Job Training Partnership Act; Title II-A, Title II-C, Title III, and Section 204(d) Performance Standards for Program Years (PY) 1994 and 1995

DEPARTMENT OF LABOR

Employment and Training Administration

Job Training Partnership Act; Title II-A, Title II-C, Title III,

and Section 204(d) Performance Standards for Program Years (PY) 1994

and 1995

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice of performance standards for PY 1994-95.

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SUMMARY: The Department of Labor is announcing performance standards

for Job Training Partnership Act (JTPA) Title II-A (Adult Training),

Title II-C (Youth Training), Title III (Dislocated Workers Training),

and section 204 (Older Workers Training) for Program Years (PY) 1994-95

(July 1, 1994-June 30, 1996). The proposed issuance appended to this

notice contains revised performance standards levels and implementation

instructions to conform the Title II performance management system with

the Job Training Reform Amendments of 1992.

EFFECTIVE DATE: July 1, 1994.

FOR FURTHER INFORMATION CONTACT: Steven Aaronson, Chief, Adult and

Youth Standards Unit, Telephone (202) 219-5487, extension 107 (this is

not a toll-free number).

PAPERWORK REDUCTION ACT: Information collection related to this

regulation has been approved previously by the Office of Management and

Budget, No. 1205-0321. No further information collections or other

paperwork requirements of the public are needed.

SUPPLEMENTARY INFORMATION: Under section 106 of the amended Job

Training Partnership Act (JTPA), the Secretary of Labor is required to

set performance standards for programs serving: (1) adults and youth

under Title II-A and Title II-C; (2) dislocated workers under Title

III; and (3) older workers under section 204(d). The Job Training

Reform Amendments of 1992 (Amendments) also introduced significant

changes in the way job training programs are designed and operated at

the local levels. These statutory changes, combined with recent

legislative and administrative initiatives to promote high-quality,

results-driven, customer-oriented services throughout the Federal

Government, are not only reshaping the way JTPA delivers its services,

but also how to measure its effectiveness.

National job training objectives have remained unchanged since 1990

and focus on enhancing the long-term employability and economic self-

sufficiency of those most at risk of becoming or remaining unemployed.

Current measures of the program's progress in achieving these

objectives relate directly to near-term employment and earnings levels

of adult program completers and levels of employment and skill

enhancements of youth program completers. These outcomes do not, by

themselves, measure the quality of the services received or the extent

to which the program is able to improve upon participants' prior

employment, earnings and welfare dependency.

For this reason, the Department will be undertaking a comprehensive

review of its performance standards over the next year to examine

alternative program measures and more cost efficient ways of assessing

the program's long-term effects on its graduates. Ongoing surveys of

JTPA's customers will also provide invaluable feedback on how helpful

JTPA services are to its users, what other services are needed but not

provided by the program, and the extent to which good outcomes are

related to levels of customer satisfaction. Finally, the Employment and

Training Administration will initiate a nationwide JTPA Report Card

that will highlight programs showing the greatest returns on their

human resource investments in terms of obtaining high-quality

employment for those participants most at-risk of failure.

Outcome measures for Title II-A and C will be retained until this

performance standards review is completed. Numerical levels for these

core standards have been updated to reflect the most recent JTPA

program experience.

The Department is also undertaking a comprehensive review of its

Title III programs; therefore, changes in outcome measures will be

deferred until the results of this critical assessment are available.

Governors will continue to be required to set an entered employment

rate standard for their Title III programs and are encouraged to

establish an average wage at placement goal. At the same time, the

Department will be exploring ways to use performance standards to

improve the quality of services provided to dislocated workers, and to

achieve higher levels of customer satisfaction.

Under section 204(d) of JTPA, older worker programs are now subject

to performance standards. However, no incentive awards or sanctions are

associated with these standards. Outcomes for these programs focus on

increasing employment and earnings similar to those programs serving

other disadvantaged adults. Because field evidence suggests that older

workers are much more likely to remain employed once they are placed in

jobs, employment and wages will be measured at program completion

rather than at a later follow-up period. Together, these measures

underscore the employment focus of the program, particularly in jobs

that are higher paying.

To comply with the legislative provisions, the Department

considered adding specific outcome measures for hard-to-serve

participants and separate outcomes for in-school and out-of-school

youth. In the interest of avoiding a proliferation of performance

measures and limiting local flexibility in programming, additional

measures for these three separate groups were not established. Rather,

the requirement to promote services to hard-to-serve individuals will

be addressed from an incentive policy perspective and the issue of in-

school and out-of-school standards will continue to be addressed

through the performance standards adjustment process. When judging

service delivery area (SDA) performance and awarding incentive funds,

States will need to design incentive policies that will promote more

effective services to out-of-school youth and reward placements into

jobs with employer-assisted benefits.

The policy of excluding cost measures from incentive awards will

remain unchanged; however, States are reminded of the integral role of

financial oversight in program management. States are also encouraged

to utilize available administrative data to relate overall costs of job

training to more direct measures of long-term employment, earnings and

reductions in welfare. The Office of the Inspector General will be

collaborating with ETA in developing a mechanism for measuring the

program's return on its investments. The wider JTPA community will also

be invited to participate in this effort.

