Reference. DINAP Bulletins No. 85-16 and 86-32. Background. DINAP Bulletin No. 85-16 contains questions and answers on audits as well as copies of pertinent laws and regulations related to the Single Audit Act of 1984. That bulletin was written exclusively for Native American Job Training Partnership Act (JTPA) Section 401 grantees. The attached manual applies to all JTPA grantees, including Native American grantees. Action. The attached Single Audit Manual should be used by grantees accountants and auditors to help ensure compliance with the Single Audit Act of 1984. Questions. Consult DINAP Bulletin 86-32 for contact points.

References. a. JTPA, Section 504; b. DINAP Bulletins 84-2 and 84-41. Background. The National Defense Authorization Act for Fiscal Year 1987, which was signed into law on November 14, 1986, amended Section 12 of the Military Selective Service Act to add a new subsection, as follows: "(g) A person may not be denied a right, privilege, or benefit under Federal law by reason of failure to present himself for and submit to registration under section 3 if--" "(1) the requirement for the person to so register has terminated or become inapplicable to the person"; and "(2) the person shows by a preponderance of the evidence that the failure of the person to register was not a knowing and willful failure to register." The accompanying Conference Report clarified "that a nonregistrant is not to be denied any Federal benefit if he can demonstrate that his failure to register was not knowing or willful." This provision was added "in order not to penalize an individual with an obvious disqualifying handicap, such as total paralysis of the limbs, or an individual who has been honorably discharged from the armed services." As a result of this new statutory requirement, it is necessary to revise the procedures for determining the qualifications of otherwise eligible males, 26 years of age and older, to participate in programs funded under JTPA. ETA is publishing these new requirements as a Notice in the Federal Register. Revised Policy. Effective immediately, in determining the qualifications of males to participate in JTPA programs, the following steps should be followed: a. For males who are at least 18 years of age but less than 26 years of age, the current procedures should continue to be used. That is, a determination should be made as to whether such males have complied with Section 504 of JTPA. b. For males 26 years of age and older a three-step process should be followed. (1) A determination shall be made as to whether the male has complied with Section 504 of JTPA and Section 3 of the Military Selective Service Act. The same procedures as are used for making such a determination with respect to males 18 to 25 may be used. If the male has complied with the above cited sections, no further action is necessary and an otherwise eligible male may participate in JTPA programs. If the male has not complied, the following determination must be made. (2) A determination shall be made as to whether the male has received an honorable discharge from the U.S. military services. If the male has received an honorable discharge from the military, no further action is necessary and an otherwise eligible male may participate in JTPA programs. Appropriate documentation would include making a copy of the individualls military discharge (Form DD-214) for the intake record. If the male does not have an honorable discharge, the following determination must be made. (3) A determination shall be made as to whether the male has a visible or obvious handicap that would permanently disqualify him from military service. If the male has such a handicap, no further action is necessary and an otherwise eligible male may participate in the JTPA program. Appropriate documentation would include a notation of the type of handicap observed by the JTPA program in the individuals intake record. If the male does not have a visible or obvious handicap that would permanently disqualify him from military service, nor an honorable discharge, and has not complied with Selective Service's Registration requirements, the procedures in 5. below shall be followed. The above determinations may be made in any order deemed appropriate by the JTPA program. Determination of Whether an Applicant Knowingly and Willfully Failed to Register. The determination of whether a male applicant knowingly and willfully failed to register as required by the Military Selective Service Act shall be made by the Selective Service System. Where a JTPA program determines that a male applicant 26 years of age or older who was born on or after January 1, 1960 does not meet any of the qualifications contained in 4.b. above, the male should be advised that an advisory opinion is required from the Selective Service, before he may be determined eligible to participate in JTPA programs. Males wishing to participate in JTPA programs who do not meet any of the qualifications in Part 4.b. are to be instructed to send information necessary for a determination to: The Office of General Counsel Selective Service System National Headquarters Washington, D.C. 20435 Necessary information consists of: (1) the applicant's name; (2) the applicant's current address; (3) the applicant's date of birth; (4) (optional) the applicant's Social Security number (Applicants may voluntarily provide this to the Selective Service to aid in differentiating among persons with identical names. The