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Monday,
April 28, 2003
Part III
Department of Labor
Employment and Training Administration
20 CFR Part 641
Senior Community Service Employment
Program; Proposed Rule
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22520 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
DEPARTMENT OF LABOR (202) 693–3758 (this is not a toll-free 26574 (May 17, 1995) (formerly codified
number). at 20 CFR part 641), and SCSEP program
Employment and Training administration materials provided to the
SUPPLEMENTARY INFORMATION: The
Administration grantee community as bulletins, or
preamble is divided into four sections.
Section I provides general background training and employment information
20 CFR Part 641 notices. New provisions of the OAA
information. Section II discusses the
include requirements for: greater
RIN 1205–AB28 implementing changes to the Older
coordination with the Workforce
Americans Act. Section III discusses the
Senior Community Service Investment Act (WIA); a greater
proposed rule. Section IV discusses
Employment Program proportion of funds for States for
miscellaneous administrative
appropriations above current funding
AGENCY: Employment and Training requirements, such as Paperwork
levels; the submission of State plans;
Administration (ETA), Labor. Reduction Act requirements. In drafting
grants for a period up to 3 years; new
these regulations, the Department
ACTION: Notice of proposed rulemaking performance measures; and corrective
consulted with interested parties
with request for comments. action and sanctions for poor
through a series of Town Hall Meetings performance.
SUMMARY: The Employment and and work groups, and received written With the enactment of the Workforce
Training Administration (ETA) of the suggestions in response to the Federal Investment Act of 1998, title V became
Department of Labor (Department or Register notices published at 66 FR a required partner in the workforce
DOL) is issuing a Notice of Proposed 6678 (Jan. 22, 2001), 66 FR 10919 (Feb. investment system. As a result, Congress
Rulemaking with request for comments 20, 2001), 66 FR 15596 (Mar. 19, 2001), amended SCSEP to include greater
to implement reforms to the Senior 66 FR 16068 (Mar. 22, 2001), and 66 FR coordination with the One-Stop
Community Service Employment 20334 (Apr. 20, 2001). Delivery System, including reciprocal
Program (SCSEP) due to the enactment I. Background use of Individual Employment Plans
of the 2000 amendments to title V of the and other assessment mechanisms.
Older Americans Act of 1965 (OAA), Since its inception in 1965, the Under both WIA and the OAA, any
Pub. L. 106–501 (2000). This proposed purpose of the Senior Community grantee operating an SCSEP project in a
rule provides administrative and Service Employment Program (SCSEP) local area must now negotiate a
programmatic guidance, as well as has been to foster and promote useful Memorandum of Understanding with
requirements for the implementation of part-time employment opportunities in the Local Workforce Investment Board,
the SCSEP. Key components of this community service activities for persons which details SCSEP’s involvement in
reform include coordination between with low incomes who are 55 years old the One-Stop Delivery System. Further,
SCSEP and the One-Stop Delivery or older. The 2000 amendments to this because of SCSEP’s closer coordination
System, increased responsibility of State legislation expand the program’s with the One-Stop Delivery System, the
grantees to collaborate with other purpose to include increasing ‘‘joint program’’ language contained in
SCSEP stakeholders, and increased participants’ economic self-sufficiency section 510 of the 1992 amendments to
accountability for performance. and increasing the number of persons the OAA, Pub. L. 102–375 (1992), and
DATES: All comments must be received
who may benefit from unsubsidized section 203 of the Job Training
by June 12, 2003. employment. The Employment and Partnership Act, Pub. L. 97–300 (1982)
Training Administration (ETA) of the (29 U.S.C. 1603 et seq.) for
ADDRESSES: All comments received
Department of Labor (DOL or ‘‘automatically’’ qualifying participants
during the comment period following Department) administers the program by
the publication of this Notice of for training or intensive services has
means of grant agreements with eligible been replaced with language that
Proposed Rulemaking should be organizations, such as governmental
submitted in writing to Mr. Gale Gibson, permits Local Boards to deem SCSEP
entities and public and private participants eligible for those services.
Division of Older Worker Programs, U.S. nonprofit agencies and organizations. The 2000 Amendments to the OAA
Department of Labor, 200 Constitution The SCSEP regulations were last revised require a different distribution of
Avenue, NW., Room N5306, in 1995, at 20 CFR part 641; 60 FR funding between State and national
Washington, DC 20210. 26574 (May 17, 1995). SCSEP grantees if the SCSEP
All comments will be available for
The 2000 amendments are the first appropriation increases. The legislation
public inspection and copying during
major legislative changes to the SCSEP requires the Department to reserve
normal business hours at the Division of amounts for section 502(e) (authorizing
in many years. This document issues a
Older Worker Programs, U.S. second career training projects), the
proposed rule to conform to the new
Department of Labor, 200 Constitution territories, and the Native American and
changes in the Older Americans Act due
Avenue, NW., Room N5306, Asian Pacific aging organizations before
to the enactment of the 2000
Washington, DC 20210. Copies of the funds are distributed between the States
amendments. The Department
proposed rule are available in alternate and national SCSEP grantees. From the
developed these regulations in
formats of large print and electronic file amounts remaining after the reservation,
consultation with program stakeholders,
on computer disk, which may be the legislation holds grantees harmless
including State agencies, national
obtained at the above-stated address. at the 2000 level of activity, which
organizations, interested individuals,
The proposed rule is also available on requires the Department to allocate 22
and public and private nonprofit
the Division of Older Worker Programs’ percent of funding to State grantees and
organizations.
Web site at http://wdsc.doleta.gov/ 78 percent of funding to national
seniors. II. Implementing Changes grantees. Funding remaining after 2000
FOR FURTHER INFORMATION CONTACT: Mr. Congress amended SCSEP to combine level of activity distribution must be
Gale Gibson, Division of Older Worker requirements that were formerly in the divided as follows: up to $35 million
Programs, U.S. Department of Labor, SCSEP legislation as last amended in will be divided to provide 75 percent to
200 Constitution Avenue, NW., 1992 by Pub. L. 102–375, the the States and 25 percent to the national
Washington, DC 20210, Telephone: accompanying regulations at 60 FR grantees. Excess amounts over $35
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22521
million will be divided 50 percent to assistance and consultation. These work Department’s experience that such
States and 50 percent to the national groups provided the Department with organizations will be able to run a
grantees. issue papers and recommendations. successful SCSEP program and also
The 2000 Amendments require Further, the Department held a series of meet the statutory administrative cost
Governors to submit an annual plan that Town Hall Meetings and requested limitations. Further, it aligns with the
discusses the number and distribution comments through Federal Register current practice of awarding SCSEP
of eligible individuals in the State, the notices to ensure that the regulations funds to organizations that are
employment opportunities, the skills of reflect the ideas of interested ‘‘national’’ in scope and further
the local eligible population, the individuals. The Department has distinguishes these grants from grants to
locations and populations for which received a number of suggestions States.
community service projects are most through this process. Every effort has Finally, the term ‘‘State grantee’’ has
needed and plans for coordinating with been made to incorporate these been defined for purposes of this
WIA. As part of the planning process, suggestions to the extent practicable and regulation to include not only the 50
the legislation requires the Governor to consistent with applicable statutory States, Puerto Rico, and the District of
obtain the advice of title V stakeholders requirements. Columbia, but also to include the
in developing a plan that addresses the following territories: Guam, American
equitable distribution of positions in Subpart A—Purpose and Definitions Samoa, the U.S. Virgin Islands, and the
each State. The legislation also allows This subpart provides a section-by- Commonwealth of the Northern Mariana
the Governor to make recommendations section overview of the regulations. This Islands. ‘‘State’’ is defined in section
on grant proposals to the Department subpart also includes a number of 506(g)(6) of the OAA to specifically
related to the proposed distribution of definitions that are intended to exclude the territories. The Department
positions within the State. familiarize the reader with basic interprets this definition as applying
Another new provision of the elements of the One-Stop Delivery only to section 506 of the OAA, which
legislation is the establishment of System established under WIA, such as governs the distribution of funds. In
performance measures. The ‘‘core services,’’ ‘‘individual section 506, where the OAA discusses
performance measures are designed to employment plan,’’ ‘‘local workforce ‘‘State,’’ it does so in terms of a State
monitor the performance of each grantee investment area.’’ Other definitions receiving its portion of SCSEP funds.
and provide a mechanism to assist those such as ‘‘recipient,’’ ‘‘subrecipient,’’ and Under section 506, the territories
grantees that need technical assistance ‘‘vendor’’ are provided to clarify the use receive a reservation of funds and
to perform better. The performance of terminology in Subpart H of these therefore, do not receive funds as part
measures are based on the required regulations, which is based on uniform of the formula distribution among the
indicators listed in section 513(b) of the administrative requirements, audit States. The Department distinguishes
OAA. For grantees that do not meet the requirements, and allowable cost this use of the word ‘‘State’’ in the
established performance measures, requirements generally applicable to funding context from its use in the
section 514 of the OAA provides for Federal financial assistance programs, regulations. Therefore, to ensure that the
corrective action and sanctions. Section including SCSEP. A number of title V provisions are administered
514 of the OAA also codifies prior definitions that are well known to those equitably, the Department has defined
regulatory eligibility and responsibility familiar with SCSEP are provided for ‘‘State grantee’’ as including the
criteria that grantees must meet before the benefit of readers who may be less territories. Thus, territories will be held
receiving SCSEP funds. Finally, section familiar with the program. These to the same requirements regarding
514 authorizes the Department to fund include such terms as ‘‘authorized State plans, coordination with the
grants for up to 3 years after the position level’’ and ‘‘host agency.’’ Workforce Investment Act, services to
establishment of the regulations and The Department added a definition of participants, section 502(e), eligibility
performance measures. ‘‘national grantee’’ for the first time by review, responsibility review,
regulation, although it is supported by performance measures, sanctions,
III. Summary and Explanation of the a long-standing Department practice.
Proposed Rule administrative costs, and appeal
This definition clarifies the list of those procedures as the States.
This section discusses and explains entities eligible to receive SCSEP
the specific provisions of the proposed national grant funds. For this purpose, Subpart B—Coordination With the
rule. As this legislation has many new the regulation defines ‘‘public agencies’’ Workforce Investment Act
provisions, the Department has drafted as meaning Federal agencies in order to This subpart incorporates those
regulations that respond both to the maintain the statutory distinction provisions of the 2000 Amendments to
SCSEP community’s concerns and to the between national grants and grants to the Older Americans Act that require
Department’s interpretation of the States. Thus, under this definition, State coordination with the Workforce
statute. The Department obtained and local public agencies are not Investment Act of 1998 (WIA). This
viewpoints of the public, including permitted to serve as national grantees. subpart does not cover every WIA
individuals and members of the grantee The definition of national grantee in provision relevant to SCSEP.
community, on the new provisions and § 641.140, also contains a requirement
any other SCSEP provision (regulatory that the organization must be capable of What Is the Relationship Between
or statutory) or policy. Five work groups administering multi-State programs. An SCSEP and the Workforce Investment
were established that included organization does not have to operate in Act? (§ 641.200)
representatives from the national more than one State, but must be SCSEP is a required partner under the
grantee organizations and several States. structured to have the capacity to Workforce Investment Act. As such,
The work groups addressed the administer multi-State programs. This SCSEP grantees and subgrantees must
following areas: Performance requirement provides the Department ensure that they are familiar with the
accountability; operational and policy with the flexibility to negotiate with WIA statutory and regulatory
issues; grant and administrative issues; grantees to ensure that all SCSEP provisions. WIA is due to be
the State Senior Employment Services participant slots are covered with no reauthorized by September 30, 2003.
Coordination Plan; and technical disruptions to the participants. It is the Reauthorization may bring changes in
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22522 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
the law. SCSEP grantees and the One-Stop Delivery System would Are SCSEP Participants Eligible for
subgrantees must ensure that they keep accept and use SCSEP IEPs as part of the Intensive and Training Services Under
current on any changes in the law. assessment process. This proposed Title I of WIA? (§ 641.240)
What Services, in Addition to the regulation mirrors the statutory Under the OAA, although SCSEP
Applicable Core Services, Must SCSEP requirement at section 502(b)(4) of the participants are not automatically
Grantees Provide Through the One-Stop OAA and clarifies that the SCSEP IEP eligible to receive intensive and training
Delivery System? (§ 641.210) and the WIA title I IEP have similar services under WIA, Local Boards now
purposes—to determine what services have the authority to deem SCSEP
The underlying notion of the One-
Stop is the coordination of programs, individuals need to meet their participants eligible to receive intensive
services and governance structures so employability objectives, which may and training services under title I of
that the customer has access to a include transition into appropriate WIA. WIA eligibility is not based on
seamless system of workforce unsubsidized employment. The income except in the adult program
investment services. The success of the information collected by each must be where a local area determines that funds
reformed workforce investment system sufficient to assist in making an are insufficient; rather, WIA eligibility is
is dependent on the development of true informed judgment between the staff based on the need for and utility of
partnerships and honest collaboration at and the individual about the specific intensive and training services to obtain
all levels and among all stakeholders. service strategy for that individual. The employment. SCSEP participants who
The Department envisions that a variety specific activities that may be provided seek unsubsidized employment may
of programs could use common intake, by each program differ. In the SCSEP need training services, which may be
case management, and job development program, beyond core services, provided by the SCSEP grantee,
systems in order to take full advantage intensive services (such as creation of a subgrantee, host agency, or by another
of the One-Stop Delivery System’s provider, like the WIA adult program, as
SCSEP IEP) and community service
potential for efficiency and agreed to in the MOU. The SCSEP IEP
activity are the major program
effectiveness. A wide range of services itself is an intensive service.
components. Some other training The issue of eligibility for WIA title I
from a variety of training and services may be provided. Placement in
employment programs can, therefore, be adult services has been raised by some
a full-time unsubsidized job is a goal for SCSEP partners, who are concerned that
available through the One-Stop. The some participants; others would prefer
proposed regulation requires SCSEP the WIA title I grantees would refuse to
to have part-time employment, while provide intensive or training services to
grantees to make arrangements to
still others would prefer to continue in SCSEP participants because their
provide their participants, eligible
individuals the grantees are unable to a community service activity. The WIA income, including their OAA title V
serve, as well as other SCSEP ineligible title I program, on the other hand, is payments, would be too high to meet
individuals with access to other services aimed at job placement through core the WIA title I local priority of service
available in the One-Stop. services, intensive services, and policies. The Department does not
training. As a practical matter, the believe that title V payments should be
Does Title I of WIA Require SCSEP To SCSEP IEP and WIA IEP must be considered income when determining
Use OAA Funds for Individuals Who sufficiently comprehensive to provide an individual’s eligibility for intensive
Are Not Eligible for SCSEP Services or the information needed to place a or training services for two reasons.
for Services That Are Not Authorized participant who is eligible for both First, the individual’s income level is
Under the OAA? (§ 641.220) programs in the correct service mix. already considered at the time of
This proposed provision clarifies that This may well require modifying enrollment in SCSEP for initial
in the One-Stop environment, OAA existing SCSEP IEP and WIA IEP eligibility purposes. Second, SCSEP
funds may only be used to provide title information collection practices, which provides work opportunities that are
V services to individuals eligible for should be negotiated during the analogous to work experience activities
SCSEP. Some eligible participants may development of the local MOU. under 20 CFR 663.200 of the WIA
not be able to receive all of the services regulations, which are not counted
he or she requires through SCSEP. Such There was also much related against the individual’s income. This
individuals must be referred to discussion that demonstrated concern type of income historically has not been
programs under WIA that may assist the that the SCSEP IEP would not be included as wages for eligibility
SCSEP eligible participant in obtaining accepted at the One-Stop, especially if determination purposes. If work
a job. The Department encourages WIA developed a more extensive IEP experience payments were to be
grantees to enroll or refer those than the SCSEP IEP, when the considered as income, it could mean
individuals who do not meet the income participant was assessed through SCSEP that the individual might be precluded
eligibility criteria to programs under and not at the One-Stop. This outcome from other program activities, which is
WIA. Grantees may want to negotiate is clearly not intended and the clearly not intended.
how these individuals will be served in Department expects One-Stop operators Subpart C—The State Senior
the Memorandum of Understanding. to accept SCSEP IEPs and SCSEP Employment Services Coordination Plan
Must the Individual Assessment grantees to accept One-Stop originated
IEPs. Both SCSEP’s IEP and WIA’s IEP This subpart of the regulations
Conducted by the SCSEP Grantee and implements the new provisions in
the Assessment Performed by the One- are meant to be ‘‘living documents,’’
updated on a continuing basis as part of section 503 of the OAA, which direct
Stop Delivery System Be Accepted for the Governor of each State to submit a
Use by Either Entity To Determine the an ongoing assessment process. The
State Senior Employment Services
Individual’s Need for Services in SCSEP intent of the provision authorizing WIA
Coordination Plan (State Plan) to the
and Adult Programs Under Title IB of and SCSEP grantees to use each other’s
Department annually. State Plan
WIA? (§ 641.230) IEPs is simply to avoid unnecessary development is a participatory process
There was much discussion during duplication and to reduce the burden on that includes Governors, State and area
the Town Hall Meetings about whether participants. agencies on aging, State and Local
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22523
Boards, national grantees, and developing the State Plan, consistent although the Department encourages
stakeholders in the aging network. It is with any applicable State laws or American Indian grantees to participate
intended to ensure a participatory regulations. A Governor who chooses to in the State planning process. These
planning process and to provide an delegate his or her State Plan national grantees must collaborate with
opportunity for public comment on the responsibility will be required to submit the Department to develop a plan for
State Plan for SCSEP services within the a signed statement to the Department projects and services to older American
State. The State planning process indicating such intent. The Department Indians in the locations that they serve.
requirements do, however, provide an will issue the required format for this
statement in an administrative bulletin. What Information Must Be Provided in
exemption for national grantees serving
The Department will also accept the the State Plan? (§ 641.325)
older American Indians at section
503(8). Under this provision, national signature of the Governor’s delegate for This section lists the minimum
grantees serving older American Indians the State plan as long as there is a valid requirements of the State Plan
are not required to be a part of the State statement on file indicating the consistent with section 503(a)(4) of the
planning process, although the Governor’s intent. OAA. The Department will issue more
Department encourages them to detailed instructions about what must
Who Participates in Developing the be included in the State Plan. Governors
participate. These national grantees are State Plan? (§ 641.315)
required to collaborate with the are encouraged to use the equitable
Department in developing a plan for This provision lists the stakeholders distribution report that State grantees
projects and services to older American and others that the Governor is required submit to the Department each year in
Indians. The Department will provide to consult for advice and preparing their State plans. The
instructions on how and when this recommendations related to the State Department will also provide more
collaboration will occur. Plan. It is important that all SCSEP detailed information about the
The State Plan is separate and distinct grantees operating programs within the collaboration efforts to grantees serving
from the SCSEP grant application and State, including national grantees older American Indians.
the plan required under WIA. The serving older American Indians, the
State and Local Boards, and the State How Should the State Plan Reflect
Department will provide instructions on Community Service Needs? (§ 641.330)
how these three types of plans relate to and area agencies on aging have an
each other in an administrative opportunity to actively participate in This proposed provision expands on
issuance. developing the State Plan. The section 503(a)(4)(E) of the OAA, which
Section 503 also allows the Governor development of the State Plan is a requires the State Plan to identify and
to submit recommendations to the participatory process that is designed to address the localities and populations
Department on any application for allow for comments from all interested for which community service projects of
SCSEP funds that proposes a project in organizations and individuals. the type authorized by this title are most
his or her State. This provision is Must all National Grantees Operating needed.
limited to recommendations on the Within a State Participate in the State How Should the Governor Address the
proposed distribution of positions and Planning Process? (§ 641.320) Coordination of SCSEP Services With
may impact the Department’s decision Activities Funded Under Title I of WIA?
Section 503(a)(2) of the OAA requires
to award or not award SCSEP funds to (§ 641.335)
the Governor to seek the advice and
a particular applicant.
recommendations of a number of Proposed § 641.335 expands on the
What Is the State Plan? (§ 641.300) different parties for providing SCSEP State Plan requirement found in section
This proposed section defines the services in the State, but does not 503(a)(4)(F) of the OAA, which requires
State Plan and emphasizes that it is require national grantees to participate coordination of SCSEP activities in the
intended to foster collaboration among in the State planning process. Proposed State with WIA activities carried out in
SCSEP stakeholders. § 641.320 places a requirement on the State.
national grantees to collaborate with the
Who Is Responsible for Developing and Governors of each State where they Must the Governor Submit a State Plan
Submitting the State Plan? (§ 641.305) operate a SCSEP program consistent Each Year? (§ 641.340)
Although developing the State Plan is with the intent of the statute. The The Department received suggestions
a participatory process involving SCSEP Department strongly believes that it is in through the Town Hall Meetings that
grantees operating programs within the the best interest of all national grantees the State Plans and the SCSEP grants
State, the OAA assigns the to work with the Governors in this cover the same time period, with an
responsibility for developing the Plan to process. Not only will national grantees annual modification process to allow for
the Governor. be a part of the planning process for any necessary revisions. The
serving SCSEP participants, but the Department recognizes the merits of
May the Governor Delegate decisions made as a result of this these suggestions. In addition, the
Responsibility for Developing and consultation help national grantees meet Department recognizes that the data
Submitting the State Plan? (§ 641.310) the eligibility criteria at section used in developing State Plans may not
This section permits the Governor to 514(c)(5) of the OAA. Further, any be updated annually and that a
delegate responsibility for the State national grantee that fails to collaborate substantial amount of staff time is
Plan. The Department recognizes that for State Plan purposes may be deemed required to fully carry out the State
the State Plan requires a sizable time ineligible for SCSEP funds in the planning requirements. Therefore, the
commitment to make certain that following Program Year under section Department is not requiring each State
stakeholders are consulted, to collect 514(c)(5). to develop and submit a completely new
and publish comments, and submit a The proposed regulation exempts State Plan each year. However, the
well-drafted State Plan for Department national grantees serving older Department will require States to seek
review. Therefore, the Department is American Indians, who may choose not the advice and recommendations of the
allowing Governors to utilize their to participate in the State planning individuals and organizations identified
resources that are best suited for process, consistent with the statute, in the statute at section 503(a)(2) about
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22524 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
what changes are needed, if any, and to Department intends for these documents program performance. Relevant sections
publish the changes to the State Plan for to work together to ensure that services describe organizations eligible to apply
public comment. States will then submit are fairly distributed in the State. for SCSEP grants, application
a modification to the Department based requirements, eligibility criteria,
How Must the Equitable Distribution
on any updated information, including responsibility reviews, and how the
Provisions Be Reconciled With the
any new comments received and a Department will select grantees. The
Provision That Disruptions to Current
summary of those comments. This OAA contains a new requirement that
Participants Should Be Avoided?
slightly abbreviated process allows the Department arrange for competition
(§ 641.365)
States to comply with the legislative should grantees fail to meet
requirements, but reduces the burden of The Department recognizes the performance measures, which are
the requirement. difficulty of balancing these provisions discussed in Subpart G. The OAA also
in the daily operation of SCSEP projects. reinforces the responsibility tests that
What Are the Requirements for Section 508 of the OAA requires the were established in the former
Modifying the State Plan? (§ 641.345) State agency for each State receiving regulations. Should a grantee fail one or
Section 641.345 discusses when funds to prepare and submit a report to more of these tests, the Department is
modifications to the State Plan are the Department each year on how the required to compete the funds of such
required. In general, modifications are State is allocating its SCSEP funds in an grantee. This subpart provides
required when there is a major change equitable manner taking the priorities procedures that the Department will use
affecting the underlying basis for the established in the State Plan into when awarding SCSEP funds under
State Plan. This section mirrors the WIA consideration. Section 503(a)(6) of the competitive and noncompetitive
regulations at 20 CFR 662.230. OAA provides that when developing the conditions.
State Plan, disruptions to current
How Should Public Comments Be participants must be avoided to the What Entities Are Eligible To Apply to
Solicited and Collected? (§ 641.350) greatest extent possible. The Department the Department for Funds To
Because State procedures vary, the proposes, in § 641.325(h) to require Administer SCSEP Community Service
Department recommends that Governors Governors to include a description of Projects? (§ 641.400)
use established methods for soliciting the steps that are being taken to comply The OAA, at section 502(b)(1),
and collecting public comments. In with section 503(a)(6) on avoiding authorizes the Secretary to enter into
general, however, soliciting and disruptions in the State Plan. When agreements with State and national
collecting public comments should there is new census data indicating that public and private nonprofit agencies
ensure that the title V planning process there has been a shift in the location of and organizations, agencies of a State
is coordinated with other related State the eligible population or when there is government or a political subdivision of
planning processes, such as the WIA 5- over-enrollment for any other reason, a State (having elected or duly
year plan and the title III OAA plan. The the Department recommends a gradual appointed governing officials), or a
process should be open and inclusive in shift that encourages current combination of such political
order to provide a meaningful participants in subsidized community subdivisions, or tribal organizations.
opportunity for the public to review the service positions to move into This proposed rule clarifies the
proposed plan and offer comments. unsubsidized jobs to make positions Department’s policy on how these
available for eligible individuals in entities may apply for SCSEP funds. The
Who May Comment on the State Plan? areas where there has been an increase proposed rule clarifies the list of eligible
(§ 641.355) in the eligible population. The entities that may apply for SCSEP funds
This section clarifies that any Department encourages interested to preserve the balance of funds
individual or organization may organizations and individuals to use the established in section 506 of the OAA,
comment on the State Plan, which is State Plan review and comment process as well as the definitions of ‘‘national
consistent with section 503(a)(2) of the to make recommendations for how their grants’’ and ‘‘State’’ in section 506(g)(5)
OAA. State can achieve an equitable and 506(g)(6). Entities that are eligible to
distribution of SCSEP positions while apply for national grants are: nonprofit
How Does the State Plan Relate to the avoiding disruptions to current organizations, Federal public agencies,
Equitable Distribution (ED) Report? participants. The Department does not and tribal organizations. These entities
(§ 641.360) define disruptions to mean that must be capable of administering a
The equitable distribution report is a participants are entitled to permanently multi-State grant. States, agencies of a
report that shows where positions are remain in their current subsidized State, political subdivisions of a State,
located throughout a State on a grantee- community service employment and combinations of political
by-grantee basis and is required by positions. As discussed in §§ 641.570 subdivisions of a State are not eligible
section 508 of the OAA. State agencies and 641.575, grantees may, under to apply for national grant funds. The
are responsible for preparing it at the certain circumstances, place time limits Department has defined ‘‘public
beginning of each fiscal year. SCSEP on an SCSEP community service agencies’’ as Federal agencies in order to
grantees use the equitable distribution assignment, thus permitting positions to maintain the statutory distinction
report to improve on the distribution of be transferred over time. between national grants and grants to
SCSEP positions within the State. States and to give effect to the use of the
The information contained in the ED Subpart D—Grant Application, separate terms ‘‘national public and
report is used in preparing the State Eligibility, and Award Requirements private nonprofit agencies and
Plan; however, the State Plan requires This subpart covers the grant organizations’’ and ‘‘agencies of a State
additional information, such as plans application, eligibility, and award government or a political subdivision of
for facilitating the coordination of requirements for all SCSEP grants under a State * * * or a combination of such
activities of grantees in the State under section 506 of the OAA. The procedures political subdivisions’ in section
WIA, and consultation with individuals in this subpart support increased 502(b)(1) of the OAA. The definition of
and organizations in the State. The State emphasis on the grantees’ accountability national grantee is expanded in
Plan is submitted annually. The for results in order to achieve enhanced § 641.140 to mean an organization that
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22525
is capable of administering multi-State How Does an Eligible Entity Apply? language at section 514(c) of the OAA
programs. An organization does not (§ 641.410) dealing with eligibility criteria, which
have to operate in more than one State, Proposed § 641.410 directs interested must be reviewed each time an
but must have the capacity to applicants, including States, to follow applicant applies for SCSEP funds. The
administer multi-State programs. This instructions in administrative issuances OAA codified the provisions of the
requirement allows the Department to previous regulations. Proposed
to apply for a SCSEP grant. The
negotiate with successful applicants to § 641.430(e) clarifies the statutory
Department decided not to include more
ensure that positions that did not language to include the One-Stop center
specific information in this section
receive a proposal continue to be served in the coordination requirement so that
because the parameters for applying for
in an effort to minimize disruptions to applicants understand that such
a SCSEP grant may change from
participants. This requirement also coordination is mandated. The OAA, at
Program Year to Program Year. Also, the
aligns with the current practice of section 514(c)(7), permit the Department
instructions for State applications may
to add additional criteria as appropriate
awarding SCSEP funds to organizations vary from the application instructions
to minimize disruptions to current
that are ‘‘national’’ in scope and further for national grants.
participants. The Department has added
distinguishes these grants from grants to Proposed paragraph (b) of this section proposed § 641.430(g)—a requirement to
States. As such, State and local public reiterates the statutory requirement that minimize disruptions. The Department
agencies are not permitted to serve as applicants for national grants, with the must conduct an eligibility review each
national grantees. exception of organizations applying to time an applicant applies for SCSEP
Section 514(e)(3) of the OAA lists the serve older American Indians, must funds.
submit a copy of their applications to
eligible entities that can apply for What Are the Responsibility Conditions
the Governor of each State where a
national grant funds in a State, but as a That an Applicant Must Meet?
project is proposed prior to submission
result of poor performance. Under (§ 641.440)
to the Department. This provision is
section 514(e)(3), States, nonprofit intended to allow the Governor to make
organizations, and public agencies are This section contains the
recommendations on position responsibility review provisions
eligible for a transfer or competition of distributions in the State only and not codified in section 514(d) of the OAA.
funds when a national grantee in a State on the quality of an application or These provisions were published in the
fails to meet its performance measures. whether the Department should fund a previous regulations. The responsibility
This list of eligible entities is discussed particular applicant. In the case of a full review provisions in this section
further at § 641.760 of Subpart G and open competition, Governors may address such matters as debt recovery
(performance measures). elect to only review the applications of deficiencies, significant fraud or
In the case of grants to States, the successful applicants to reduce the criminal activity, serious administrative
Department is required to allocate burden on the States and applicants. deficiencies such as failure to maintain
SCSEP funds to each State under section Organizations proposing to serve a financial management system,
506(e) of the OAA. However, it is often older American Indians do not have to maintaining excess cash or having
an agency of the State, such as the State meet this requirement because they are deficient internal controls, willful
agency on aging, that operates SCSEP exempt from State planning under obstruction of auditing or monitoring or
projects for the State. The Department section 503(a)(8) of the OAA. The failure to correct deficiencies, failure to
will continue the practice of allocating Department encourages such entities to provide services to applicants or to meet
funds to each State or the State’s submit applications to the Governors in applicable performance measures,
designee (such as the State agency on the State(s) they propose to serve so that failure to return outstanding cash
aging). Other entities, such as, political the Governors may better plan the advances, failure to submit required
subdivisions, a combination of political activities in their State. reports, failure to ensure subgrantee
subdivisions, or a national grantee Paragraph (c) of this section allows compliance with applicable audit
operating in the State may operate the States to apply for State grant funds requirements, and final disallowed costs
SCSEP projects on the State’s behalf if as a part of its WIA State Unified Plan. in excess of five percent of the grant or
State policy permits; however, these contract award.