Discussion of Comments

On March 1, 1994, proposed revisions to the performance standards

for JTPA Title II-A, Title II-C, Title III, and newly instituted

section 204(d) performance standards were published in the Federal

Register at 59 FR 9910. Interested parties were invited to submit

written comments through March 31, 1994.

The Department of Labor (DOL) received 96 written comments on the

proposed performance standards issuance. Eighteen of the letters

explicitly endorsed the overall direction which the Department is

taking in establishing performance standards policy for Program Years

1994 and 1995. In general, the majority of comments requested

clarifications or raised issues about specific aspects of the proposed

requirements. While the concept of imposing a hard-to-serve ``gate''

for incentive awards eligibility received support, its application to

terminees rather than enrollments drew considerable local and State

criticism.

The following summarizes the major issues raised by the commenters

and the Department's respective responses.

Use of Participants Rather Than Terminees as the Basis for Determining

SDA Eligibility for Incentive Awards

The Department specifically sought comments on whether the hard-to-

serve ``gate'' for incentive award eligibility fully addresses the need

to emphasize this population in the performance standards system, and

whether compliance with the gate should be measured against those

enrolled in training or those completing the program. A majority of

those commenting on this issue agreed with the Department's approach of

restricting eligibility for incentive awards to those programs that

enroll in training at least a minimum (65%) hard-to-serve adults as

well as youth.

However, fully three-fourths of States and SDAs submitting comments

specifically recommended that the basis for the gate should be

participants (all individuals served during the year, including those

still enrolled at the end of the program year) rather than terminees.

Basing the 65% hard-to-serve level on program terminees was seen as

pressuring SDAs to ``manipulate'' their terminations. Local programs

can manage the recruitment process to ensure that adequate numbers of

hard-to-serve are enrolled. Ensuring comparable numbers of hard-to-

serve individuals will graduate each year is more problematic because

of the clients' varying training needs. Participants with multiple

barriers typically need to remain in programs longer than those with

fewer barriers.

The Department concurs with the arguments made for changing the

basis of the incentive award ``gate'' from terminations to

participants. Particularly compelling is the rationale that hard-to-

serve participants need longer-term interventions and the adverse

effects that such a gate might create in prompting SDAs to terminate

participants prematurely. Thus, beginning in FY 1994 for SDAs to become

eligible for incentives, at least 65 percent of both the SDAs' Title

II-A and Title II-C (in-school and out-of-school combined) participants

receiving training, and/or other services beyond objective assessment,

must be hard-to-serve. For the purpose of determining compliance with

this requirement, those individuals with SDA-defined barriers that have

been approved by the Governor are to be included as well as

participants in school-wide projects under section 263(g) and

participants in five percent-funded projects.

To further reinforce JTPA's focus on serving hard-to-serve

participants, the Department encourages Governors to design incentive

policies that explicitly promote increased service to that group. For

example, Governors may wish to adjust themselves based on the degree to

which SDAs exceed the incentive eligibility ``gate'' or on a sliding

scale of continuous improvement.

Improved Service to Out-of-School Youth and Employer-Assisted Benefits

Incentive Award Criteria

About 30 percent of all commenters mentioned this issue. Most of

the comments requested additional guidance and clarification on how

these two items could be incorporated into incentive award policies and

asked whether Governors could ignore or ``zero weight'' either one of

them in the awarding of incentives. The Department is sensitive to

concerns about establishing incentive criteria without sufficient

information on the program's prior experience in placing individuals in

jobs with employer-assisted benefits; or in the case of out-of-school

youth, in the absence of effective program models that have a positive

impact on a youth's long-term earnings potential.

In response to the field comments several changes have been made to

the incentive policy guidance as originally proposed. First, Governors

will be encouraged, but not required, to include these criteria in

State incentive policy for PY 1994. States will be required to

incorporate these criteria (i.e., they cannot be zero-weighted)

beginning in PY 1995. In the interim States can use data from the

Standardized Program Information Reports (SPIR) for PYs 1992 and 1993

to establish performance benchmarks for programs serving out-of-school

youth and job placements providing employer-assisted benefits.

Therefore, the Department is giving Governors maximum flexibility in

terms of how these criteria may be applied. Suggested approaches for

rewarding improved service to out-of-school youth and placements in

jobs providing employer-assisted benefits will be included in the

Training and Employment Guidance Letter appended to this Notice.

Several commenters noted that the intent of the incentive

provisions is to encourage service to more out-of-school youth; thus,

SDAs should be rewarded solely on the extent to which they exceed the

statutory minimum service levels. The Department's position is that

rewarding SDAs simply on the basis of increasing the numbers of out-of-

school youth does not go far enough in addressing the disappointing

findings from the National JTPA study. Thus, while SDAs will not be

exempted from the statutory requirement to serve at least 50% out-of-

school youth, ETA is encouraging States to use incentive funds to pilot

innovative youth models and to evaluate and replicate promising

strategies.