Selective Service does not, however, require this information.); (5) a statement that the applicant is requesting an advisory opinion under Section 3 of the Military Selective Service Act; and (6) the applicant's documentation regarding his reasons for not registering for the draft. The Selective Service has agreed to respond to each individual with an advisory opinion within 30 days of receipt of each request. Where the Selective Service opinion advises that the male did knowingly and willfully fail to comply with the Military Selective Service Act, the male is ineligible for JTPA services and cannot be enrolled. Where the Selective Service opinion advises that the male did not knowingly and willfully fail to register, the applicant should promptly return to JTPA with this letter. Males with such a Selective Service advisory opinion may, if otherwise eligible, be determined eligible to participate in JTPA programs. Transition Procedures - Determination Whether a Current Participant Knowingly and Willfully Failed to Register. Prior to July 31, 1987, the determination called for in Part 4.b. above shall be made for all male participants currently enrolled in JTPA programs who were born on or after January 1, 1960 for whom no such determinations have previously been made. Males who meet any of the conditions outlined in Part 4.b. shall be determined as eligible to continue to participate in JTPA. Where a male does not meet any of the conditions outlined in 4.b. above, the male shall be notified that an advisory opinion will be requested by the grantee from the Selective Service in order to determine whether he may continue to participate in JTPA. For current participants, grantees are to send information necessary for a determination directly to the Office of General Counsel of the Selective Service System. The necessary information is identical to that listed in Part 5. above, for each current participant to be reviewed for an advisory opinion. Grantees are not responsible for offering advice or direction to individuals, when obtaining a statement from each participant of his reasons why he did not comply with the draft registration requirement. The Selective Service shall respond within 30 days of receipt of each request. If the Selective Service opinion advises that a current participant did not knowingly and willfully fail to register, the male may continue to participate. If the Selective Service opinion advises that any male did knowingly and willfully fail to register, that individual must be immediately terminated from the JTPA program. Allowable Costs for Current Male Participants. Through July 31, 1987, all costs associated with males 26 years of age or older who were born after January 1, 1960, and who were determined eligible and enrolled into JTPA in accordance with the policy set forth in DINAP Bulletins 84-2 and 84-41 shall be recognized as allowable costs, if otherwise allowable, unless the grantee has received the advisory opinion made by the Selective Service that the individual did knowingly and willfully fail to register. In such instances, the costs associated with such an individual will be recognized as allowable for no more than seven days following the grantee's receipt of the opinion from the Selective Service. This seven-day action period shall apply to all Selective Service advisory opinions regarding current participants, both those opinions received by the JTPA program before July 31, 1987 as well as those received after July 31, 1987. All costs associated with current participants who have been determined eligible under the conditions described in part 4.b. of this bulletin, or who are not found in the Selective Services's advisory opinion to have knowingly or willfully failed to register, shall continue to be allowable costs for the balance of these individuals' participation in JTPA. Action. Grantees shall assure that they are in compliance with these revised requirements. Inquiries. Contact your DINAP Federal Representative.

Reference. None. Background. The Immigration Reform and Control Act (IRCA) of 1986, Public Law 99-603, amended the Immigration and Nationality Act by adding provisions relating to the control of illegal immigration. A major provision of this Act will permit the legalization of aliens who were in the U.S. illegally prior to January 1, 1982. In addition, alien farmworkers who performed seasonal agricultural services for at least 90 days in the 12-month period ending May 1, 1986 may apply for U.S. residency. The IRCA prohibits these newly legalized aliens from receiving most Federal assistance, such as social security and aid to families with dependent children, until they have been legalized for 5 years. The major exceptions to this exclusion are certain education programs and the Job:Training Partnership Act (JTPA). Also, such individuals may be eligible for unemployment insurance. Another major provision makes it unlawful to hire, recruit or refer for a fee, unauthorized aliens for employment in the United States. The statute also requires employment eligibility verification of all new employees to prevent the employment of unauthorized aliens. Implications for JTPA. It is expected that the new legislation will affect JTPA entities in at least three ways. First, since JTPA Section 167(a)(5) has excluded individuals who were not authorized to work, the number of persons eligible for JTPA programs will increase, significantly in some areas. Illegal aliens