Job Training Partnership Act; Proposed Revisions to the Performance Management System, and Proposed Performance Standards for Program Years (PY's) 1994 and 1995

SUMMARY: To comply with the statutory requirements in the Job Training

Partnership Act, as amended in 1992, the Department of Labor is

proposing changes to State incentive and sanction provisions for

programs operated under Title II of the Job Training Partnership Act.

Also being introduced are two new performance standards for job

training programs serving older workers funded under Section 204.

DATES: These changes to the performance management system will be

effective for programs in PY's 1994 and 1995 (July 1, 1994-June 30,

1996).

COMMENTS: Written comments are invited from the public. Comments must

be submitted on or before March 31, 1994.

ADDRESSES: Written comments shall be addressed to the Assistant

Secretary for Employment and Training, U.S. Department of Labor, room

N5631, 200 Constitution Avenue NW., Washington, DC 20210, Attention:

Steven Aaronson, Chief, Adult and Youth Standards Unit.

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.

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).

SUPPLEMENTARY INFORMATION:

Introduction

The Job Training Reform Amendments of 1992 (Amendments) 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 reshaping national and State policy and

practices.

Under Section 106 of the amended Job Training Partnership Act

(JTPA), the Secretary of Labor is required to set 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 Secretary may modify these performance standards no

more than every two years, and such modifications cannot be

retroactive.

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 adult measures reflect this emphasis on employment retention

and earnings; for youth, employment and skill enhancements are

stressed. For this reason, the Secretary's performance measures will be

retained for PY's 1994 and 1995.

Numerical levels for these core standards, however, have been

updated to reflect the most recent JTPA program experience.

Programs serving older workers were not previously subject to

performance standards. Under section 204(d) of JTPA, as recently

amended, these programs are now subject to performance standards that

are to be focused on increasing employment and earnings including

hourly wages, similar to those programs serving other disadvantaged

adults. In developing requirements for these performance standards, the

special needs and circumstances of this population group were

considered. Because field evidence suggests that older workers are much

more likely to remain employed once they are placed in jobs, employment

at program completion is a fundamental priority. The employment and

wage measures together underscore the employment focus of the program,

particularly in jobs that are higher paying.

To comply with the new 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. However, 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 proposed.

States will need to consider, however, the quality of service to

out-of-school youth and placements in jobs with employer-assisted

benefits when judging service delivery area (SDA) performance and

awarding incentive funds. The Department requests comments on whether

these proposals adequately address statutory requirements for promoting

service to the hard-to-serve population and improving service to out-

of-school youth through its existing performance standards and revised

incentive award criteria.

Since the Department is undertaking a comprehensive review of its

Title III programs, changes in outcome measures will be deferred until

this critical assessment is completed. Governors will continue to be

required to set an entered employment rate standard for their Title III

programs and encouraged to establish an average wage at placement goal.

At the same time, the Department will be exploring ways to maximize

post-program wages, to better measure skills acquisition and customer

satisfaction, and to improve the quality of services provided to

dislocated workers.

Financial information will continue to be collected for program

management purposes; however, the policy of excluding cost measures

from incentive awards will remain unchanged.

Statutory Basis of Performance Standards

Section 106 of JTPA directs the Secretary of Labor to establish

performance standards for major job training programs funded under

separate JTPA statutory provisions: Title II-A (adult programs), Title

II-C (youth programs), and Title III (dislocated worker programs).

Section 204(d)(6)(A) of JTPA, as recently amended, for the first time

subjects older worker programs to performance standards. Performance

standards serve the purpose of assuring Congress that the basic

statutory objectives (increased earnings and employment, skills

acquisition, and reduced welfare dependency) are being met (29 U.S.C.

1516). On the basis of the Secretary's performance standards, Governors

must set performance standards for each of their SDA's and substate

areas (SSA's).

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.

Rationale for Retaining Adult Measures

Data on post-program employment and earnings provide the most

direct measure of long-term employability. Currently, measures for

programs serving adults and adult welfare recipients capture a

participant's employment status and earnings three months after program

completion.

The Amendments, however, envision longer periods of employment

retention--beyond six months--to measure a job training program's

success in preparing its adult participants for long-term employment.