What Factors Will the Department The Department understands that
entities may only apply independently Consider in Selecting Grantees? Congress’ intent was to make the SCSEP
for the State’s funds as a result of a (§ 641.420) program more performance-oriented and
competition under section 514(f) of the This section describes the selection to assure that the SCSEP was well
OAA. The Department believes that this criteria to be used on a program-wide managed. Consistent with that intent,
list of eligible applicants is a common basis for the selection of all SCSEP the Department intends to enforce the
sense approach to managing the State grantees, whether selected responsibility tests more strictly than it
portion of the SCSEP funds. It also competitively or on a noncompetitive has in the past.
aligns with current State practice of basis. This proposed rule identifies the The Department is interpreting the
selecting an agency, local government, eligibility and responsibility first criterion to mean that if an
or national grantee operating in the requirements in section 514 of the OAA. applicant fails to make payments on a
State as agents or subgrantees to The selection criteria must also be used debt owed to the Department, whether
administer its SCSEP projects. However, to replace any grantee that fails to meet incurred on its own or through
as discussed in § 641.881, the the performance measures listed in subgrantees or subcontractors, after the
Department will not negotiate with or section 513 of the OAA and when new grantee has received three demand
directly fund such entities. The State or additional grantees are funded. letters from the Department, it will no
remains responsible for receiving the longer be eligible to receive SCSEP
grant and for selecting an agent or What Are the Eligibility Criteria That funds. This interpretation is consistent
subgrantee to operate the grant in Each Applicant Must Meet? (§ 641.430) with the former SCSEP regulations, as
accordance with its own procurement The eligibility criteria listed in this well as the Department’s requirements
procedures. proposed section reflect the statutory for finding any grantee or contractor
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22526 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
responsible as outlined in 29 CFR 95.14 Under What Circumstances May the These factors can lead to some
and 97.12. Department Reject an Application? complications in fashioning a remedy
The Department will determine (§ 641.465) that will meet the Department’s
whether an applicant for SCSEP funds obligations to minimize disruptions and
Once an application has been
has met the responsibility requirements that will ensure that programs are
submitted, whether competitively or
before awarding funds. non-competitively, the Department may successful. How should a remedy be
question any proposed project fashioned that will take these factors
Are There Responsibility Conditions into account? For example, how should
That Alone Will Disqualify an component if it believes that the
component will not serve the purposes the remedy be fashioned if an appeal
Applicant? (§ 641.450) succeeds only in part and the resulting
of SCSEP. The Department may reject
The OAA defines two criteria that the application if the applicant does not award would be below the minimum
will automatically disqualify an submit or negotiate an acceptable standards for a grant or if the result
applicant. They are: (1) Efforts by the alternative. The Department may also would leave an existing grantee below
organization to recover debts, after three reject an application, if in the Grant that standard? How should the remedy
demand letters have been sent, that are Officer’s opinion, the application does take into account the results of
established by final agency action and not serve the program well, or if the negotiations? If, as a result of
have been unsuccessful, or that there applicant does not meet the eligibility or negotiations, a grantee has acquired
has been failure to comply with an responsibility criteria. Where grants are additional projects that neither it nor its
approved repayment plan; and (2) competitively selected, the Department competitor applied for, should the
established fraud or criminal activity of may reject an application that is remedy take that into account? If an
a significant nature within the determined to be less advantageous to appeal is successful, to what extent
organization. the Department than another should the Department be able to
competitive application, even if the negotiate the grant agreement that will
As discussed in § 641.440, the application is out of rank order.
Department is interpreting the first result? May the Department propose a
criterion to mean that if an applicant What Happens if an Applicant’s different configuration of projects than
fails to make payments on a debt owed Application Is Rejected? (§ 641.470) was applied for in order to minimize
to the Department, whether incurred on disruptions or optimize results for the
This section is reserved for the successful appellant and other existing
its own or through subgrantees or Department’s policy on providing
subcontractors, after the grantee has grantees? If the Department can
remedies for applicants that are not negotiate with the successful appellant,
received three demand letters from the selected to receive a SCSEP grant and
Department, it will no longer be eligible what happens if the negotiations are not
that are successful in appealing the
to receive SCSEP funds. The successful? In cases where the applicant
Department’s decision.
Department interprets the second to jurisdiction relationship is not one-
The Department is particularly on-one, complexities of arranging a
criterion strictly. A plain reading of the
interested in receiving comments on grant that will both minimize disruption
statute indicates that whenever there is
this section. The Department is and provide both the successful
fraud or criminal activity within an particularly interested in comments on
organization of a significant nature, the appellant and the grantee(s) that lose
available remedies and the timing of
entity must be deemed non-responsible. projects with grants that can be
those remedies.
Under this interpretation, the entity successfully operated, should the
could be deemed non-responsible even Competitions for SCSEP projects will remedy be limited to recovering the cost
if the act was done by an individual not necessarily be ‘‘one-on-one’’ of creating a proposal or something else?
competitions. Because applicants may Are the remedies currently available
within the organization without the
seek to operate projects scattered all
approval or knowledge of the under the Workforce Investment Act
over the country, applications may not
organization. The remaining (WIA), Migrant and Seasonal
necessarily compete against each other
responsibility tests require a substantial Farmworker Program (see 20 CFR
on a one-on-one basis. An applicant
or persistent (for 2 or more years) 633.205) appropriate for this program
might propose projects in 10 different
finding before the applicant is found and why or why not? What remedy
States, and compete against one of more
ineligible. other applications for each of the 10 should be available for one-year grants?
How Will the Department Examine the projects. An applicant that proposes to Another important issue is the timing
Responsibility of Eligible Entities? serve one area may compete against of the remedy. How long is an
(§ 641.460) several applicants, each of which seeks appropriate transition period? What
only a portion of that area. In addition, factors associated with the complexity
This proposed regulation addresses the Department may negotiate a grant of the transition involved should affect
how the Department will examine award that differs somewhat from the the length of an appropriate transition
applicants to determine if they are original application. The Department period? Should a period of time for
responsible as required by section 514 also has an obligation to minimize negotiations be built in? How should the
of the OAA. Section 514(d)(1) disruption to existing participants. Department remedy an applicant when
specifically requires the Department to Finally, the Department’s experience is the decision was rendered in close
review available records to assess an that there is a certain minimum size proximity to the next program year?
applicant’s overall responsibility to grant needed to give a grantee a good Should there be a cut off point after
administer Federal funds. Additionally, chance at success within the program’s
which a grant will not be awarded as
section 514(d)(2) allows the Department administrative cost limits (which is a
to consider any other information there is in the WIA Migrant and
grant size of approximately $6 million
relevant to responsibility, including the or approximately 840 positions), and to Seasonal Farmworker Program? What
applicant’s history with managing other adhere to the required level of activities should that cut-off point be?
grant funds. in section 506 of the OAA.
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22527
May the Governor Make the types of services and benefits that provisions should be consolidated or
Recommendations to the Department on participants may receive, termination eliminated, or if other new categories
Grant Applications? (§ 641.480) from the program, and the grantee’s should apply. The Department is
Proposed § 641.480 clarifies the responsibility to participants. considering eliminating the exclusion of
Governor’s statutory authority under the first $500.00 of a participant’s
Who Is Eligible To Participate in the
section 503(a)(5) of the OAA to make SCSEP? (§ 641.500) income for re-certification purposes
recommendations to the Department on because this provision is not consistent
Proposed § 641.500 establishes the with the income eligibility requirements
grant applications before funds are statutorily defined eligibility criteria.
awarded. The Governor’s under the 2000 Amendments. See OW
According to section 516(2) of the OAA, Bulletin 95–5, section 2(g) under the
recommendations must relate to the only those individuals who are at least
distribution of positions in the State. Exclusions. Further, in order to serve
55 years of age and a member of a family the populations that the program is
Any comments received relating to the with an income 125 percent or less of
quality of a particular application will intended to serve, (i.e., those most in
the poverty guidelines are eligible to need), the Department is also
not be considered. Under non- receive SCSEP services. Participant
competitive conditions, the Governor considering placing limitations on the
income eligibility criteria was the area amount of assets a participant may have
may make recommendations on all that received the most attention in
submitted applications. Under to be eligible for the program. See OW
Town Hall Meetings and Bulletin 95–5, section 2(h) under the
competitive conditions, the Governor recommendations submitted in response
has the option of either making Exclusions. Similarly, the Department is
to Federal Register notices. Individuals considering placing limitations on the
recommendations on every proposal offered various suggestions, all directed
that will be submitted to the Department amount of one-time unearned income
at providing greater flexibility in the that may be excluded. See OW Bulletin
or providing recommendations on the income eligibility criteria. More
applications of successful applicants. It 95–5, section 2(j) under the Exclusions.
specifically, some individuals suggested The Department intends to provide
is incumbent on each Governor to a higher income threshold to serve those
inform the Department whether he or additional guidance on the calculations
individuals who may be just above the through an administrative issuance.
she wishes to review all applications or 125 percent income threshold issued by
only successful applications. As stated the Department of Health and Human What Happens if a Grantee/Subgrantee
in § 641.410, organizations applying to Services and approved by the Office of Determines That a Participant Is No
serve older American Indian Management and Budget. The Longer Eligible for the SCSEP Due to an
participants are exempt, but are Department has decided not to increase Increase in Family Income? (§ 641.510)
encouraged to submit applications to the income eligibility threshold because
the Governor in the State(s) they are Grantees are required to terminate
SCSEP currently serves only a small
proposing to serve. participants who are no longer income
percentage of individuals who are
eligible for the program according to
When May SCSEP Grants Be Awarded within the 125 percent income
§ 641.580. Participants who are no
Competitively? (§ 641.490) threshold. Individuals who are in need
longer income eligible for SCSEP must
of the services provided under the
Proposed § 641.490 outlines the receive a written notification of
SCSEP but who do not meet the income
circumstances under which the termination within 30 days of the
eligibility requirement, should be
Department may compete SCSEP funds. termination date. Grantees must assist
referred to or enrolled in WIA.
Section 514 of the OAA requires a these individuals by referring them to
competition for national grantee, When Is Eligibility Determined? the WIA One-Stop or to another
national grantee in a State, or State (§ 641.505) appropriate partner program. (See
funds if the organization fails to meet its This section discusses when the § 641.255). Any participant who
performance measures or fails to meet eligibility of a participant is determined. disagrees with a termination on the
the eligibility or responsibility tests of Clearly, the first time eligibility is basis of income may grieve the decision
section 514(c) and (d) of the OAA. determined is when an individual according to the grantee’s grievance
The Department may also compete applies to participate in SCSEP. Once an procedures in accordance with Subpart
national grant funds through a full and individual becomes a SCSEP I of this regulation.
open competition. The details of such participant, however, grantees are How Must Grantees/Subgrantees Recruit
competition will be issued through a responsible for verifying the and Select Eligible Individuals for
Solicitation for Grant Application and individual’s income eligibility at least Participation in the SCSEP? (§ 641.515)
published in the Federal Register. The once every 12 months. Grantees are
Department favors full and open encouraged to verify a participant’s Proposed § 641.515 outlines the
competition because it provides the income more frequently, however, when general statutorily required means for
Department with an opportunity to circumstances dictate. recruiting and selecting eligible
ensure that the best applicants are individuals for participation in SCSEP.
awarded grants and the program is What Types of Income Are Included and Generally, grantees are required to
administered to its full potential. It also Excluded for Participant Eligibility develop a method for recruiting and
allows new and different entities, Determinations? (§ 641.507) selecting eligible individuals. To the
including faith-based and community- The Department is seeking comments extent possible, grantees must meet the
based organizations, to become a part of on the types of income that grantees statutory requirement at section
the grantee community. must consider when determining a 502(b)(1)(M) to develop methods of
participant’s eligibility. Older Worker recruitment and selection that offer
Subpart E—Services to Participants Bulletin 95–5 lists the current services to minorities, limited English-
This subpart covers services to SCSEP inclusions and exclusions for speaking, and Indian eligible
participants. More specifically, it covers determining a participant’s income. The individuals, and eligible individuals
who is eligible to receive services, Department is specifically seeking who have the greatest economic need, in
priorities in enrollment of participants, comments on whether certain proportion to their numbers in the State
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22528 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
and based on the rates of poverty and speaking, or who are Indians, to the that the information gathered during the
unemployment. extent feasible. The addition of the participant assessment must be used as
Grantees are also required by section priority under the Jobs for Veterans Act the basis for preparing the SCSEP IEP.
502(b)(1)(H) of the OAA, to list job does not alter this preference. These It is particularly important that grantees
vacancies with the State Workforce preferences operate within the context thoroughly assess each participant and
Agencies and utilize existing methods of of the two priorities (age and status ensure that all of the required
recruitment and selection, including by under the Jobs for Veterans Act); that is, information is included in the SCSEP
participating in the One-Stop. grantees should apply the priority in IEP, since it is considered an intensive
Beyond these requirements, grantees selecting among individuals who are service under title I of WIA.
have a great deal of flexibility to eligible, and then provide services Assessments must be updated on a
determine how to recruit and select within the priority to those who meet quarterly basis so that the SCSEP IEP is
individuals and are encouraged to be as the preference first. a ‘‘living document.’’ The information
creative as possible. gathered during the assessment and
Must the Grantee/Subgrantee Always
Are There Any Priorities That Grantees/ recorded in the IEP serves as the basis
Select Priority or Preference
Subgrantees Must Use in Selecting for determining the services that a
Individuals? (§ 641.530)
Eligible Individuals for Participation in participant needs, most appropriate host
The statutory priorities must always agency assignments/reassignments for
the SCSEP? (§ 641.520)
be applied first. However, the participants and for ensuring that
This section emphasizes the statutory Department understands that there may participants are getting the training
requirement at section 516(2) of the be a limited number of individuals who necessary to achieve their unsubsidized
OAA, which requires that priority of fall outside of the prescribed statutory placement goals.
services be given to individuals who are preference characteristics, but who may The listing of services in proposed
at least 60 years old, as well as the still be in need of SCSEP services. The § 641.535 is not intended to be all-
veterans’ priority requirement in the Department is providing grantees/ inclusive. Grantees should refer to
Jobs for Veterans Act, Pub. L. 107–288 subgrantees with the flexibility to operating procedures and guidelines
(2002). The latter requirement provides exercise their judgment when they issued by the Department, such as Older
a priority of services for veterans and for determine that a non-preference eligible Worker Bulletins and technical
certain spouses: Spouses of a veteran individual should receive services over assistance guides, for additional
who died of a service-connected a preference eligible individual requirements. Participants may not be
disability; spouses of a member of the described above. For example, grantees/ enrolled in SCSEP solely for the
Armed Forces on active duty, who has subgrantees may choose to serve former purpose of receiving job search
been listed for a total of more than 90 SCSEP participants who left the assistance and job referral services.
days as missing in action, or who has program due to illness and now seek to SCSEP staff working in a One-Stop
been captured in the line of duty by a return to the program, or they may Delivery System, however, may provide
hostile force, or forcibly detained by a choose to serve a former SCSEP these services to individuals who are
foreign government or power; spouses of participant who was placed in an not being enrolled in the SCSEP, as long
any veteran who has a total disability unsubsidized job and who seeks to as the staff time is appropriately charged
resulting from a service-connected return to the program, over the to the appropriate program under the
disability; and spouses of any veteran preference individuals. The flexibility to WIA cost allocation principles or the
who died while a disability so evaluated serve these individuals reassures SCSEP staff may refer such individuals
was in existence. To receive the priority, participants who leave the program to appropriate One-Stop partners.
the veteran or qualified spouse must under these circumstances and can be
used as a motivator to encourage them What Types of Training May Grantees/
meet program eligibility requirements.
The Department interprets the Jobs for to take unsubsidized jobs. Grantees Subgrantees Provide to SCSEP
Veterans Act so as to harmonize the two should take care to document why a Participants? (§ 641.540)
priority provisions. Under this particular participant who is not Training may take many forms,
interpretation, both priorities would entitled to a preference has received including skills training, on-the-job
apply. That is, within the group of services. Grantees must balance the use training, work experience, community
eligible individuals age 60 and over, the of this discretion with the performance service training, job search and job
veteran or qualified spouse would measures in subpart G that require referral services. Training may be
receive SCSEP services before non- grantees to service those of greatest provided through lectures, seminars,
veterans within that age group. Within economic need, greatest social need, or classroom instruction, individual
the group of individuals who are age 55 poor employment history or prospects instruction, or other arrangements,
to 59, veterans and qualified spouses and must not use this discretion to including, arrangements with other
would again receive a priority over avoid applying the statutory priorities. workforce development programs. The
other eligible individuals. The Department intends to monitor Department also encourages participants
these requirements through the to continue to self-develop by engaging
Are There Any Other Groups of in training through other programs or
quarterly reports as well as when
Individuals Who Should Be Given sources when they are not working in a
determining whether a grantee has met
Special Consideration When Selecting community service activity. The
its performance measures.
SCSEP Participants? (§ 641.525) Department believes that self-
In addition to the priorities outlined What Services Must Grantees/ development training is beneficial to
in § 641.520, the OAA also require Subgrantees Provide to Participants? participants because it facilitates their
grantees to give special consideration to (§ 641.535) placement into unsubsidized
individuals who have income below the This section sets forth those services employment.
poverty level, who have poor that grantees/subgrantees must provide Also, the Department expects grantees
employment prospects, who have the to all SCSEP participants. It includes a to review regulations outlining the
greatest social and/or economic need, or listing of what each participant limitations on the use of funds and the
who are minorities, limited English assessment must include and clarifies OMB cost principles when proposing to
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22529
use funds for travel or room and board transition to unsubsidized employment What Policies Govern the Provision of
associated with training. by hiring the participants who are Wages and Fringe Benefits to
Only a limited amount of SCSEP placed there through the community Participants? (§ 641.565)
funds are available for training service component of the SCSEP. This provision requires grantees to
purposes. SCSEP grantees/subgrantees
What Responsibility Do Grantees Have pay participants the highest applicable
should look to other resources, such as
to Participants Who Have Been Placed minimum wage for time spent in
those available under title I of WIA, for
in Unsubsidized Employment? orientation, required training, and for
training of SCSEP participants.
work in community service
(§ 641.555)
What Supportive Services May assignments. The applicable minimum
Grantees/Subgrantees Provide to This proposed section outlines a wage may be the highest of the Federal
Participants? (§ 641.545) grantee’s responsibilities to participants minimum wage, the State or local
Section 641.545 lists some of the after they have been placed in minimum wage, or the prevailing rate of
supportive services that grantees/ unsubsidized positions. This section pay for persons employed in similar
subgrantees may provide to participants. requires grantees to contact placed public occupations by the same
Supportive services may be provided participants within 6 months of the employer. The Department is aware that
while a participant is enrolled in the starting date to determine whether the because funding calculations are
SCSEP and until a participant has been statutorily based on the Federal
employer has retained them. This
retained by an employer for 6 months. minimum wage, when a particular
provision is consistent with the statute,
This list of supportive services is not grantee is required to pay at a higher
at section 513, which uses retention in
intended to be all-inclusive. Grantees/ minimum wage for its location, the
unsubsidized positions after 6 months result is that the program is under-
subgrantees should seek to ensure that as a performance measure. (Refer also to
participants receive those supportive funded for its activities.
subpart G on performance measures). A number of stakeholders asked that
services necessary for them to
Therefore, grantees must contact the Department address the situation of
participate in the program and to realize
the goals set forth in their SCSEP IEPs. participants 6 months after placement to States that have a higher minimum wage
Grantees are especially encouraged to ensure that participants are still than the Federal minimum wage. The
ensure that individuals who are placed employed. Grantees/subgrantees are two main suggestions were that either
in unsubsidized positions have the encouraged to conduct follow-up before grantees in those States should receive
necessary supportive services to enable 6 months when possible, to ensure that additional funding to cover their
them to retain those positions. Since the placement is successful. Grantees/ additional expenses for wages, or that
only a limited amount of SCSEP funds subgrantees may also want to check the Department should reduce the
are available to provide supportive with the employer at this time to see if number of positions for which grantees
services, grantees/subgrantees should it has other positions that may be in those States will be held accountable,
seek to obtain such services from other offered to SCSEP participants. particularly in light of the new
sources. emphasis on performance measures.
During this period of follow-up
The Department agrees that grantees
What Responsibility Do Grantees/ grantees are permitted to provide in States with a higher-than-Federal
Subgrantees Have To Place Participants supportive services to participants to minimum wage, or similarly, grantees in
in Unsubsidized Employment? the extent possible. The Department areas where the prevailing rate of pay
(§ 641.550) encourages grantees to provide for persons employed in similar public
Because a major purpose of SCSEP is supportive services to participants occupations by the same employer is
to increase the number of individuals during this time because it ensures that higher than the Federal minimum wage,
who may participate in the program, participants are able to remain in the will not be able to fully fill the
grantees/subgrantees should make every unsubsidized position. The Department authorized level of positions allotted to
reasonable effort to prepare participants distinguishes supportive services from them. If the Department receives
who desire unsubsidized employment wages, and these services are therefore additional appropriations that are not
for such employment, in accordance not considered a subsidy. Supportive required to create more positions, the
with the employability goals listed in services are discussed at § 641.545. funding gap will decrease. Also, it is not
their SCSEP IEPs. In offering the Department’s intent for this issue to
participants unsubsidized employment, May Grantees Place Participants negatively impact grantees when
grantees/subgrantees must take into Directly Into Unsubsidized reviewing whether grantees have met
account whether the job will allow Employment? (§ 641.560) their performance measures. The
participants to achieve economic self- This proposed rule emphasizes the Department will address this issue and
sufficiency. Grantees must also strive to its impact on the number of positions
importance that grantees serve the most
match the participant with the best job that may be filled through the
difficult seniors to place. Grantees are
instead of just filling jobs with performance accountability process in
participants. The objective of the encouraged to work with individuals
subpart G.
program is to place participants in who are in need of skills training, etc., Paragraph (b) of this section addresses
positions that will maximize the use of and develop those individuals through fringe benefits. With some exceptions,
their skills, based on their job readiness, the assessment and IEP so that discussed in the regulation, grantees
skills, and preferences. Thus, grantees ultimately they may be placed in an must assure that participants receive the
must contact private and public unsubsidized position. Individuals who fringe benefits required by law. Fringe
employers directly or through the One- already have employable skills and who benefits must also be administered
Stop to develop or identify suitable may be directly placed in an uniformly among participants of a
unsubsidized employment unsubsidized position without further grantee’s projects, unless the
opportunities. Also, grantees and development should be referred to the Department waives this requirement
subgrantees must encourage host services provided under the One-Stop because it is in the best interest of the
agencies to assist participants in their Delivery System. participants. Physical examinations are
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22530 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
a fringe benefit that grantees/ May a Grantee Establish a Limit on the Are Participants Employees of the
subgrantees must offer annually to each Amount of Time Its Participants May Grantee, the Local Project, and/or the
participant. Physicians commonly Spend at Each Host Agency? (§ 641.575) Host Agency? (§ 641.590)
recommend annual physical
examinations for people over the age of Some grantees have found that they Proposed § 641.590 addresses the
have been able to increase their issue of whether a participant is an
50 as a means of early identification of
unsubsidized placement rate by limiting employee of the grantee, local project, or
any serious medical problems. The
the amount of time their participants host agency. The Department is unable
Department’s policy is to actively can spend at each host agency. The
promote this program benefit for each to concretely answer this question
regulations clarify that this is an because whether a participant is an
participant. Grantees/subgrantees allowable practice, provided that the
should encourage participants to take ‘‘employee’’ depends on the laws
time limit is established in the grant defining an employee/employer
advantage of this important benefit. agreement and included in the relationship. Thus, grantees and
Grantees may not provide physical participants’ IEPs. Grantees that intend participants should consult with an
examinations to determine a to establish a limit on the amount of attorney to determine if there are
participant’s ‘‘fitness to work.’’ time a participant may spend at a host
circumstances that qualify a participant
Physicals can be useful, however, in agency must submit this plan in their
as an employee.
helping participants make informed application proposal. If the Department
judgments about their ability to perform approves the grant application, this Subpart F—Private Sector Training
certain work assignments. After an process will become part of the grant Projects Under Section 502(e) of the
individual is enrolled (on the payroll) agreement. OAA
and the grantee/subgrantee is Under What Circumstances May a This section describes private sector
developing a suitable assignment, job- Grantee Terminate a Participant? training projects authorized under
related medical inquiries are (§ 641.580) section 502(e) of the OAA, including
permissible to assist in matching the
Grantees/subgrantees may serve only information on allowable activities,
participant with an assignment. These
those individuals who are eligible for eligibility, co-enrollment, and
inquiries, if made, should be made of
the SCSEP. Should a grantee/subgrantee administration. The Department
every participant to ensure that each
learn that an individual is no longer received many suggestions for changing
participant is receiving the same level of
eligible for the program, the grantee/ the section 502(e) program, particularly
service.
subgrantee must terminate the to allow for more flexibility in the use
The Department continues the policy participant from the program. of the funds, and two suggestions to
of discouraging the use of title V funds eliminate the program altogether due to
for unemployment insurance and Grantees/subgrantees may terminate
participants for cause, including the additional reporting and budgeting
retirement fund contributions. requirements. The section 502(e)
behavior that is inconsistent with their
Is There a Time Limit on Participation SCSEP IEP, or for refusing to accept a program is required by the OAA, which
in the Program? (§ 641.570) reasonable number of referrals to jobs or authorizes the Department to reserve up
training. The Department expects to 1.5 percent of the total appropriation
There is no time limit on participation grantees to inform participants of the to place individuals into private sector
in the SCSEP because the Department conditions that could lead to a job opportunities. The Department
recognizes that some participants may termination from the program in writing believes that the section 502(e) program
never transition to unsubsidized and review the requirements with each will complement grantee efforts to
employment. It is expected, however, participant in person at the time of promote training for older individuals
that most SCSEP participants will enrollment. and move participants into
receive services for only a reasonable As provided in § 641.570, grantees unsubsidized employment in the
period of time, i.e., not more than 24 to may terminate participants based on an general SCSEP program. The
36 months. Due to the increased approved maximum duration of Department recognizes the need for
emphasis in the OAA for unsubsidized enrollment provision in the grant improved technical assistance, however,
employment placements, and the agreement approved by the Department and will work to help section 502(e)
Government Performance and Results as long as they provide appropriate grantees and subgrantees better
Act goals, grantees/subgrantees should services to help the participants implement and take advantage of the
work to place as many participants as transition to other available programs. program.
feasible in unsubsidized jobs in order to Grantees/subgrantees may not One of the biggest changes to the
create additional community service terminate a participant because of age, administration of the section 502(e)
opportunities. Grantees/subgrantees nor may they impose an upper age limit program, is the Department’s decision to
may also require that participants rotate for participation in the SCSEP. sponsor a full and open competition for
to different host agency assignments the funds so that all eligible entities may
after specified periods of time. Are Participants Employees of the apply. The Department has made this
Federal Government? (§ 641.585)
The Department may authorize the change to be more in line with the
establishment of a maximum duration of This regulation clarifies that statutory requirements, as well as
enrollment in the grantee’s grant participants are not Federal employees. Department policy on having full and
agreement, on the condition that the If, however, the grantee or host agency open competition. The Department
grantees provide a process for of a participant is a Federal agency, believes that competing this program
transitioning participants into whether or not the participant qualifies will strengthen the unsubsidized
unsubsidized employment or other as an employee depends on the laws placement goals of the program as a
assistance before the maximum duration defining an employer/employee whole and will integrate private
period has expired. relationship. (See § 641.590). industry into the SCSEP community.