20-Hour Requirement

Section 106(k) of JTPA requires for performance standards purposes

that employment be for at least 20 or more hours per week. This

requirement applies to Title II-A (adults), Title II-C (youth), Section

204(d) (older workers), and Title III (dislocated workers) programs.

About 15 percent of the comments questioned the reasonableness of this

requirement for in-school youth, older workers, or disabled

participants, and requested that the Department waive it in these

cases. Since this requirement is explicitly defined in the statute, it

cannot be waived.

Several commenters also requested clarification about the reference

period, i.e., whether a ``week'' means 5 or 7 days and whether follow-

up is needed to verify that an individual actually worked for at least

20 hours. For determining compliance with this provision, a ``week''

means a period of 7 consecutive days, and the 20 or more hours is to be

understood as a condition of employment. (See section 5 of the attached

TEGL.) No formal verification is required, but the Department

encourages States to set up a system that would, at a minimum, provide

for random checking to assess compliance by SDAs.

Definition of ``Failure to Meet Standards''

Section 106(j)(i)(A) of JTPA requires the Secretary to establish

uniform criteria of determining whether a service delivery area fails

to meet performance standards. To comply with this provision, the

Department specified the number of failed standards which constitute

overall failure. Commenters generally agreed with the concept of a

uniform definition of performance failure; however, there was minor

opposition to defining overall failure as missing a combination of any

three standards or simply missing both youth standards. The Department

was criticized for placing too much weight on the youth standards.

Given Congressional interest in improving the quality of service to

youth, as reflected in various provisions in the amended JTPA, and

given the need to respond to the programmatic issues raised by the

National JTPA Study, the Department believes its emphasis on youth

program performance is appropriate.

Several commenters requested clarification on whether SDAs had to

fail the same standards two consecutive years to trigger a

reorganization. The sanction policy does not apply to the same

standards over the two-year period. Thus, for the purpose of

identifying whether an SDA has failed to meet performance standards for

two consecutive years, overall failure means failing any three core

standards or both youth standards for two consecutive years.

Definitions for meeting and failing individual standards will be

established by Governors.

Performance Standards for Older Worker Programs Under Section 204(d)

The other major area of comment involved the performance standards

for older worker programs under Section 204(d). A total of 27 letters

was received from advocates/service providers and State agencies on

aging. These letters questioned the methodology and data used for

setting the performance standards levels. Many indicated that the

proposed levels were too high, particularly the level of the average

wage at placement standard.

Since March 1, 1994, when the notice appeared in the Federal

Register, additional data became available from the PY 1992 SPIR.

Reported information on the Section 204(d) Older Worker program was

analyzed and used to establish revised levels for the standards that

are more closely related to actual experience for that program. This

has resulted in a lower entered employment rate standard, but the

average wage at placement standard remains unchanged. It should be

remembered, however, that the Secretary's standards are merely

departure points which will be adjusted to account for local economic

conditions and the characteristics of the terminees. The Department

will be providing States with a methodology for making these

adjustments.

Performance Standards Levels

A total of 9 comments was received about the overall performance

levels for Titles II-A and II-C standards. Comments were mixed with

hard-to-serve advocates supporting both higher and lower levels. The

majority of comments advocating lower levels were from youth advocates

who felt that the standard for youth employment was too high given the

recent decline in the rate of placing youth in jobs.

The numerical values of the standards are generally set so that if

local programs continue to perform unchanged from the prior program

year, 75 percent of the system are expected to exceed their standards.

The proposed numerical standards for five of the six core measures (all

but the YEER) and the Title III Entered Employment Rate measure are set

in this manner, using PY 1992 performance. Further adjustments were

made to reflect the new 20 hour per week minimum requirement for

employment. To arbitrarily raise the level of all standards, as

suggested by certain advocate groups, appeared counterproductive when

the Department was imposing new targeting requirements and employment

caveats.

One exception is the numerical standard for the YEER which if

similarly set, would lead to reduced standards for SDAs. The recently

published 30-month results from the National JTPA Study suggest that

employment and earnings experienced by out-of-school youth in JTPA fall

short of acceptable levels. Therefore, to foster improved services to

out-of-school youth, the numerical standard for the YEER will remain at

its current level of 41 percent.

The Secretary's standards for the new older worker performance

measures were derived from an analysis of available PY 1992 Section

204(d) data from the SPIR. The same general rules that were used for

setting the levels for the Titles II-A, II-C, and III programs,

including the adjustment for 20-hour employment, were used for the

Section 204(d) program. Again, it must be emphasized that these

national standards are merely departure points and States must make

adjustments to account for local conditions.

Certifications

This issuance is procedural in character and gives directions to

States and local service deliverers on the implementation of

performance standards under Title II-A, Title II-C, Section 204(d), and

Title III of JTPA. Therefore, it is not classified as ``major'' under

Executive Order 12291 and no impact analysis is required. This issuance

has been assessed according to the Federalist policymaking criteria

outlined in Executive Order 12612. The Department believes that this

issuance will not materially limit the policymaking discretion of the

States. This issuance both addresses Departmental policy objectives and

permits States discretionary authority in the application of

performance standards. The procedural framework included in this

issuance enables States to better assist localities in more effective

and efficient program design and management.