Looking toward the feasibility of developing such measures, the

Department has awarded grants to 16 States to compare alternative

approaches, measures using Unemployment Insurance (UI) wage records

versus follow-up survey data, as a basis for assessing and rewarding

local program performance. Information on the operational problems of

using alternative measures, such as timing for incentive awards and

addressing uncovered or out-of-State employment, will be an important

part of the pilot project report due in Fall 1994. The Department, in

conjunction with State and local staff, will use the results of these

State case studies and other information to introduce, where feasible,

alternative post-program measures in FY 1995.

Rationale for Retaining Youth Measures

Youth measures have undergone the most refinements since JTPA's

inception and now more fully reflect the dual goals of programs serving

youth who are enrolled in school, as well as those who are out of

school and seeking employment. Additionally, all the required program

outcomes in the newly revised youth provisions at Section 106(b)(4),

including employment, attainment of employment competencies, dropout

prevention and recovery, secondary and post-secondary school

completion, and enrollment in advanced training, are encompassed in the

current two measures. To address a longstanding concern that employment

may not be an appropriate outcome for all youth, the Department will

continue its practice of excluding in-school youth--those enrolled in

dropout prevention or dropout recovery programs--from the base used to

compute the Youth Entered Employment Rate.

Although separate performance measures for in-school and out-of-

school youth are not specifically called for in Section 106(b)(4)(B),

the Department has carefully examined the implications of a dual

performance management system for youth programs. Separate performance

measures are not preferred for a number of reasons. One objection to

separate performance measures is that they lead to a proliferation of

measures, creating confusion at the local level among conflicting

policy priorities. In addition, separate measures for in-school and

out-of-school youth limit flexibility in program design by penalizing

SDA's that do not choose to balance enrollments between in-school and

out-of-school youth. In programs serving only small numbers of in-

school youth, each terminee would represent a large percentage of in-

school terminations. Individual outcomes would therefore have a

relatively larger impact on overall performance.

Rationale for New Older Worker (Section 204(d)) Performance Measures

Section 204(d)(6)(A) of JTPA imposes performance standards on State

programs serving older workers. Quality employment is a primary goal of

these programs and the Department believes that, in the absence of

postprogram data, measures surrounding job placements at termination

are appropriate at this time. As postprogram information becomes

available on the section 204(d) program, the Department will reconsider

the possibility of follow-up employment and earnings measures. However,

for PYs 1994 and 1995, the Department is proposing to assess programs

operated under section 204(d) using an Entered Employment Rate and an

Average Wage at Placement measure.

Note: Programs operated under section 204(d) are State programs,

even though they may be operated by various local entities.

Therefore, the two performance measures will be applied to all older

worker programs statewide.

Rationale for Not Establishing Separate Hard-to-Serve Performance

Measures

Section 106(b)(7) of JTPA states that Governors shall award

incentive grants to SDA's that, in addition to meeting other criteria,

``exceed the performance standards established by the Secretary * * *

with respect to services to populations of hard-to-serve individuals *

* *''. This provision could be interpreted as requiring the addition of

separate hard-to-serve performance measures to the current JTPA

performance standards system.

However, additional performance measures for the hard-to-serve

population, per se, do not appear to be the best approach for

implementing this requirement. The four current adult measures provide

critical evaluative data which would preclude their exclusion from the

performance standards system. Therefore, additional hard-to-serve

performance measures merely would add to the complexity of the system

and lead to an unwanted proliferation of measures. In fact, past

experience with 12 performance measures provided solid evidence of the

pitfalls of introducing such complexity.

Moreover, with the addition of hard-to-serve measures, the core set

of performance standards is redundant and, thus, not a useful

management tool. It is estimated that over 60 percent of adults and

youth currently served in JTPA qualify for one or more hard-to-serve

categories. Therefore, it can be argued that the current measures

adequately reflect the program goals of increased employment and self-

sufficiency among those most in need of JTPA's services, because these

individuals constitute a majority of the program's participants. In

fact, welfare recipients are already double counted in the current

measures; adding outcomes for hard-to-serve groups will result in

welfare recipients being counted three times (as adults, as welfare

adults, and as hard-to-serve adults).