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22531
What Is the Purpose of the Private coordinate section 502(e) projects with Who Is Eligible To Participate in Section
Sector Training Activities Authorized the WIA programs. 502(e) Private Sector Training
Under Section 502(e) of the OAA? Activities? (§ 641.660)
(§ 641.600) How Do the Private Sector Training
Activities Authorized Under Section This rule adopts the eligibility criteria
The purpose of section 502(e) is to 502(e) Differ From Other SCSEP
facilitate the unsubsidized employment used in subpart E to determine an
Activities? (§ 641.640) eligible participant. According to
of program participants in the private
sector, particularly in different work Generally, the provisions in subpart E subpart E, section 502(e) grantees are
modes such as job sharing, flex-time, also apply to private sector training required to serve low-income
flex-place, and to encourage the activities, including equitably individuals who are age 55 and over.
development of arrangements related to distributing positions by region of the Priority must also be given to those
reduced physical exertion, and country. Because most participants eligible individuals who are age 60 or
innovative work modes with a focus on work at a private sector worksite, over and to veterans and qualified
second career training and placement in however, section 502(e) activities are spouses under the Jobs for Veterans Act.
growth industries in jobs requiring new not required to have a community Section 502(e) grantees must also give
technological skills. service component. One major special consideration to those
The amendments to the OAA difference between the general SCSEP individuals who have incomes below
eliminated the reference to program and the section 502(e) program the poverty level, who have poor
‘‘experimental’’ activities under section is the list of applicants that are eligible employment prospects and who have
502(e). The Department interprets this to receive section 502(e) funds. For the greatest social and/or economic
action to mean that section 502(e) funds section 502(e) only, the Department is need or who are minorities, limited
may be used to fund private sector authorized to enter into agreements with English speaking, or who are Indians.
training activities whether or not they private business concerns, in addition to Preference may also be given to former
are experimental in nature; however, the
nonprofit organizations, States, and SCSEP participants who reapply after
Department encourages section 502(e)
public agencies. Also, where in the having left the program because of
grantees to be innovative.
general SCSEP program participants illness or to take an unsubsidized job.
How Are Section 502(e) Activities may be placed with a nonprofit
Administered? (§ 641.610) organization, State agency (when When Is Eligibility Determined?
permissible), or Federal agency (when (§ 641.665)
This section discusses how the
Department administers section 502(e) permissible), section 502(e) specifically This provision mirrors the
projects. It generally provides that the requires participants to be placed in requirements at § 641.505, however, it
Department may enter into agreements employment opportunities with private
has been modified to address the nature
with States, public agencies, private business concerns. Section 502(e)
of this program as a job placement
nonprofit organizations, and private organizations that serve as training sites
program. As such, grantees are not
businesses to fund proposed projects. It (on-the-job or other), or provide work
experience that lead to unsubsidized required to verify a participant’s income
also emphasizes the types of activities
employment do not have to be every 12 months since it is a single
that should occur, such as job sharing,
designated as section 501(c)(3) Program Year project, but grantees may
flex-time, flex-place, etc. Finally, this
section reiterates the importance of organizations as defined in the Internal verify income as often as circumstances
coordinating section 502(e) activities Revenue Code. Finally, the Department require verification.
with programs carried out under WIA may pay all of the costs of a 502(e) May an Eligible Individual Be Enrolled
and with other SCSEP projects in the project, which is not authorized for the Simultaneously in Section 502(e)
area. general SCSEP program. Private Sector Training Activities
How May an Organization Apply for Does the Requirement That Not Less Operated by One Grantee and a
Section 502(e) Funding? (§ 641.620) Than 75 Percent of the Funds Be Used Community Service SCSEP Project,
This proposed section provides that To Pay Participant Wages and Fringe Operated by a Different SCSEP Grantee?
eligible organizations may apply for Benefits Apply to Section 502(e) (§ 641.670)
section 502(e) funds through a full and Activities? (§ 641.650)
This proposed rule clarifies that an
open competitive process. If the
This proposed rule clarifies that the eligible individual may be
Department competes these funds
through a full and open competition it requirement to use 75 percent of funds simultaneously enrolled in section
will issue a Solicitation for Grant for wages and fringe benefits applies to 502(e) and a community service SCSEP
Applications for these funds for each all grants awarded under title V of the project operated by two different SCSEP
Program Year in which a competition is OAA. Section 502(c)(6)(B) of the OAA grantees. The Department encourages
held. specifically requires that 75 percent of co-enrollment when participants can
the grant funds be used to pay wages benefit from services provided by two
What Private Sector Training Activities and benefits for older individuals who different grantees. For example,
Are Allowable Under Section 502(e)? are employed under SCSEP projects. participants may receive training from a
(§ 641.630) The Department has interpreted this section 502(e) activity while they
Proposed § 641.630 lists the activities section to mean that when a SCSEP continue to receive wages, benefits, and
that are authorized for private sector grantee receives section 502(e) funds supportive services from a community
training under section 502(e). This list and funds for community service service project. Under these
in not intended to be exhaustive. projects under a single grant, the 75 circumstances, the Department expects
Section 502(e) grantees should note that percent requirement will apply to the grantees to work jointly to ensure that
many of these activities align with total amount of SCSEP funds that the they are providing complementary and
activities under WIA. Section 502(e) grantee received. The Department is not not duplicative services.
grantees are statutorily required to authorized to waive this requirement.
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22532 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
How Should Section 502(e) Grantees performance measures. The Department includes: (1) The number of persons
Report on Participants Who Are Co- relied upon Town Hall Meetings, served, with particular consideration
Enrolled? (§ 641.680) Federal Register notices soliciting given to individuals with greatest
This provision establishes that the comments, and the recommendations of economic need, greatest social need, or
Department’s reporting instructions, a workgroup of entities interested in poor employment history or prospects,
SCSEP to address the consultation and individuals who are over the age of
which are used for the general SCSEP
requirements. Intergovernmental 60; (2) community services provided; (3)
program, should also be used to report
organizations representing the general placement into and retention in
on section 502(e) participants.
WIA community were also consulted unsubsidized public or private
How Is the Performance of Section and participated in workgroup employment; (4) satisfaction of the
502(e) Grantees Measured? (§ 641.690) activities. participants, employers, and host
Most notably different about the agencies with the experiences and the
This provision establishes the
SCSEP performance system is the services provided; and (5) any
performance measures that section
distinction that is made among the additional indicators of performance
502(e) grantees will be responsible for
grantees. Section 514 of the OAA that the Department determines to be
meeting. These measures incorporate
establishes a technical assistance and appropriate to evaluate services and
the common performance measures. The
sanction scheme that addresses national performance. The Department has
common performance measures that
grantees, national grantees in a State, added the earnings increase common
will apply to this program are: (1) and State grantees. The concept performance measures as an additional
Entered employment; (2) retention in ‘‘national grantee in a State’’ addresses indicator of performance. This measure
employment; and (3) earnings increase. the individualized performance that a is discussed further at proposed
These measures are defined at proposed national grantee must meet within each § 641.710 and § 641.715. Grantees will
§ 641.715. State in which it operates. It is another report on the additional common
Section 502(e) grantees must follow means to ensure that national grantees performance measures as discussed at
the definitions and rules that apply to are performing well on all levels. § 641.720.
the general SCSEP program in Subpart In addition, SCSEP is part of the
G of this regulation (with the exception Administration’s new common How Are the Performance Indicators
of sanctions) and any Department performance measures initiative for Defined? (§ 641.710)
administrative issuances relating to employment and job training programs. The OAA, at section 513, lists four
performance accountability as they This initiative has identified new indicators of performance. Several of the
specifically apply to these measures. In indicators that will be applied across indicators have multiple subparts. Thus,
this case, if a section 502(e) program Federal job training programs and have the Department has severed many of the
grantee fails to meet its performance a common set of definitions and data indicators so that grantees are clearly
measures, the Department may require sets. Adoption of these common accountable for each part of each
corrective action and provide technical measures across government will help indicator and so that the indicators are
assistance, or it may decline to fund that implement the President’s Management easier to implement. For example, the
grantee in the next Program Year. Agenda for budget and performance first indicator is ‘‘the number of persons
Subpart G—Performance Accountability integration as well as reduce barriers to served, with particular attention given
integrated service delivery through the to individuals with the greatest
This subpart covers the requirements local One-Stop Career Centers. economic need, greatest social need, or
for performance accountability Adoption of these common measures poor employment history or prospects,
established by the OAA, including across Government will help to integrate and individuals who are over the age of
performance indicators, the provision of service delivery through the One-Stop 60.’’ Conceivably this one indicator
technical assistance, and the imposition Career Centers at the local level. The could be divided into multiple parts and
of sanctions. The Department is strongly Department will seek to amend title V result in several different measures. The
committed to a system-wide continuous of the Older Americans Act when it is Department decided to divide this
improvement approach, grounded upon reauthorized to conform the SCSEP measure into two parts. The first
proven quality principles and practices. performance measures to the new indicator measures the number of
The development and establishment of common performance measures. The persons served, and the second
these performance accountability Department cannot fully adopt the indicator measures the characteristics of
provisions reflect the commitment of common measures at this time because those who are served. For the number
the broad range of organizations and the definitions for the two performance served portion of the indicator, the
entities involved with the measures that are part of both the Department will continue the past
implementation of the OAA, as well as common measures and the SCSEP practice of establishing a minimum
the continuous effort of SCSEP to align statutory measures, entered employment performance level of 140 percent of a
itself with the WIA performance and retention in employment differ. grantee’s authorized positions. This is a
measures to the extent possible. They These regulations represent an interim measure that has been in place for some
are intended to apply to national step in which grantees will be required time as a goal. The regulations address
grantees as well as State grantees unless to collect performance measurement the second portion of the indicator in
otherwise distinguished. These areas are information based on the current OAA, part through the statutory definitions
covered in general in the regulations, as well as on the new common measures provided for greatest economic need
and will be supplemented by that will be proposed as part of the and greatest social need; and in part
administrative issuances providing Older Americans Act reauthorization. through a common sense approach to
greater detail. defining poor employment history or
The OAA established a new What Performance Measures Apply to prospects and individuals over the age
performance accountability process for SCSEP Grantees? (§ 641.700) of 60. The OAA, at section 101(27),
SCSEP. Sections 513(a)(1) and 513(c)(1) Section 513(b) lists the required defines ‘‘greatest economic need’’ as the
of the OAA call for a broad consultation indicators that form the basis for SCSEP need that results from an income level
process in establishing and defining performance measures. This list at or below the poverty line. Section
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22533
101(28) of the OAA defines ‘‘greatest weatherization activities; economic three groups will be determined using
social need’’ as the need caused by non- development; and such other services the American Customer Satisfaction
economic factors, which include: essential and necessary to the Index (ACSI). The ACSI is the most
physical and mental disabilities; community as the Department may widely used indicator of general
language barriers; and cultural, social, prescribe. At this time, we have not customer satisfaction. It captures
or geographical isolation, including prescribed any services in addition to common customer satisfaction
isolation caused by racial or ethnic those specified in the OAA. information that can be aggregated and
status, that restricts the ability of an The placement and retention measure compared at different levels. The ACSI
individual to perform normal daily is the third statutory indicator and is will allow the SCSEP program to not
tasks, or threatens the capacity of the found at section 513(b)(3) of the OAA. only look at its performance, but also to
individual to live independently. The The Department intends to divide this benchmark its performance against
definition also includes individuals measure into two measures: one other entities within and outside of the
with a poor employment history or measure that captures placement into employment and training system. It is
prospects and individuals over age 60. unsubsidized employment, and one
the methodology used to measure
Grantees may identify individuals with measure that captures retention in
customer satisfaction under WIA, and
poor employment history or prospects unsubsidized employment. The
was recently adopted by the U.S.
from the information participants placement indicator is defined in the
OAA, at section 513(c)(2)(A), as full-or Employment Service. The ACSI also has
provide during the initial assessment a history of usefulness in tracking
process. part-time paid employment in the
public or private sector by a participant changes over time, making it an ideal
The second indicator in the OAA is way to gauge progress in continuously
under this title for 30 days within a 90-
‘‘community services provided.’’ This improving performance—one of the
day period without the use of funds
indicator has not been previously used essential tenets of the 2000
under this title or any other Federal or
in SCSEP. However challenging it is to Amendments of the OAA. Through the
State employment subsidy program, or
measure, it is important because it ACSI, the Department will collect
the equivalent of such employment as
recognizes the dual purpose of the national samples from each of the three
measured by the earning of a participant
SCSEP program and provides a tracking populations. Each sample will be large
through the use of wage records or other
measurement in furtherance of the enough to collect statistically valid
appropriate methods. Therefore, the
community benefit goal. The placement indicator will stand alone results for each State grantee and each
Department considered several and be measured based on the number national grantee. Grantees will be
variations on how it should measure of participants who move into responsible for distributing written
community services provided to unsubsidized employment during each survey instruments using the
participants. Some of these variations year, compared to the total number of methodology established by the
include: Reviewing the participants. Unsubsidized employment Department in administrative guidance.
accomplishments (i.e., ‘‘SCSEP includes both full- and part-time jobs Completed surveys will be sent to a
participants helped more than 750 consistent with the definition found in central collection point for collation and
children to read over the past year’’); section 513(c)(2)(A) of the OAA. Part- analysis. The Department will publish
hours of community services provided time is defined as at least 20 hours of administrative guidance in the Federal
(i.e., ‘‘SCSEP mentors provided more workweek employment. (OAA sec. Register that provides more information
than 6,000 hours of tutoring’’); value 515(a)).
added to the community expressed as a about the licensing of ACSI and the
Retention 6 months after placement is responsibility of grantees to this
dollar amount (i.e., multiply the hours a new measure for SCSEP and is defined
of service by an appropriate wage level); process, and about how information will
in the OAA, at section 513(c)(2)(B). It be collected for this indicator. Customer
some way of looking at or comparing requires grantees to evaluate the
general services to the community with satisfaction data collection and analysis
retention of participants in an are costly. Data will be collected for
services to the elderly community or unsubsidized position 6 months after
aging network; and adding questions on performance measures purposes for
the starting date of placement into the
the American Customer Satisfaction States, national grantees, and national
unsubsidized employment in the public
Index (ACSI) survey that relate to grantees in a State, and the territories.
or private sector, without the use of
community service. The Department Federal or State employment subsidy According to the OAA, at section
decided that the number of hours of program funds, not to include 513(b)(5), the Department may create
community services provided was a supportive services. any additional indicators of
good measure for this indicator because The fourth indicator, ‘‘customer performance that it determines are
it represents the most accurate way of satisfaction of participants, employers appropriate to evaluate services and
capturing this information and also and host agencies,’’ is a required performance. The Department has
allows the Department to establish a measure under section 513(b)(4) of the decided to add the earnings increase
level of performance. The OAA defines OAA. The Department interprets this common performance measures as an
‘‘community services,’’ at section provision as requiring 3 separate and additional performance measure. This
516(1), as social, health, welfare, and distinct measures of customer measure is defined as the percentage
educational services (including literacy satisfaction: one measure for participant change in earnings pre-registration to
tutoring), legal and other counseling satisfaction; one measure for employer post-program; and between the first
services and assistance, including tax satisfaction; and one measure for host quarter after exit and the third quarter.
counseling and assistance and financial agency satisfaction. Since these three The methodology for determining this
counseling, and library, recreational, groups vary in size, focus, and measure is calculated in two parts. The
and other similar services; conservation, expectations, measuring them separately first part measures the change pre-
maintenance, or restoration of natural will give equal weight to the needs of registration to post-program. The second
resources; community betterment or each group and ensure that program part measures the earning increase from
beautification; antipollution and operators are attending to their diverse the start of employment to 6 months
environmental quality efforts; needs. Customer satisfaction for all after.
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22534 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
The Department will issue further as well as on the new common measures How Will the Department Determine
administrative guidance, to be that will be proposed as part of the Whether a Grantee Meets, Exceeds, or
published in the Federal Register, Older Americans Act reauthorization. Fails To Meet Negotiated Levels of
implementing the performance The Department will provide Performance? (§ 641.740)
indicators and explaining the timing instructions on how the information The OAA requires the Department to
and specific definitions of data elements will be collected through an determine whether a grantee has met its
to be collected, and the methods used to administrative issuance. See § 641.879 performance measures overall (i.e., in
calculate each indicator. on reporting requirements. the aggregate). Under proposed
What Are the Common Performance How Will the Department Set and § 641.740, overall performance is
Measures? (§ 641.715) Adjust Performance Levels? (§ 641.730) calculated by combining the
Proposed § 641.715 outlines the ‘‘percentage results’’ achieved on each
indicators of the common performance The proposed rule establishes the of the individual measures to obtain an
measures. The first measure, entered method that the Department will use to average score. If this average score for
employment, is defined as the set and adjust negotiated levels of the total of all measures is between 80
percentage employed in the first quarter performance. In setting negotiated and 100 percent, the grantee has
after program exit. This measure performance levels, the Department is performed satisfactorily, or is meeting
identifies those individuals who are not adopting a method similar to the WIA performance. Grantees with an average
employed at registration, but who have method of negotiating levels of above 100 percent are exceeding on the
entered employment by the end of the performance. For SCSEP, levels of performance measures. Grantees that
first quarter. Retention in employment performance will be negotiated before fall below 80 percent, however, are
is the second measure. It is defined as the beginning of each Program Year. considered to have failed to meet
the percentage of those employed in the Under section 513(a)(2)(C) of the OAA, negotiated levels of performance and,
first quarter after exit that were still the ‘‘placement into unsubsidized thus, are subject to the sanctions
employed in the second and third public or private employment’’ measure outlined in section 514 of the OAA.
quarter after program exit. This measure has a statutory ‘‘floor’’ of 20 percent; This approach aligns the SCSEP
is similar to the retention measures however, the Department may negotiate program with WIA and ensures that
under the OAA, however, it tracks a with grantees to establish a higher level. very low performance on any single
participant’s retention with an employer indicator has full weight when assessing
In negotiating levels with grantees, overall performance. A national grantee
for an additional three months. The the Department will first establish
third measure, earnings increase, has serving in a State, however, is required
baseline goals. The end result levels are by section 514(e)(3)(A) of the OAA to
been added as a program performance the adjustments made to those goals for
measures in § 641.700 and defined in meet both 80 percent of the negotiated
each grantee. Adjustments to the national measures and the levels
§ 641.710. Grantees will be required to established negotiated levels of
report on all three common performance established for the State in which it
performance, including the ‘‘placement serves. The Department will evaluate
measures as identified in § 641.879. into unsubsidized public or private each performance indicator to
How Do the Common Performance employment’’ measure, may be made determine the level of success that a
Measures Affect Grantees and the OAA only if they are based on those factors grantee has achieved and take the
Performance Measures? (§ 641.720) delineated in section 513(a)(2)(B). Those aggregate to determine if, on the whole,
Proposed § 641.720 discusses the factors are: (1) High rates of the grantee met its performance
common performance measures and unemployment, poverty, or welfare objectives. Grantees will also receive the
how they relate to grantees and the OAA recipiency in the areas served by a results for each individual performance
performance and competition scheme. grantee, relative to other areas of the indicator. The advantage of grantees
SCSEP is part of the Department’s new State or Nation; (2) significant having this information is two-fold—
common performance measures downturns in the areas served by the grantees will know about any
initiative for employment and job grantee or in the national economy; and performance indicator on which they
training programs. This initiative has (3) significant numbers or proportions of need to improve; and the Department
identified new indicators that will apply enrollees with one or more barriers to can provide technical assistance to the
across Federal job training programs and employment served by a grantee relative grantee on a specific indicator to
have a common set of definitions and to grantees serving other areas of the improve performance.
data sets. Adoption of these common State or Nation. As part of the process One indicator that is distinct among
measures across government will help of negotiating with grantees to set the performance measures is the
implement the President’s Management baseline levels of negotiated ‘‘placement into unsubsidized
Agenda for budget and performance performance, the Department will offer employment’’ measure. This measure
integration as well as reduce barriers to grantees the opportunity to propose has a statutory ‘‘floor’’ of 20 percent
integrated service delivery through the adjustments to those levels based on the before the allowable adjustments are
local One-Stop Career Centers. The conditions specified in the OAA. Since made; however the Department may
Department will seek to amend title V many of the factors enumerated in the negotiate higher, but not lower, levels
of the Older Americans Act when it is OAA can change dramatically during with individual grantees. Thus, if the
reauthorized to conform the SCSEP the program year, grantees will have the negotiated performance indicator
performance measures to the new opportunity to request adjustments both remains at the floor, performance levels
common performance measures. As this at the beginning of the program year and between 80 and 100 percent will require
legislation will not be introduced until during the program year. The grantees to place 20 percent to 25
after completion of these regulations, Department will issue administrative percent of their participants into
these regulations represent an interim guidance outlining the parameters for unsubsidized employment, unless one
step in which grantees will be required claiming one or more of the three or more adjustment factor applies. A
to collect performance measurement permissible adjustments of performance placement rate of more than 25 percent
information based on the current statute levels. would mean that a grantee is exceeding
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22535
on this measure, and a placement rate of the potential difficulties in obtaining it serves. This provision is required
of less than 20 percent would be a response rates high enough to assure under section 514(e)(3) of the OAA and
failure on that measure, unless one of survey accuracy at an acceptable level. is intended to monitor those national
more adjustment factor applies. All of The Department will provide additional grantees that may be meeting national
the levels will be negotiated with the instructions for how customer performance goals but are failing their
Department on a grantee-by-grantee satisfaction will be measured. goals in a particular State. In any
basis, which will then become the basis Program Year that a national grantee
What Sanctions Will the Department
for determining the range for each attains levels of 20 percent or more
Impose if a National Grantee Fails To
indicator as discussed in proposed below the national performance
Meet Negotiated Levels of Performance
§ 641.740. measures and fails to meet the State’s
Under the Total SCSEP Grant?
performance levels for a project carried
What Sanctions Will the Department (§ 641.760)
out in the State, the Department will
Impose if a Grantee Fails To Meet Proposed § 641.760 outlines the take corrective action. The Department
Negotiated Levels of Performance? sanctions required under section 514(e) interprets this requirement as applying
(§ 641.750) of the OAA that apply when a national when the Department determines that
Grantees that fail to meet negotiated grantee fails to meet its performance there is a failure, and there are no
levels of performance will be subject to measures for its entire SCSEP grant. In justifications that the national grantee
the sanctions established in section 514 the first year of failure, the Department can provide, such as the size of the
of the OAA. These sanctions range from will provide technical assistance and project or the adjustment factors
requiring the grantee to submit a the national grantee must submit a described in § 641.730. Thus, national
corrective action plan and receive corrective action plan no later than 160 grantees in a State must perform at 80
technical assistance, to competition of days after the end of the Program Year. percent of the national performance
part of the funds, to a competition of all If a grantee fails to meet the national measures and meet the State’s level of
of the funds. Technical assistance may performance measures for a second performance to meet performance
take many forms depending on the consecutive Program Year, the objectives, unless there is a justification
needs of the grantee and the availability Department will have a national for lower performance. The Department
of resources within the Department. In competition in the next Program Year proposes to monitor national grantee
some cases, review of reports and for 25 percent of the funds that were State-by-State performance each
discussions with a grantee may be awarded to the grantee, while also Program Year or at the Governor’s
sufficient. In other cases, recommending minimizing disruptions to current request. (See OAA §§ 514(e)(3)–514(e)(4)
participation in formal training may be participants to the extent possible. and proposed § 641.780). The
warranted, and in still other cases, Thus, the failing grantee will receive Department interprets the phrase
direct on-site assistance provided by only 75 percent of its former grant ‘‘project carried out in a State’’ to mean
Department staff, peers, or contractors award. The Department reserves the all of a grantee’s projects in a State so
may be necessary. The degree of right to specify the locations of the that no single project in a State will
assistance available will largely be positions that will be subject to provide a basis to initiate a review or
determined by the nature of the competition. Further, the Department sanctions.
problem, the extent of the failure, and may explore a number of options to The first Program Year in which a
the resources available to address it. determine how this competition will be national grantee fails to meet its
The statutory scheme for applying conducted. The Department will performance measures in a State, the
sanctions is grantee specific (i.e., establish the parameters of a Department will require a corrective
national grantee, national grantee in a competition through a Solicitation for action plan and may require the transfer
State, or State grantee). (See proposed Grant Application or comparable of the responsibility for the project to
§§ 641.760–641.790). The Department instrument. other grantees, provide technical
will determine if sanctions should be If a grantee fails to meet its assistance, and take other appropriate
applied not later than 120 days after the performance measures for a third actions. After a second consecutive year
end of each Program Year. (See OAA consecutive Program Year, the of failure to meet the performance
sec. 514). Therefore, grantees and the Department will conduct a national criteria, the Department will either
Department will not know if a grantee competition for the full amount of the transfer all or part of the responsibility
has failed its performance measures reduced grant in the following Program for a project to a State, public agency,
until the grantee has already begun the Year. Any new national grantee selected or private nonprofit agency or
next Program Year. As a result, the through this process must serve the organization, or compete all or a portion
Department strongly encourages all geographic areas served by the former of the funds. After a third consecutive
grantees to regularly monitor their grantee. Any entity eligible to apply for year of failure to meet the performance
performance and seek technical national grants may compete for such criteria, the Department will conduct a
assistance when problems arise. funds, including Federal public competition for the remaining funds.