Signed at Washington, DC, this 5th day of July, 1994.

Doug Ross,

Assistant Secretary of Labor.

Appendix--Revisions to the Performance Management System, and

Performance Standards for Program Years (PY's) 1994 and 1995

Training and Employment Guidance Letter________

Training and Employment Guidance Letter No. ________

From: Barbara Ann Farmer, Administrator for Regional Management

Subject: Job Training Partnership Act (JTPA) Title II and Title III

Performance Standards for PY's 1994-1995

1. Purpose. To transmit guidance on the Secretary's required

performance measures and the Secretary's implementing instructions for

performance standards for Program Years (PY's) 1994 and 1995 (July 1,

1994-June 30, 1995; July 1, 1995-June 30, 1996).

2. 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 parameter criteria

for States to follow in adjusting the Secretary's standards for service

delivery areas (SDAs) and substate areas (SSAs).

The Job Training Reform Amendments (JTRA) of 1992 mandated

significant changes in the design and operation of local job training

programs, as well as the criteria used to assess their performance.

Revised Section 106 requires that performance standards for Title II-A,

Title II-C, Section 204(d) and Title III programs measure the number of

job placements that provide a minimum of 20 hours of work per week, and

that programs be rewarded based on high performance, increased service

to the ``hard-to-serve,'' and quality job placements that are both

high-paying and offer employer-assisted benefits. Incentive and

sanction policies are to be structured around more explicit criteria,

and performance standards failure is now federally defined to ensure

greater uniformity in assessing underperformance nationwide. As a

result of the JTPA amendments, section 204(d) now mandates performance

measures for the older worker program.

To assist the Department in responding to the substantive changes

required in the section 106 amendments, a Technical Workgroup was

convened in Washington, DC, in mid-July 1993. The workgroup had

representatives from State and local JTPA programs; public interest

groups, including the Partnership for Training and Employment Careers;

the U.S. Conference of Mayors; the National Association of Counties;

the National Governors' Association; and the National Council on the

Aging; and staff from the Department of Labor (DOL) Office of the

Inspector General. This Guidance Letter incorporates, to a large

extent, the workgroup's findings.

3. Performance Management Goals for PY's 1994-1995. Departmental

goals, initially established for PY 1990 in anticipation of the

amendments, remain unchanged and are as follows:

--Targeting services to a more at-risk population;

--Improving the quality and intensity of services that lead to

skills acquisition, long-term employability and increased earnings;

--Placing greater emphasis on basic skills acquisition to qualify

for employment or advanced education or training; and

--Promoting comprehensive, coordinated human resource programs to

address the multiple needs of at-risk populations.

In addition, with the passage of the 1992 JTPA Amendments, the

performance management system has been tasked, through its performance

incentive policies, to improve service to out-of-school youth and also

to foster employment in better quality jobs which offer high wages and

employer-assisted benefits.

These goals are reflected in the Secretary's six Title II-A and

Title II-C (core) measures, national numerical standards for these

measures, new incentive award criteria, and associated reporting

requirements. Governors still retain authority to establish additional

standards which reflect State policy and to develop the specific

approach to determining incentive awards.

This issuance specifies the national standards for PY's 1994-1995

and introduces the new criteria which must be a part of State incentive

grant policies. 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. Data on costs together

with program performance will provide critical information for State

monitoring, fiscal oversight, and assist States in measuring returns on

their human resource investments.

The Department has identified two additional goals for PY 1994-

1995. These are:

--Establishing a strong customer focus and orientation toward

improving the program's responsiveness in meeting the individual needs

of participants; and

--Seeking and using customer feedback to monitor the

appropriateness of JTPA services and to promote continuous program

improvements.

States and SDAs are encouraged to survey customers on a regular

basis as an integral part of their program oversight to identify

program weaknesses and to improve program services. Technical

assistance will be made available on cost-effective ways to gather and

utilize such information.

4. Secretary's National Standards for PY's 1994-1995. 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 1994-1995 Performance Standards

Title II-A

Adult Follow-up Employment Rate

59%

Adult Weekly Earnings at

Follow-up

$245

Welfare Follow-up Employment

Rate

47%

Welfare Weekly Earnings at

Follow-up

$223

Title II-C

Youth Entered Employment Rate

41%

Youth Employability Enhancement Rate

40%

Section 204(d) Older Worker Programs

Entered Employment Rate

52%

Average Hourly Wage at Placement

$5.45

Title III

Entered Employment Rate

67%

Average Wage at Placement

State Determined

The Title II-A adult and welfare follow-up measures will continue

to be based on individuals who terminate during the first three

quarters of the program year and the last quarter of the previous

program year.

5. Explanation of Performance Standards Levels. The Title II-A and

II-C numerical standards were derived from PY 1992 aggregate

performance data reported on the JTPA Annual Status Report (JASR) and

are generally set at a minimally-acceptable level that approximately

75% of the SDA's can be expected to exceed.