The Department considered several strategies for avoiding the

proliferation of measures while, at the same time, maintaining

Congressional intent. The most expedient way to approach the statutory

requirement was from a State incentive policy perspective. Therefore,

in order for an SDA to be considered eligible to receive any incentive

award, the Department is proposing that 65 percent of their terminees

(i.e., both 65 percent of Title II-A terminees and 65 percent of Title

II-C terminees) receiving services beyond objective assessment (i.e.,

training and/or job search assistance) must be from the legislatively

defined hard-to-serve categories.

This requirement serves as a ``gate'' in determining an SDA's

eligibility for incentive awards, thus ensuring the Congressional

objective that program be rewarded on the basis of both high levels of

service to the hard-to-serve and good performance. In the absence of

such a gate, both State and local administrators expressed concerns

that local programs could exceed their performance standards and thus

be rewarded, even if service levels to the hard-to-serve fall below the

legislatively required floor of 65 percent.

Excluding individuals participating in the program, but receiving

only objective assessment, from the determination of eligibility for

incentive awards is consistent with existing Department policy of

excluding such individuals from the performance standards universe.

Rationale for Including Improved Service to Out-of-School Youth and

Employer-Assisted Benefits Incentive Award Criteria

Section 106(b)(7) of JTPA includes, among other required criteria

for awarding incentive grants to SDA's, improved service to out-of-

school youth and job placements that provide employer-assisted

benefits. Governors will be required to reward model out-of-school

youth programs either identified by the Department of Labor or

recognized by the State or SDA as having a demonstrated record of

success. Considerable flexibility will be given to Governors in

establishing a method for doing so.

The Act is not at all directive with regard to rewarding employment

in jobs offering fringe benefits. In the absence of any data on what

constitutes a reasonable national estimate of job placements with

employer-assisted benefits in JTPA, the Department has given States

considerable flexibility in establishing incentive policies that

promote such placements. Once relevant data become available from

JTPA's management information system, the Department will be able to

offer more guidance to States.

Because numerous types of employer-assisted benefits are available

which are more or less typically provided, the Department needs to

ensure some degree of uniformity. It is proposed that the States use a

standardized definition. The definition used in JTPA's newly instituted

Standardized Program Information Report (SPIR) provides this

comparability. This definition requires that the job offer employer-

assisted health benefits; but the individual does not have to actually

receive such benefits. Again, in the absence of firm data with which to

establish a credible benchmark, the Department is offering States

maximum flexibility in measuring the provision of employer-assisted

benefits and determining an appropriate incentive policy emphasis.

Rationale for New Numerical Levels

The Secretary's national numerical standards for PY's 1994-1995 are

set on the basis of the most recent JTPA performance data available (PY

1992). The numerical values of the standards are generally set so that

if SDA's/SSA's continue to perform in the same manner as they did in

the most recent program year, 75 percent of the system should exceed

their standards. This means that the proposed numerical standards for

five of the six core measures and the Title III Entered Employment Rate

measure are set at the 25th percentile of PY 1992 performance. Revising

the numerical standard for the youth entered employment rate (YEER) in

the same way would lead to reduced standards for SDAs. However, 30

month results from the recent National JTPA Study suggest that outcomes

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. The Secretary's standards for the new older worker

measures are derived from a combination of data obtained from Job

Training Quarterly Survey data and the JTPA Annual Status Report.

Rationale for New Sanction Policy Provisions

The amended JTPA states in Section 106(j)(1) that the Department is

to establish uniform criteria for determining whether an SDA fails to

meet performance standards and the circumstances under which remedial

action shall be taken. This provision shifts responsibility for

defining ``failure'' to meet standards from the States to the

Department.

In determining the new sanction policy provisions, the Department

sought uniformity and, thus, comparability across the JTPA system. This

is clearly in line with Congressional intent. Furthermore, the

Department believes that, to minimize confusion, the meaning of

``failure'' in one year should be consistent with the meaning of

``failure'' for a second year, since failure for two consecutive years

triggers reorganization. States and local areas should clearly

understand the meaning of failure, and it should be consistent from one

program year to the next. Use of the Secretary's standards for the

purpose of imposing sanctions on SDA's is consistent with past

practices.