may now apply to the INS for legalization. Upon submittal of applications to INS, many of these individuals will now be authorized to work in the United States and to participate in specified Federal programs, including JTPA. Specific services, such as English-as-a-second language training, may be needed by many of these individuals. Second, the employment eligibility of each worker will have to be verified by the employer, using an INS-specified form, the I-9. Where the JTPA program serves as the employer, as is the case for many summer youth and work experience programs, the JTPA program would have to verify employment eligibility. Employers determined to have failed to comply with the employment verification requirements may be subject to a civil penalty of not more than $1,000 for each individual for whom such a violation occurred. Employers who knowingly hire unauthorized aliens may be subject to a fine of up to $2,000 for the first violation and up to $10,000 for subsequent violations. At the outset, verifying employment eligibility may be a problem, particularly for those grantees that conduct summer youth employment and training programs (SYETP) in 1987. All employment beginning on or after June 1., 1987 will have to have the necessary INS employment eligibility verification. In instances where there may be a question regarding who is the youth's employer, all possible employers should maintain a copy of the I-9 and supporting documentation. This would especially be true of summer youth participants where the grantee is paying the youth and a public or private non-profit entity is providing the work site. In such situations, either entity, the grantee or the work site entity in the example above, may complete the I-9 and provide the other with a copy (and supporting documentation) to maintain. In all cases both entities should be aware of where the original I-9 and supporting documentation are being maintained. This should be worked out locally. Both entities may, of course, complete an original I-9. Third, as a matter of practice, the JTPA system should ascertain for each participant being referred to employment that the individual being referred has produced, or can produce the documentation necessary to verify employment eligibility. While this is not required of the JTPA system, it would be prudent since verification by employers is required for all new employees after June 1, 1987. Under the new rules, State employment service (ES) agencies have the option to establish verification procedures. where State ES certification is provided, the employer is not required to complete Form I-9. Otherwise, the employer is responsible for verification. Note that, in general, verification must be completed in three days from time of employment. Even if verification is not completed within 3 days, it should be completed as soon as possible thereafter. Good faith efforts to comply with these new requirements will be a major consideration by the INS when reviewing compliance. For an individual who has lost or not yet obtained a document for either identity or work eligibility purposes, the individual is required to present a receipt for application for the document within 3 days and present the required document itself within 21 days. The verification process is accomplished by use of the Form I-9. Attached is a copy of the "Handbook For Employers," which includes the I-9 form and instructions. Additional copies may be obtained from INS offices. Action. Grantees should carry out the instructions in this bulletin and the attached "Handbook for Employers." Questions. Consult your DINAP Federal Representative or the nearest office of the Immigration and Naturalization Service.

Reference. DINAP Bulletin No. 86-29 and the revision to OMB Circular A-110, Attachment I, paragraph 8, "Payment Requirements". Background. The proposed revision to OMB Circular A-110 was finalized on January 16, 1987. All Native American grantees subject to OMB Circular A-110 must maintain advances of Federal funds in an interest-bearing account. DINAP Bulletin 86-29 informed recipients of the effective date of the new A-110 requirement and requested grantees to submit any questions concerning this requirement to the Department of Labor/ Employment and Training Administration (DOL/ETA). Questions and Answers. Following are the questions received from the recipients and DOL/ETA's response. a. What happens when the bank subtracts service charges from the total interest earned? Answer: Reasonable service charges are an allowable cost and should be paid from the administrative portion of the recipient's grant. The amount of interest to be remitted to DOL is determined by the total interest earned not the net interest (total interest minus service charge). b. What if State and/or Federal law prohibits non-profits from maintaining interest-bearing accounts? Answer: Neither OMB nor DOL is aware of any Federal laws which prohibit non-profits from maintaining interest-bearing accounts. If a State has such a law/regulation, a copy of the law or regulation should be submitted to ETA where a decision whether to waive the requirement will be made. c. What if the only available interest-bearing account requires a minimum balance? Answer: If this is the only type of interest-bearing account available in the area, a minimum balance account may be maintained. d. If a State is a sub of a non-profit, what governs -- A-102 or A-110? Answer: If a State is a