WIOA POLICY 15-WIOA-3.1
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1 April 15, 2016 WIOA POLICY 15-WIOA-3.1 ANNUAL ALLOCATION AND MODIFICATION REQUIREMENTS OF WIOA FORMULA GRANT FUNDS I. POLICY This policy provides guidelines by which Workforce Innovation and Opportunity Act (WIOA) formula grants shall be established and modified. A. General 1. Allocation of funds shall apply to the three formula funding streams that are found in the WIOA Title 1B program: Adults, Dislocated Workers, and Youth. 2. The annual allotment issued by USDOL-ETA in a Training and Employment Guidance Letter (TEGL): a. Disseminates the amounts available to each state. b. Specifies the amount available for the Governor to set aside for statewide workforce investment activities and rapid response activities. c. Lists the salary cap imposed under the latest appropriation act. No funds under the header Employment and Training Administration may be used by a recipient or subrecipient to pay the salary and/or bonus of an individual, either as direct costs or indirect costs, at a rate in excess of Executive Level II. 3. Each program year the Governor must reserve a portion of the dislocated worker funds for statewide rapid response activities, as described in Section 134(a)(2) of WIOA. 4. All formula funds are subject to the Uniform Guidance outlined at 2 CFR 200 and the US Department of Labor exceptions outlined at 2 CFR No WIOA funds may be expended by a local area until a signed contract document has been submitted to the Department and the grant information is entered into Department of Commerce s accounting system Springfield Chicago
2 PAGE 2 B. Adult and Dislocated Worker Allocations 1. WIOA funds for the Adult and Dislocated Worker programs are provided in two separate appropriations. a. The first appropriation, termed base funds, becomes available for obligation on July 1. b. Advance funds, which is the second appropriation, becomes available for obligation on October 1. 1) These advance funds are provided in the appropriations act passed during the fiscal year (FY) immediately before the fiscal year when the funds are available. 2. First Quarter Limitation a. Advance funds issued on October 1 (i.e., future fiscal year appropriations) cannot pay prior fiscal year expenditures. b. States and local areas cannot expend more than what was allotted on July 1 through September 30. c. For a breakdown of available Adult and Dislocated Worker funding, see Attachments B-2, B-3, C-2, and C-3 of the annual funding Notice. 3. Transfer Authority a. WIOA Section 133(b)(4) allows a board to transfer up to one hundred percent (100%) of funds between the Adult and Dislocated Worker funding streams with Governor s approval. 1) The Governor has approved local boards to transfer up to fifty percent (50%) of funds between the Adult and Dislocated Worker funding streams. a) A waiver requesting a transfer of more than fifty percent (50%) may be submitted by a local board as described in the annual funding Notice. 2) Local boards may exercise their transfer authority and request transfers between the adult and dislocated worker funding streams at time of establishment. 4. Incumbent Worker Training a. Incumbent Worker training is designed to meet the special requirements of an employer (including a group of employers) to retain a skilled workforce or avert the need to lay off employees by assisting the workers in obtaining the skills necessary to retain employment.
3 PAGE 3 1) The training must be conducted with a commitment by the employer to retain or avert the layoffs of the incumbent worker(s) trained. b. In accordance with WIOA Section 134(d)(4)(A)(i) a local area may reserve up to twenty percent (20%) of their combined total of adult and dislocated worker allotments for incumbent worker training as described in 20 CFR Transitional Jobs a. Transitional Jobs provide limited work experience subsidized in the public, private, or non-profit sectors for individuals who experience chronic unemployment or have inconsistent work history that creates a barrier to employment. b. In accordance with WIOA Section 134(d)(5) local areas may reserve up to ten percent (10%) of their combined total of adult and dislocated worker allotments for transitional jobs as described in 20 CFR Pay-for-Performance Contracts a. A local area may reserve up to ten percent (10%) of their combined total adult and dislocated worker allotments for Pay-for-Performance contract strategies as allowed under WIOA Section 133(b)(2)-(3). b. In addition, WIOA Section 128(b) allows a local area use of the youth allotment for Pay-for-Performance contract strategies. c. Follow proposed 20 CFR through and 20 CFR when implementing Pay-for-Performance contracts. 7. Training Expenditure Requirement a. All local workforce areas are required to ensure that at least forty percent (40%) of their formula-allocated program expenditures in a program year are on allowable training costs in the WIOA Title I Adult and Dislocated Worker programs. b. The Illinois Workforce Innovation Board (IWIB) approved the allowance of local boards to combine the Adult and Dislocated Worker funding streams into one calculation for each local workforce area in determining the training expenditure percentage. 1) This approval overrides the requirement that remains in the Minimum Training Expenditure policy letter.