Revising the numerical standard for the Youth Entered Employment

Rate (YEER) in the same way would lead to reduced standards for SDAs.

However, recent National JTPA Study results suggest that employment and

earnings experienced by out-of-school youth in JTPA fall short of

acceptable levels. Therefore, to encourage improved services to out-of-

school youth, the numerical standard for the YEER will remain at its

current level of 41 percent.

Earnings standards have been adjusted to account for expected

future inflation. Finally, an additional special adjustment has been

made to employment-related standards to account for the requirement in

section 106(k) that permits credit, for performance standards purposes,

only for employment that is scheduled for 20 or more hours per week.

Similar to the Title II-A and Title II-C standards, the Title III

standard was derived from PY 1992 performance data reported on the

Worker Adjustment Program Annual Program Report (WAPR). This standard

is set at a level that, approximately, 75 percent of the substate areas

can be expected to exceed. As with the employment measures for Titles

II-A and II-C, an adjustment has been made to take into account the 20-

hour per week employment requirement.

Since discrete aggregate data were not available for PY 1992

Section 204(d) Older Worker program performance, available SPIR data

were used to assist in setting performance standards levels for that

program. As with the employment measures for Titles II-A, II-C, and

III, an adjustment has been made to take into account the 20-hour per

week employment requirement.

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.

6. Implementing Provisions. The following implementing requirements

must be followed:

A. 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 an Average Wage at Placement goal

B. Setting the Standards. Consistent with new legislative

provisions, 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:

1. Procedures must be:

--Responsive to the intent of the Act,

--Consistently applied among the SDA's/SSA's,

--Objective and equitable throughout the State,

--In conformance with widely accepted statistical criteria;

2. Source data must be:

--Of public use quality,

--Available upon request;

3. Results must be:

--Documented,

--Reproducible; and

4. Adjustment factors must be limited to:

--Economic factors,

--Labor market conditions,

--Geographic factors,

--Characteristics of the population to be served,

--Demonstrated difficulties in serving the population (this

adjustment factor is new), and

--Type of services to be provided.

The Department offers Governors an 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 soon-to-be

issued 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.

C. Performance Standards Definitions. Governors must calculate the

performance of their SDA's, SSA's, and section 204(d) programs

according to the definitions included in the Attachments.

D. Titles II-A and II-C Incentive and Sanction Policies.

Performance standards are to be established for programs funded under

Titles II and III of the Act. In applying the Secretary's standards for

Titles II-A and II-C, Governors must use the six core measures and also

consider criteria relating to programs successfully serving out-of-

school youth and placement in jobs providing employer-assisted

benefits. Governors are encouraged to begin using these criteria in PY

1994 incentive policies; these criteria are required (i.e., they cannot

be zero-weighted) to be incorporated into State incentive policies

beginning in PY 1995. Governors may select additional non-cost

measures, such as increased service to hard-to-serve participants, to

form the basis of incentive policies as long as the following criteria

are met:

1. As the basis for making incentive awards, the Governors must use

all (i.e., cannot ``zero weight'' any) of the six Secretary's core

measures. Beginning in PY 1995, Governors will also be required to

reward innovative out-of-school youth program models either identified

by the Department of Labor or recognized by the State as having a

demonstrated record of success, and placements in jobs providing

employer-assisted benefits. Although successful programs for out-of-

school youth remain the cornerstone of out-of-school incentives, SDA's

will still be expected to exceed the 50 percent minimum service level

to be rewarded under that criterion. Governors have considerable

flexibility in implementing the new incentive criteria. Suggested

approaches to addressing these criteria are included as Attachments 3

and 4 to this TEGL. Decisions regarding the relative weight or emphasis

of each core measure (e.g., the Youth Entered Employment Rate) and

incentive criterion (e.g., placement in jobs with employer-assisted

benefits) in a State's incentive award formula rest with the Governor.

The core measures will be the basis for identifying SDA's that are

candidates for technical assistance and for imposing sanctions. At

least 75 percent of the funds set aside for performance incentives must

be related to these measures and the out-of-school youth and employer-

assisted benefits criteria, in accordance with section 106(b)(7)(E).

2. 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.

3. 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.

4. 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 service 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 the purpose of determining compliance with this

requirement, Governors are to include any SDA-defined barriers that

have been approved by the Governor, as well as the characteristics of

participants in school-wide projects under section 263(g) and

participants in five percent-funded projects.

5. For those SDA's that successfully ``pass through'' the gate,

three criteria (in addition to any funds set aside for Governors'

standards) will determine the amount of the incentive award: (1)

exceeding the Secretary's performance standards, (2) providing quality

service to out-of-school youth, and (3) placing participants in

employment that provides employer-assisted benefits.

--The definition of ``employer-assisted benefits'' is to be

consistent with the SPIR definition (see Attachment 4). For the

purposes of reporting and performance standards, fringe benefits count

so long as they are an acknowledged component of employment conditions,

whether actually received at the time of placement or not. Thus, State

incentive policies will be structured to include benefit information

for those participants who entered employment at termination, and

Governors will have considerable latitude in implementing this

incentive policy requirement.