Additionally, if a grantee fails only agencies and organizations, private Any entity eligible to receive a SCSEP
the customer satisfaction performance nonprofit organizations, and tribal grant may apply for these funds, with
measure, that failure will not in itself organizations. (See proposed § 641.400 the exception of the grantee that is
trigger the imposition of sanctions if the on eligible entities). subject to the sanction.
grantee has met its other performance
measures and the failure to meet the What Sanctions Will the Department When Will the Department Assess the
customer satisfaction measure causes a Impose if a National Grantee Fails To Performance of a National Grantee in a
grantee to fail to meet its performance Meet Negotiated Levels of Performance State? (§ 641.780)
measures in the aggregate. The in Any State That It Serves? (§ 641.770) Proposed § 641.780 provides the
Department is taking this position in Proposed § 641.770 outlines the Department’s interpretation of the
recognition of the difficulty it sanctions that apply to a national requirements in section 514(e)(3)–(e)(4)
understands grantees may face in grantee that fails to meet its of the OAA. These provisions require
obtaining this information and because performance measures in any State that the Department to assess the
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22536 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
performance of a national grantee in Subpart H—Administrative How Must SCSEP Program Income Be
every State in which it has projects. The Requirements Used? (§ 641.806)
Department will monitor national The program income provisions of the
grantee performance in a State every Subpart H covers the administrative
requirements that apply to all SCSEP proposed rule clarify the application of
Program Year. Grantees will submit the Department’s uniform
such information as part of their grantees. Throughout this subpart, the
administrative requirements to SCSEP
national performance information. The regulations refer to ‘‘recipient’’ and
activities by indicating what types of
Department will also conduct a review ‘‘subrecipient’’ rather than to the terms
income earned or generated by
of any national grantee’s project ‘‘grantee’’ and ‘‘subgrantee,’’ which are
recipients and subrecipients are
performance in a State upon request of generally used elsewhere in this Part to
considered program income, how the
the Governor, as required under section refer to the same types of entities. The
costs of producing program income are
514(e)(4) of the OAA. terms ‘‘recipient’’ and ‘‘subrecipient’’ to be treated, and by directing recipients
are used in this subpart in order to be to follow the addition method described
What Sanctions Will the Department consistent with the style of the in 29 CFR 95.24 and 29 CFR 97.25 and
Impose if a State Grantee Fails To Meet Government-wide requirements from add program income to Federal and
Negotiated Levels of Performance? which these provisions were derived. non-Federal resources provided for
(§ 641.790) Grantees and recipients receive grant SCSEP activities. More specifically,
awards directly from the Department. paragraph (b) requires all recipients/
Proposed § 641.790 outlines the Subgrantees and subrecipients receive
requirements for imposing sanctions on grantees with a continuous relationship
financial assistance subawards from with the Department—that is
States that fail to meet negotiated levels grantees and other recipients of direct organizations that continue to be funded
of performance, as required by section awards from the Department, or higher with SCSEP funds for succeeding grant
514(f) of the OAA. The Department will tier subgrantees or subrecipients. periods—to use such income for SCSEP
determine if a State has met its
What Uniform Administrative purposes in the Program Year it is
performance measures no later than 120 received. Paragraph (c) requires all
days after the end of a Program Year. In Requirements Apply to the Use of
SCSEP Funds? (§ 641.800) recipients/grantees that do not continue
the first year of failure, the Department to receive a SCSEP grant after the grant
will provide technical assistance and period to remit all program income
Section 503(f)(2) of the OAA is a new
require the State to submit a corrective earned or generated to the Department.
provision requiring title V grantees to
action plan no later than 160 days after comply with the uniform allowable cost These sections are permissible
the end of the Program Year. After a principles and administrative modifications under 29 CFR 95.24 and
second consecutive year of failure, the requirements applicable to most Federal 29 CFR 97.25. The purpose of this
Department will require the State to financial assistance programs. The requirement is to leverage Federal funds
conduct a competition to award 25 former regulations included similar for the benefit of the program, which
percent of the funds available to the requirements. This subpart includes will enhance the services provided to
State to another eligible organization. requirements relating to lobbying as SCSEP participants. This requirement
The Department reserves the right to well as subjects covered by the would also apply to income earned or
specify the locations of the positions Department’s regulatory administrative generated through copyrighted material
that will be subject to competition. After requirements at 29 CFR 95.2(bb) and 29 or other intellectual property as
a third consecutive year of failure, the CFR 97.25(b). Recipients also must provided in § 641.803.
State must compete its entire SCSEP ensure that their subrecipients follow What Non-Federal Share (Matching)
award. Any eligible entity, except the these uniform requirements. Requirements Apply to the Use of
entity that caused the failure, may SCSEP Funds? (§ 641.809)
compete for such funds, including other What Is Program Income? (§ 641.803)
agencies of the State, or public and The regulations underscore the 10
This section describes program percent non-Federal share requirement
private nonprofit organizations.
income as income earned or generated in section 502(c) of the OAA, which
Will There Be Incentives for Exceeding by the recipient or subrecipient during applies even to other Federal agencies
Performance Measures? (§ 641.795) the grant period that is generated by an that may receive SCSEP funds, unless
allowable activity under the grant. The such entity has a statutory exemption
Proposed § 641.795 addresses term ‘‘grant period’’ as used here is from the requirement. Section 502(c)(1)
incentives for grantees that exceed their consistent with the Department’s allows the Department to pay all of the
performance measures. It clarifies that regulations at 29 CFR parts 95 and 97. costs of only those projects that are
the Department is committed to Grantees are accountable for program emergency or disaster projects, or
providing incentives to grantees that income earned or generated during the located in an economically depressed
exceed performance when possible. grant period, which may exceed the area. Additionally, the amendments to
These incentives may take the form of period of availability of the funds used the OAA did not alter the Department’s
a non-financial incentive, which will be to generate the income (see § 641.812). authority in section 502(e) of the OAA,
addressed in administrative guidance, This regulation also identifies license to pay for all of the costs of private
or it may be in the form of an incentive fees and royalties as program income. employment projects. Therefore, the
grant. The Department is authorized This requirement is a permissible Department expects to continue the
under section 515(c)(1) of the OAA to modification under 29 CFR 95.24(e) and present practice of using this authority
award incentive grants from recaptured 29 CFR 97.25(e). As provided in for section 502(e) projects, when
unexpended funds at the end of the § 641.806, any organization that applicable. Also, proposed § 641.809(d)
Program Year, among other permissible continues to receive SCSEP grant funds defines the non-Federal share as cash or
uses of such funds. The Department is required to use program income in-kind. It further provides that if a
may exercise this authority at its earned or generated after the Program recipient (grantee) plans to obtain its
discretion. Year for program purposes. non-Federal share from a subgrantee or
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22537
host agency, it may not make providing What Audit Requirements Apply to the What Policies Govern Political
the funds a condition of becoming a Use of SCSEP Funds? (§ 641.821) Patronage? (§ 641.833)
subgrantee or host agency. Proposed § 641.821 details the general The proposed rule provides the
What Is the Period of Availability of audit requirements that apply to all Department’s policy on political
SCSEP Funds? (§ 641.812) recipients of Federal funds. This section patronage. This provision existed in the
provides that recipients and former regulations. Generally, recipients
Proposed § 641.812 details the period subrecipients, including entities and subrecipients are prohibited from
of availability of SCSEP funds. receiving Federal awards of SCSEP selecting, rejecting, promoting, or
According to section 515(b), SCSEP funds under cost-reimbursement terminating an individual based on
funds are available for obligation on a contracts, must follow the Department’s political services provided by the
Program Year basis (July 1–June 30). uniform audit requirements. The individual, or based on the individual’s
Under no circumstances, however, is an Department is responsible for audits of political affiliations or beliefs. Further,
SCSEP recipient permitted to obligate commercial organizations that are recipients and subrecipients are
SCSEP funds before July 1. Also, the recipients for SCSEP funds as well. prohibited from providing funds to any
Department may extend the period of Commercial organizations that are entity based on political affiliation.
availability of SCSEP funds beyond June subrecipients must either have an
30 as discussed in proposed § 641.815. What Policies Govern Political
organization-wide audit or a program Activities? (§ 641.836)
May the Period of Availability Be specific financial and compliance audit
Proposed § 641.836 outlines the
Extended? (§ 641.815) that meets OMB Circular A–133
Department’s policies governing
standards, if they expend $300,000 or
Proposed § 641.815 permits SCSEP political activities. In general, recipients
more (as of July 1, 2001).
recipients to receive an extension are prohibited from using SCSEP funds
beyond June 30 to expend funds. The What Lobbying Requirements Apply to for political activities. The proposed
Department will provide instructions the Use of SCSEP Funds? (§ 641.824) rule also requires SCSEP recipients to
each year on how and when SCSEP This proposed rule continues the provide participants with a written
recipients must request an extension. In explanation about allowable and
Department’s policy in the former
general, however, SCSEP recipients unallowable political activities under
regulations concerning lobbying. There
must justify the necessity of the the Hatch Act (5 U.S.C. 1501 et seq.),
are two provisions relating to lobbying.
extension either by submitting a letter to and to post this explanation in every
The proposed rule requires recipients to
the Department with the request and the workplace where SCSEP activities are
report on their lobbying activities, under
justification, or by submitting a conducted. Also, all such notices must
the uniform administrative rule on
proposed SF–424 to the Department. be approved by the Department and
lobbying codified at 29 CFR part 93.
The Department will process the request must contain the address and telephone
Proposed § 641.850(c) prohibits the use
and notify the SCSEP recipients in number of the Department of Labor
of grant funds for lobbying State or
writing of the Department’s approval or Inspector General, as required by
Federal legislators. section 502(b)(1)(P) of the OAA.
disapproval. Any approval of a grant
extension will be accomplished through What General Nondiscrimination Further, it is prohibited for any
a modification to the grant. However, Requirements Apply to the Use of participant or staff person to engage in
SCSEP recipients are strongly SCSEP Funds? (§ 641.827) political activities during hours paid
encouraged to spend funds throughout with by SCSEP funds. The regulation
Recipients, subrecipients, and host
the Program Year to minimize the need also prohibits the placement of
agencies must comply with the
for an extension. participants in certain offices and
Department’s generally applicable
The former authorization to extend positions that might involve political
nondiscrimination requirements for activities. It prohibits placement of
funds for one year and two months recipients at 29 CFR parts 31 and 32. SCSEP participants in the offices of
(through August 31st) no longer applies. The WIA nondiscrimination elected legislators. It also prohibits
This provision was replaced by section requirements at 29 CFR part 37 apply to placements in the offices of other
515(b), which authorizes the Secretary SCSEP activities that are administered elected officials unless the grantee
to extend the period of the grant as in conjunction with the One-Stop provides safeguards to assure that such
necessary to assure the effective Delivery System. position performs no political activities.
obligation expenditure of the funds.
Thus, grant extensions may be made for What Nondiscrimination Protections What Policies Govern Union Organizing
a longer period, if justified. Apply Specifically To Participants in Activities? (§ 641.839)
SCSEP Programs? (§ 641.830)
What Happens to Funds That Are The proposed rule emphasizes the
The proposed rule establishes Department’s policy that no Federal
Unexpended at the End of the Program
nondiscrimination protections to funds may be used to assist, promote, or
Year? (§ 641.818)
participants in SCSEP programs. deter union organizing. This provision
Section 515(c) of the OAA gives the Specifically, the proposed rule lists the existed in the former regulations and is
Department the authority to recapture Federal programs on nondiscrimination aligned with the WIA regulations.
unexpended funds from SCSEP that apply to SCSEP, such as, the Age
recipients at the end of the Program Discrimination Act of 1975, section 504 What Policies Govern Nepotism?
Year and reobligate those funds within of the Rehabilitation Act of 1973, the (§ 641.841)
the 2 succeeding Program Years to be Americans with Disabilities Act of 1990, This proposed rule outlines the
used for incentive grants, technical and title VI of the Civil Rights Act of Department’s policy on nepotism.
assistance, or grants or contracts for any 1964. The proposed rule also provides Specifically, the Department’s policy
other SCSEP program. The Department information to participants about how prohibits recipients from hiring and
intends to issue administrative guidance and where to file a complaint alleging participants from working in an SCSEP
to provide SCSEP recipients with discrimination or to whom they may position if the participant is a member
additional details. address questions. of the decision-maker’s immediate
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22538 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
family. The Department’s goal is to than treating them as program income or provisions with requirements relating to
decrease the opportunities for a as revenue for which the recipient is not costs of claims against the Government,
recipient to show ‘‘favoritism’’ to a accountable under Federal financial lobbying, premises, and participants’
relative. ‘‘Immediate family’’ is defined management principles. An example of fringe benefits to reflect provisions of
as a wife, husband, son, daughter, a cost allowable under certain applicable legislation and Departmental
mother, father, brother, sister, son-in- circumstances is the cost of claims policies. The lobbying costs provision is
law, daughter-in-law, mother-in-law, against the Federal government. Such based on a requirement included in
father-in-law, brother-in-law, sister-in- costs are generally unallowable (see, for Department of Labor Appropriation Acts
law, aunt, uncle, niece, nephew, example, OMB Circular A–122, for many years. The limitation on costs
stepparent, stepchild, grandparent, or Attachment B, item 7.g.), but Federal of purchasing or constructing buildings
grandchild. The Department may waive agencies differ on whether they consider reflects the Department’s policy of
this provision, however, for worksites an appeal from a Grant Officer’s discouraging the use of grant funds for
on Indian reservations and in rural areas determination to be a claim against the major capital expenditures in order to
if it can be documented that no other Government. Proposed § 641.850(b) conserve scarce resources for other
persons are eligible and available for indicates that costs incurred in costs. If the limitations did not exist,
participation in the program. If a State connection with appeals to each such expenditure would require
or local nepotism rule is stricter, it must Administrative Law Judges are prior approval by the Department.
be followed. unallowable costs.
The Department received several How Are Costs Classified? (§ 641.853)
What Maintenance of Effort suggestions relating to allowable cost The proposed rule discusses whether
Requirements Apply to the Use of issues in response to the March 19, costs are classified as administrative
SCSEP Funds? (§ 641.844) 2001, Federal Register notice and Town costs or program costs, and how
The proposed rule outlines the Hall Meetings. The principal issue grantees must categorize participant
responsibilities of recipients when they involved the distribution of costs among wages and fringe benefit costs within
accept SCSEP funds. For instance, the participating programs in One-Stop that framework. For instance, program
recipients that receive SCSEP funds centers. The uniform cost principles costs may include participant wages and
have a duty to ensure that: Currently that apply to SCSEP activities require fringe benefits and other enrollee costs,
employed workers are not displaced, costs to be allocated to Federal programs such as training and supportive
existing contracts are not impaired or in proportion to the benefits received services. Administrative costs, such as
result in the substitution of Federal from goods and services for which the salaries, equipment, etc., expended for
funds for other funds in connection costs were incurred. This requirement administrative functions continue to be
with work that would otherwise be aligns with the WIA statutory and attributed to administrative costs. (See
performed, positions are not filled that regulatory requirements for required §§ 641.856 and 641.864). When
were occupied by a person who is on partners to the One-Stop, which participants perform an administrative
layoff, and SCSEP funded positions are includes SCSEP. Thus, SCSEP function for a grantee or subgrantee, the
not substituted for existing federally recipients and subrecipients are cost of the function is charged to the
assisted jobs, as required by sections responsible for their fair share of the administrative cost category. The cost of
502(b)(1)(F) and 502(b)(1)(G) of the costs of operating One-Stop centers. the participant’s wages and fringe
OAA. The purpose of this requirement Cost allocation, however, is only one benefits, however, are charged to the
is to ensure that there will be an of the issues involved in providing program cost category.
increase in employment opportunities SCSEP financial support to a One-Stop
over those opportunities that would center. Another issue is resource What Functions and Activities
otherwise be available, as discussed in allocation. Several of the responses Constitute Costs of Administration?
section 502(b)(1)(F) of the OAA. supported the idea of SCSEP recipients (§ 641.856)
making in-kind contributions in The proposed rule discusses the
What Uniform Allowable Cost
payment of their fair share of One-Stop functions and activities that constitute
Requirements Apply to the Use of
center costs. In-kind contributions are the costs of administration. It provides
SCSEP Funds? (§ 641.847)
acceptable forms of payment if the other a detailed list of those costs that are
As previously mentioned, section partners are agreeable. A local One-Stop administrative as permitted under
503(f)(2) of the OAA requires grantees to MOU may include a resource allocation section 502(c)(4) of the OAA. This
comply with the applicable uniform arrangement that permits some of the section of the OAA aligns the WIA
allowable cost principles under the partners to make cash contributions administrative cost provisions.
OMB Circulars, according to the type of toward center costs, permit others to
organization that incurs SCSEP costs What Other Special Rules Govern the
donate paid office space, and allow still
(e.g., governmental units, nonprofit Classification of Costs as Administrative
others to contribute volunteer services,
organizations). This section codifies the Costs or Program Costs? (§ 641.859)
and so on. The resource allocation
previous regulations on administrative arrangement should indicate what costs The OAA imports the WIA cost
cost principles. The allowable cost and non-cash charges need to be classification scheme into the SCSEP
principles establish requirements for the allocated, what resources are available program. This includes the division of
treatment of costs generally, rules as to to pay for or otherwise absorb the costs costs into administrative costs and
what types of costs are allowable, and charges, and describe each partner’s program costs, and the WIA definitions
unallowable, or allowable under certain fair share based on the benefits-received of administrative cost components. This
circumstances, and acceptable principle. has the effect of making it easier to
methodologies for allocating costs operate title V activities within the One-
among Federal grant programs. An Are There Other Specific Allowable and Stop Delivery System established under
example of a general cost principle is Unallowable Cost Requirements for WIA. In addition to the material on cost
the requirement to treat refunds and SCSEP? (§ 641.850) classification, the proposed rule
rebates as reductions in previously The proposed rule supplements the contains additional requirements for
charged costs whenever possible, rather generally applicable allowable cost allocating costs to the ‘‘administrative
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22539
costs’’ or ‘‘program costs’’ categories. Under What Circumstances Can the when all funds are expended or the end
The proposed rule is based on the same Administrative Cost Limitation Be of the availability period.
principles used in the WIA and Welfare- Increased? (§ 641.870)
What Are the Fiscal and Performance
to-Work programs for determining how
This section continues the Reporting Requirements for Recipients?
to allocate particular types of cost and (§ 641.879)
how to classify costs incurred by Department’s previous regulations
particular types of organizations. concerning administrative cost Section 503(f)(3) of the OAA
However, when participants are limitations. The Department will establishes reporting requirements that
assigned to functions normally continue to allow increases in were required by the previous
classified as administrative costs, administrative cost limits as permitted regulation. The proposed regulation
recipient charges to the ‘‘administrative under section 502(c)(3) of the OAA, if requires electronic submission to the
cost’’ category are reduced from levels the recipient demonstrates that such an Department via the Internet of a
that would exist if such functions were increase is necessary to carry out the quarterly financial status report, a final
performed by regular staff members project and if the recipient demonstrates financial status report, a non-financial
since all participant wage and fringe that major administrative cost increases progress report, and a final progress
benefit costs must be charged to the are being incurred in necessary program report. Final financial status reports and
‘‘program costs’’ cost category. components, such as liability insurance, progress reports are due 90 days after
workers’ compensation, etc.; that the the end of the Program Year. The
Must SCSEP Recipients Provide number of employment positions in the Department will issue reporting
Funding for the Administrative Costs of project or the number of minority instructions indicating whether progress
Subrecipients? (§ 641.861) eligible individuals participating in the reports must be submitted quarterly or
project will decline if the amount semiannually. Quarterly financial status
Section 502(b)(1)(R) of the OAA
available for paying the cost of the reports are due 30 days after the end of
requires that each project ensure that
administration is not increased; or that each quarter. Progress reports, other
sufficient funding is provided for the
the size of the project is so small that than the final progress report, will be
administrative costs of entities below
the amount of administrative expenses due 30 days after the end of each
the recipient level. The Department has
incurred to carry out the project exceeds reporting period. The proposed rule
determined to implement this
13.5 percent of the amount for such requires recipients to develop their
requirement by requiring each SCSEP
project. The burden of justification is on financial status reports on an accrual
recipient to indicate in its grant
the recipient requesting an increase in basis. The proposed rule also requires
application how it will achieve
administrative costs. A request for an submission of an annual equitable
compliance. The Department has chosen distribution report, a report on section
this course in order to avoid prescribing increase in administrative costs may be
submitted at any time. 502(e) activities, reports for the common
needlessly detailed requirements while performance measures, and reports from
enabling recipients and subrecipients to What Minimum Expenditure Levels Are Federal agencies operating SCSEP
achieve the objectives of the law by Required for Participant Wages and programs and activities. The
establishing arrangements consistent Fringe Benefits? (§ 641.873) Department will hold grantees
with their own unique funding and accountable for accurate reporting. Any
organizational structures. Section 502(c)(6)(B) of the OAA
report that cannot be validated or
provides that participant wages and
What Functions and Activities verified as accurate may be considered
fringe benefit costs must comprise not
Constitute Program Costs? (§ 641.864) a failure to submit reports, which is a
less than 75 percent of the funds made
factor to be considered in applying the
The OAA also includes a description available for community service projects responsibility test at section 514(d) of
of programmatic functions and activities under title V. The proposed regulation the OAA.
that may be performed with SCSEP clarifies that the statute applies to
funds and charged to the program cost community service projects conducted What Are the SCSEP Recipient’s
category in section 502(c)(6)(A). Except by a recipient in the aggregate and not Responsibilities Relating to Awards to
for participant wages and fringe benefits to each such project or subproject. Subrecipients? (§ 641.881)
provided in connection with Funds used for programs and activities The proposed rule clarifies that the
community service assignments, the under section 502(e) are also covered by recipient is responsible for all SCSEP
services comprising all of the described this requirement. (See proposed activities performed with SCSEP funds
functions and activities are available § 641.650). If a recipient receives a and for ensuring that subrecipients
through the One-Stop Delivery System regular title V SCSEP grant as well as a comply with SCSEP requirements. Any
for WIA participants. The Department section 502(e) grant, the 75 percent recipient that fails to recover debts to
believes that SCSEP participants will requirement applies to the total of both the Federal government, including all
have easier access to these services grants. debts owed to the recipient by a
through the One-Stop Delivery System When Will Compliance With Cost subrecipient, will be in violation of the
than they had before its development. Limitations and Minimum Expenditure responsibility tests in section 514(d) of
What Are the Limitations on the Levels Be Determined? (§ 641.876) the OAA. Also, recipients must follow
Amount of SCSEP Administrative the organization or State procedures for
Costs? (§ 641.867) This proposed rule establishes that a allocating funds to other entities. At no
recipient’s compliance with cost time, however, will the Department
The proposed rule outlines the limitations and minimum expenditures grant funds to another entity on the
administrative cost limitations found in levels will be determined under the recipient’s behalf. Each entity must
section 502(c)(3) of the OAA. Under this standard used in other Department- follow its own procedures for
provision, SCSEP administrative costs funded financial assistance programs. subgranting/subcontracting with other
are limited to 13.5 percent. The Thus, the Department will assess a entities to administer its SCSEP
Department is authorized to increase the recipient’s compliance with cost projects. (See also 29 CFR 95.21 and 29
limit, but only up to 15 percent. limitations on the earlier of the date CFR 95.41).
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22540 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
What Are the Grant Closeout should differ from one-year grants to Is There an Alternative Dispute
Procedures? (§ 641.884) multi-year grants, if applicable. Resolution Process That May Be Used in
Place of an OALJ Hearing? (§ 641.930)
The proposed rule continues the What Grievance Procedures Must
requirement of the previous regulation Grantees Make Available to Applicants, This proposed rule allows grantees to
concerning closeout procedures. The Employees, and Participants? use the alternative dispute resolution
Department requires all recipients to (§ 641.910) system in lieu of requesting a hearing
follow the grant closeout procedures at with an ALJ. Any decision rendered
Section 641.910(a) requires State and through this process will be considered
29 CFR 97.50 or 29 CFR 95.71. The national grantees to establish grievance
Department will also issue a final determination.
procedures for handling employee,
supplementary closeout instructions to participant, and applicant complaints, IV. Administrative Information
all SCSEP recipients as necessary. and requires that the procedures be A. Paperwork Reduction Act
Subpart I—Grievance Procedures and described in the grant agreement. The The proposed rule establishes new
Appeals Process Department will not review final information collection requirements that
decisions reached under the grantees’ did not previously exist. Currently,
Subpart I describes the grievance grievance procedures, except to assure
procedure requirements and the grantees are required to submit and a
that the grantee’s procedures were collection is approved for: Quarterly
Department’s appeals process for grant followed. Under paragraph (c),
applicants, SCSEP State grantees and and Final Progress Reports; Quarterly
individuals may file allegations that an and Final Financial Status Reports (SF
national grantees. These provisions are SCSEP grantee has not complied with
similar to equivalent provisions in 269); annual Equitable Distribution
applicable Federal law (except for Reports; Budget Information (SF 424
previous regulations. allegations of discrimination, which are and SF 424-A); demographic
What Appeal Process Is Available to an handled under § 641.910(d)) with the information; participant characteristic
Applicant That Does Not Receive a Chief of the Division of Older Worker information; and the political activity
Grant? (§ 641.900) Programs. The Department will only poster notice under section 502(b)(1)(P).
accept such a filing when the individual The proposed rule would extend this
The Department is considering having has first sought resolution through the requirement to include additional
an appeals process for applicants that grantee’s grievance procedures and has collections as required by the 2000
believe the Department has not reached resolution within 60 days. Amendments to the Older Americans
inappropriately denied them a grant. Allegations determined to be substantial Act, and therefore, would increase the
The Department is seeking comments on and credible will be investigated. reporting burden. The additional
whether there should be an Section 641.910(d) specifies that collections are as follows: the State
administrative appeal process and how allegations of discrimination will be Senior Employment Services
an appeals process should be structured handled under the WIA Coordination Plan (State Plan) described
given the complexities of fashioning a nondiscrimination regulations at 29 CFR in section 503 of the Act and proposed
remedy for an applicant. The 37.70–37.80. Questions, or complaints subpart C (641.300–641.365) of this
Department encourages comments that alleging discrimination, may be directed proposed rule; a section 502(e) activity
demonstrate how to successfully appeal or mailed to the Director, Civil Rights report to accompany the activities
the grant decisions. Center, U.S. Department of Labor, Room described in subpart F (641.600–
The Department also seeks comments N–4123, 200 Constitution Avenue, NW., 641.690) and listed in proposed section
on procedures for operating an appeals Washington, DC 20210. 641.879 for reporting requirements; and
process, should the Department decide What Actions of the Department May a additional information under the
to adopt one. Under one scenario, the Grantee Appeal and What Procedures Quarterly and Final Progress/Status
Department could model the appeals Apply to Those Appeals? (§ 641.920) Reports, including the new performance
process after the Indian and Native measures and common performance
American Program under WIA (see 20 Section 641.920 describes those measures at subpart G (641.700–
CFR 667.800). Under that process, there actions that may be appealed to the 642.795). Other information collections
are time limits on when an entity could Department and the rules of procedure subject to the Paperwork Reduction Act
file an appeal and it allows an appeal of and timing of decisions for Office of are: the Solicitation for Grant
an Administrative Law Judge’s opinion Administrative Law Judge (OALJ) Applications or comparable instrument
to an Administrative Review Board. The hearings. These rules are similar to used to make funding determinations
Department would like comments on those that were in effect under the for National grants and under the
whether this process would work, previous regulations. Appeals from a section 502(e) program; and the
including your reasons why or why not. disallowance of costs as a result of an orientation information that grantees are
If you do not think this process would audit are discussed at 29 CFR 96.6, and required to provide each participant,
work, the Department would like appeals of suspensions or terminations including, but not limited to, notices of
comments on other suggestions for a of grants on the grounds of termination, assessments, Hatch Act
process that it could use, including how discrimination are discussed in 29 CFR information, and complaint resolution
the process would work for this parts 31 or 37, as appropriate. Other procedures. In order to provide a
program. The Department also seeks Grant Officer final determinations coherent reporting package, these
comments on whether it should make relating to costs, payment, suspension, requirements, including those that have
available an appeals process for one- or termination may be appealed to the already been approved and those that
year grant applicants, including OALJ under the procedures described in are new and contained in this proposed
applicants for section 502(e) projects § 641.920(c). The decision of the ALJ is rule, have been submitted to the Office
and any supporting justifications for final, unless the grantee files a petition of Management and Budget (OMB) as
having an appeals process for these for review with the Administrative one reporting package for review under
applicants. Specifically include Review Board within 20 days under the the Paperwork Reduction Act of 1980
comments on how the appeal rights requirements of § 641.920(d). (44 U.S.C. 3501 et seq.). The reporting
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22541
burden for these collections of entities (those in areas with fewer than ‘‘Summary and Explanation’’ section of
information is estimated to average 450 50,000 residents). This rule will affect the preamble.
hours per year, per respondent, primarily the 50 States, the District of To a considerable degree, these rules
including the time to review the Columbia, and certain Territories; reflect the suggestions received. They
instructions, search existing data however it also affects those national also reflect the intent of the Act to
sources, gather and maintain the data organizations and any subgrantees that improve the SCSEP by integrating
needed, and complete and review the have fewer than 500 employees. As SCSEP into the One-Stop Delivery
information for submission to the described in this preamble, ETA has System and improving the performance
Department. taken a variety of measures to consult of the grantee community. The
Comments about these burden with grant recipients of this program. Department has determined that the
estimates or any other aspect of this The Department has assessed the proposed rule will not have an adverse
collection of information, including potential impact of the proposed rule in effect in a material way on the nation’s
suggestions for reducing this burden, order to identify any areas of concern. economy.
should be sent directly to the Office of Based on that assessment, the However, this rule is a significant
Information Management, Department Department certifies that these Rules, as regulatory action under section (3)(f)(1)
of Labor, Room N–1301, 200 promulgated, will not have a significant of Executive Order 12866 because it
Constitution Avenue, NW., Washington, impact on a substantial number of small includes many provisions that are new
DC 20210; and to the Office of entities. to SCSEP and, therefore, the proposed
Information and Regulatory Affairs, In addition, under the Small Business rule has been reviewed by OMB in
Office of Management Budget, Regulatory Enforcement Fairness Act accordance with that Order.