4 PAGE 4 C. Youth Allocation 1. The WIOA Youth grants are funded through a single appropriation. 2. First Quarter Limitation: a. One hundred percent (100%) of the youth funding is available for expenditure on April 1 each year since it is fully funded from the base federal fiscal year (FFY). 3. Out-of-School Youth a. WIOA establishes a primary Title I youth program focus to support the educational and career success of out-of-school youth (OSY). WIOA requires that local areas must expend at least seventy-five percent (75%) of all youth program funds on OSY. 4. Work-Based Training a. LWIBs must expend at least twenty percent (20%) of the total youth program funds in Work-Based Training. D. Formula Grant Establishment 1. The allocations for each local workforce innovation area will be transmitted through the annual funding Notice 2. Each LWIB must use the amounts provided in the attachments listed above in order to develop the Budget & Planning Forms which consist of the Program Funding, Registrant, and Operating Budget forms in the annual funding Notice. Please note that each form is on separate tabs in the spreadsheet and all of them must be completed. a. LWIBs must complete the Program Funding Form (Tab 2) 1) The form includes columns for budgeted costs for the first quarter of the program year (7/1-9/30) and the budgeted costs for the full program year (7/1-6/30). 2) This information will be used to establish the budget limits in the Department of Commerce Grantee Reporting System (GRS) during the first quarter of the program year. 3) The form includes the budget line items and the sub roll-up line items that the local areas will be required to report on a monthly basis. 4) Attachment F of the annual funding Notice includes additional information, the budget line item, and the sub roll-up line item definitions. b. LWIBs must complete the Operating Budget (Tab 3)
5 PAGE 5 1) This form tracks the costs charged to WIOA Title 1B for the operation of the one stop and the associated workforce programs for the entire program year. 2) Section 2a of this form includes the infrastructure costs as defined by the proposed rule at 20 CFR ) Section 2b contains the shared system costs agreed to among all partners as defined by the proposed rule at 20 CFR ) Section 2c includes other non-shared operational costs. 5) Section 2d includes the Grantee s indirect rate or de minimus rate that will be included in the Grant Agreement. 6) If a grantee has a direct grant from DOL (e.g., Workforce Innovation Fund grant), they must apply for a federally approved indirect cost rate or use the ten percent (10%) de minimis rate for indirect costs. a) In other words, the grantee would have to use the same cost allocation methodology for its WIOA formula grants that it is required to use for its direct DOL grant(s). b) For grantees that have a direct grant(s) from another federal agency, the requirement for an indirect cost rate would depend on the requirements of the other federal agency. c) WIOA grantees that are required to have a federally approved indirect cost rate and do not currently have a rate may have 90 days to obtain a rate. d) In the interim, the grantee may use a provisional/estimated rate, which must be reconciled with the actual rate/costs upon approval of the indirect cost rate. c. LWIBs must complete the Registrants Form (Tab 4) 1) This form outlines the projected number of registrants that will be provided individual career services and training services in each training category. 2) Note that these categories may include duplicate counts. (For example, an adult registrant may require remedial training, training through an ITA, and a transitional job before they are placed in permanent employment). 3. Cost Allocation Plan a. The Uniform Guidance requires Commerce to review the local cost allocation plan. 1) All WIOA formula grantees must submit a copy of their WIOA cost allocation plans with their budget and planning forms. 2) This plan must be signed by the authorized official of the organization. 3) If applicable, the cost allocation plan must identify the methodology to be used to charge the parent organization s (i.e., college or county government) overhead costs to the grant. 4) If applicable, the cost allocation plan must identify the federally approved indirect cost rate or de minimis rate to be charged to the grant.
6 PAGE 6 5) If a federally approved indirect cost rate will be charged to the grant, the indirect cost rate agreement must be submitted along with the cost allocation plan. 6) If the grantee has applied for or intends to apply for a federally approved indirect cost rate, it must identify the interim rate in its cost allocation plan and submit the indirect cost rate agreement to the Department upon execution. 7) Any relevant supporting documentation (i.e., studies) must also be submitted along with the cost allocation plan. b. Subrecipients Cost Allocation Plan 1) Grantees are responsible for reviewing and certifying the cost allocation plans of their subrecipients. 2) This should be done as part of the award approval process, not as part of the monitoring process. 3) The grantee is not required to review financial statements or the proposed budget, but it must review the cost allocation plan and provide written notice to the subrecipient that its cost allocation plan has been reviewed and accepted. 4) The grantee should also review any relevant supporting documentation. 5) Generally, the same requirements that apply to WIOA formula grantees cost allocation plans apply to WIOA subrecipients cost allocation plans. 6) Non federal entities may negotiate indirect cost rates and/or cost allocation plans with their subrecipients. Such rates would not be considered official rates by DOL or other federal agencies and would not preclude the subrecipient from switching to the ten percent (10%) de minimis rate or applying for a federally approved indirect cost rate in the future. 4. The budget and registrant information must be entered into the grant plan in the Illinois Workforce Development System (IWDS) and set to Pending status. 5. The following documents are required when submitting the grant establishment: a. A cover letter signed by the LWIB Chairperson and the CEO(s) indicating approval of the grant establishment planned budget and registrants; b. The Budget and Planning Forms which consist of the Program Funding, Operating Budget, and Registrant forms in Attachment E to the annual funding Notice; and c. The cost allocation. 6. Electronic submissions of 5.a. through c. above must be sent via to lora.dhom@illinois.gov and charles.dooley@illinois.gov, with an electronic carbon copy to beverly.miller@illinois.gov.