6. Consistent with present DOL policy, SDA's that pass through the

``gate'' and exceed all six of the Secretary's Titles II-A and II-C

standards must receive an incentive award.

7. Determination of an SDA's failure to meet these 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, one of which must be a youth

standard. Conversely, overall ``Failure'' is defined as failing any

three (3) or more of the core standards or failing both youth

standards. Definitions for meeting and failing individual standards

will be established by Governors.

--Failure for the first year precludes an SDA from receiving any

incentive awards and requires Governors to provide technical assistance

to the underperforming SDA.

--Failure in the second consecutive year precludes an SDA from

receiving any incentive award and requires Governors to impose a

reorganization plan.

8. 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

that 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 will be provided under

separate cover. 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. In addition, the Employment

and Training Administration will initiate a national JTPA Report Card

that will highlight programs showing the greatest returns on their

human resource investments in terms of high-quality employment (type of

job, wages and fringe benefits) for those participants most at-risk of

failure. Further information on the content and procedures for

preparing the ``report card'' will be provided separately.

9. 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 1994-95 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, 1994.

10. In PY 1994 and 1995, 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 SDA's are

encouraged to use such funds to develop or replicate model programs

serving out-of-school youth, particularly those based on contextual

learning models.

Note: For those SDA's in which ``incentive projects'' are

indistinguishable from those that provide general training, these

programs would not be considered exempt from performance standards.

7. State Action. States are to distribute this Guidance Letter to

all officials within the State who need such information to implement

the new performance standards policies and requirements for PY 1994-95.

It is especially critical that States, State Councils, Private Industry

Councils and SDA operational staff become thoroughly familiar with the

new provisions concerning incentive and sanctions policies.

A copy of this Guidance Letter is also being sent to your State

JTPA Liaison, the State Wagner-Peyser Administering Agency, and the

State Worker Adjustment Liaison.

8. Inquiries. Questions concerning this issuance may be directed to

Steven Aaronson at (202) 219-5487, ext. 107.

9. Attachments.

1. Definitions for Performance Standards;

2. Youth Employability Enhancement Definitions;

3. Rewarding Model Programs for Out-of-School Youth;

4. Rewarding Placements in Jobs Providing Employer-Assisted

Benefits.

Attachment 1--Definitions for Performance Standards

Those terminees who receive only objective assessment and/or

supportive services (or only objective assessment and/or supportive

services and entered employment) are to be excluded from the

calculation of performance outcomes for Title II-A, Title II-C, and

section 204(d) older worker programs. Participants in special 5-

percent-funded projects may, at the discretion of the Governor, also be

excluded from the calculation of performance outcomes for Title II-A

and Title II-C.

The following defines the Title II-A performance standards:

1. Adult Follow-Up Employment Rate--Total number of adult

respondents who were employed (for at least 20 hours per week) during

the 13th full calendar week after termination, divided by the total

number of adult respondents (i.e., terminees who completed follow-up

interviews).

2. Adult Follow-Up Weekly Earnings--Total weekly earnings for all

adult respondents who were employed (for at least 20 hours per week)

during the 13th full calendar week after termination, divided by the

total number of adult respondents employed (for at least 20 hours per

week) at the time of follow-up.

Welfare

3. Welfare Follow-Up Employment Rate--Total number of adult welfare

respondents who were employed (for at least 20 hours per week) during

the 13th full calendar week after termination, divided by the total

number of adult welfare respondents (i.e., terminees who completed

follow-up interviews).

4. Welfare Follow-Up Weekly Earnings--Total weekly earnings for all

adult welfare respondents employed (for at least 20 hours per week)

during the 13th full calendar week after termination, divided by the

total number of adult welfare respondents employed (for at least 20

hours per week) at the time of follow-up.

Note: The Title II-A adult and welfare follow-up employment

measures will continue to be based on individuals who terminate

during the first three quarters of the program year and the last

quarter of the previous program year. If the response rates for

those employed at termination and those not employed at termination

in an SDA differ by more than 5 percentage points in either the

adult or welfare samples, then the calculations of the follow-up

outcomes for that group must be modified to adjust for non-response

bias. The following defines the Title II-C performance standards:

5. Youth Entered Employment Rate (YEER)--Total number of youth who

entered employment at termination (for at least 20 hours per week),

divided by the total number of youth who terminated, excluding those

potential dropouts who are reported (on the Standardized Program

Information Report [SPIR]) as remained-in-school and dropouts who are

reported (on the SPIR) as returned-to-school.

Note: As in past practice, youth terminees who remain-in-school

or return-to-school and who also enter employment will not be

excluded from the termination pool reflected in the denominator of

the Youth Entered Employment Rate. However, only employment of at

least 20 hours per week satisfies the requirement for

``employment.''

6. Youth Employability Enhancement Rate (YEEN)--Total number of

youth who attained one of the employability enhancements at

termination, whether or not they also obtained a job, divided by the

total number of youth who terminated.

