I.Purpose
The purpose of this policy is to provide guidance on the methodology
for determining potential budget reductions in formula or discretionary allocations
issued to the local workforce development areas (local areas) when a rescission
of State funding occurs.
II.Effective
Date
Immediately
III.Rescission
ODJFS, Workforce
Investment Act Transmittal Letter No. 26, WIA Funds Rescission Policy
(January 8, 2007).
IV.Background
Under the Workforce Innovation and Opportunity Act (WIOA), the State
may be subject to reductions in formula or discretionary grants for several reasons
including sanctions and penalties, budget reductions enacted by Congress, or the
federal budget sequestration process.
Also, pursuant to 20 C. F. R. § 683.135, the United States Department
of Labor (USDOL) may recapture a portion of the State’s WIOA Title I funds for the
adult, dislocated worker, or youth program and reallot them to other States if the
State has not obligated at least 80 percent of the funds by the end of the first
program year in which they were allotted as determined separately for each of the
three programs.
To minimize the impact of rescissions on individuals, businesses,
and local areas, the Ohio Department of Jobs and Family Services (ODJFS) will absorb
rescissions at the state level by reducing the ODJFS budget for statewide activities
to the maximum extent possible. However,
if ODJFS is unable to fully absorb a rescission due to its budget constraints, local
area allocations will be reduced to comply with the rescission.
V.Definitions
Affected grant: A sub-award subject to a State or local budget
reduction due to a rescission.
Obligations: The sum value of orders placed for property and
services, contracts and subawards made, and similar transactions during a given
period that require payment during the same or a future period.
Rescission: The cancellation of budget authority previously
provided by Congress or the reduction in a federal program allotment by a federal
agency.
VI.Requirements
A.Sequential
Rescission Process
In the event of a grant rescission, the State will reduce budgets
funded by the grant using a five-step sequential process until the rescission is
fully covered. Each subsequent step in the
process will be implemented only if the rescission has not been fully covered by
the previous step(s) and only to the extent necessary to cover the remaining amount
of funding rescinded from the State but not covered in the previous step(s). This process is designed to minimize the likelihood
of having to reduce a local area’s funding involuntarily.
The steps in the sequential rescission process are as follows:
1.The amount of
affected grant funding reserved by ODJFS for statewide activities must be reduced
to no more than 15 percent of the State’s remaining allotment following the rescission. In addition, statewide funds will be further reduced
to the maximum extent feasible while not jeopardizing the ability of ODJFS to:
- Carry out the required WIOA statewide activities;
- Ensure the quality, integrity, and sustainability
of the workforce development system and WIOA Title I services, including the ongoing
operation of statewide information systems; and
- Complete critical State workforce development strategic
priorities.
2.ODJFS will notify
the local areas of the remaining amount of the rescission and invite them to voluntarily
reduce their allocations. The level of voluntary
local area budget reduction will be determined by the local workforce development
board (WDB) and submitted in writing to ODJFS by the local WDB chair or director
prior to the deadline specified by ODJFS.
3.Each local area’s
allocation of the affected grant funds will be reduced across the board by an equal
percentage value up to 10 percent, except that any local area that had voluntarily
reduced its budget in the prior step will receive a dollar-for-dollar credit toward
its reduction in this step equal to its voluntary reduction.
4.For local areas
that are not on track to expend at least 70 percent of their allocation of the affected
grant funds by the end of the program year, their remaining allocations will be
reduced by an equal percentage value up to an additional 15 percent. For purposes of this determination, a local area
is considered not on track to expend at least 70 percent of the allocation if, in
the quarter in which the rescission is announced, the local area has spent less
than the target spending total for that quarter based on the reports submitted in
the State’s designated financial reporting system. The local area’s target spending total for each
quarter shall be based on the following formulas:
Quarter 1 target spending total for July through
September rescissions based on financial reporting as of June 30th:
[Prior Year PY + FY Allocation]
X [70%]
Quarter 2 target spending total for October
through December rescissions based on financial reporting as of September 30th:
[Prior Year PY + FY Allocation]
X [70%] +
[Current Year PY Allocation]
X [17.5%]
Quarter 3 target spending total for January
through March rescissions based on financial reporting as of December 31st:
[Prior Year PY + FY Allocation]
X [70%] +
[Current Year PY + FY Allocation] X [35%]
Quarter 4 target spending total for April
through June rescissions based on financial reporting as of March 30th:
[Prior Year PY + FY Allocation]
X [70%] +
[Current Year PY + FY Allocation] X [52.5%]
5.The local areas’
remaining allocations (after applying the above steps) will be reduced proportionately
to cover the entire remaining rescission amount, with each area’s proportionate
share of the remaining rescission equal to its remaining allocation divided by the
sum of all local areas’ remaining allocations.
B.Local
Workforce Development Area Budget Adjustments
If the rescission process results in the reduction of a local area’s
allocation, the local WDB must reduce its commitments and obligations as needed
to avoid overspending the affected grant.
The local WDB must determine the best strategy for providing continued services
to WIOA participants and businesses with minimal negative impacts to job seekers
and other customers of the workforce delivery system by reviewing and considering:
- Current contracts and sub-recipient awards;
- The number of affiliate OhioMeansJobs centers funded
with WIOA dollars;
- The number of participants currently enrolled in
training;
- Unobligated training commitments for future quarters
or semesters; and
- Costs of other services, activities, and operations.
Local WDBs must also consider the priority of service for veterans
and eligible spouses and, under the adult program, the priority of service for recipients
of public assistance, other low-income individuals, individuals with disabilities,
and other individuals with significant barriers to receive individualized career
services and training.
If the local area’s reduced budget affects the delivery of WIOA services
in the OhioMeansJobs centers, the number of centers in the local area, or the WIOA
partner contribution to the infrastructure or additional costs of the workforce
system, an amended memorandum of understanding (MOU) should be submitted to ODJFS
documenting the changes.
VII. Technical Assistance
For additional information, contact ODJFS, Office of Workforce Development
at WIOAQNA@JFS.OHIO.GOV.
VIII. References
Workforce Innovation and Opportunity Act, §§ 106 – 107, Public Law
113-128.
20 C.F.R. §§ 680.600, 683.120, 683.135, 683.140.
ODJFS, Workforce Innovation and Opportunity Act (WIOA) Policy Letter
16-11.1, Development of the Memorandum of Understanding for the Workforce Delivery
System, (April 1, 2019).
USDOL, Training and Employment Guidance Letter No. 29-10, Federal
Financial Management and Reporting Definitions, (May 27, 2011)