Another issue related to imposing sanctions on SDA's concerns the

definition of ``failure'', specifically, defining an appropriate

``level of failure''. Consistent with the intent of the amended

legislation, the Department has specified the number of ``standards not

met'' as constituting failure. It was noted that the lack of

specificity in the past led to confusion and inconsistency across the

JTPA system. In addition, to make the definition more explicit and to

properly consider the goals of the youth program, the Department added

a stipulation that an SDA which does not meet at least one of the two

youth standards will be considered as failing.

``Meeting Performance Standards'' is defined as meeting at least

four of the six core standards, one of which must be a youth standard.

Conversely, ``Failure'' is defined as: Failing to meet three (3) or

more of the core standards or failing to meet both youth standards. For

the first year, failure will require a State to provide technical

assistance to an SDA and will preclude that SDA from receiving any

incentive award. (This is explicitly stated, since an SDA which passes

through the eligibility gate could conceivably qualify for an incentive

award based on meeting other criteria.) For the second year, failure

will trigger the reorganization of the SDA and preclude receipt of any

incentives in that year.

Public Comment and Participation

The Department is committed to a participatory process in the

development of performance standards through periodic meetings with

State, SDA, and Private Industry Council (PIC) representatives to

address performance standards issues. Such a meeting was held in July

1993 to provide the Department with field input critical to the

development of these standards. This request for comment, which

incorporates that input, is another important part of the participatory

process.

The Secretary especially requests comments on the following issues:

General

Does the system proposed in this notice adequately deal with

legislated requirements for promoting service to the hard-to-serve

through performance standards and related incentive award criteria?

Retaining Current Adult and Youth Measures as the Secretary's Core

Measures

Given currently available data, do the six adult and youth measures

proposed as the Secretary's core measures adequately and appropriately

reflect the program's overall goals of increased employment and

earnings, reduced welfare dependency, long-term economic self-

sufficiency, and increased educational attainment and occupational

skills?

Hard-to-Serve ``Gate'' for Incentive Award Eligibility

The Department proproses to require for eligibility to receive

incentive awards that SDA's ensure that 65 percent of their terminees

receiving training or other services beyond objective assessment

represent one of the statutorily defined hard-to-serve categories. Does

establishing this requirement fully address the need to emphasize this

population in the performance standards system? Would additional

outcome measures for hard-to-serve create confusion or undue complexity

at the local level? In assessing compliance with the eligibility gate

for incentive awards, should the 65 percent targeting provision be

applied to those enrolled in JTPA or those completing the program?

Also, should the eligibility gate be comprised of total individuals

served (i.e., adults and youth combined), or should appropriate

separate adult and youth gates be identified?

Failure To Meet Performance Standards

Is the definition of failure to meet standards reasonable, fair,

and consistent with the intent of the amended JTPA?

Older Worker (Sec. 204(d)) Performance Measures

Is it appropriate to limit performance assessment to outcomes at

termination, or does the reintroduction of termination-based measures

create a perverse effect? Once postprogram data on 204(d) programs

become available from the SPIR beginning in PY 1994, should any

postprogram measures be considered? Do the standards adequately address

the needs of individuals who participate in older worker programs?

Signed at Washington, DC, this 18th day of February 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 provisions 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 are updated every two

years based on the most JTPA program experience and on 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 (SDA's) and substate areas

(SSA's).

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. The revised Section 106 requires that performance

standards reflect job placements that are a minimum of 20 hours per

week, and that programs be rewarded based not only on high

performance, but also on increased service to the ``hard-to-serve,''

and on 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 guidelines, and

criteria for failure to achieve program objectives are to be

clarified and made more uniform. Section 204(d) 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. PY 1994 will

begin the sixth two-year cycle of the performance management system

under JTPA. Departmental goals, initially established for PY 1990 in

anticipation of the amendments, remain unchanged:

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 Amendments in 1992, the

performance management system has been tasked, through performance

incentive award policies, to improve service to out-of-school youth

and also 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 those in

incentive policies. Cost data are to be used for purposes of program

oversight and fiscal management only. Numerical levels for the core

standards are identified in Section 7 of this Guidance Letter.