7 PAGE 7 E. Modification a. The submission due date will be communicated through the annual funding Notice. 1. Grant modifications may be required if the following conditions occur: a. Any changes to the grantees available funding such as additional allocations, transfers between the adult and dislocated worker funding streams, reallocations, rescissions, or any other change such as budget line item adjustment; b. Local boards need to alter estimated planned expenditures for budgeted line items; and c. Local boards need to adjust the planned registrant numbers based on changes in service strategy or other factors. d. Additional Allocation of Funds 1) If additional funding is made available at the state level, an additional allocation may occur during the life of the grant. 2) The modification documents must reflect actual additionally allocated amounts, which will be transmitted through an attachment to this policy. e. Transfer of Funds 1) Boards may exercise their transfer authority and request transfers between the adult and dislocated worker funding streams at any time during the life of the grant. f. Reallocation of Funds 1) Reallocation of funds shall apply to the three formula funding streams, which are found in the WIOA Title 1B program: Adults, Dislocated Workers, and Youth. 2) For Adults, Dislocated Workers, and Youth programs, the amount to be recaptured from each local area for purposes of reallocation, if any, will be based on the amount by which the prior program year s un-obligated balance of allocated funds exceeds 20% of that year s allocation for the program, less any amount reserved (up to 10%) for costs of administration. 3) Un-obligated balances will be determined based on allocations adjusted for any allowable transfer between funding streams. 4) These amounts, if any, will be separately determined for each funding stream. 5) The modification documents must reflect actual reallocated/de-obligated amounts, which will be transmitted through an attachment to this policy. 6) Eligibility for Reallocated Funds
8 PAGE 8 a) A local area s eligibility to receive reallocated funds will be separately determined for each funding stream. b) Any local area that exceeds the minimum obligation level, by funding stream, will be eligible to receive reallocated funds for that specific funding stream. g. Rescission of Funds 1) If state funding is rescinded through the federal appropriation process, grantees may be required to reduce funding during the life of the grant. 2) The modification documents must reflect actual rescinded amounts, which will be transmitted through an attachment to this policy. h. Budgeted Line Item Adjustment 1) The expenditure reporting screens in GRS were expanded to include the budget and the sub roll-up line items as part of the monthly expenditure reporting requirements. 2) Grantees may adjust the budget line items that roll up to a budget line item without a formal budget modification so long as the total for the category is not exceeded. a) Example: Grantees may alter the Adult budget for any of the following sub roll-up line items so long as the total amount for budget line item of Adult Direct Training does not change: Occupational Skills Training ITAs; Occupational Skills Training Other; Remedial/Pre-Vocational Training; Pay for Performance Contracts; and Supportive Services. i. Registrants 1) Should local boards need to adjust the planned registrant numbers, they are able to do so without a formal grant modification. a) The same procedures to modify must be followed in order to adjust planned registrant numbers. 2) Significant changes to the planned service strategies may require a local plan modification. j. Procedures to Modify 1) The grantee should ensure budgeted costs submitted for the fourth quarter in the Funding Form in Attachment E to the annual funding Notice are in excess of costs reported in GRS for each budgeted line item. 2) The following documents are required when submitting a grant modification: a) A cover letter signed by the LWIB Chairperson and the CEO(s) indicating approval of the grant modification planned budget and registrants; and b) The Budget and Planning Forms which consist of the Program Funding, Operating Budget, and Registrant forms in Attachment E to the annual funding Notice.
9 PAGE 9 F. Reporting c) The modified budget and registrant information must be entered into the grant plan in the Illinois Workforce Development System (IWDS) and set to Pending status. d) Electronic submissions must be sent via to lora.dhom@illinois.gov and electronically carbon copy beverly.miller@illinois.gov. 1. On or before July 20 of each year, local areas must enter all of their preceding program year WIOA expenditures into GRS. 2. If a local area has exceeded the minimum obligation of funds requirements through its expenditures by individual funding stream, it would not be necessary to report its unspent obligations on the GRS system. 3. In addition, on or before July 20, each local area has the option of increasing its obligations by entering the balance of their unexpended obligations by funding stream, into the GRS system on the screen(s) provided for that purpose. II. INQUIRIES Inquiries related to the requirements of this policy may be directed to OET, Lora Dhom, (217) or lora.dhom@illinois.gov. Sincerely, Julio Rodriguez, Deputy Director Office of Employment and Training JR:mb
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