in a one percent
reduction; achievement between 94.0 and 96.99 percent would result
in a two percent deduction, etc.
I. Sanctions for Failure To Submit Annual Performance Progress Reports
Section 136(g)(1)(B) provides that the Secretary may reduce the
grant amount by up to five percent for failure by a State to submit
the annual performance progress report to the Secretary. States that
are more than 45 days late in submitting complete and sufficiently
accurate reports will be sanctioned by one percent, plus an
additional one percent for each addition 45-day period of lateness.
Any state sanctioned for not submitting its
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performance progress report within the specified time will not be
eligible to apply for incentive funds.
Incentives Example State A
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Percent
Measures Adjusted level Actual achieved Lower limit*
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Adult
Entered Employment.............................. 74% 82% 110.8 59.2%
6-Month Retention............................... 86% 89% 103.5 68.8%
6-Month Earnings Change......................... $4,000 $3,579 89.5 $3,200
Credential Attainment Rate...................... 20% 19% 95.0 16.0%
Dislocated Workers
Entered Employment.............................. 82% 89% 108.5 65.6%
6-Month Retention............................... 88% 92% 104.5 70.4%
6-Month Earnings Change......................... $1,000 $910 91.0 $800
Credential Attainment Rate...................... 20% 25% 125.0 16.0%
Youth 19-21
Entered Employment.............................. 55% 67% 121.8 44.0%
6-Month Retention............................... 60% 70% 116.7 48.0%
6-Month Earnings Change......................... $3,000 $3,557 118.6 $2,400
Credential Attainment Rate...................... 35% 47% 134.3 28.0%
Youth 14-18
Skill Attainment................................ 67% 72% 107.5 53.6%
Diplomas or Equivalent Attainment............... 25% 27% 108.0 20.0%
Placement and Retention......................... 65% 62% 95.4 52.0%
Customer Satisfaction
Employer........................................ 87% 94% 108.0 69.6%
Participant..................................... 87% 92% 105.7 69.6%
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Average Achieved Over All................... .............. .............. 108.5 ..............
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State A has exceeded the adjusted levels for WIA Title I: the overall average percent achieved is over 100%;
actual performance didn't fall below the lower limit for any measure; and both customer satisfaction adjusted
levels were met.
*In this example, the lower limit was calculated at 80% of Adjusted Level for all measures.
Sanctions Example State B
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Percent
Measures Lower limit Actual achieved
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Adult
Entered Employment.............................................. 56% 75% 133.9
6-Month Retention............................................... 65% 80% 123.1
6-Month Earnings Change......................................... $3,000 $2,579 86.0
Credential Attainment Rate...................................... 15% 14% 93.3
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Adult Program Average....................................... .............. .............. 109.1
Dislocated Workers
Entered Employment.............................................. 62% 80% 129.0
6-Month Retention............................................... 66% 76% 115.2
6-Month Earnings Change......................................... $750 $605 80.7
Credential Attainment Rate...................................... 15% 20% 133.3
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DW Program Average.......................................... .............. .............. 114.5
Youth 19-21
Entered Employment.............................................. 41% 39% 95.1
6-Month Retention............................................... 45% 46% 102.2
6-Month Earnings Change......................................... $2,250 $1,998 88.8
Credential Attainment Rate...................................... 26% 24% 92.3
Youth 14-18
Skill Attainment................................................ 50% 54% 108.0
Diplomas or Equivalent Attainment............................... 19% 20% 105.3
Placement & Retention........................................... 49% 47% 95.9
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Youth Program Average....................................... .............. .............. 98.2
Customer Satisfaction
Employer........................................................ 65% 77% 118.5
Participant..................................................... 65% 81% 124.6
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Customer Satisfaction Average............................... .............. .............. 121.5
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State B failed the Youth Program measures: 98.2% of lower limit achieved on average. If these youth measures
depict failure in the second consecutive year, a monetary sanction equal to one percent would be applied to
the youth allocation.
[FR Doc. 99-10473 Filed 4-26-99; 8:45 am]
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