Note: The Department has identified two additional goals for

which Title II measures/standards have not yet been established:

Establishing a strong customer focus and orientation

and improving the responsiveness of services to the individual needs

of participants; and

Improving access to labor market information and

obtaining feedback from customers and employers on the quality of

program services.

Various options for collecting and analyzing customer feedback

will be explored. In the meantime, States and SDA's are encouraged

to begin on their own to focus on improving the quality of program

services and using customer feedback as a management tool.

4. Title II-A and Title II-C Core Performance Measures. Four

performance measures will be used for Title II-A for PY's 1994 and

1995. These are:

--the Adult Follow-Up Employment Rate;

--Adult Weekly Earnings at Follow-Up;

--the Welfare Follow-Up Employment Rate; and

--Welfare Weekly Earnings at Follow-Up.

Two performance measures will be used for Title II-C for PY's

1994 and 1995. These are:

--the Youth Entered Employment Rate; and

--the Youth Employability Enhancement Rate.

The adult and welfare measures are being retained because post-

program outcomes are the most direct measure of long-term

employability. The current measures send an explicit policy signal

that JTPA, as a value-added program, promotes employment retention

for its participants, as measured by an individual's employment

status and earnings three months after leaving the program. Since

earnings are also a critical factor in reducing welfare dependency,

the welfare earnings measure is the best proxy currently available

for identifying reduced dependency.

Note: The Amendments suggest that adult program measures should

address longer periods of employment retention than the current 13

weeks. The Department has awarded grants to 16 States that will

examine the merits of using Unemployment Insurance (UI) wage records

for such longer-term measures. Preliminary data indicate that

comparable performance measures can be developed from UI wage

records. Applying the results of longer-term measures to ongoing

program management and annual incentive award determinations raises

technical and operational issues which will need to be examined by

the pilot sites. The Department will use the results of these States

studies and other available data to introduce, where feasible,

longer-term measures in PY 1995.

Youth measures are unchanged because they fully reflect

Departmental priorities and the required performance standards

factors listed in section 106(b)(4) of JTPA (employment, attainment

of employment competencies, dropout prevention and recovery,

secondary and post-secondary school completion, and enrollment in

other training programs). Acknowledging that employment may not be

an appropriate outcome for all youth, those individuals who are

enrolled in dropout prevention programs and successfully remain in

school, and those who are enrolled in dropout recovery programs and

successfully return to school will not be included in the Youth

Entered Employment Rate.

5. Performance Standards Provisions for Older Workers Programs.

Except for incentive award and sanctions provisions, section 204

(d)(6) of JTPA identifies requirements, including performance

standards, for the operation of older worker programs. In response

to this new provision, two performance measures have been

established to take into account program goals for this segment of

the population. Starting in PY 1994, there will be an Entered

Employment Rate performance measure as well as an Average Wage at

Placement performance measure for older worker programs. As

postprogram information becomes available on the section 204(d)

program, the Department will reconsider the possibility of follow-up

employment and earnings measures.

Note: Programs operated under section 204(d) are State programs

even though they may be operated by various local entities.

Therefore, performance standards will be applied to the total older

worker programs State-wide.

6. Performance Standards Provisions for Title III. Governors are

required to set an entered employment rate standard for Title III

programs and are encouraged to establish an average wage at

placement goal. Performance standards for Title III will be applied

to the following programs funded under section 302: all of section

302(c)(1) State activities, and sections 302(c)(2) and 302(d)

substate area activities. Performance outcomes will be reported for

programs operated under section 302(a)(2), Secretary's National

Reserve, in lieu of applying performance standards, because these

funds are typically used for one-time projects rather than ongoing

programming.

While rewards and the imposition of sanctions are not required

for title III programs, Governors may use a portion of the 40

percent funds reserved for State activities under section 302(c)(1)

for rewarding substate area performance, particularly lengthier,

substantive training that will better ensure the long-term

employability of participants. Although no statutory requirement

exists for monetary incentives, Congress requires State plans to

include incentives to ensure that long-term training is provided to

those who need it.