Washington, DC 20503. The Department (SBREFA) (5 U.S.C. chapter 8), the
E. Executive Order 13211 (Energy
welcomes suggestions on all aspects of Department has determined that these
Effects)
the burden associated with this NPRM. are not ‘‘major rules,’’ as defined in 5
U.S.C. 804(s). The Department certifies Executive Order 13211 requires all
B. Executive Order 13132 (Federalism) agencies to provide a Statement of
that the proposed rule has been assessed
The Employment and Training in accordance with Pub. L. 105–277, 112 Energy Effects for regulatory actions that
Administration (ETA) has reviewed this Stat. 2681, for its effect on family well- effect energy supply, energy
proposed rule in accordance with being. The purpose of SCSEP is to distribution, or energy use. The
Executive Order 13132 on Federalism, provide community service activities Department has analyzed this proposed
and has determined that it does not and employment opportunities to rule and determined that it is not a
have ‘‘federalism implications.’’ After individuals age 55 and over who are low ‘‘significant energy action’’ under that
the enactment of the 2000 amendments income and have poor employment order because it is not a ‘‘significant
to the OAA, the Department consulted prospects. This program is designed at regulatory action’’ under Executive
with public interest groups and the State and local level to fulfill this Order 12866 and is not likely to have a
intergovernmental groups on the purpose with the effect of enhancing significant adverse effect on the supply,
development of regulations necessary to family well-being through increased distribution, or use of energy. It has not
implement the amendments to the OAA. skills and earnings and to promote self- been designated by the Administrator of
Included in the consultation process sufficiency for older individuals. the Office of Information and Regulatory
were the Intergovernmental Affairs as a significant energy action.
Organizations; interested individuals; D. Executive Order 12866
Therefore, this proposed rule does not
and representatives of the grantee Executive Order 12866 requires that require a Statement of Energy Effects
community, including State regulations be drafted to ensure that under Executive Order 13211.
representatives and representatives from they are consistent with the priorities
the U.S. Forest Service; National Senior and principles set forth in the Executive F. Unfunded Mandates Reform Act of
Citizens Education and Research Center; Order. The Department has determined 1995
National Council on the Aging; AARP that these rules are consistent with these Section 202 of the Unfunded
Foundation; Green Thumb, Inc.; priorities and principles. This Mandates Reform Act of 1995 (2 U.S.C.
National Urban League, Inc.; National rulemaking implements statutory 1501 et seq.) requires that a covered
Center and Caucus for the Black Aged, authority based on broad consultation agency prepare a budgetary impact
Inc.; Asociacion Nacional Por Personas and coordination. It reflects the statement before promulgating a rule
Mayores; National Asian Pacific Center Department’s response to suggestions that includes any Federal mandate that
on Aging; and National Indian Council received in writing and through work may result in the expenditure by State,
on Aging. groups. local, and Tribal governments, in the
The Executive Order encourages aggregate, or by the private sector, of
C. Regulatory Flexibility and Regulatory agencies, as appropriate, to provide the $100 million or more in any one year.
Impact Analysis, SBREFA; Family Well- public with meaningful participation in If a covered agency must prepare a
Being the regulatory process. The Department budgetary impact statement, section 205
The Regulatory Flexibility Act (5 consulted with the Department of further requires that it select the most
U.S.C. chapter 6) requires the Federal Health and Human Services, as well as cost-effective and least burdensome
government to anticipate and reduce the with State and local officials and their alternative that achieves the objectives
impact of rules and paperwork representative organizations, in addition of the rule and is consistent with the
requirements on small businesses and to a broad range of stakeholder groups statutory requirements. In addition,
other small entities. ‘‘Small entities’’ are and others to obtain their views before section 203 requires a plan for
defined as small businesses (those with the publication of this proposed rule. informing and advising any small
fewer than 500 employees, except where The Department also considered the government that may be significantly or
otherwise provided) and small nonprofit numerous suggestions received in uniquely impacted by the rule.
organizations (those with fewer than writing and through work groups. The The Department has determined that
500 employees, except where otherwise Department has responded to some of the proposed rule will not require the
provided) and small governmental the suggestions received in the expenditure by State, local, or Tribal
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22542 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
governments, in the aggregate, or by the Subpart B—Coordination with the 641.460 How will the Department examine
private sector, of more than $100 Workforce Investment Act the responsibility of eligible entities?
million in any one year. Accordingly, 641.200 What is the relationship between 641.465 Under what circumstances may the
SCSEP and the Workforce Investment Department reject an application?
the Department has not prepared a
Act? 641.470 What happens if an applicant’s
budgetary impact statement specifically application is rejected? [Reserved]
addressing the regulatory alternatives 641.210 What services, in addition to the
applicable core services, must SCSEP 641.480 May the Governor make
considered, or prepared a plan for grantees provide through the One-Stop recommendations to the Department on
informing and advising any significantly Delivery System? grant applications?
or uniquely affected small government. 641.220 Does title I of WIA require SCSEP 641.490 When may SCSEP grants be
to use OAA funds for individuals who awarded competitively?
G. Executive Order 12988 (Civil Justice are not eligible for SCSEP services or for
Reform) Subpart E—Services to Participants
services that are not authorized under
the OAA? 641.500 Who is eligible to participate in the
The Department drafted and reviewed 641.230 Must the individual assessment SCSEP?
this rule according to Executive Order conducted by the SCSEP grantee and the 641.505 When is eligibility determined?
12988, and determined that it will not assessment performed by the One-Stop 641.507 What types of income are included
unduly burden the Federal court Delivery System be accepted for use by and excluded for participant eligibility
system. The rule has been written to either entity to determine the determinations? [Reserved]
individual’s need for services in the 641. 510 What happens if a grantee/
minimize litigation and provide a clear subgrantee determines that a participant
legal standard for affected conduct, and SCSEP and adult programs under title IB
of WIA? is no longer eligible for the SCSEP due
has been reviewed carefully to eliminate 641.240 Are SCSEP participants eligible for to an increase in family income?
drafting errors and ambiguities. intensive and training services under 641.515 How must grantees/subgrantees
title I of WIA? recruit and select eligible individuals for
H. Executive Order 13175 (Tribal participation in the SCSEP?
Summary Impact Statement) Subpart C—The State Senior Employment 641.520 Are there any priorities that
Services Coordination Plan grantees/subgrantees must use in
Executive Order 13175 requires 641.300 What is the State Plan? selecting eligible individuals for
consultation and coordination with 641.305 Who is responsible for developing participation in the SCSEP?
Indian Tribal Governments and also and submitting the State Plan? 641.525 Are there any other groups of
requires a tribal summary impact 641.310 May the Governor delegate individuals who should be given special
statement in the preamble of the responsibility for developing and consideration when selecting SCSEP
regulation, which describes the extent of submitting the State Plan? participants?
the agency’s prior consultation with 641.315 Who participates in developing the 641.530 Must the grantee/subgrantee
tribal officials, a summary of nature of State Plan? always select priority or preference
641.320 Must all national grantees individuals?
their concerns and the agency’s position operating within a State participate in 641.535 What services must grantees/
supporting the need to issue the the State planning process? subgrantees provide to participants?
regulation, and a statement of the extent 641.325 What information must be 641.540 What types of training may
to which the concerns of tribal officials provided in the State Plan? grantees/subgrantees provide to SCSEP
have been met. The Department has 641.330 How should the State Plan reflect participants?
reviewed this regulation for tribal community service needs? 641.545 What supportive services may
impact and has determined that no 641.335 How should the Governor address grantees/subgrantees provide to
provision preempts tribal law or the the coordination of SCSEP services with participants?
ability of tribes to self-govern. The activities funded under title I of WIA? 641.550 What responsibility do grantees/
641.340 Must the Governor submit a State subgrantees have to place participants in
Department has encouraged input from Plan each year? unsubsidized employment?
members of tribal organizations as well 641.345 What are the requirements for 641.555 What responsibility do grantees
as other individuals through a series of modifying the State Plan? have to participants who have been
Town Hall meetings. 641.350 How should public comments be placed in unsubsidized employment?
solicited and collected? 641.560 May grantees place participants
List of Subjects in 20 CFR Part 641 641.355 Who may comment on the State directly into unsubsidized employment?
Plan? 641.565 What policies govern the provision
Aged, Employment, Government 641.360 How does the State Plan relate to of wages and fringe benefits to
contracts, Grant programs—labor, the equitable distribution (ED) report? participants?
Reporting and recordkeeping 641.365 How must the equitable 641.570 Is there a time limit for
requirements. distribution provisions be reconciled participation in the program?
with the provision that disruptions to 641.575 May a grantee establish a limit on
For the reasons stated in the current participants should be avoided? the amount of time its participants may
Preamble, 20 CFR Part 641 is proposed spend at each host agency?
to be revised to read as follows: Subpart D—Grant Application and
641.580 Under what circumstances may a
Responsibility Review Requirements
grantee terminate a participant?
PART 641—PROVISIONS GOVERNING 641.400 What entities are eligible to apply 641.585 Are participants employees of the
THE SENIOR COMMUNITY SERVICE to the Department for funds to Federal Government?
EMPLOYMENT PROGRAM administer SCSEP community service 641.590 Are participants employees of the
projects? grantee, the local project and/or the host
Subpart A—Purpose and Definitions 641.410 How does an eligible entity apply? agency?
641.420 What factors will the Department
Sec. Subpart F—Private Sector Training Projects
consider in selecting grantees?
641.100 What does this Part cover? 641.430 What are the eligibility criteria that Under Section 502(e) of the OAA
641.110 What is the SCSEP? each applicant must meet? 641.600 What is the purpose of the private
641.120 What are the purposes of the 641.440 What are the responsibility sector training projects authorized under
SCSEP? conditions that an applicant must meet? section 502(e) of the OAA?
641.130 What is the scope of this Part? 641.450 Are there responsibility conditions 641.610 How are section 502(e) activities
641.140 What definitions apply to this Part? that alone will disqualify an applicant? administered?
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22543
641.620 How may an organization apply for 641.815 May the period of availability be Authority: 42 U.S.C. 3056 et.seq.
section 502(e) funding? extended?
641.630 What private sector training 641.818 What happens to funds that are Subpart A—Purpose and Definitions
activities are allowable under section unexpended at the end of the Program
502(e)? Year? § 641.100 What does this Part cover?
641.640 How do the private sector training 641.821 What audit requirements apply to
activities authorized under section
This Part 641 contains the Department
the use of SCSEP funds?
502(e) differ from other SCSEP activities? 641.824 What lobbying requirements apply of Labor’s regulations for the Senior
641.650 Does the requirement that not less to the use of SCSEP funds? Community Service Employment
than 75 percent of the funds be used to 641.827 What general nondiscrimination Program (SCSEP), authorized under the
pay participant wages and fringe benefits requirements apply to the use of SCSEP title V of the Older Americans Act, 42
apply to section 502(e) activities? funds? U.S.C. 3056 et seq., as amended by the
641.660 Who is eligible to participate in 641.830 What nondiscrimination Older Americans Act Amendments of
section 502(e) private sector training protections apply specifically to 2000 (OAA), Pub. L. 106–501. This Part,
activities? participants in SCSEP programs?
641.665 When is eligibility determined? and other pertinent regulations
641.833 What policies govern political
641.670 May an eligible individual be patronage?
expressly incorporated by reference, set
enrolled simultaneously in section 641.836 What policies govern political forth the regulations applicable to the
502(e) private sector training activities activities? SCSEP.
operated by one grantee and a 641.839 What policies govern union (a) Subpart A of this part contains
community service SCSEP project organizing activities?
operated by a different SCSEP grantee? introductory provisions and definitions
641.841 What policies govern nepotism? that apply to this Part.
641.680 How should grantees report on 641.844 What maintenance of effort
participants who are co-enrolled? requirements apply to the use of SCSEP (b) Subpart B of this part describes the
641.690 How is the performance of section funds? required relationship between the OAA
502(e) grantees measured? 641.847 What uniform allowable cost and the Workforce Investment Act of
Subpart G—Performance Accountability requirements apply to the use of SCSEP 1998 (WIA), 29 U.S.C. 2801 et seq.
funds? These provisions discuss the
641.700 What performance measures apply
641.850 Are there other specific allowable coordinated efforts to provide services
to SCSEP grantees?
and unallowable cost requirements for
641.710 How are these performance through the integration of the SCSEP
SCSEP?
indicators defined?
641.853 How are costs classified? within the One-Stop Delivery System.
641.715 What are the common performance
measures?
641.856 What functions and activities (c) Subpart C of this part sets forth the
constitute costs of administration? requirements for the State Senior
641.720 How do the common performance
measures affect grantees and the OAA 641.859 What other special rules govern the Employment Services Coordination Plan
performance measures? classification of costs as administrative (State Plan), such as required
641.730 How will the Department set and costs or program costs? coordination efforts, public comments,
adjust performance levels? 641.861 Must SCSEP recipients provide
funding for the administrative costs of
and equitable distribution.
641.740 How will the Department
determine whether a grantee fails, meets, subrecipients? (d) Subpart D of this part establishes
or exceeds negotiated levels of 641.864 What functions and activities grant planning and application
performance? constitute program costs? requirements, including grantee
641.750 What sanctions will the 641.867 What are the limitations on the eligibility, and responsibility review.
Department impose if a grantee fails to amount of SCSEP administrative costs?
641.870 Under what circumstances may the (e) Subpart E of this part details
meet negotiated levels of performance? SCSEP participant services.
641.760 What sanctions will the administrative cost limitation be
Department impose if a national grantee increased? (f) Subpart F of this part provides the
fails to meet negotiated levels of 641.873 What minimum expenditure levels rules for projects designed to assure
performance under the total SCSEP are required for participant wages and second career training and the
grant? fringe benefits?
641.876 When will compliance with cost
placement of eligible individuals into
641.770 What sanctions will the unsubsidized jobs in the private sector.
Department impose if a national grantee limitations and minimum expenditure
fails to meet negotiated levels of levels be determined? (g) Subpart G of this part outlines the
performance in any State it serves? 641.879 What are the fiscal and performance accountability
641.780 When will the Department assess performance reporting requirements for requirements. This subpart establishes
the performance of a national grantee in recipients? requirements for performance measures,
a State? 641.881 What are the SCSEP recipient’s
defines such measures, and establishes
641.790 What sanctions will the responsibilities relating to awards to
subrecipients? corrective actions, including the
Department impose if a State grantee
fails to meet negotiated levels of 641.884 What are the grant closeout imposition of sanctions for failure to
performance? procedures? meet performance measures.
641.795 Will there be incentives for Subpart I—Grievance Procedures and (h) Subpart H of this part sets forth
exceeding performance measures? Appeals Process the administrative requirements for
Subpart H—Administrative Requirements 641.900 What appeal process is available to
SCSEP grants.
641.800 What uniform administrative an applicant that does not receive a (i) Subpart I of this part describes the
requirements apply to the use of SCSEP grant? [Reserved] grievance and appeals processes and
funds? 641.910 What grievance procedures must requirements.
641.803 What is program income? grantees make available to applicants,
641.806 How must SCSEP program income employees, and participants? § 641.110 What is the SCSEP?
be used? 641.920 What actions of the Department
641.809 What non-Federal share (matching) may a grantee appeal and what
The Senior Community Service
requirements apply to the use of SCSEP procedures apply to those appeals? Employment Program or the SCSEP is a
funds? 641.930 Is there an alternative dispute program administered by the
641.812 What is the period of availability of resolution process that may be used in Department of Labor that serves low-
SCSEP funds? place of an OALJ hearing? income persons who are 55 years of age
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22544 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
and older and have poor employment weatherization activities; and economic isolation, including isolation caused by
prospects by placing them in part-time development. (OAA sec. 516(1)). racial or ethnic status, that restricts the
community service positions and by Comprehensive One-Stop Center ability of an individual to perform
assisting them to transition to means a facility located in each Local normal daily tasks, or threatens the
unsubsidized employment. Workforce Investment Area that capacity of the individual to live
provides core services, and provides independently. (OAA sec. 101(28)).
§ 641.120 What are the purposes of the access to other programs and activities Host agency means a public agency or
SCSEP? carried out by the One-Stop partners. a private nonprofit organization exempt
The purposes of the SCSEP are to (See WIA sec. 134(c)(2)). from taxation under the provisions of
foster and promote useful part-time Core Services means those services section 501(c)(3) of the Internal Revenue
opportunities in community service described in section 134(d)(2) of WIA. Code of 1986, other than a political
activities for unemployed low-income Department or DOL mean the United party or any facility used or to be used
persons who are 55 years of age or older; States Department of Labor, including as a place for sectarian religious
to foster individual economic self- its agencies and organizational units. instruction or worship, which provides
sufficiency; and to increase the number Equitable distribution report means a a work site and supervision for one or
of older persons who may enjoy the report based on the latest available more participants. (See also OAA sec.
benefits of unsubsidized employment in Census data, which lists the optimum 502(b)(1)(C)). A host agency may be a
both the public and private sectors. number of participant positions in each place of sectarian worship or instruction
designated area in the State, and the as long as the work experience provided
§ 641.130 What is the scope of this Part? number of authorized participant for the participant is not for sectarian
The regulations in this Part address positions each grantee serves in that purposes.
the requirements that apply to the area, taking the needs of underserved Indian means a person who is a
SCSEP. More detailed policies and States into account. This report provides member of an Indian tribe. (OAA sec.
procedures are contained in a basis for improving the distribution of 101(5)).
administrative guidelines issued by the SCSEP positions. Indian tribe means any tribe, band,
Department. Throughout this Part, Grant period means the time period nation, or other organized group or
phrases such as, ‘‘according to between the effective date of the grant community of Indians (including Alaska
instructions (procedures) issued by the award and the ending date of the award, Native village or regional or village
Department’’ or ‘‘additional guidance which reflects any modifications corporation as defined in or established
will be provided through administrative extending the period of performance, pursuant to the Alaska Native Claims
issuance’’ refer to the SCSEP Bulletins, whether by the Department’s exercise of Settlement Act) which:
technical assistance guides, and other options contained in the grant (1) Is recognized as eligible for the
SCSEP directives. agreement or otherwise. Also referred to special programs and services provided
as ‘‘project period’’ or ‘‘award period.’’ by the United States to Indians because
§ 641.140 What definitions apply to this Grantee means an entity receiving of their status as Indians; or
Part? financial assistance directly from the (2) Is located on, or in proximity to,
The following definitions apply to Department to carry out SCSEP a Federal or State reservation or
this Part: activities. The grantee is the legal entity rancheria. (OAA sec. 101(6)).
Authorized position level means the that receives the award and is legally Individual employment plan or IEP
number of SCSEP enrollment responsible for carrying out the SCSEP, means a plan for a participant that
opportunities that can be supported for even if only a particular component of includes an employment goal,
a 12-month period based on the average the entity is designated in the grant achievement of objectives, and
national unit cost. The authorized award document. Grantees include appropriate sequence of services for the
position level is derived by dividing the States, tribal organizations, territories, participant based on an assessment
total amount of funds appropriated for public and private nonprofit conducted by the grantee or subgrantee
a Program Year by the national average organizations, agencies of a State and jointly agreed upon by the
unit cost per participant for that government or a political subdivision of participant. (See OAA sec. 502(b)(1)(N)).
Program Year as determined by the a State, or a combination of such Intensive services means those
Department. The national average unit political subdivisions that receive services authorized by section 134(d)(3)
cost includes all costs of administration, SCSEP grants from the Department. of the Workforce Investment Act.
other participant costs, and participant (OAA sec. 502). In the case of the Jobs for Veterans Act means the
wage and fringe benefit costs as defined section 502(e) projects, grantee may be program established in section 2 of Pub.
in section 506(g) of the OAA. A used to include private business L. 107–288 (2002) (38 U.S.C. 4215), that
grantee’s total award is divided by the concerns. As used here, ‘‘grantees’’ provides a priority for veterans and the
national unit cost to determine the include ‘‘grantees’’ as defined in 29 CFR spouse of a veteran who died in a
authorized position level for each grant 97.3 and ‘‘recipients’’ as defined in 29 service-connected disability, the spouse
agreement. CFR 95.2(g). of a member of the Armed Forces on
Community service includes, but is Greatest economic need means the active duty who has been listed for a
not limited to, social, health, welfare, need resulting from an income level at total of more than 90 days as missing in
and educational services (including or below the poverty guidelines action, captured in the line of duty by
literacy tutoring); legal assistance, and established by the Department of Health a hostile force, or forcibly detained by
other counseling services, including tax and Human Services and approved by a foreign government or power, the
counseling and assistance and financial the Office of Management and Budget. spouse of any veteran who has a total
counseling; library, recreational, and (OAA sec. 101(27)). disability resulting from a service-
other similar services; conservation, Greatest social need means the need connected disability, and the spouse of
maintenance, or restoration of natural caused by non-economic factors, which any veteran who died while a disability
resources; community betterment or include: physical and mental so evaluated was in existence, who meet
beautification; anti-pollution and disabilities; language barriers; and program eligibility requirements to
environmental quality efforts; cultural, social, or geographical receive services in any Department of
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22545
Labor-funded workforce development part-time paid employment in the administer a State or territory SCSEP
program. public or private sector by a participant project under the OAA. Except as
Local Workforce Investment Area or for 30 days within a 90-day period applied to funding distributions under
local area means an area established by without the use of funds under title V section 506 of the OAA, this definition
the Governor of a State under section or any other Federal or State applies to the 50 States, Puerto Rico, the
116 of the Workforce Investment Act. employment subsidy program, or the District of Columbia and the following
Local Board means a Local Workforce equivalent of such employment as territories: Guam, American Samoa, U.S.
Investment Board established under measured by the earnings of a Virgin Islands, and the Commonwealth
section 117 of the Workforce Investment participant through the use of wage of the Northern Mariana Islands.
Act. records or other appropriate methods. State Plan means the State Senior
National grantee means Federal (OAA sec. 513(c)(2)(A)). Employment Services Coordination Plan
public agencies and organizations, Poor employment prospects means as required under section 503(a) of the
private nonprofit agencies and the likelihood that an individual will OAA.
organizations, or tribal organizations not obtain employment without the Subgrantee means the legal entity to
that operate under title V of the OAA assistance of SCSEP or any other which a subaward of financial
that are capable of administering multi- workforce development program. assistance, which may include a
State projects under a national grant Persons with poor employment subcontract, which is made by the
from the Department. (See OAA sec. prospects include, but are not limited grantee (or by a higher tier subgrantee or
506(g)(5)). to, those without a substantial recipient), and that is accountable to the
OAA means the Older Americans Act employment history, basic skills, and/or grantee for the use of the funds
as amended by the Older Americans Act English-language proficiency; displaced provided. As used here, ‘‘subgrantee’’
Amendments of 2000 (Pub. L. 106–501; homemakers, school dropouts, persons includes ‘‘subgrantees’’ as defined in 29
42 U.S.C. 3056 et seq.). with disabilities, including disabled CFR 97.3 and ‘‘subrecipients’’ as
One-Stop Delivery System means a veterans, homeless individuals, and defined in 29 CFR 95.2(kk).
system under which employment and individuals residing in socially and
training programs, services, and Subrecipient means a subgrantee.
economically isolated rural or urban
activities are available through a areas where employment opportunities Title V of the OAA means 42 U.S.C.
network of eligible One-Stop partners, are limited. 3056 et seq. or title V of Pub. L. 106–
which assures that information about 501.
Program year means the one-year
and access to core services is available period beginning July 1 and ending on Training Services means those
regardless of where the individuals June 30. (OAA sec. 515(b)). services authorized by section 134(d)(4)
initially enter the statewide workforce of the Workforce Investment Act.
Project means an undertaking by a
investment system. (WIA sec. 134(c)(2)). Tribal organization means the
grantee or subgrantee according to a
One-Stop partner means an entity recognized governing body of any
grant agreement that provides
described in section 121(b)(1) of the Indian tribe, or any legally established
community service, training, and
Workforce Investment Act; i.e., required organization of Indians which is
employment opportunities to eligible
partners, and an entity described in controlled, sanctioned, or chartered by
individuals in a particular location
section 121(b)(2) of the Workforce such governing body. (OAA sec. 101(7)).
within a State.
Investment Act, i.e., additional partners.
Recipient means grantee. As used Workforce Investment Act or WIA
Other participant (enrollee) cost
here, ‘‘recipients’’ include ‘‘recipients’’ means the Workforce Investment Act of
means participant training, including
as defined in 29 CFR 95.2(g) and 1998 (Pub. L. 105–220—Aug. 7, 1998;
the payment of reasonable costs to
‘‘grantees’’ as defined in 29 CFR 97.3. 112 Stat. 936); 29 U.S.C. 2801 et seq.
instructors, classroom rental, training
supplies, materials, equipment, and Retention in public or private Workforce Investment Act regulations
tuition, and which may be provided on unsubsidized employment means full-or or WIA regulations means regulations at
the job, in a classroom setting, or under part-time paid employment in the 20 CFR part 652 and parts 660–671.
other appropriate arrangements; job public or private sector by a participant
for 6 months after the starting date of Subpart B—Coordination With the
placement assistance, including job
placement into unsubsidized Workforce Investment Act
development and job search assistance;
participant supportive services to assist employment without the use of funds § 641.200 What is the relationship between
a participant to successfully participate under title V or any other Federal or SCSEP and the Workforce Investment Act?
in a project, including the payment of State employment subsidy program.