Youth Employability Enhancements include:

a. Attained (two or more) PIC-recognized Youth Employment

Competencies.

b. Completed major level of education following participation of at

least 90 calendar days or 200 hours in JTPA activity.

c. Entered and retained for at least 90 calendar days or 200 hours

in non-Title II training or received a certification of occupational

skill attainment.

Note: It is expected that the ultimate result of this outcome

will be the attainment of a job-specific skill competency on the

part of the terminee.

d. Returned to and retained in full-time school (dropouts only) for

one semester or at least 120 calendar days, attained a basic or job-

specific skill competency, and made satisfactory progress.

Note: For the purposes of this outcome, and the remained in

school outcome described below, ``school'' includes alternative

schools, defined as a specialized, structured curriculum offered

inside or outside of the public school system which may provide

work/study and/or General Educational Development (GED) test

preparation.

e. Remained in school for one semester or at least 120 calendar

days (for youth at risk of dropping out of school), attained a basic or

job-specific skill competency, and made satisfactory progress.

Note: For youth aged 14 and 15, the acceptable competencies will

be basic skills or pre-employment/work maturity.

The following defines Section 204(d) Older Worker program

performance standards:

1. Entered Employment Rate--Total number of individuals who entered

employment of at least 20 hours per week at termination, divided by the

number of total terminations.

2. Average Wage at Placement--Total hourly wage rate of all

terminees who entered employment of at least 20 hours per week at

termination, divided by the number of terminees who entered employment

of at least 20 hours per week at termination.

The following defines the Title III performance standard:

1. Entered Employment Rate--Total number of individuals who entered

employment of at least 20 hours per week at termination, excluding

those who were recalled or retained by the original employer after

receipt of a layoff notice, divided by the total terminations,

excluding those who were recalled or retained by the original employer

after receipt of a layoff notice.

Note: As indicated in the definitions listed above, for

performance standards purposes, the term ``employment'' means

employment for 20 or more hours per week. For determining compliance

with this provision, a ``week'' means a period of 7 consecutive

days, and the 20 or more hours is to be understood as a condition of

the employment. No formal verification is required, but the

Department encourages States to set up a system that would, at a

minimum, provide for random checking to assess compliance by SDA's.

Attachment 2--Youth Employability Enhancement Definitions

``Youth Employability Enhancement'' means an outcome for youth,

other than entered unsubsidized employment, which is recognized as

enhancing long-term employability and contributing to the potential for

a long-term increase in earnings and employment. Outcomes which meet

this requirement shall be restricted to the following:

(1) Attained PIC-Recognized Youth Employment Competencies (two or

more reported from SPIR items 36a, 36d, and 36e);

(2) Returned to Full-Time School;

(3) Remained in School;

(4) Completed Major Level of Education; or

(5) Entered Non-Title II Training.

1. Attained PIC-Recognized Youth Employment Competencies--The total

number of youth who demonstrated proficiency, as defined by the PIC in

two or more of the following three skill areas in which the terminee

was deficient at enrollment: (1) pre-employment/work maturity (SPIR

item 36a); (2) basic education (SPIR item 36d); or (3) job-specific

skills (SPIR item 36e). Competency gains must be achieved through

program participation and be tracked through sufficiently developed

systems that must include: quantifiable learning objectives, related

curricula/training modules, pre and post-assessment, employability

planning, documentation, and certification.

The completely detailed definition for Youth Employment Competency

systems is located in the Standardized Program Information Reporting

System (SPIR) instructions.

2. Returned to Full-Time School--The total number of youth who: (1)

had returned to full-time secondary school (e.g., junior high school,

middle school and high school) including an alternative school if, at

the time of intake, the participant was not attending school (exclusive

of summer school) and had not obtained a high school diploma or

equivalent; and (2) prior to termination, had been retained in school

for one semester or at least 120 calendar days.

Alternative School--A specialized, structured curriculum offered

inside or outside of the public school system which may provide work/

study and/or GED preparation.

Note: To obtain credit for Returned to Full-Time School and

Remained in School (described below), SDA's must be prepared to

demonstrate that retention results from continuing, active

participation in JTPA activities and the youth must: (1) be making

satisfactory progress in school; and (2) (for youth aged 16-21)

attain a PIC-approved Youth Employment Competency in Basic Skills or

Job-Specific Skills; or (3) (for youth aged 14-15) attain a PIC-

approved Youth Employment Competency in Pre-employment/Work Maturity

or Basic Skills.

Satisfactory Progress in School--An SDA, in cooperation with the

local school system, must develop a written policy that defines an

individual standard of progress for each participant that he or she is

required to meet. Such a standard should, at a minimum, include both a

qualitative element of a participant's progress (e.g., performance on a

criterion-referenced test or a grade point average) and a quantitative

element (e.g., a time limit for completion of the program or course of

study). This policy may provide for exceptional situations in which

students who do not meet the standard of progress are nonetheless

making satisfactory progress during a probationary period because of

mitigating circumstances.

