U.S. DEPARTMENT OF LABOR
Employment and Training Administration
Washington, D. C. 20210
May 3, 1996
TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 04-95, Change 1
ALL STATE JTPA LIAISONS
BARBARA ANN FARMER
Job Training Partnership Act (JTPA) Title II and Title III Performance Standards for PY's 1996 and 1997
Purpose. To transmit additional guidance to Attachment G, "JTPA Performance Standards", of Training and Employment Guidance Letter No. 4-95, dated February 21, 1996. This Guidance Letter provides additional information on the Secretary's required performance measures and the Secretary's implementing instructions for performance standards for Program Years (PYs) 1996 and 1997 (July 1, 1996-June 30, 1997; July 1, 1997-June 30, 1998).
Job Training Partnership Act (JTPA), as amended.
JTPA Regulations, 20 CFR 626-629 and 631, published in the Federal Register on September 2, 1994.
Training and Employment Guidance Letter (TEGL) No. 4-95, dated February 21, 1996.
Training and Employment Guidance Letter (TEGL) No. 2-95, dated August 10, 1995.
Training and Employment Guidance Letter (TEGL) No. 1-94, dated August 31, 1994.
Training and Employment Information Notice No. 5-93, Change 1, dated June 23, 1994.
Background. Sec. 106 of JTPA, as amended, directs the Secretary to establish performance standards for adult, youth, and dislocated worker programs. These standards may be updated every two years based on the most recent JTPA program experience, as well as program emphases and goals established by the Department of Labor. The Secretary also issues instructions for implementing standards and parameters for States to follow in adjusting the Secretary's standards for service delivery areas (SDAs) and substate areas (SSAs).
To assist the Department in assessing the JTPA operational environment and constraints likely to influence state and local performance during the reference period, a Performance Standards Workgroup was convened in February 1996. The Workgroup had representatives from State and local JTPA programs; public interest groups, including the National Association of Workforce Development Professionals; the U.S. Conference of Mayors; the National Association of Private Industry Councils; the National Association of Counties; the National Governors' Association; and the National Council on the Aging. This Guidance Letter largely incorporates the Workgroup's recommendations.
Highlights of Changes from PY's 1994 and 1995. Following is a summary of major changes from PY 1994 and 1995 policy:
All performance indicators remain the same--none are added or dropped;
All numerical levels in which there was an appreciable difference in average performance between PY l992 and 1994 are updated; thus, numerical levels for three of the six core standards in Title II as well as the Title III standard are raised, and three (including both youth measures) remain the same;
Overall failure to meet standards under Title II is defined as failing three or more of the Secretary's six core standards;
Governors are encouraged to include in their incentive awards policies criteria rewarding successful out-of-school youth programs and placements in jobs providing employer-assisted benefits; and
Clarification of the definition of what constitutes complete follow-up data is provided in Attachment 1.
Performance Management Goals for PY's 1996 and 1997. Departmental goals for JTPA's performance management system serving disadvantaged adults and youth and dislocated workers focus on:
Improving the quality and intensity of services to disadvantaged adults that lead to skills acquisition, long-term employability and increased earnings above poverty;
Raising the quality of job placements for disadvantaged adults by ensuring above-poverty wages, full-time work, and employer-assisted benefits;
Ensuring disadvantaged youth attain skill enhancements that lead to employment or advanced education or training;
Equipping and placing adult laid-off workers in need of immediate reemployment with jobs that pay equal or better than their previous wage; and
Committing to continuous improvement in the delivery of employment and training services to maximize their value to the customers.
These goals are reflected in the Secretary's Title II-A, Title II-C, Title III and Section 204(d) performance measures, national numerical standards for these measures, incentive award criteria, and associated reporting requirements. Governors have the authority to establish additional standards which reflect State goals, to develop the definitions of passing and failing individual standards, and to develop the specific approach to determining incentive awards.
This issuance specifies the national standards for PY's 1996 and 1997 and details the criteria which must be a part of State incentive grant policies for Title II. Data to support additional non-cost measures will continue to be reported, and Governors may use these measures or others in making State incentive award determinations for the up to 25% of incentive funds permitted for additional State standards under Section 106 (e). Data on costs, together with program performance data, will provide critical information for State monitoring and fiscal oversight, and assist States in measuring returns on their human resource investments.
Secretary's National Standards for PY's 1996 and 1997. The Secretary's performance measures and national standards for Title II-A, Title II-C, section 204(d), and Title III (all of section 302(c)(1) State activities, and sections 302(c)(2) and 302(d) substate area activities) are as follows:
|PY 1996 and 1997 Performance Standards
Adult Follow-up Employment Rate*:
|Adult Weekly Earnings at Follow-up*:||$281|
|Welfare Follow-up Employment Rate*:||50%|
|Welfare Weekly Earnings at Follow-up*:||$244||Title II-C
|Youth Entered Employment Rate*:||41%|
|Youth Employability Enhancement Rate*:||40%||Section 204(d) Older Worker Programs
|Entered Employment Rate:||56%|
|Average Hourly Wage at Placement:||$5.85||Title III
|Entered Employment Rate:||72%|
*Indicates Secretary's six required "core" measures that are subject to incentives and sanctions.