(OAA sec. 513(c)(2)(B)). SCSEP is a required partner under the
reasonable costs of transportation, Workforce Investment Act. As such, it is
health care and medical services, SCSEP means the Senior Community
Service Employment Program a part of the One-Stop Delivery System.
special job-related or personal SCSEP grantees are required to follow
counseling, incidentals (such as work authorized under title V of the OAA.
all applicable rules under the WIA and
shoes, badges, uniforms, eyeglasses, and Service area means the geographic
its regulations.
tools), child and adult care, temporary area served by a local SCSEP project.
shelter, and follow-up services; and State Workforce Agency means the § 641.210 What services, in addition to the
outreach, recruitment and selection, State agency that administers the State applicable core services, must SCSEP
intake orientation, and assessments. Wagner-Peyser program. grantees provide through the One-Stop
(OAA sec. 502(c)(6)(A)). State Board means a State Workforce Delivery System?
Participant means an individual who Investment Board established under In addition to providing core services,
is eligible for the SCSEP, has been section 111 of the Workforce Investment SCSEP grantees must make
enrolled and is receiving services as Act. arrangements to provide eligible and
prescribed under subpart E of this part. State grantee means the entity ineligible individuals with access to
Placement into public or private designated by the Governor to enter into other activities and programs carried out
unsubsidized employment means full-or a grant with the Department to by other One-Stop partners.
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22546 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
§ 641.220 Does title I of WIA require appropriate and as negotiated in the employment services, including each
SCSEP to use OAA funds for individuals MOU. grantee operating an SCSEP project
who are not eligible for SCSEP services or (c) SCSEP provides opportunities for within the State, except as provided for
for services that are not authorized under eligible individuals to engage in part- in § 641.320(b);
the OAA?
time community service activities for (4) Social service organizations
No, SCSEP requirements continue to which they are compensated. These providing services to older individuals;
apply. Title V resources may only be assignments are analogous to work (5) Grantees under title III of the OAA;
used to provide title V services to title experience activities or intensive service (6) Affected communities;
V-eligible individuals. The Workforce under 20 CFR 663.200 of the WIA (7) Underserved older individuals;
Investment Act creates a seamless regulations. (8) Community-based organizations
service delivery system for individuals serving older individuals;
seeking workforce development services Subpart C—The State Senior (9) Business organizations; and
by linking the One-Stop partners in the Employment Services Coordination (10) Labor organizations
One-Stop Delivery System. Although Plan (b) The Governor may also obtain the
the overall effect is to provide universal advice and recommendations of other
access to core services, SCSEP resources
§ 641.300 What is the State Plan? interested organizations and
may only be used to provide services The State Senior Employment individuals, including SCSEP program
that are authorized and provided under Services Coordination Plan (the State participants, in developing the State
SCSEP to eligible individuals. All other Plan) is a plan, submitted by the Plan. (OAA sec. 305(a)(2)).
individuals who are in need of the Governor in each State, as an
§ 641.320 Must all national grantees
services provided under the SCSEP, but independent document or as part of the operating within a State participate in the
who do not meet the eligibility criteria WIA Unified Plan, that describes the State planning process?
to enroll in SCSEP, should be referred planning and implementation process
(a) Yes, although section 503(a)(2)
to or enrolled in WIA or other for SCSEP services in the State, taking
requires the Governor to obtain the
appropriate partner programs. (WIA sec. into account the relative distribution of
advice and recommendation of SCSEP
121(b)(1)). These arrangements should eligible individuals and employment
national grantees with no reciprocal
be negotiated in the MOU. opportunities within the State. The
provision requiring the national
State Plan is intended to foster
grantees to participate in the State
§ 641.230 Must the individual assessment coordination among the various SCSEP
conducted by the SCSEP grantee and the
planning process, the eligibility
grantees operating within the State and
assessment performed by the One-Stop provision at section 514(c)(5) requires
to facilitate the efforts of stakeholders,
Delivery System be accepted for use by grantees to coordinate with other
including State and Local Boards under
either entity to determine the individual’s organizations at the State and local
WIA, to work collaboratively through a
need for services in SCSEP and adult level. Therefore, any national grantee
participatory process to accomplish the
programs under title IB of WIA? that does not participate in the State
SCSEP program’s goals. (OAA sec.
Yes, section 502(b)(4) of the OAA planning process may be deemed
503(a)(1)). The State Plan provisions are
provides that an assessment or IEP ineligible to receive SCSEP funds in the
listed at proposed § 641.325.
completed by SCSEP satisfies any following Program Year.
condition for an assessment, service § 641.305 Who is responsible for (b) National grantees serving older
strategy, or IEP completed at the One- developing and submitting the State Plan? American Indians are exempted from
Stop and vice-versa. These reciprocal The Governor of each State is participating in the planning
arrangements and the contents of the responsible for developing and requirements under section 503(a)(8) of
SCSEP IEP and WIA IEP should be submitting the State Plan to the the OAA. These national grantees may
negotiated in the MOU. (OAA sec. Department. choose not to participate in the State
502(b)(4)). planning process, however, the
§ 641.310 May the Governor delegate Department encourages participation. If
§ 641.240 Are SCSEP participants eligible responsibility for developing and a national grantee serving older
for intensive and training services under submitting the State Plan? American Indians does not participate
title I of WIA? Yes, the Governor may delegate in the State planning process, it must
(a) Yes, although SCSEP participants responsibility for developing and describe its plans for serving older
are not automatically eligible for submitting the State Plan, provided that American Indians in its application for
intensive and training services under any such delegation is consistent with SCSEP grant funds.
title I of WIA, Local Boards may deem State law and regulations. To delegate
responsibility, the Governor must § 641.325 What information must be
SCSEP participants, either individually provided in the State Plan?
or as a group, as satisfying the submit a signed statement indicating the
individual and/or organization that will The Department issues instructions
requirements for receiving adult
be submitting the State Plan on his or detailing the information that must be
intensive and training services under
her behalf. provided in the State Plan. At a
title I of WIA.
minimum, the State Plan must include
(b) SCSEP participants who have been § 641.315 Who participates in developing information on the following:
assessed through an SCSEP IEP have the State Plan? (a) The ratio of eligible individuals in
received an intensive service according (a) In developing the State Plan the each service area to the total eligible
to 20 CFR 663.240(a) of the WIA Governor must obtain the advice and population in the State;
regulations. SCSEP participants who recommendations of representatives (b) The relative distribution of:
seek unsubsidized employment as part from: (1) Eligible individuals residing in
of their SCSEP IEP, may require training (1) The State and area agencies on urban and rural areas within the State;
to meet their objectives. The SCSEP aging; (2) Eligible individuals who have the
grantee/subgrantee, the host agency, the (2) State and Local Boards; greatest economic need;
WIA program, or another One-Stop (3) Public and private nonprofit (3) Eligible individuals who are
partner may provide training as agencies and organizations providing minorities; and
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22547
(4) Eligible individuals who have the recommendation of the individuals and addition to equitable distribution, as
greatest social need; organizations identified in the statute at discussed in proposed § 641.325, and
(c) The employment situations and section 503(a)(2) about what, if any, sets forth a proposed plan for
the types of skills possessed by eligible changes are needed, and publish the distribution of authorized positions in
individuals; changes to the State Plan for public the State. Any distribution or
(d) The localities and populations for comment each year and submit a redistribution of positions made as a
which community service projects of modification to the Department. result of a State Plan proposal will be
the type authorized by title V are most reflected in the subsequent year’s ED
needed; § 641.345 What are the requirements for report, which then forms the basis for
(e) Actions taken or planned to modifying the State Plan?
the proposed distribution in the next
coordinate activities of SCSEP grantees (a) Modifications are required when: year’s State plan. This process is
with the activities being carried out in (1) There are changes in Federal or iterative in that it moves the authorized
the State under title I of WIA; State law or policy substantially positions from over-served areas to
(f) A description of the State’s changes the assumptions upon which underserved areas over a period of time.
procedures and time line for ensuring the State Plan is based;
an open and inclusive planning process (2) There are changes in the State’s § 641.365 How must the equitable
that provides meaningful opportunity vision, strategies, policies, performance distribution provisions be reconciled with
for public comment; indicators, or organizational the provision that disruptions to current
(g) Public comments received, and a responsibilities; participants should be avoided?
summary of the comments; (3) The State has failed to meet Governors must describe the steps
(h) A description of the steps taken to performance goals and must submit a that are being taken to comply with the
avoid disruptions to the greatest extent corrective action plan; or statutory requirement to avoid
possible (see § 641.365); and (4) There is a change in a grantee or disruptions in the State Plan. (OAA sec.
(i) Such other information as the grantees. 503(a)(6)). When there is new census
Department may require in the State (b) Modifications to the State Plan are data indicating that there has been a
Plan instructions. (OAA sec. 503(a)(3)– subject to the same public review and shift in the location of the eligible
(4), (6)). comment requirements that apply to the population or when there is over-
development of the State Plan under enrollment for any other reason, the
§ 641.330 How should the State Plan §§ 641.325 and 641.350.
reflect community service needs? Department recommends a gradual shift
(c) The Department will issue that encourages current participants in
The Governor must ensure that the additional instructions for the subsidized community service positions
State Plan identifies the types of procedures that must be followed when to move into unsubsidized employment
community services that are needed and requesting modifications to the State to make positions available for eligible
the places where these services are most Plan. (OAA sec. 503(a)(1)). individuals in the areas where there has
needed. The State Plan should
§ 641.350 How should public comments be been an increase in the eligible
specifically identify the needs and
solicited and collected? population. The Department does not
locations of those individuals most in
The Governor should follow define disruptions to mean that
need of community services and the
established State procedures to solicit participants are entitled to remain in a
groups working to meet their needs.
and collect public comments. The State subsidized community service
(OAA sec. 503(a)(4)(E)).
Plan must include a description of the employment position indefinitely. As
§ 641.335 How should the Governor State’s procedures and schedule for discussed in §§ 641.570 and 641.575,
address the coordination of SCSEP ensuring an open and inclusive grantees may, under certain
services with activities funded under title I planning process that provides circumstances, place time limits on an
of WIA? SCSEP community service assignment,
meaningful opportunity for public
The Governor must seek the advice comment. thus permitting positions to be
and recommendations from transferred over time.
representatives of the State and area § 641.355 Who may comment on the State
agencies on aging in the State and the Plan? Subpart D—Grant Application,
State and Local Boards established Any individual or organization may Eligibility, and Award Requirements
under title I of WIA. (OAA sec. comment on the Plan.
§ 641.400 What entities are eligible to
503(a)(2)). The State Plan must describe apply to the Department for funds to
§ 641.360 How does the State Plan relate
the steps that are being taken to administer SCSEP community service
to the equitable distribution (ED) report?
coordinate SCSEP activities within the projects?
State with activities being carried out The two documents address some of
the same areas, and are prepared at (a) National Grants. Entities eligible to
under title I of WIA. (OAA sec.
different points in time. The ED report apply for national grants include
503(a)(4)(F)). The State Plan must
is prepared by State agencies at the nonprofit organizations, Federal public
describe the steps being taken to ensure
beginning of each fiscal year and agencies, and tribal organizations. These
that the SCSEP is an active partner in
provides a ‘‘snapshot’’ of the actual entities must be capable of
each One-Stop Delivery System and the
distribution of all of the authorized administering a multi-State program.
steps that will be taken to encourage
positions within the State, grantee-by- State and local agencies may not apply
and improve coordination with the One-
grantee, and the optimum number of for these funds.
Stop Delivery System.
participant positions in each designated (b) National Grants in a State. Section
§ 641.340 Must the Governor submit a area based on the latest available Census 514(e)(3) of the OAA permits nonprofit
State Plan each year? data. It provides a basis for improving organizations, public agencies, and
The Governor is not required to the distribution of SCSEP positions States to receive SCSEP funds when a
submit a full State Plan each year; within the State. (See OAA sec. 508). national grantee in a State fails to meet
however, at a minimum, the Governor The State plan is prepared by the its performance measures in the second
must seek the advice and Governor and covers many areas in and third year of failure. Any entity that
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22548 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
was the subject of the competition is not Solicitation for Grant Application into (d) Willful obstruction of the auditing
eligible to receive SCSEP funds. consideration, including the or monitoring process.
(c) State Grants. Section 506(e) of the applicant’s/grantee’s past performance (e) Failure to provide services to
OAA requires the Department to enter in any prior Federal grants or contracts applicants as agreed to in a current or
into agreements with each State to for the past 3 years. recent grant or to meet applicable
provide SCSEP services. States may use performance measures.
individual State agencies, political § 641.430 What are the eligibility criteria (f) Failure to correct deficiencies
that each applicant must meet?
subdivisions of a State, a combination of brought to the grantee’s attention in
such political subdivisions, or a To be eligible to receive SCSEP funds, writing as a result of monitoring
national grantee operating in the State to each applicant must be able to activities, reviews, assessments, or other
administer SCSEP funds. If the State’s demonstrate: activities.
funds are competed under section 514(f) (a) An ability to administer a program (g) Failure to return a grant closeout
of the OAA, other agencies within the that serves the greatest number of package or outstanding advances within
State, political subdivisions of a State, a eligible participants, giving particular 90 days after the grant expiration date
combination of political subdivisions of consideration to individuals with or receipt of closeout package,
a State, and national grantees operating greatest economic need, greatest social whichever is later, unless an extension
in the State are eligible to apply for need, poor employment history or has been requested and granted.
funds. Other States may not apply for prospects, and over the age of 60; (h) Failure to submit required reports.
this funding. (b) An ability to administer a program (i) Failure to properly report and
that provides employment for eligible dispose of Government property as
§ 641.410 How does an eligible entity individuals in communities in which instructed by the Department.
apply? they reside, or in nearby communities, (j) Failure to have maintained
(a) General. An eligible entity must that will contribute to the general effective cash management or cost
follow the application guidelines issued welfare of the community; controls resulting in excess cash on
by the Department. The Department will (c) An ability to administer a program hand.
issue application guidelines announcing that moves eligible participants into (k) Failure to ensure that a subgrantee
the availability of State and national unsubsidized employment; complies with applicable audit
SCSEP funds whether they are awarded (d) An ability to move participants requirements, including OMB Circular
on a competitive or noncompetitive with multiple barriers to employment A–133 audit requirements specified at
basis. The guidelines will contain into unsubsidized employment; 20 CFR 667.200(b) and § 641.821.
application due dates, application (e) An ability to coordinate with other (l) Failure to audit a subgrantee
instructions, and other necessary organizations at the State and local within the period required under
information. All entities must submit levels, including the One-Stop Delivery § 641.821.
applications in accordance with the System; (m) Final disallowed costs in excess
Department’s instructions. (f) An ability to properly manage the of five percent of the grant or contract
(b) National Grant Applicants. All program, including its plan for fiscal award if, in the judgment of the grant
applicants for SCSEP national grant management of the SCSEP program; officer, the disallowances are egregious
funds, except organizations proposing to (g) An ability to minimize program findings.
serve older American Indians, must disruption for current participants if (n) Failure to establish a mechanism
submit their applications to the there is a change in project sponsor and/ to resolve a subgrantee’s audit in a
Governor of each State in which projects or location, and its plan for minimizing timely fashion.
are proposed before submitting the disruptions; and
application to the Department. (OAA (h) Any additional criteria that the § 641.450 Are there responsibility
sec. 503(a)(5)). Secretary deems appropriate in order to conditions that alone will disqualify an
(c) State Applicants. A State that minimize disruptions for current applicant?
submits a Unified Plan under WIA may participants. (a) Yes, an applicant may be
include the State’s SCSEP community disqualified if either of the first two
service project grant application in its § 641.440 What are the responsibility
conditions that an applicant must meet?
responsibility tests listed in § 641.440 is
Unified Plan. Any State that submits an not met.
SCSEP grant application as part of its Each applicant must be able to meet (b) The remainder of the
WIA Unified Plan must address all of the following responsibility tests: responsibility tests listed in § 641.440
the application requirements as (a) The Department has been unable require a substantial or persistent failure
published in the Department’s to recover a debt from the applicant, (for 2 or more consecutive years).
instructions. State plan applications, whether incurred on its own or through
and modifications are addressed in subgrantees or subcontractors, or the § 641.460 How will the Department
applicant has failed to comply with a examine the responsibility of eligible
§§ 641.340 and 641.345.
debt repayment plan to which it agreed. entities?
§ 641.420 What factors will the Department In this context, a debt is established by The Department will conduct a
consider in selecting grantees? final agency action, followed by three review of available records to assess
The Department will select grantees demand letters to the applicant, without each applicant’s overall fiscal and
from among applicants that are able to payment in full by the applicant. administrative ability to manage Federal
meet the eligibility criteria and (b) Established fraud or criminal funds. The Department’s responsibility
responsibility review at section 514 of activity of a significant nature within review may consider any available
the OAA. (Section 641.430 contains the the applicant’s organization. information, including the
eligibility criteria and §§ 641.440 and (c) Serious administrative deficiencies organization’s history with regard to the
641.450 contain the responsibility identified by the Department, such as management of other grants awarded by
criteria). If there is a full and open failure to maintain a financial the Department or by other Federal
competition, the Department also will management system as required by agencies. (OAA secs. 514(d)(1) and
take the rating criteria described in the Federal regulations. (d)(2)).
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§ 641.465 Under what circumstances may responsibility tests established by according to the grantee’s procedures
the Department reject an application? section 514 of the OAA. and subpart I.
(a) The Department may question any (b) The Department may hold a full § 641.515 How must grantees/subgrantees
proposed project component of an and open competition before the recruit and select eligible individuals for
application if it believes that the beginning of a new grant period, or if participation in the SCSEP?
component will not serve the purposes additional grantees are funded. The (a) Grantees and subgrantees must
of the SCSEP program. The Department details of the competition will be develop methods of recruitment and
may reject the application if the provided in a Solicitation for Grant selection that assure that the maximum
applicant does not submit or negotiate Applications published in the Federal number of eligible individuals have an
an acceptable alternative. Register. The Department believes that opportunity to participate in the
(b) The Department may reject any full and open competition is the best program. To the extent feasible, grantees
application that the Grant Officer way to assure the highest quality of should seek to enroll individuals who
determines unacceptable based on the services to eligible participants. are eligible minorities, limited English
content of the application, rating score, speakers, Indians, or who have the
past performance, fiscal management, or Subpart E—Services to Participants greatest economic need at least in
any other factor the Grant Officer proportion to their numbers in the area,
§ 641.500 Who is eligible to participate in
believes serves the best interest of the the SCSEP? taking into consideration their rates of
program, including the application’s poverty and unemployment, should be
comparative rating in a competition. Anyone who is at least 55 years old
afforded community service
and who is a member of a family with
§ 641.470 What happens if an applicant’s opportunities. (OAA sec. 502(b)(1)(M)).
an income that is not more than 125 (b) Grantees and subgrantees must
application is rejected? percent of the family income levels notify the State Workforce Agency of all
[Reserved]. prepared by the Department of Health SCSEP community service opportunities
and Human Services and approved by and must use the One-Stop Delivery
§ 641.480 May the Governor make
the Office of Management and Budget System in the recruitment and selection
recommendations to the Department on
grant applications? (poverty guidelines) is eligible to of eligible individuals. (OAA sec.
participate in the SCSEP. (OAA sec. 502(b)(1)(H)).
(a) Yes, each Governor will have a 516(2)). A person with a disability may
reasonable opportunity to make be treated as a ‘‘family of one’’ for § 641.520 Are there any priorities that
comments on any application to operate income eligibility determination grantees/subgrantees must use in selecting
a SCSEP project located in the purposes. The Department will issue eligible individuals for participation in the
Governor’s State before the Department administrative guidance on the SCSEP?
makes a final decision on a grant award. procedures for computing family (a) Yes, in selecting eligible
The Governor’s comments should be income for purposes of determining individuals for participation in the
directed to the Department and may SCSEP eligibility. SCSEP, priority must be given to:
include the anticipated effect of the (1) individuals who are at least 60
proposal on the overall distribution of § 641.505 When is eligibility determined? years old (OAA sec. 516(2)); and
program positions within the State; Initial eligibility is determined at the (2) a veteran, or the spouse of a
recommendations for redistribution of time individuals apply to participate in veteran who died of a service-connected
positions to underserved areas as the SCSEP. Once individuals become disability, a member of the Armed
vacancies occur in previously SCSEP participants, the grantee/ Forces on active duty, who has been
encumbered positions in other areas; subgrantee is responsible for verifying listed for a total of more than 90 days
and recommendations for distributing as missing in action, captured in the
their continued income eligibility at
any new positions that may become line of duty by a hostile force, or
least once every 12 months. Grantees
available as a result of an increase in forcibly detained by a foreign
may also verify an individual’s
funding for the State. The Governor’s government or power, the spouse of any
eligibility as circumstances require.
recommendations should be consistent veteran who has a total disability
with the State Plan. § 641.507 What types of income are resulting from a service-connected
(b) Under noncompetitive conditions, included and excluded for participant disability, and the spouse of any veteran
the Governor may make the authorized eligibility determinations? who died while a disability so evaluated
recommendations on all applications. [Reserved]. was in existence, who meet program
However, under competitive conditions, eligibility requirements under section 2
the Governor has the option of making § 641.510 What happens if a grantee/ of the Jobs for Veterans Act, Pub. L.
subgrantee determines that a participant is 107–288 (2002).
the authorized recommendations on all
no longer eligible for the SCSEP due to an (b) Grantees must apply these
applications or following the rating increase in family income?
process. It is incumbent on each priorities in the following order:
Governor to inform the Department of If a grantee/subgrantee determines (1) Veterans and qualified spouses at
his or her intent to review the that a participant is no longer eligible least 60 years old;
for the SCSEP, the grantee/subgrantee (2) Other individuals at least 60 years
applications before or after the rating
must give the participant written old;
process. (3) Veterans and qualified spouses
notification of termination within 30
§ 641.490 When may SCSEP grants be days, and the participant must be aged 55–59; and
awarded competitively? terminated within 30 days of receiving (4) Other individuals aged 55–59.
(a) The Department must hold a the written notification. Grantees/ § 641.525 Are there any other groups of
competition for SCSEP funds when a subgrantees must refer such individuals individuals who should be given special
grantee (national grantee, national to the services provided under the One- consideration when selecting SCSEP
grantee in a State, or State grantee) fails Stop Delivery System or other participants?
to meet its performance measures; the appropriate partner program. Yes, in selecting participants from
eligibility requirements; or the Participants may file a grievance among those individuals who are
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22550 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
eligible, to special consideration must community in which they reside, or in § 641.540 What types of training may
be given, to the extent feasible, to a nearby community (OAA sec. grantees/subgrantees provide to SCSEP
individuals who have incomes below 502(b)(1)(B)); participants?
the poverty level, who have poor (5) Providing or arranging for (a) Grantees and subgrantees must
employment prospects and who have necessary training specific to the arrange skill training for participants
the greatest social and/or economic participants’ community service that is realistic and consistent with the
need and who are eligible minorities, assignments (OAA sec. 502(b)(1)(I)); participants’ IEP, and that makes the
limited English speakers, or Indians. most effective use of their skills and
(OAA sec. 502(b)(1)(M)). (6) Assisting participants in arranging
for other training identified in their talents.
§ 641.530 Must the grantee/subgrantee SCSEP IEPs (OAA sec. 502(b)(1)(N)); (b) Training may be provided before
always select priority or preference or after placement in a community
(7) Assisting participants in arranging
individuals? service activity.
for needed supportive services
Grantees must always select qualified identified in their SCSEP IEPs (OAA (c) Training may be in the form of
individuals in accordance with sec. 502(b)(1)(N)); lectures, seminars, classroom
§ 641.520. Grantees must apply the instruction, individual instruction, on-
preference, to the extent feasible, when (8) Providing participants with wages the-job experiences or other
selecting individuals within the priority and fringe benefits for time spent arrangements, including but not limited
groups, unless the grantee determines working in the assigned community to, arrangements with other workforce
based on an assessment of their service employment activity (OAA sec. development programs such as WIA.
circumstances and the available 502(c)(6)(A)(i)); (OAA sec. 502(c)(6)(A)(ii)).
community service employment (9) Ensuring that participants have (d) Grantees and subgrantees are
opportunities, that a non-preference safe and healthy working conditions at encouraged to place a major emphasis
individual should receive services over their community service worksites on training available through on-the-job
a preference individual. When the (OAA sec. 502(b)(1)(J)); experience.
Department examines the characteristics (10) Verifying participant income (e) Grantees/subgrantees are
of a grantee’s participant population, the eligibility at least once every 12 months; encouraged to obtain training through
grantee may be asked to provide
(11) Assisting participants in locally available resources, including
evidence that it is adhering to the
obtaining unsubsidized employment, host agencies, at no cost or reduced cost
enrollment priorities and preferences set
including providing or arranging for to the SCSEP.
forth in §§ 641.520 and 641.525.
employment counseling in support of (f) Grantees/subgrantees may pay
§ 641.535 What services must grantees/ their IEPs; reasonable costs for instructors,
subgrantees provide to participants? (12) Providing appropriate services for classroom rental, training supplies and
(a) When individuals are selected for participants through the One-Stop materials, equipment, tuition and other
participation in the SCSEP, the grantee/ Delivery System established under WIA costs of training. (OAA sec.
subgrantee is responsible for: (OAA sec. 502(b)(1)(O)); 502(c)(6)(A)(ii)).
(1) Providing orientation to the (g) Grantees/subgrantees may
(13) Assessing participants’ progress
SCSEP, including information on reimburse participants for costs
in meeting the goals and objectives
project goals and objectives, community associated with travel and room and
identified in their IEPs, and meeting
service assignments, training board necessary to participate in
opportunities, available supportive with participants to reevaluate their
community service assignments, training.
services, the availability of a free
physical examination, participant rights training needs, supportive service needs (h) Nothing in this section prevents or
and responsibilities, and permitted and and potential for transitioning to limits participants from engaging in self-
prohibited political activities (OAA sec. unsubsidized employment, making development training available through
502); appropriate revisions to the SCSEP IEPs other sources during hours when not
(2) Assessing participants’ work as necessary (OAA sec. assigned to community service
history, skills and interests, talents, 502(b)(1)(N)(iii)); activities.
physical capabilities, aptitudes, needs (14) Following-up with participants § 641.545 What supportive services may
for supportive services, occupational placed into unsubsidized employment grantees/subgrantees provide to
preferences, training needs, potential for during the first 6 months of placement participants?
performing community service to make certain that participants receive
any follow-up services they may need to (a) Grantees/subgrantees may provide
assignments, and potential for transition
to unsubsidized employment at least ensure successful placements; and or arrange for supportive services to
once each quarter; assist participants in successfully
(15) Following-up at 6 months with participating in SCSEP projects,
(3) Using the information gathered participants who are placed in
during the assessment to develop IEPs including but not limited to payment of
unsubsidized employment to determine reasonable costs of transportation;
for participants; except that if an whether they are still employed (OAA
assessment has already been performed health care and medical services;
sec. 513(c)(2)(B)); special job-related or personal
and an IEP developed under title I of
WIA, the WIA IEP will satisfy the (b) In addition to the services listed in counseling; incidentals such as work
requirement for an SCSEP assessment paragraph (a) of this section, grantees shoes, badges, uniforms, eyeglasses, and
and IEP (see § 641.260) and updating the and subgrantees must provide service to tools; child and adult care; temporary
IEPs as necessary to reflect information participants according to administrative shelter; and follow-up services. (OAA
gathered during the quarterly guidelines that may be issued by the sec. 502(c)(6)(A)(iv)).
participant assessments (OAA sec. Department. (b) To the extent practicable, the
502(b)(1)(N)); (c) Grantees may not use SCSEP funds grantee/subgrantee should provide for
(4) Placing participants in appropriate for individuals who only need job the payment of these expenses from
community service activities in the search assistance or job referral services. other resources.