3. Remained in School--The total number of youth who, prior to

termination, had been retained in full-time secondary school, including

alternative school, for one semester or at least 120 calendar days. A

youth may be reported as Remained-in-School only if he/she was

attending school at the time of intake, had not received a high school

diploma or its equivalent, and was considered ``at risk of dropping out

of school,'' as defined by the Governor in consultation with the State

Education Agency.

4. Completed Major Level of Education--The total number of adults/

youth who, prior to termination, had completed, during enrollment in

the program, a level of educational achievement which had not been

reached at entry. Levels of educational achievement are secondary and

post-secondary. Completion standards shall be governed by State

standards and shall include a high school diploma, GED Certificate or

equivalent at the secondary level, and shall require a diploma or other

written certification of completion at the post-secondary level.

Note: To obtain credit, completion of a major level of education

must result primarily from active JTPA program participation of at

least 90 calendar days or 200 hours, usually prior to the completion

of the major level of education.

5. Entered Non-Title II Training--The total number of adults/youth

who, prior to termination, had entered an occupational skills

employment/training program not funded under Title II of the JTPA, that

builds upon and does not duplicate training received under Title II.

Note: To obtain credit, the participant must have been retained

in that program for at least 90 calendar days OR 200 hours or must

have received a certification of occupational skill attainment.

During the period the participant is in non-Title II training, he/

she may or may not have received JTPA services. It is expected that

the ultimate result of this outcome will be the attainment of a job-

specific skill competency on the part of the terminee.

Attachment 3--Rewarding Model Programs for Out-of-School Youth

One of the Department of Labor's high priorities is to improve the

effectiveness of JTPA programs for out-of-school youth. Results from

the National JTPA Study show that outcomes achieved by out-of-school

youth 30 months after entering the program are disappointing. To

implement section 107(b)(7)(C) of the amended JTPA, the Department

encourages in PY 1994, and will require in PY 1995, that Governors

reward out-of-school youth programs that are identified by the

Department or recognized by the State as having a demonstrated record

of success. States need to develop ways to identify such programs.

Possible approaches include:

--Using outcomes achieved to identify successful programs. Outcomes

could include both the two youth performance measures and measures such

as learning gains and earnings/retention in full-time employment.

--Alternatively, States could offer SDA's ``seed money'' from

incentive funds to plan/operate programs that provide innovative or

high-quality training to out-of-school youth based on criteria

established by the Governor. Examples of such criteria include training

that integrates occupational and basic skills training, and training

that emphasizes acquiring job skills in demand in the emerging

workplace.

Note: Whatever method is used to reward successful out-of-school

youth programs, access to such incentives must be limited to those

SDA's that serve in excess of 50 percent out-of-school youth in

their overall Title II-C program.

Attachment 4--Rewarding Placements in Jobs Providing Employer-

Assisted Benefits

PY 1994 is the first year Governors are asked to reward SDA's for

placements in jobs with employer-assisted benefits, including health

benefits. (Governors will be required to do so beginning in PY 1995.)

Rewarding such placements is intended to increase the focus on overall

job quality. To include placements in jobs with employer-assisted

benefits in their incentive policies, States will need to:

1. Specify how the criterion will be measured. The definition must

be consistent with that for SPIR Item 35c (i.e., consisting of, at a

minimum, health insurance benefits and coverage under Social Security

or an equivalent pension plan). Note that it is not necessary for an

individual to actually receive benefits when employment begins as long

as they are an acknowledged component of employment conditions. For

example, health benefits available after a waiting-period and benefits

that are refused because of availability from another source both count

as employer-assisted benefits. Examples of measures of jobs with

benefits, using data from SPIR Item 35c are:

--among terminees who enter employment, the percent who are in jobs

providing employer-assisted benefits; and

--among all terminees, the percent who enter employment and are in

jobs providing employer-assisted benefits.

2. Determine how to reward placement in jobs with employer-assisted

benefits. One possible approach would require the State to determine a

departure point or benchmark to use in setting rewards levels for

benefits. This departure point would serve the same function served by

the numerical national standards for the Secretary's core measures. It

would be the level that, before any adjustment for local factors,

identifies rewardable performance. Under this approach, a State would

also decide whether and how the departure point should be adjusted for

local clientele and economic conditions when setting reward levels for

each SDA.

Rather than setting reward levels for employer-assisted benefits

using a process akin to setting standards for the Secretary's core

measures, States may choose a simpler approach. Because there are no

sanctions based on this criterion, it is not absolutely necessary to

set a minimally acceptable performance level. It is possible to reward

SDA's at all levels of performance on employer-assisted benefits. One

way to do this would be to set aside a portion of incentive funds to

reward such placements. This reward pool could be divided among SDA's

based on their proportionate share of all placements in jobs with

employer-assisted benefits. This procedure is equivalent to giving a

fixed amount for each placement (i.e., the amount is the value of the

pool divided by the total number of placements into jobs with benefits

in the State.

Because this approach may be viewed as favoring SDA's in areas

where benefits are widely prevalent, it should be viewed as interim

until better data on employer-assisted benefits are available.

[FR Doc. 94-16698 Filed 7-8-94; 8:45 am]

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