DIRECTIVE	:	TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 03-98
TO	:	ALL STATE WELFARE-TO-WORK CONTACTS ALL STATE JTPA LIAISONS
FROM	:	DAVID HENSON Director Office of Regional Management
SUBJECT	:	Welfare-to-Work Planning Guidance and Instructions for Annual State Plans and Planning Allocations for Fiscal Year 1999

1. Purpose. To provide States with Welfare-to-Work (WtW) Planning Guidance and Instructions for Annual State Plans and planning allocations for fiscal year (FY) 1999.

2. Authorities and References. Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (Public L. 104-193) and Balanced Budget Act of 1997 (Public L. 105-33) amending Title IV-A of the Social Security Act. Welfare-to-Work Interim Final Rule, 20 CFR 645 (62 Fed. Reg. 61588 (Nov. 18, 1997)). Planning Guidance and Instructions for Annual State Plans for Fiscal Year (FY) 1998, dated March 1998.

3. Background. The Balanced Budget Act of 1997, which was signed by President Clinton on August 5, 1997, authorizes the Department of Labor to provide WtW grants to States and local communities for transitional employment assistance to move hard-to-employ Temporary Assistance to Needy Families (TANF) recipients with significant employment barriers and certain noncustodial parents into unsubsidized jobs offering long-term employment opportunities. These grants are designed to provide many welfare recipients with the job placement services, transitional employment, and job retention and support services to achieve the goal of economic self-sufficiency.

   Seventy-five percent of WtW funds (less small set-asides for specific statutory purposes) are available to States in amounts based on the statutory formula set forth in Section 403 (a)(5)(A)(v) of the Social Security Act. States must provide one dollar of non-Federal matching funds for every two dollars of Federal WtW funds. States are required to pass through at least 85 percent of the money to local Private Industry Councils (PICs) (unless the Secretary approves a waiver to permit an alternate entity to administer funds in a particular area) and may retain up to 15 percent of the funds for WtW projects that focus on helping long-term welfare recipients enter unsubsidized employment.

   In order to receive formula funds, the State must submit a plan in the form of an addendum to the State TANF plan, for the administration of the WtW grant. The Secretary of Labor must determine that the plan meets the statutory requirements. Governors are responsible for receiving formula funds, distributing 85% of funds to the PICs, operating State level programs with the remaining 15% of the funds, and for assuring, together with PICs, that WtW funds are coordinated with funds spent under the TANF block grant. PICs shall determine on which individuals and activities listed in the statute to expend the WtW funds they receive.

4. Changes in the FY 1999 Planning Guidance. The FY 1999 Planning Guidance and Instructions for Submission of Annual State Plans for FY 1999 WtW Formula Grants does not differ significantly from the final FY 1998 guidance issued in March, 1998. The following are the major changes:

   • An additional signature block for the State signatory official has been added to the plan signature page.

   • In item I.A.6.of the planning guidance, States are asked to specify any additional characteristics which have been identified by the State, in consultation with the operating entities, which will be used in determining eligibility under the thirty percent provision.

   • In item I.E.1. of the planning guidance, emphasis is added to the requirement that copies of comments should be provided regarding the Governor's designation of each alternative agency.

   • In item III. 1. of the planning guidance, the phrase "during the period covered by the plan" has been added to clarify that matching funds may be expended over the three year life of the grant. This clarification is pursuant to a technical amendment enacted on November 13, 1997 in the 1998 Labor, Health and Human Services, and Eduacation Appropriations Act (Public L 105-78). This technical amendment changed the period of expenditure for matching funds from one year to three years, which is the same availability as the Federal WtW funds.

   • In item IV of the planning guidance, additional language was added to clarify that the State is to provide an estimate of expenditures for each quarter of each fiscal year covered by the plan.

5. Plan Submission. Using the format prescribed in the Planning Guidance provided in Attachment I, States may submit their FY 1999 Annual Plans beginning on August 14, 1998. All plans must be submitted no later than March 31, 1999. The State should submit one copy of the plan, with original signatures, to the Employment and Training Administration (ETA) national office with simultaneous copies to the appropriate ETA regional office, the Administration for Children and Families (ACF) national office and the appropriate ACF regional office. Addresesses, including e-mail addresses for the ACF and ETA regional offices, for submission of the plan are provided in Attachment I.

6. Requests for Waivers. If a State has received an approved waiver as part of its approved FY 1998 Annual Plan, it does not need to re-apply for the same waiver in its FY 1999 Annual Plan. In this case, the State should include in Section I.E. of its FY 1999 plan submission: ( 1) a statement that a waiver was approved in the FY 1998 plan; and, (2) the name(s) of the alternative administering entity(ies) as well as the geographic area(s) being served.

7. Final WtW Regulations. Final WtW Regulations are being drafted based on the comments received on the Interim Final WtW Regulations published in the Federal Register on November 18, 1997. We anticipate that these Final Regulations will be published in the Federal Register in Fall, 1998. In the meantime, States should use the Interim Final Regulations when drafting their FY 1999 plans. If the Final Regulations contain any change to policy which was previously promulgated in the Interim Final Regulations, such changes are not retroactive and will only become effective on the effective date of the Final Regulations.

8. Planning Estimates. Attachment II provides the FY 1999 planning estimates for WtW State formula grants. These estimates are based on FY 1999 total availability minus the statutory set asides, including the $100 million set aside for the performance bonuses which will be awarded to States in FY 2000.

9. Reallocation of FY 1998 Funds. Additional FY 1998 funds may be available for a second FY 1999 formula allocation to take place in early 1999. The second pool will include: (1) funds not awarded to States because they provided a lower level of matching than required to receive their full FY 1998 allocation; and, (2) funds captured from States that fail to obligate 100% of the FY 1998 funds awarded to them.

   States wishing to apply for these reallocated FY 1998 funds should so indicate in the transmittal letters for their FY 1999 plans and include in the letters a statement indicating that they are capable of providing additional matching funds. The maximum amount that a State may be eligible to receive will be determined by applying the entitlement formula required by SSA section 403(a)(5)(A)(iii) to the total amount of funds that comprise the additional pool of funds.

   States which receive reallotted FY 1998 funds will be required to submit a modification to their FY 1999 plans when notified of the amount that the Department of Labor has determined is available to be added to the States' FY 1999 grants.

   10. Action. States should provide this guidance to appropriate staff for the preparation and submission of the FY 1999 Welfare-to-Work Annual State Plans.

10. Inquiries. Inquiries on this TEGL should be directed as follows:

    • Program Issues - Stephanie Curtis (202) 219-0024 x189

    • Funding Issues - Sherryl Bailey (202) 219-5774 x155

    • Jess Aragon (202) 219-5628 x172

11. Attachments.

    1. Planning Guidance and Instructions for Submission of Annual State Plans Fiscal Year (FY) 1999 Welfare-to-Work Formula Grants

    2. Fiscal Year (FY) 1999 State Formula Welfare-to-Work Planning Allocations.