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22551
§ 641.550 What responsibility do grantees/ highest applicable minimum wage is (i) The costs are allowable under the
subgrantees have to place participants in either the minimum wage applicable appropriate cost principles indicated at
unsubsidized employment? under the Fair Labor Standards Act of § 641.847; and
Because one goal of the program is to 1938; the State or local minimum wage (ii) Such contributions bear a
foster economic self-sufficiency, for the most nearly comparable covered reasonable relationship to the cost of
grantees and subgrantees should make employment; or the prevailing rate of providing benefits to participants. A
reasonable efforts to place as many pay for persons employed in similar ‘‘reasonable relationship’’ exists when
participants as possible into public occupations by the same the benefits vest at the time
unsubsidized employment, in employer. contributions are made on behalf of the
accordance with each participant’s IEP. (b) Fringe benefits. participants, or the charges to SCSEP
Grantees are responsible for working funds are for contributions on behalf of
with participants to ensure that, for (1) Required fringe benefits. Except as
participants to a ‘‘defined benefit’’ type
those participants whose IEPs include provided in paragraphs (b)(3) and (b)(4)
of plan that do not exceed the amounts
an unsubsidized employment goal, the of this section, grantees must ensure
reasonably necessary to provide the
participants are receiving services and that enrollees receive all fringe benefits
specified benefit to participants, as
taking actions designed to help them required by law.
determined under a separate actuarial
achieve this goal. Grantees and (i) Grantees must provide fringe determination.
subgrantees must contact private and benefits uniformly to all participants (4) Unemployment compensation.
public employers directly or through the within a project or subproject, unless Unless required by law, grantees may
One-Stop Delivery System to develop or the Department agrees to waive this not pay the cost of unemployment
identify suitable unsubsidized provision due to a determination that insurance for participants.
employment opportunities. They must such a waiver is in the best interests of
applicants, participants, and project § 641.570 Is there a time limit for
also encourage host agencies to assist
administration. participation in the program?
participants in their transition to
unsubsidized employment, including (ii) Grantees must offer participants No, there is no time limit for
unsubsidized employment with the host the opportunity to receive physical participation in the SCSEP; however, a
agency. examinations annually. maximum duration of enrollment may
be established by the grantee in the
(A) Physical examinations are a fringe
§ 641.555 What responsibility do grantees grant agreement, when authorized by
benefit, and not an eligibility criterion.
have to participants who have been placed the Department. If there is such a time
in unsubsidized employment? The examining physician must provide,
limit on enrollment established in the
to participants only, a written report of
(a) Grantees must contact placed grant agreement, the grantee must
the results of the examination.
participants during the first 6 months to provide for a system to transition
Participants may, at their option,
determine if participants have the participants to unsubsidized
provide the grantee or subgrantee with
necessary supportive services to remain employment or other assistance before
a copy of the report.
in the job. the maximum enrollment duration has
(b) Grantees must contact participants (B) Participants may choose not to expired. Provisions for transition must
6 months after placement to determine accept the physical examination. In that be reflected in the participant’s IEP.
if they have been retained by the case, the grantee or subgrantee must
employer or use wage records to verify document this refusal, through a signed § 641.575 May a grantee establish a limit
statement or other means, within 60 on the amount of time its participants may
continued employment. (OAA sec.
workdays after commencement of the spend at each host agency?
513(c)(2)(B)).
community service assignment. Each Yes, grantees may establish limits on
§ 641.560 May grantees place participants year thereafter, grantees and subgrantees the amount of time that its participants
directly into unsubsidized employment? must offer the physical examination and may spend at a host agency. Such limits
Grantees are encouraged to refer document the offer and any should be established in the grant
individuals who may be placed directly participant’s refusal. agreement, as approved by the
in an unsubsidized employment (iii) When participants are not Department, and reflected in the
position to an employment provider, covered by the State participants’ IEPs.
including the One-Stop for job workers’compensation law, the grantee § 641.580 Under what circumstances may
placement assistance under WIA. The or subgrantee must provide participants a grantee terminate a participant?
SCSEP encourages grantees to work with workers’ compensation benefits
closely with participants to develop an (a) If, at any time, a grantee or
equal to those provided by law for subgrantee determines that a participant
IEP and assessment to determine what covered employment.
training the individual may need. The was incorrectly declared eligible as a
(2) Allowable fringe benefit costs. result of false information given by that
Department encourages grantees to work Grantees may provide the following
with those participants who are the individual, the grantee or subgrantee
fringe benefits: annual leave; sick leave; must terminate the participant and
most difficult to place to provide them holidays; health insurance; social
with the services necessary to develop provide the participant with a written
security; and any other fringe benefits notice that explains the reason for
the skills needed for job placement. approved in the grant agreement and termination.
§ 641.565 What policies govern the permitted by the appropriate Federal (b) If, during annual income
provision of wages and fringe benefits to cost principles found in OMB Circulars verification, a grantee finds a participant
participants? A–87 and A–122, except for retirement to be no longer eligible for enrollment
(a) Wages. Grantees must pay costs. (See subpart H, §§ 641.847 and because of changes in family income,
participants the highest applicable 641.850). the grantee may terminate the
minimum wage for time spent in (3) Retirement. Grantees may not use participant. In order to terminate the
orientation, training required by the grant funds to provide contributions participant in such a case, the grantee
grantee/subgrantee, and work in into a retirement system or plan unless must provide the participant with a
community service assignments. The the grantee documents the following: written notice and terminate the
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22552 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
participant 30 days after the participant of an ‘‘employee’’ varies depending on (a) Providing participants with
receives the notice. (See § 641.505). the laws defining an employer/ services leading to transition to private
(c) If, at any time, the grantee or employee relationship. sector employment, including:
subgrantee determines that it incorrectly (1) Training in new technological
determined a participant to be eligible Subpart F—Private Sector Training skills;
for the program through no fault of the Projects Under Section 502(e) of the (2) On-the-job training with private-
participant, the grantee or subgrantee OAA for-profit employers;
must give the participant immediate (3) Work experience with private-for-
§ 641.600 What is the purpose of the
written notice explaining the reason(s) profit employers;
private sector training projects authorized
and must terminate the participant 30 under section 502(e) of the OAA?
(4) Adult basic education;
days after the participant receives the (5) Classroom training;
notice. The purpose of the private sector (6) Occupational skills training;
(d) A grantee and subgrantee may training projects authorized under (7) In combination with other services
terminate a participant for cause. In section 502(e) of the OAA is to allow listed in paragraphs (a)(1) through (6) of
doing so, the grantee or subgrantee must States, public agencies, nonprofit this section or in conjunction with the
inform the participant, in writing, of the organizations, and private businesses local One-Stop Delivery System, job
reason(s) for termination. Grantees must through an open competition, to clubs or job search assistance;
develop and operate projects designed (8) In combination with other services
discuss the proposed reasons for such
to provide SCSEP participants with listed in paragraphs (a)(1) through (7) of
terminations in the grant application,
second career training and placement this section, supportive services, which
and must discuss such reasons with
opportunities in the private business may include counseling, motivational
participants and provide each
industry. In addition, the OAA provides training, and job development; or
participant a written copy of its policies
section 502(e) grantees or contractors (9) Combinations of the above-listed
for terminating a participant for cause or
with opportunities to initiate or enhance activities.
otherwise at the time of enrollment. (b) Working with employers to
(e) A grantee or subgrantee may their relationships with the private
sector, fostering collaboration with the develop jobs and innovative work
terminate a participant if the participant modes including job sharing, flex-time,
refuses to accept a reasonable number of One-Stop Delivery System, improving
their ability to meet and exceed flex-place and other arrangements,
job offers or referrals to unsubsidized including those relating to reduced
employment consistent with the SCSEP performance standards, and broadening
the range of options available to SCSEP physical exertion.
IEP and there are no extenuating
circumstances that would hinder the participants.
§ 641.640 How do the private sector
participant from moving to § 641.610 How are section 502(e) activities training activities authorized under section
unsubsidized employment. administered? 502(e) differ from other SCSEP activities?
(f) When a grantee or subgrantee (a) The Department may enter into (a) The private sector training
makes an unfavorable determination of agreements with States, public agencies, activities authorized under section
enrollment eligibility under paragraphs private nonprofit organizations, and 502(e) are not required to have a
(a), (b), and (c) of this section, it must private businesses to carry out section community service project component.
give the individual a reason for (b) The private sector training
502(e) projects.
termination and, when feasible, should activities authorized under section
refer the individual to other potential (b) To the extent possible, private 502(e) focus solely on providing SCSEP-
sources of assistance, such as the One- sector training activities should eligible individuals with second career
Stop Delivery System. emphasize different work modes, such training, placement opportunities, and
(g) Any termination, as described in as job sharing, flex-time, flex-place, other assistance necessary to obtain
paragraphs (a) through (f) of this section, arrangements relating to reduced unsubsidized employment in the private
must be consistent with administrative physical exertion, and innovative work sector.
guidelines issued by the Department, modes with a focus on second career (c) The Department is authorized to
and the termination must be subject to training and placement in growth pay all of the costs of section 502(e)
the applicable appeal rights and industries in jobs requiring new activities (i.e., there is no ‘‘matching
procedures described in § 641.910. technological skills. funds’’ requirement).
(h) Participants may not be terminated (c) Grantees must coordinate section (d) The Department may enter directly
from the program solely on the basis of 502(e) private sector training activities into agreements with private businesses
their age. Grantees/subgrantees may not with programs carried out under title I for section 502(e) activities.
impose an upper age limit for of WIA and with SCSEP projects (e) Grantees may fund private-for-
participation in the SCSEP. operating in the area whenever possible. profit and other organizations that do
not have the IRS 501(c)(3) designation
§ 641.585 Are participants employees of § 641.620 How may an organization apply
for section 502(e) funding? or are not public agencies to conduct
the Federal Government? section 502(e) activities if provided for
(a) No, participants are not Federal Organizations applying for section in their grant or contract agreement with
employees. (OAA sec. 504(a)). 502(e) funding must follow the the Department.
(b) If a Federal agency is a grantee or instructions issued by the Department
host agency, § 641.590 applies. in a Solicitation for Grant Applications, § 641.650 Does the requirement that not
which will be published in the Federal less than 75 percent of the funds be used
§ 641.590 Are participants employees of Register, or other similar instrument. to pay participant wages and fringe benefits
the grantee, the local project and/or the apply to section 502(e) activities?
host agency? § 641.630 What private sector training Yes, under section 502(c)(6)(B) of the
Grantees must consult with an activities are allowable under section OAA, 75 percent of SCSEP funds made
attorney to determine if a participant is 502(e)? available through a grant must be used
an employee of the grantee, local Allowable activities authorized under to pay for the wages and fringe benefits
project, or host agency as the definition section 502(e) include: of participants employed under SCSEP
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22553
projects. This requirement applies to the administrative issuances implementing normal daily tasks, or threatens the
total grant, and not necessarily to the SCSEP performance standards. capacity of the individual to live
individual components of the grant. For (c) If a section 502(e) grantee fails to independently; or (OAA sec. 101(28))
entities that receive an SCSEP grant for meet its performance standards, the (iii) Have poor employment history or
both community service projects and Department may require corrective prospects; and
section 502(e) projects, the requirement action, may provide technical (iv) Are over the age of 60.
applies to the total grant. For entities assistance, or may decline to fund the (3) ‘‘Community services provided’’ is
that receive only a section 502(e) grant, grantee in the next Program Year. defined as the number of hours of
the requirement applies to that grant. community service provided by SCSEP
Subpart G—Performance participants. ‘‘Community service’’ is
§ 641.660 Who is eligible to participate in Accountability defined in the OAA at section 516(1)
section 502(e) private sector training
and in § 641.140.
activities? § 641.700 What performance measures (4) ‘‘Placement into unsubsidized
The same eligibility criteria used in apply to SCSEP grantees?
public or private employment’’ is
the community service portion of the (a) The OAA, at section 513(b), defined by comparing the number of
program apply for participation in the enumerate the indicators of performance participants placed into unsubsidized
private sector training activities. (See as follows: employment, as defined in § 641.140 to
subpart E, §§ 641.500, 641.510, 641.520, (1) The number of persons served, the total number of participants. (OAA
641.525, 641.530). with particular consideration given to sec. 513(c)(2)(A)).
individuals with greatest economic (5) ‘‘Retention in public or private
§ 641.665 When is eligibility determined?
need, greatest social need, or poor unsubsidized employment’’ means the
Eligibility is determined at the time employment history or prospects, and
individuals apply to participate in the number of participants retained in
individuals who are over the age of 60; unsubsidized employment, as defined
SCSEP. Grantees may also verify an (2) Community services provided;
individual’s eligibility as circumstances in § 641.140, compared to the total
(3) Placement into and retention in number of participants. (OAA sec.
require. unsubsidized public or private 513(c)(2)(B)).
§ 641.670 May an eligible individual be employment; (6) ‘‘Satisfaction of participants’’
enrolled simultaneously in section 502(e) (4) Satisfaction of the participants, means the results accumulated as the
private sector training activities operated by employers, and their host agencies with results of surveys of the participant
one grantee and a community service their experiences and the services customer group of their satisfaction with
SCSEP project operated by a different provided; and their experiences and the services
SCSEP grantee? (5) Additional indicators of provided.
Yes, an eligible individual may be performance that the Department (7) ‘‘Satisfaction of employers’’ means
enrolled simultaneously in section determines to be appropriate to evaluate the results accumulated as the results of
502(e) private sector training activities services and performance. surveys of the employer customer group
and a community service SCSEP project, (b) The additional indicator of of their satisfaction with their
operated by two different SCSEP performance is earnings increase. experiences and the services provided.
grantees. This is known as co- (8) ‘‘Satisfaction of host agencies’’
enrollment. When a participant is co- § 641.710 How are these performance
indicators defined? means the results accumulated as the
enrolled, the projects that are providing results of surveys of the host agency
services to the participant must jointly (a) For ease of calculation and to make customer group of their satisfaction with
work to ensure that they are providing the indicators better measures of their experiences and the services
complementary rather than duplicative performance, the Department has provided.
services and that they are providing the divided some of the indicators into (9) ‘‘Earnings increase’’ means the
participant with the services required multiple parts. percentage change in earnings pre-
under § 641.535. Co-enrollment may (b) The individual indicators are registration to post-program, and
also describe arrangements such as defined as follows: between the first quarter after exit and
participants receiving services from (1) ‘‘The number of persons served’’ is the third quarter after exit.
both SCSEP and another One-Stop defined by comparing the total number (c) The Department will publish
partner program, such as the WIA title of participants served to a grantee’s administrative issuances that elaborate
I adult program. authorized number of positions adjusted on these definitions and their
for the differences in wages required to application.
§ 641.680 How should grantees report on be paid in a State or area.
participants who are co-enrolled? (2) ‘‘The number of persons served § 641.715 What are the common
The Department’s reporting with the greatest economic need, performance measures?
instructions provide information on greatest social need or with poor The common performance measures
how grantees should report on employment history or prospects and are a Government-wide initiative
participants who are co-enrolled. individuals who are over age 60’’ is adopted by the Department that apply to
§ 641.690 How is the performance of defined by comparing the total number employment and job training programs.
section 502(e) grantees measured? of participants to the number of Adoption of these common measures
(a) The following performance participants who: across government will help implement
measures apply to section 502(e) (i) Have an income level at or below the President’s Management Agenda for
grantees: the poverty line; (OAA sec. 101(27)) budget and performance integration as
(1) Entered employment; (ii) Have physical and mental well as reduce barriers to integrated
(2) Retention in employment; and disabilities; language barriers; and service delivery through the local One-
(3) Earnings increase. cultural, social, or geographical Stop Career Centers. Grantees will be
(b) These measures are defined and isolation, including isolation caused by required to report on these measures as
governed by Subpart G of this Part and racial or ethnic status, that restricts the required under § 641.879. The common
the applicable provisions of ability of the individual to perform performance measure indicators are:
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22554 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
(a) Entered employment, defined as more barriers to employment served by (b) Grantees that only fail the
the percentage employed in the first a grantee relative to grantees serving customer satisfaction performance
quarter after program exit; other areas of the State or Nation. (OAA measure, but meet or exceed all other
(b) Retention in employment, defined sec. 513(a)(2)(B)). performance measures, will not be
as the percentage of those employed in (e) Grantees may seek an adjustment subject to sanctions. The Department
the first quarter after exit who were still to their performance levels, based on the will provide additional instructions for
employed in the second and third factors listed in paragraph (d) of this how it will measure customer
quarter after program exit; and section, during the negotiation process satisfaction.
(c) Earnings increase defined as the or during the grant period.
percentage change in earnings pre- § 641.760 What sanctions will the
§ 641.740 How will the Department
registration to post program; and Department impose if a national grantee
determine whether a grantee fails, meets, or
between the first quarter after exit and fails to meet negotiated levels of
exceeds negotiated levels of performance?
the third quarter after exit. performance under the total SCSEP grant?
(a) The Department will evaluate each
§ 641.720 How do the common performance indicator to determine the (a) The Department will annually
performance measures affect grantees and level of success that a grantee has assess the performance of each national
the OAA performance measures? achieved and take the aggregate to grantee no later than 120 days after the
One of the common performance determine if, on the whole, the grantee end of a Program Year to determine if
measures, earnings increase, has been met its performance objectives. The a national grantee has failed to meet its
included as a performance measures aggregate is calculated by combining the negotiated levels of performance. (OAA
under § 641.700 and § 641.710 under the percentage results achieved on each of sec. 514(e)(1)).
Secretary’s discretionary authority. The the individual measures to obtain an
(b) If the Department determines that
two additional common performance average score.
(b) Once the aggregate is determined, a national grantee has failed to meet its
measures will be used to determine the negotiated levels of performance for a
overall success of the program as if a grantee is unable to meet 80 percent
of the negotiated level of performance Program Year, the national grantee must
compared to other programs submit a corrective action plan not later
Government-wide. The results will be for the aggregate of all of the
performance measures, that grantee has than 160 days after the end of that
the basis for making funding Program Year. The plan must detail the
failed to meet its performance measures.
determinations. The Department will steps the national grantee will take to
Performance in the range of 80 to 100
require grantees to collect data for the improve performance. The Department
percent constitutes meeting the level for
common performance measures as a will provide technical assistance related
the performance measures. Performance
reporting requirement under § 641.879. to performance issue(s). (OAA sec. 514
in excess of 100 percent constitutes
§ 641.730 How will the Department set and exceeding the level for the performance (e)(2)(A)–(e)(2)(B)).
adjust performance levels? measures. (c) If a national grantee fails to meet
(a) Before the beginning of each (c) A national grantee in a State must its negotiated levels of performance for
Program Year, the Department will meet 80 percent of the negotiated level
a second consecutive Program Year, the
negotiate and set baseline levels of of performance for its national
Department will conduct a national
negotiated performance for each measures, and it must meet the
competition to award an amount equal
measure with each grantee, taking into measures negotiated for the State in
which the national grantee serves. to 25 percent of that organization’s
consideration the need to promote funds in the following full Program
continuous improvement in the program (c) The Department will impose the
sanctions outlined in section 514 of the Year. (OAA sec. 514(e)(2)(C)). The
overall, past performance, and, when Department reserves the right to specify
applicable, the performance of similar OAA when a grantee fails to meet
overall negotiated levels of performance. the locations of the positions that will
programs. be subject to competition.
(d) When a grantee fails one or more
(b) The baseline level of negotiated
measures, but does not fail to meet its (d) If a national grantee fails to meet
performance for ‘‘placement into public
performance measures in the aggregate, its negotiated levels of performance for
or private unsubsidized employment’’ is
the Department will provide technical a third consecutive Program Year, the
set at 20 percent. (OAA sec.
assistance on the particular measures Department will conduct a national
513(a)(2)(C)).
that a grantee failed. competition to award an amount equal
(c) Grantees may request adjustments
(e) The Department will provide to the full amount of that organization’s
from these baseline levels before or
further guidance through administrative
during the Program Year. Grantees may remaining grant after deducting the
issuances.
base such requests only on the factors in amount awarded in paragraph (c) of this
paragraph (d) of this section. The § 641.750 What sanctions will the section. (OAA sec. 514(e)(2)(D)).
Department will issue guidance for Department impose if a grantee fails to (e) To the extent possible, the
negotiating adjustment requests. meet negotiated levels of performance?
competitions outlined in paragraphs (c)
(d) Adjustments to performance levels (a) Grantees that fail to meet and (d) of this section will be conducted
may be made based on the following negotiated levels of performance will be in such a way as to minimize the
conditions only: subject to the sanctions established in
disruption of services to participants.
(1) High rates of unemployment, section 514 of the OAA. The sanctions
(OAA sec. 514(e)(2)(C)).
poverty, or welfare recipiency in the that apply are grantee specific (i.e.,
areas served by a grantee relative to national grantee, national grantee in a (f) The organizations selected to
other areas of the State or Nation; State, or State grantee). These sanctions receive a grant through the national
(2) Significant economic downturns range from requiring grantees to submit competitions discussed in paragraphs
in the areas served by the grantee or in a corrective action plan and receive (c) and (d) of this section must continue
the national economy; or technical assistance, to competition of to provide service to the geographic
(3) Significantly higher numbers or part of the funds, to a competition of all areas formerly served by the national
proportions of participants with one or of the funds. grantee(s). (OAA sec. 514(e)(2)(D)).
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22555
§ 641.770 What sanctions will the § 641.790 What sanctions will the and Local Governments,’’ codified at 29
Department impose if a national grantee Department impose if a State grantee fails CFR part 97. The allowable cost
fails to meet negotiated levels of to meet negotiated levels of performance? requirements for governmental
performance in any State it serves? (a) The Department will annually recipients and subrecipients are in OMB
(a) Each national grantee must be assess the performance of State grantees Circular A–87.
assessed on the performance of the no later than 120 days after the end of
(c) Nonprofit and commercial
projects it operates within any State. a Program Year to determine if the State
has failed to meet its negotiated levels organizations. Institutions of higher
Such an assessment may lead to a
of performance. (OAA sec. 514(f)(1)). education, hospitals, other nonprofit
finding that the national grantee has
(b) A State failing to meet its organizations, and commercial
failed to meet negotiated levels of
negotiated levels of performance must organizations that receive SCSEP funds
performance for its projects in a
submit a corrective action plan not later under grants or cooperative agreements
particular State. A national grantee’s
than 160 days after the end of the must follow the common rule
failure to meet performance measures in
Program Year in which the failure implementing OMB Circular A–110,
a State may be mitigated by justifying
occurred. The plan must detail the steps codified at 29 CFR part 95. The
the failure, such as the size of the
the State will take to improve allowable cost requirements for
project or taking into consideration the
performance. The Department will also recipients and subrecipients subject to
adjustments permitted under section
provide technical assistance. (OAA sec. 29 CFR part 95 are cited in 29 CFR 95.27
513(a)(2)(B) of the OAA. (OAA sec.
514(f)(2) and (f)(3)). (Allowable costs).
514(e)(3)(A)).
(b) If the Department determines that (c) If a State fails to meet its § 641.803 What is program income?
there has been a failure to meet negotiated levels of performance after
negotiated levels of performance, the two consecutive years, then the State Program income, as described in 29
Department will require a corrective must conduct a competition to award an CFR 97.25 (governments) and 29 CFR
action plan and may take other amount equal to 25 percent of its 95.2(bb) (nonprofit and commercial
appropriate actions, including transfer allotted funds for the following year. organizations), is income earned by the
of the responsibility for the project to The Department reserves the right to recipient or subrecipient during the
other grantees or providing technical specify the locations of the positions grant period that is directly generated by
assistance. (OAA sec. 514(e)(3)(B)). that will be subject to competition. an allowable activity supported by grant
(c) The Department will take (d) In the event that a State fails to funds or earned as a result of the award
corrective action if there is a second meet its negotiated levels of of grant funds. Program income includes
consecutive Program Year of failure by performance after three consecutive income earned from license fees and
a national grantee operating within a years, then the State must conduct a royalties for copyrighted material,
particular State. Such corrective action competition to award an amount equal patents, patent applications, trademarks,
may include transfer of, or a to 100 percent of its allotted funds for and inventions produced under an
competition for, all or a portion of the the following year. award. (See 29 CFR 95.24(e) and 29 CFR
operation of the national grantee in the (e) Entities that operated any portion 97.25(e)). Costs of generating SCSEP
State to another entity. Entities that of the State’s program that contributed program income may be deducted from
were the subject of this corrective action to the failure will not be eligible to gross income received by SCSEP
will not be eligible to receive the funds participate in the competitions. recipients and subrecipients to
of the transfer or to compete. (OAA sec. determine SCSEP program income
§ 641.795 Will there be incentives for
514(e)(3)(C)). exceeding performance measures? earned or generated provided these
(d) If there is a third consecutive costs have not been charged to the
Yes, the Department will address non-
Program Year of failure, the Department SCSEP program.
financial incentives in its administrative
will conduct a competition for all of the issuances. The Department is authorized § 641.806 How must SCSEP program
funds available to a national grantee for by section 515(c)(1) of the OAA to use income be used?
operations within a particular State. recaptured funds to provide incentive
Entities that are the subject of this grants. The Department will issue (a) SCSEP recipients that earn or
corrective action will not be eligible to administrative guidance detailing how generate program income during the
participate in the competition. (OAA incentive grants will be awarded. grant period must add the program
sec. 514(e)(3)(D)). income to the Federal and non-Federal
Subpart H—Administrative funds committed to the SCSEP program
§ 641.780 When will the Department and use it for the program, as provided
assess the performance of a national
Requirements
in 29 CFR 95.24(a) or 29 CFR
grantee in a State? § 641.800 What uniform administrative 97.25(g)(2), as applicable.
(a) The Department will assess the requirements apply to the use of SCSEP
performance of a national grantee in a funds? (b) Recipients that continue to receive
State annually. (a) SCSEP recipients and a SCSEP grant from the Department
(b) The Department may also initiate subrecipients must follow the uniform must spend program income earned or
the assessment of a national grantee’s administrative requirements and generated from SCSEP funded activities
performance in a State if: allowable cost requirements that apply after the end of the grant period for
(1) The Department receives to their type of organization. (OAA sec. SCSEP purposes in the Program Year it
information indicating that a grantee is 503(f)(2)). was received.
having difficulty implementing a (b) Governments. State, local, and (c) Recipients that do not continue to
particular performance indicator; or Indian tribal government organizations receive a SCSEP grant from the
(2) The Governor of a State requests that receive SCSEP funds under grants Department must remit program income
the Department to review the or cooperative agreements must follow earned or generated during the grant
performance of a particular national the common rule ‘‘Uniform period from SCSEP funded activities to
grantee serving in the State. (OAA sec. Administrative Requirements for Grants the Department after the end of the grant
514(e)(4)). and Cooperative Agreements to State period.
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22556 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
§ 641.809 What non-Federal share § 641.818 What happens to funds that are provisions codified in the Department’s
(matching) requirements apply to the use of unexpended at the end of the Program regulations at 29 CFR parts 31 and 32.
SCSEP funds? Year? (b) Recipients of SCSEP funds are
(a) The Department will pay no more (a) The Department may recapture any required to comply with the
than 90 percent of the total cost of unexpended funds at the end of any nondiscrimination provisions codified
Program Year and use the recaptured in the Department’s regulations at 29
activities carried out under an SCSEP
funds during the two succeeding CFR part 37 if:
grant. (OAA sec. 502(c)(1)).