7. Secretary's National Numerical Standards for PY's 1994-1995.

The title II-A and II-C numerical standards are derived from PY '92

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

and are generally set at a level that approximately 75% of the SDA's

are 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, 30 month results from the

recent National JTPA Study suggest that outcomes 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 have been adjusted to account for expected future

inflation. Finally, an additional special adjustment has been made

to the Adult and Welfare Follow-Up Employment Rates and the Youth

Entered Employment Rate to account for the requirement in section

106(k) that for performance standards purposes ``. . . `employment'

means employment for 20 or more hours per week.''

The Secretary's standards for title II-A for PY's 1994-1995 are

as follows:

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

The Secretary's standards for title II-C for PY's 1994-1995 are

as follows:

Youth Entered Employment Rate: 41%

Youth Employability Enhancement Rate: 40%

No national data on older worker program performance are

currently available to assist in setting national standards.

However, the Job Training Quarterly Survey (JTQS) has detailed

employment and wage data on older workers served by regular title

II-A programs. Based on these data, and adjusting for the 20 hours

per week employment requirement, the Secretary's standards for older

worker programs are as follows:

Entered Employment Rate: 62%

Average Hourly Wage at Placement: $5.45

The title III standard is derived from PY '92 performance data

reported on the Worker Adjustment Program Annual Program Report

(WAPR). This standard is at a level that approximately 75 percent of

the substate areas are expected to exceed. As with the employment

measures for title II-A and II-C, an adjustment has been made to

take into account the 20 hour per week employment requirement. The

Secretary's standard for title III is:

Entered Employment Rate: 67%

8. 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 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 an adjustment methodology that conforms to

these parameter criteria for Governors to use in making required

adjustments. 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/

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 model programs

successfully serving out-of-school youth and placement in jobs

providing employer-assisted benefits. Governors may select

additional non-cost measures 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. Governors will also be required to reward model out-

of-school youth programs either identified by the Department of

Labor or recognized by the State or SDA as having a demonstrated

record of success. Considerable flexibility will be given to

Governors in establishing a method for doing so. Likewise, in the

absence of firm data with which to establish a credible benchmark,

States have total flexibility in how to measure the provision of

employer-assisted benefits. 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 and employer-assisted benefits criteria, in accordance

with Section 106(b)(7)(E).

2. Cost standards cannot be used for incentive award purposes.

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 the amended 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

combined) terminees 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.

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:

Exceeding the Secretary's standards; providing quality service to

out-of-school youth and placing participants in employment that

provides employer-assisted benefits.

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

consistent with the SPIR definition (Item 35c). 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 exceed all six

of the Secretary's Titles II-A and II-C standards must receive an

incentive award (if the ``gate'' is successfully attained).

7. Determination of an SDA's failure to meet standards and

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'' is defined as meeting at least

four of the six core standards, one of which must be a youth

standard. Conversely, ``Failure'' is defined as failing to meet

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

youth standards.

--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 for the second 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 for each SDA ``failing'' for the first year are required. 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.

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).

10. In PY 1994 and 1995, Governors will continue to have the

discretion to exclude pilot projects serving ``hard-to-serve''

individuals, particularly out-of-school youth, 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.

9. 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 1994-1995. 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.

10. Inquiries. Questions concerning this issuance may be

directed to Steven Aaronson at (202) 219-5487, extension 107.

11. Attachments:

1. Definitions for Performance Standards

2. Youth Employability Enhancement Definitions

Attachment 1--Definitions for Performance Standards

Those terminees who receive only objective assessment (or only

objective assessment 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: 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 nonresponse 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. In effect, SDA's would ``receive

credit'' for these individuals twice--in the YEER and in the YEEN.

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 for one semester

or at least 120 calendar days (dropouts only), attained a basic or

job-specific skill, 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 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.

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);

(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: pre-employment/work maturity;

basic education; or job-specific skills. 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, transmitted in

TEIN No. 5-93, dated July 30, 1993.

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 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 individuals 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 that each participant 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.

[FR Doc. 94-4587 Filed 2-28-94; 8:45 am]

BILLING CODE 4510-30-M