The four Title II-A adult and welfare follow-up measures will continue to be calculated based on outcomes data for individuals who terminate during the first three quarters of the program year and the last quarter of the previous program year.
Explanation of Performance Standards Levels. The Title II-A and II-C numerical standards were derived from PY 1994 program data aggregated from the Standardized Program Information Report (SPIR). The same approach for setting numerical levels used previously is expected to produce local standards that are similar in difficulty to what SDAs/SSAs have experienced in the past. Past practice was to set numerical levels on non-earnings measures where at least 75% of SDAs can be expected to meet the standard, and to set levels for earnings measures where at least 60% of SDAs can be expected to meet the standard. The higher level was used for earnings measures to account for expected inflation in wage rates.
Essentially the same procedure was used to set the PY 94 numerical levels for those measures with significant changes in performance. The Adult Weekly Earnings at Follow-Up standard has been set at a level that was exceeded by 60% of SDAs in PY 94 to account for expected future inflation. By PY 96, about 75% of SDAs are expected to exceed this level. However, the Welfare Weekly Earnings was set at a level exceeded by 75% of SDAs in PY 94. State welfare reforms and funding cuts are changing the client mix and reducing the types of services provided welfare clients. This may slow future gains in welfare clients' earnings. Further, welfare reform's emphasis on immediate placement at any wage, and the "earnings disregard" practice in many States, may also lower the average weekly earnings of welfare clients served by JTPA.
Because of the cuts in youth program funding, no changes are made in the levels for these standards. To give the system some flexibility in sustaining youth services, the sanctioning requirements for youth measures are relaxed. SDAs will no longer be penalized if they do not meet the youth standards as long as they meet at least four of six core standards.
Similar to the Title II-A and Title II-C standards, the Title III standard for PY 1996 and 97 was derived from PY 1994 program data aggregated from the SPIR. This standard is also set at a level that approximately 75 percent of the substate areas can be expected to meet or exceed.
For the first time, PY 1994 SPIR data were used to assist in setting performance standards levels for the Section 204(d) Older Workers program. Since no trend data were available to guide assessment of future performance on the Average Hourly Wage standard, it also was not future-inflation adjusted.
NOTE: Programs operated under section 204(d) are State programs even though they may be managed by various local entities. Therefore, performance standards will be applied to the total older worker programs State-wide. Unlike the adult and youth programs under Title II-A/C, however, no incentive awards or sanctions are associated with these standards.
Implementing Provisions. The following implementing requirements must be followed:
Required Standards. For Titles II-A and II-C, Governors are required to set, for each SDA, a numerical performance standard for each of the six Secretary's measures; for the Older Worker program, Governors are required to set numerical Entered Employment Rate and Average Wage at Placement standards for programs operated under section 204(d); for Title III, Governors are required to set for each substate area a numerical performance standard for the Entered Employment Rate and are encouraged to establish a wage recovery goal.
Setting the Standards. Consistent with provisions in JTPA, Governors are now required to adjust the Secretary's performance standards to reflect local area circumstances (section 106(d)). Such adjustments apply to Title II-A, Title II-C, section 204(d) and Title III programs, and must conform to the Secretary's parameters described below:
Procedures must be:
Responsive to the intent of the Act,
Consistently applied among the SDAs/SSAs,
Objective and equitable throughout the State,
n conformance with widely accepted statisticalcriteria;
Source data must be:
Of public use quality,
Available upon request;
Results must be:
Adjustment factors must be limited to:
Labor market conditions,
Characteristics of the population to be served,
Demonstrated difficulties in serving the population, and
Type of services to be provided.
The Department offers Governors an optional adjustment methodology that conforms both to these parameters and to the requirement in section 106(d). This methodology covers Title II-A, Title II-C, Section 204(d), and Title III programs and will be provided to States in a future Training and Employment Information Notice. Should the Governor choose to use an alternate methodology, or make adjustments not addressed by the Departmental model, it must conform to the parameter criteria and be documented in the Governor's Coordination and Special Services Plan (GCSSP) prior to the program year to which it applies.
The State Job Training Coordinating Council and, where appropriate, the State Human Resources Investment Council must have an opportunity to consider adjustments to the Secretary's standards and to recommend variations. To determine whether an SDA has met or exceeded a performance standard, Governors must use actual end-of-year program data to recalculate the performance standards.
Performance Standards Definitions. Governors must calculate the performance of their SDAs, SSAs, and section 204(d) programs according to the definitions included in the Attachments.