Program Years for: (1) The recipient operates programs
(b) All SCSEP recipients, including (1) Incentive grants; and activities through the One-Stop
Federal agencies if there is no statutory (2) Technical assistance; or Delivery System established under the
exemption, must provide or ensure that (3) Grant and contract awards for any Workforce Investment Act; or
at least 10 percent of the total cost of other SCSEP programs and activities. (2) The recipient is a State agency that
activities carried out under an SCSEP (OAA sec. 515(c)). is also a recipient of WIA title I financial
grant (non-Federal share of costs) (b) The Department will provide the
assistance.
consists of non-Federal funds, except as necessary information through an
provided in paragraph (e) and (f) of this administrative issuance. § 641.830 What nondiscrimination
section. protections apply specifically to
§ 641.821 What audit requirements apply participants in SCSEP programs?
(c) Recipients must calculate the non- to the use of SCSEP funds?
(a) All participants in SCSEP
Federal share of costs in accordance (a) Recipients and subrecipients
programs under this Part must have
with 29 CFR 97.24 for governmental receiving Federal awards of SCSEP
such rights as are available under all
units, or 29 CFR 95.23 for nonprofit and funds must follow the audit
applicable Federal, State and local laws
commercial organizations. requirements in paragraphs (b) and (c)
prohibiting discrimination, and their
(d) The non-Federal share of costs of this section that apply to their type
implementing regulations, including:
may be provided in cash, or in-kind, or of organization. As used here, Federal
(1) The Age Discrimination Act of
a combination of the two. (OAA sec. awards of SCSEP funds include Federal
1975 (42 U.S.C. 6101 et seq.);
502(c)(2)). If, however, recipients plan financial assistance and Federal cost-
(2) Section 504 of the Rehabilitation
to obtain the non-Federal share from a reimbursement contracts received
Act of 1973 (29 U.S.C. 794);
subgrantee or host agency, they may not directly from the Department or
(3) The Americans with Disabilities
require provision of non-Federal indirectly under awards by SCSEP
Act of 1990 (42 U.S.C. 12101 et seq.);
recipients or higher-tier subrecipients.
resources as a condition of such and
(OAA sec. 503(f)(2)).
relationship. (4) Title VI of the Civil Rights Act of
(b) All governmental and nonprofit
(e) The Department may pay all of the organizations that are recipients or 1964 (42 U.S.C. 2000d et seq.). (OAA
costs of activities carried out under subrecipients must follow the audit sec. 503(b)(3)).
section 502(e) of the OAA. (OAA sec. requirements of OMB Circular A–133. (b) Questions about or complaints
502(e)). These requirements are codified at 29 alleging a violation of the
CFR, parts 96 and 99 and referenced in nondiscrimination laws in paragraph (a)
(f) The Department may pay all of the of this section may be directed or
costs of activities in an emergency or 29 CFR 97.26 for governmental
organizations; and in 29 CFR 95.26 for mailed to the Director, Civil Rights
disaster project or a project in an Center, U.S. Department of Labor, Room
economically distressed area. (OAA sec. institutions of higher education,
hospitals, and other nonprofit N–4123, 200 Constitution Avenue, NW.,
502(c)(1)(A) and 502(c)(1)(B)). Washington, DC 20210 for processing.
organizations.
§ 641.812 What is the period of availability (c)(1) The Department is responsible (See § 641.910(d)).
of SCSEP funds? for audits of SCSEP recipients that are § 641.833 What policies govern political
commercial organizations. patronage?
(a) Except as provided in proposed (2) Commercial organizations that are
§ 641.815, recipients must expend (a) A recipient or subrecipient must
subrecipients under the SCSEP program
SCSEP funds during the Program Year not select, reject, promote, or terminate
and that expend more than the
for which they are awarded (July 1–June an individual based on political services
minimum level specified in OMB
30). (OAA sec. 515(b)). provided by the individual or on the
Circular A–133 ($300,000 as of July 1,
individual’s political affiliations or
(b) SCSEP recipients must ensure that 2001) must have either an organization-
beliefs.
no subagreement provides for the wide audit conducted in accordance
(b) A recipient or subrecipient must
expenditure of any SCSEP funds before with OMB Circular A–133 or a program-
not provide funds to any subrecipient,
July 1, or after the end of the grant specific financial and compliance audit.
host agency or other entity based on
period, except as provided in § 641.815.
§ 641.824 What lobbying requirements political affiliation.
§ 641.815 May the period of availability be apply to the use of SCSEP funds? (c) SCSEP recipients must ensure that
extended? SCSEP recipients and subrecipients every entity that receives SCSEP funds
must comply with the restrictions on through the recipient is applying the
SCSEP recipients may request in policies stated in paragraphs (a) and (b)
lobbying codified in the Department’s
writing, and the Department may grant, of this section.
regulations at 29 CFR part 93. (Also
an extension of the period during which
refer to § 641.850(c), ‘‘Lobbying costs.’’)
SCSEP funds may be obligated or § 641.836 What policies govern political
expended. SCSEP recipients requesting § 641.827 What general nondiscrimination activities?
an extension must justify that an requirements apply to the use of SCSEP (a) No project under title V of the
extension is necessary. (OAA sec. funds? OAA may involve political activities.
515(b)). The Department will notify (a) SCSEP recipients, subrecipients, SCSEP recipients must ensure
recipients in writing of the approval or and host agencies are required to compliance with the requirements and
disapproval of any such requests. comply with the nondiscrimination prohibitions involving political
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22557
activities described in paragraphs (b) (ii) These safeguards are described in (4) Must not substitute SCSEP-funded
and (c) of this section. the grant agreement and are subject to positions for existing federally assisted
(b) State and local employees review and monitoring by the SCSEP jobs; and
involved in the administration of SCSEP recipient and by the Department. (5) Must not employ or continue to
activities may not engage in political employ any participant to perform work
activities prohibited under the Hatch § 641.839 What policies govern union
organizing activities?
that is the same or substantially the
Act (5 U.S.C. Chapter 15), including: same as that performed by any other
(1) Seeking partisan elective office; Recipients must ensure that SCSEP person who is on layoff. (OAA sec.
(2) Using official authority or funds are not used in any way to assist, 502(b)(1)(G)).
influence for the purpose of affecting promote, or deter union organizing.
elections, nominations for office, or § 641.847 What uniform allowable cost
§ 641.841 What policies govern nepotism? requirements apply to the use of SCSEP
fund-raising for political purposes. (5 (a) SCSEP recipients must ensure that
U.S.C. 1502). funds?
no recipient or subrecipient hires, and (a) General. Unless specified
(c) SCSEP recipients must provide all
no host agency serves as a worksite for, otherwise in this part or the grant
persons associated with SCSEP
a person who works in a SCSEP agreement, recipients and subrecipients
activities with a written explanation of
community service position if a member must follow the uniform allowable cost
allowable and unallowable political
of that person’s immediate family is requirements that apply to their type of
activities under the Hatch Act. A notice engaged in a decision-making capacity
explaining these allowable and organization. For example, a local
(whether compensated or not) for that government subrecipient receiving
unallowable political activities must be project, subproject, recipient,
posted in every workplace in which SCSEP funds from a nonprofit
subrecipient or host agency. The organization must use the allowable cost
SCSEP activities are conducted. This Department may exempt this
notice must be approved by the requirements for governmental
requirement from worksites on Native organizations in OMB Circular A–87.
Department of Labor and must contain American reservations and in rural areas
the address and telephone number of The Department regulations at 29 CFR
provided that adequate justification can 95.27 and 29 CFR 97.22 identify the
the Department of Labor Inspector be documented, such as that no other
General. (OAA sec. 502(b)(l)(P)). Federal principles for determining
persons are eligible and available for allowable costs that each kind of
(d) SCSEP recipients must ensure
participation in the program. organization must follow. The
that: (b) To the extent that an applicable
(1) No SCSEP participants or staff applicable Federal principles for each
State or local legal requirement
persons engage in partisan or kind of organization are described in
regarding nepotism is more restrictive
nonpartisan political activities during paragraphs (b)(1) through (b)(5) of this
than this provision, SCSEP recipients
hours for which they are being paid section. (OAA sec. 503(f)(2)).
must ensure that the more restrictive
with SCSEP funds. (b) Allowable costs/cost principles.
requirement is followed.
(2) No participants or staff persons (1) Allowable costs for State, local,
(c) For purposes of this section,
engage in partisan political activities in and Indian tribal government
‘‘Immediate family’’ means wife,
which such participants or staff persons organizations must be determined under
husband, son, daughter, mother, father,
represent themselves as spokespersons OMB Circular A–87, ‘‘Cost Principles
brother, sister, son-in-law, daughter-in-
for the SCSEP program. for State, Local and Indian Tribal
law, mother-in-law, father-in-law,
(3) No participants are employed or Governments.’’
brother-in-law, sister-in-law, aunt,
out-stationed in the offices of a Member (2) Allowable costs for nonprofit
uncle, niece, nephew, stepparent,
of Congress, a State or local legislator, organizations must be determined under
stepchild, grandparent, or grandchild.
or on the staff of any legislative OMB Circular A–122, ‘‘Cost Principles
committee. § 641.844 What maintenance of effort for Non-Profit Organizations.’’
(4) No participants are employed or requirements apply to the use of SCSEP (3) Allowable costs for institutions of
out-stationed in the immediate offices of funds? higher education must be determined
any elected chief executive officer of a (a) Employment of a participant under OMB Circular A–21, ‘‘Cost
State or unit of general government, funded under title V of the OAA is Principles for Educational Institutions.’’
except that: permissible only in addition to (4) Allowable costs for hospitals must
(i) Units of local government may employment that would otherwise be be determined in accordance with
serve as host agencies for participants, funded by the recipient, subrecipient appendix E of 45 CFR part 74,
provided that their assignments are non- and the host agency without assistance ‘‘Principles for Determining Costs
political; and under the OAA. (OAA sec. 502(b)(1)(F)). Applicable to Research and
(ii) While assignments may (b) Each project funded under title V: Development Under Grants and
technically place participants in such (1) Must result in an increase in Contracts with Hospitals.’’
offices, such assignments actually must employment opportunities in addition (5) Allowable costs for commercial
be concerned with program and service to those that would otherwise be organizations and those nonprofit
activities and not in any way involved available; organizations listed in Attachment C to
in political functions. (2) Must not result in the OMB Circular A–122 must be
(5) No participants are assigned to displacement of currently employed determined under the provisions of the
perform political activities in the offices workers, including partial displacement Federal Acquisition Regulation (FAR) at
of other elected officials. Placement of such as a reduction in hours of non- 48 CFR part 31.
participants in such offices in non- overtime work, wages, or employment
political assignments is permissible, benefits; § 641.850 Are there other specific
however, provided that: (3) Must not impair existing contracts allowable and unallowable cost
(i) SCSEP recipients develop for service or result in the substitution requirements for SCSEP?
safeguards to ensure that participants of Federal funds for other funds in (a) Yes, in addition to the generally
placed in these assignments are not connection with work that would applicable cost principles in
involved in political activities; and otherwise be performed; § 641.847(b), the cost principles in
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22558 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
paragraphs (b) through (e) of this section § 641.856 What functions and activities (c) Personnel and related non-
apply to SCSEP grants. constitute costs of administration? personnel costs of staff who perform
(b) Claims against the Government. (a) The costs of administration are both administrative functions specified
For all types of entities, legal expenses that allocable portion of necessary and in § 641.856(b) and programmatic
for the prosecution of claims against the reasonable allowable costs of recipients services or activities must be allocated
Federal Government, including appeals and subrecipients that are associated as administrative or program costs to the
to an Administrative Law Judge, are with those specific functions identified benefiting cost objectives/categories
unallowable. in paragraph (b) of this section and that based on documented distributions of
(c) Lobbying costs. In addition to the are not related to the direct provision of actual time worked or other equitable
prohibition contained in 29 CFR part 93, programmatic services specified in cost allocation methods.
§ 641.864. These costs may be both (d) Specific costs charged to an
SCSEP funds must not be used to pay
personnel and non-personnel and both overhead or indirect cost pool that can
any salaries or expenses related to any
direct and indirect costs. be identified directly as a program cost
activity designed to influence legislation
(b) The costs of administration are the must be charged as a program cost.
or appropriations pending before the
costs associated with: Documentation of such charges must be
Congress of the United States or any
(1) Performing overall general maintained.
State legislature. (See § 641.824). (e) Except as provided in paragraph
administrative and coordination
(d) Building repairs and acquisition functions, including: (b) of this section, all costs incurred by
costs. Except as provided in paragraph (i) Accounting, budgeting, financial vendors are program costs. (See 29 CFR
(e) and as an exception to the allowable and cash management functions; 99.210 for a discussion of factors
cost principles in § 641.847(b), no (ii) Procurement and purchasing differentiating subrecipients from
SCSEP funds may be used for the functions; vendors).
purchase, construction, or renovation of (iii) Property management functions; (f) Costs of the following information
any building except for the labor (iv) Personnel management functions; systems including the purchase, systems
involved in: (v) Payroll functions; development and operating (e.g., data
(1) Minor remodeling of a public (vi) Coordinating the resolution of entry) costs are charged to the ‘‘program
building necessary to make it suitable findings arising from audits, reviews, cost’’ category:
for use for project purposes; investigations and incident reports; (1) Tracking or monitoring of
(vii) Audit functions; participant and performance
(2) Minor repair and rehabilitation of (viii) General legal services functions;
publicly used facilities for the general information;
and (2) Employment statistics information,
benefit of the community; and (ix) Developing systems and
(3) Minor repair and rehabilitation by including job listing information, job
procedures, including information skills information, and demand
participants of housing occupied by systems, required for these
persons with low incomes who are occupation information; and
administrative functions; (3) Local area performance
declared eligible for such services by (2) Oversight and monitoring information.
authorized local agencies. responsibilities related to administrative
(e) Accessibility and reasonable functions; § 641.861 Must SCSEP recipients provide
accommodation. Recipients and (3) Costs of goods and services used funding for the administrative costs of
subrecipients may use SCSEP funds to for administrative functions of the subrecipients?
meet their obligations under section 504 program, including goods and services (a) Recipients and subrecipients must
of the Rehabilitation Act of 1973, as such as rental or purchase of equipment, obtain funding for administrative costs
amended, and the Americans with utilities, office supplies, postage, and to the extent practicable from non-
Disabilities Act of 1990 to provide rental and maintenance of office space; Federal sources. (OAA sec. 502(c)(5)).
physical and programmatic accessibility (4) Travel costs incurred for official (b) SCSEP recipients must ensure that
and reasonable accommodation. (29 business in carrying out administrative sufficient funding is provided for the
U.S.C. 794). activities or the overall management of administrative activities of
(f) Participants’ fringe benefit costs. the program; and subrecipients that receive SCSEP
Recipients and subrecipients may use (5) Costs of information systems funding through the recipient. Each
SCSEP funds for participant fringe related to administrative functions (for SCSEP recipient must describe in its
benefit costs only under the conditions example, personnel, procurement, grant application the methodology used
set forth in § 641.565. purchasing, property management, to ensure that subrecipients receive
accounting and payroll systems) sufficient funding for their
§ 641.853 How are costs classified? including the purchase, systems administrative activities. (OAA sec.
(a) All costs must be classified as development and operating costs of 502(b)(1)(R)).
‘‘administrative costs’’ or ‘‘program such systems. (OAA sec. 502(c)(4)).
§ 641.864 What functions and activities
costs.’’ (OAA sec. 502(c)(6)). § 641.859 What other special rules govern constitute program costs?
(b) Recipients and subrecipients must the classification of costs as administrative Program costs include, but are not
assign participants’ wage and fringe costs or program costs? limited to, the costs of the following
benefit costs and other participant (a) Recipients and subrecipients must functions:
(enrollee) costs, such as supportive comply with the special rules for (a) Participant Wages and Fringe
services, to the ‘‘program cost’’ category. classifying costs as administrative costs Benefits, consisting of wages paid and
(See § 641.864). When participants are or program costs set forth in paragraphs fringe benefits provided to participants
assigned to functions normally (b) through (f) of this section. for hours of community service
classified as administrative costs, (b) Costs under awards to assignments, as described in § 641.565;
recipient must charge the functions, but subrecipients or vendors that are solely (b) Outreach, recruitment and
not the participants’ wages and fringe for the performance of administrative selection, intake, orientation,
benefits, to the ‘‘administrative cost’’ functions are classified as assessment, and preparation and
category. administrative costs. updating of IEPs;
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22559
(c) Participant training provided on § 641.873 What minimum expenditure reporting frequency, for the preparation
the job, in a classroom setting, or levels are required for participant wages of this report. (OAA sec. 503(f)(3)).
utilizing other appropriate and fringe benefits? (b) In accordance with 29 CFR 97.41
arrangements, consisting of reasonable (a) Not less than 75 percent of the or 29 CFR 95.52, each SCSEP recipient
costs of instructors’ salaries, classroom SCSEP funds provided under a grant must submit a SCSEP Financial Status
space, training supplies, materials, from the Department must be used to Report (FSR) in electronic format to the
equipment, and tuition; pay for the wages and fringe benefits of Department via the Internet within 30
participants in such projects, including days after the ending of each quarter of
(d) Job placement assistance,
awards made under section 502(e) of the the Program Year. Each SCSEP recipient
including job development and job
OAA. (OAA sec. 502(c)(6)(B)). must also submit a final FSR to the
search assistance, job fairs, job clubs, (b) An SCSEP recipient is in
and job referrals; and Department via the Internet within 45
compliance with this provision if at days after the end of the grant period.
(e) Participant supportive services, as least 75 percent of the total If the grant period ends on a date other
described in § 641.573. (OAA sec. expenditures of SCSEP funds provided than the last day of a Federal PY
502(c)(6)(A)). to the recipient were for wages and quarter, the SCSEP recipient must
benefits, even if one or more submit the final FSR covering the entire
§ 641.867 What are the limitations on the
amount of SCSEP administrative costs?
subrecipients did not expend at least 75 grant period no later than 45 days after
percent of their SCSEP funds for wages the ending date of the grant. The
(a) Except as provided in paragraph and fringe benefits for community Department will provide instructions for
(b), no more than 13.5 percent of the service projects.
the preparation of this report. (OAA sec.
SCSEP funds received for a Program (c) Recipients receiving general
503(f)(3)).
Year may be used for administrative SCSEP funds and section 502(e) funds
must meet the 75 percent requirement (1) Financial data is required to be
costs.
based on the total of both grants. reported on an accrual basis, and
(b) The Department may increase the cumulatively by funding year of
amount available for administrative § 641.876 When will compliance with cost appropriation. Financial data may also
costs to not more than 15 percent, in limitations and minimum expenditure levels be required on specific program
accordance with § 641.870. (OAA sec. be determined? activities.
502(c)(3)). The Department will determine (2) If the SCSEP recipient’s
§ 641.870 Under what circumstances may
compliance by examining expenditures accounting records are not normally
the administrative cost limitation be of SCSEP funds. The cost limitations kept on the accrual basis of accounting,
increased? and minimum expenditure level the SCSEP recipient must develop
requirements must be met at the time all accrual information through an analysis
(a) SCSEP recipients may request that such funds have been expended or the of the documentation on hand.
the Department increase the amount period of availability of such funds has (c) Each State agency receiving title V
available for administrative costs. The expired, whichever comes first. funds must annually submit an
Department may honor the request if:
§ 641.879 What are the fiscal and equitable distribution report of SCSEP
(1) The Department determines that it performance reporting requirements for positions by all recipients in the State.
is necessary to carry out the project; and recipients? The Department will provide
(2) The recipient demonstrates that: (a) In accordance with 29 CFR 97.40 instructions for the preparation of this
(i) Major administrative cost increases or 29 CFR 95.51, as appropriate, each report. (OAA sec. 508).
are being incurred in necessary program SCSEP recipient must submit an SCSEP (d) Each SCSEP recipient that receives
components, including liability Quarterly Progress Report (QPR) to the section 502(e) funds must submit
insurance, payments for workers’ Department in electronic format via the reports on its section 502(e) activities.
compensation, costs associated with Internet within 30 days after the end of The Department will provide
achieving unsubsidized placement each quarter of the Program Year (PY). instructions for the preparation of these
goals, and other operation requirements The SCSEP recipient must prepare this reports. (OAA sec. 503(f)(3)).
imposed by the Department; report to coincide with the ending dates (e) Each SCSEP recipient must collect
for Federal PY quarters. Each SCSEP data and submit reports regarding the
(ii) The number of employment
recipient must also submit a final QPR program performance measures and the
positions in the project or the number
to the Department within 45 days after common performance measures. See
of minority eligible individuals
the end of the grant period. If the grant §§ 641.700–641.720. The Department
participating in the project will decline
period ends on a date other than the last will provide instructions detailing these
if the amount available for paying the
day of a Federal Program Year quarter, measures and how recipients must
cost of administration is not increased;
the SCSEP recipient must submit the prepare this report.
or
final QPR covering the entire grant (f) Each SCSEP recipient may be
(iii) The size of the project is so small period no later than 45 days after the required to collect data and submit
that the amount of administrative ending date of the grant. Grantees reports regarding the demographics of
expenses incurred to carry out the submitting reports that cannot be program participants. The Department
project necessarily exceeds 13.5 percent validated or verified as accurately will provide instructions detailing these
of the amount for such project. (OAA counting and reporting activities in measures and how recipients must
sec. 502(c)(3)). accordance with the reporting prepare this report.
(b) A request by a recipient or instructions may be treated as failing to (g) Federal agencies that receive and
prospective recipient for an increase in submit reports, which may result in use SCSEP funds under interagency
the amount available for administrative failing one of the responsibility tests agreements must submit project fiscal
costs may be submitted as part of the outlined in proposed § 641.440 and and progress reports in accordance with
grant application or as a separate section 514(d) of the OAA. The this subsection. Federal recipients must
submission at any time after the grant Department will provide instructions, maintain the necessary records that
award. including instructions concerning support required reports according to
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22560 Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules
instructions provided by the determined to be substantial and Subpart B of 29 CFR part 18, will not
Department. (OAA sec. 503(f)(3)). credible will be investigated and apply to any hearing conducted under
(h) Recipients may be required to addressed. this section. However, rules designed to
maintain records that contain any other (d) Allegations of discrimination must assure production of the most credible
information that the Department be resolved according to complaint evidence available and to subject
determines to be appropriate in support processing procedures meeting the testimony to test by cross-examination
of any other reports that the Department requirements of 29 CFR 37.70 through will be applied when they are
may require. (OAA sec. 503(f)(3)). 37.80 or any other applicable regulation. considered reasonably necessary by the
Questions about or complaints alleging Administrative Law Judge conducting
§ 641.881 What are the SCSEP recipient’s discrimination may be directed or the hearing. The certified copy of the
responsibilities relating to awards to
subrecipients?
mailed to the Director, Civil Rights administrative file transmitted to the
Center, U.S. Department of Labor, Room Administrative Law Judge by the official
(a) The SCSEP recipient is responsible N–4123, 200 Constitution Avenue, NW., issuing the final determination must be
for all grant activities, including the Washington, DC 20210. part of the evidentiary record of the case
performance of SCSEP activities by and need not be moved into evidence.
subrecipients, and ensuring that § 641.920 What actions of the Department
subrecipients comply with the OAA and may a grantee appeal and what procedures (4) The Administrative Law Judge
this Part. (See also OAA sec. 514 on apply to those appeals? should render a written decision no
responsibility tests). (a) Appeals from a final disallowance later than 90 days after the closing of the
(b) Recipients must follow their own of costs as a result of an audit must be record.
procedures for allocating funds to other made under 29 CFR 96.63. (d) The decision of the ALJ constitutes
entities. The Department will not grant (b) Appeals of suspensions or final agency action unless, within 20
funds to another entity on the terminations on the grounds of days of the decision, a party dissatisfied
recipient’s behalf. discrimination are processed under 29 with the ALJ’s decision, in whole or in
CFR parts 31 or 37, as appropriate. part, has filed a petition for review with
§ 641.884 What are the grant closeout (c) Upon a grantee’s receipt of the the Administrative Review Board (ARB)
procedures? Department’s final determination (established under Secretary’s Order No.
SCSEP recipients must follow the relating to costs (except final 2–96), specifically identifying the
grant closeout procedures at 29 CFR disallowance of costs as a result of an procedure, fact, law or policy to which
97.50 or 29 CFR 95.71, as appropriate. audit, as described in paragraph (a) of exception is taken. The Department will
The Department will issue this section), payment, suspension or deem any exception not specifically
supplementary closeout instructions to termination, the grantee may appeal the urged to have been waived. A copy of
title V recipients as necessary. final determination to the Department’s the petition for review must be sent to
Office of Administrative Law Judges, as the opposing party at that time.
Subpart I—Grievance Procedures and follows: Thereafter, the decision of the ALJ
Appeals Process (1) Within 21 days of receipt of the constitutes final agency action unless
§ 641.900 What appeal process is available Department’s final determination, the the ARB, within 30 days of the filing of
to an applicant that does not receive a grantee may transmit by certified mail, the petition for review, notifies the
grant? return receipt requested, a request for a parties that the case has been accepted
[Reserved]. hearing to the Chief Administrative Law for review. Any case accepted by the
Judge, United States Department of ARB must be decided within 180 days
§ 641.910 What grievance procedures Labor, 800 K Street, NW., Room 400 N, of acceptance. If not so decided, the
must grantees make available to applicants, Washington, DC 20001 with a copy to decision of the ALJ constitutes final
employees, and participants? the Department official who signed the agency action.
(a) Each grantee must establish, and final determination. The Chief
describe in the grant agreement, § 641.930 Is there an alternative dispute
Administrative Law Judge will resolution process that may be used in
grievance procedures for resolving designate an Administrative Law Judge place of an OALJ hearing?
complaints, other than those described to hear the appeal.
by paragraph (d) of this section, arising (2) The request for hearing must be (a) Parties to a complaint that has
between the grantee, employees of the accompanied by a copy of the final been filed according to the requirements
grantee, subgrantees, and applicants or determination, and must state of § 641.920 may choose to waive their
participants. specifically those issues of the rights to an administrative hearing
(b) The Department will not review determination upon which review is before the OALJ. Instead, they may
final determinations made under requested. Those provisions of the choose to transfer the settlement of their
paragraph (a) of this section, except to determination not specified for review, dispute to an individual acceptable to
determine whether the grantee’s or the entire determination when no all parties who will conduct an informal
grievance procedures were followed, hearing has been requested within the review of the stipulated facts and render
and according to paragraph (c) of this 21 days, are considered resolved and a decision in accordance with
section. not subject to further review. applicable law. A written decision must
(c) Allegations of violations of Federal (3) The Rules of Practice and be issued within 60 days after
law, other than those described in Procedures for Administrative Hearings submission of the matter for informal
paragraph (d) of this section, which are Before the Office of Administrative Law review.
not resolved within 60 days under the Judges, set forth at 29 CFR part 18, (b) The waiver of the right to request
grantee’s procedures, may be filed with govern the conduct of hearings under a hearing before the OALJ will
the Chief, Division of Older Worker this section, except that: automatically be revoked if a settlement
Programs, Employment and Training (i) The appeal is not considered as a has not been reached or a decision has
Administration, U.S. Department of complaint; and not been issued within the 60 days
Labor, 200 Constitution Avenue, NW., (ii) Technical rules of evidence, such provided in paragraph (a) of this
Washington, DC 20210. Allegations as the Federal Rules of Evidence and section.
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Federal Register / Vol. 68, No. 81 / Monday, April 28, 2003 / Proposed Rules 22561
(c) The decision rendered under this as a final decision of an Administrative Signed at Washington, DC this 14th day of
informal review process will be treated Law Judge. April, 2003.
Emily Stover DeRocco,
Assistant Secretary, Employment and
Training Administration.
[FR Doc. 03–9579 Filed 4–25–03; 8:45 am]
BILLING CODE 4510–30–P
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