Titles II-A and II-C Incentive Policies. Governors are to develop and implement policies and procedures for awarding incentive grants in accordance with Section 106(b)(7). As the basis for making incentive awards, the Governors must use all and cannot "zero weight" any of the six Secretary's core measures. At least 75 percent of the funds set aside for performance incentives must be related to these measures and, if applicable, the out-of-school youth and employer-assisted benefits criteria, in accordance with section 106(b)(7)(E). The following criteria are required in Governors' incentive award policies:
A Secretary's standard for service to the hard-to-serve, as required by section 106(b)(7)(B) of JTPA, has been established in the form of a stand-alone eligibility criterion ("gate") for incentive awards. In order for an SDA to be eligible to receive ANY incentive award, at least 65 percent of BOTH the SDA's (a) Title II-A AND (b) Title II-C (in-school and out-of-school youth combined) participants receiving training and/or other services beyond objective assessment must be hard-to-serve. The definitions of hard-to-serve are to be consistent with the definitions in sections 203(b), 263(b), and 263(d) of the Act.
For those SDAs that successfully "pass through" the gate, (in addition to any funds set aside for Governors' standards) the amount of the incentive award for SDAs exceeding the Secretary's performance standards will be determined by the Governor's policy in conformance with DOL requirements.
SDAs that pass through the "gate" and exceed all six of the Secretary's Titles II-A and II-C core standards must receive an incentive award.
Governors also may select additional non-cost measures, such as increased service to hard-to-serve participants, to include in incentive policies.
Cost standards cannot be used for incentive award purposes. However, States are reminded of the integral role of financial reviews in program management. States are encouraged to explore ways of relating overall costs of job training to more direct measures of long-term employment, earnings and reductions in welfare.
Incentive policies may include adjustments to incentive award amounts based upon factors such as grant size, additional services to the hard-to-serve, intensity of service, and expenditure level.
In PY 1996 and 1997, Governors will continue to have the authority to exclude pilot projects serving "hard-to-serve" individuals funded from the 5 percent incentive fund set-aside in computing their standards and actual performance. States and SDAs are encouraged to use such funds to develop or replicate model programs serving out-of-school youth.
NOTE: For those SDAs in which "incentive projects" are indistinguishable from those that provide general training, these programs would not be considered exempt from performance standards.
Governors are encouraged to include in their incentive policies criteria relating to: 1) programs successfully serving out-of-school youth, and 2) placement in jobs providing employer-assisted benefits. Although successful programs for out-of-school youth remain the cornerstone of out-of-school incentives, SDAs will still be expected to exceed the 50 percent minimum service level to be rewarded under that criterion.
Titles II-A and II-C Technical Assistance and Sanction Policies. Determination of an SDA's failure to meet standards and the consequent imposition of technical assistance and reorganization requirements under section 106(j) will be based only on the Secretary's Title II-A and Title II-C core measures.
"Meeting Performance Standards" overall is defined as meeting at least four of the six core standards. Conversely, overall "failure to meet performance standards" is defined as failing any three (3) or more of the core standards. Definitions for meeting and failing individual standards will be established by Governors.
Failure to meet performance standards for the first year precludes an SDA from receiving any incentive awards and requires Governors to provide technical assistance to the underperforming SDA.
Failure to meet performance standards in the second consecutive year precludes an SDA from receiving any incentive award and requires Governors to impose a reorganization plan.
Section 106(j)(3) requires each State to report to the Secretary, not later than 90 days after the end of each program year, the actual performance and performance standards for each SDA within the State. Within the same timeframe, technical assistance plans developed by the State are required for each SDA "failing" for the first year. A 90-day timeframe also applies to the imposition of a reorganization plan, which is mandatory when an SDA "fails" for a second consecutive year. Specific procedures for the formal performance standards report and required State action were provided in Training and Employment Guidance Letter 2-95, dated August 10, 1995.
However, in addition to the formal annual process, there should be ongoing oversight of SDA performance and continuous technical assistance and capacity-building aimed at addressing areas where program performance can be improved.
Action Required. States are to distribute this Guidance Letter to all officials within the State who need such information to implement the performance standards policies and requirements for PY 1996 and 1997. It is especially critical that States, State Councils, Private Industry Councils and SDA operational staff become thoroughly familiar with the provisions concerning performance standards and incentive and sanctions policies.
Governors must specify in the GCSSP their incentive award policy under section 202(c)(1)(B) and 202(c)(3)(A) and imposition of sanctions policy under section 106(j). It is recognized that the timing of this issuance may preclude some States from submitting complete incentive policies with their PY 1996 and 1997 GCSSPs. States are to provide as much information as possible in compliance with required due dates and submit a GCSSP amendment containing complete information no later than August 31, 1996.
Inquiries. Questions concerning this issuance may be directed to Valerie Lloyd at (202) 219-5487, ext. 115.
Definitions for Performance Standards
Youth Employability Enhancement Definitions
Rewarding Model Programs for Out-of-School Youth
Rewarding Placements in Jobs Providing Employer-Assisted Benefits