sub of a non-profit, the State is subject to the requirements of A-102. e. Has OMB notified the banking community of the new A-110 requirement? Answer: The banking community was not specifically notified by OMB. Publication in the Federal Register is considered adequate notification. f. If a grantee is on a reimbursement basis of funding, is the interest-bearing account requirement applicable? Answer: The A-110 requirement does not apply to the reimbursable grantees because there are no advances of Federal funds. g. Does the interest-bearing account requirement flow through to subs? Answer: Yes. The provisions of A-110 shall be applied to subrecipients performing substantive work under the grants that are passed through or awarded by the primary recipient (except for States). h. If interest is earned in excess of $100, is the grantee required to remit the entire amount (including the $100) or just the amount over $100 (grantees retain $100 or less)? Answer: It is required that all interest in excess of $100 a year be remitted to DOL. If the grantee earns $101 of interest on Federal funds in a year, $1 will be remitted, and the remaining $100 will be retained by the grantee. i. Can Federal agencies waive the interest-bearing account requirement? Answer: Generally, agencies would not waive the interest-bearing account requirement; but under exceptional circumstances a waiver can be granted, e.g., if there is a State law prohibiting non-profits from maintaining an interest-bearing account. j. Can a grantee maintain an interest-bearing account for receiving advances of Federal funds, transfer the funds to a non-interest-bearing checking account from which disbursements are made? Answer: If Federal funds are transferred to a non-interestbearing checking account on the same day that disbursements occur, such a transaction is acceptable. However, if the disbursement from the non-interestbearing account occurs on a later date, this type of system would not be acceptable because advances of Federal funds must be maintained in an interest-bearing account until disbursed for program purposes. k. Does the A-110 requirement necessitate a separate bank account for JTPA? Answer: No. It would not be necessary to maintain advances of Federal funds in a separate interest-bearing account as long as the general account is interest bearing. The interest earned on outstanding balances of Federal funds in the general account should be pro-rated among the Federal agencies advancing the funds. The proration should be determined by each Federal agency's pro-rata share of the balance of advanced funds earning interest. The methodology used to arrive at the prorated distribution of interest should be based on sound allocation principles and all documentation should be retained for audit purposes. l. What are the sanctions available against those recipients who fail to comply with the interest-bearing account requirement? Answer: Recipients who fail to maintain advances of Federal funds in an interest-bearing account are subject to being funded on a reimbursable basis.

Reference. None. Information. The attached bulletin was drawn up in response to numerous requests for clarification of Federal travel regulations. Questions. Contact your DINAP Federal Representative.

References. The Age Discrimination Act of 1975, 42 U.S.C. Sec. 6102. The Rehabilitation Act of 1973, 29 U.S.C. Sec. 794, and its implementing regulations at 29 CFR Part 32; Title IX of the Education Amendments of 1972, 20 U.S.C. Sec. 1681; Title VI of the Civil Rights Act of 1964, 42 U.S.C. Par. 2000d, and its implementing regulations at 29 CFR Part 31; Section 167 of the Job Training Partnership Act of 1982, 29 U.S.C. Sec. 1559. Backqround. Section 401 of the Job Training Partnership Act authorized the Secretary of Labor to fund programs offering job referral, job training, job counseling and other employment-related services to help jobless Native Americans. Eligible persons include Indians, Eskimos, Aleuts, Hawaiians and other persons of Native American descent who are economically disadvantaged, unemployed, or underemployed. Presently there are one hundred eighty-eight (188) tribes, bands, or groups administering comprehensive training and employment programs for Native Americans. All programs which receive financial assistance from the Department of Labor (DOL), including Native American programs, are covered by equal opportunity and nondiscrimination laws and regulations. The following provisions apply to Native American programs: -- Title VI of the Civil Rights Act of 1964, as amended, which provides that no person shall, on the basis of race, color, or national origin, be excluded from participation in, denied the benefits of, or otherwise subjected to discrimination under any program or activity receiving financial assistance from DOL.* -- Section 167 of the Job Training Partnership Act of 1982, which provides that no person shall, on the basis of race, color, religion, sex, national origin, age, handicap, or political affiliation or belief, be excluded from participation in, denied the benefits of, be subjected to discrimination under, or denied employment in the administration of or in connection with any program or activity funded under the Act; JTPA further requires that any such program or activity be open to participation by citizens and nationals of the United States, lawfully admitted permanent resident aliens, lawfully admitted refugees and parolees, and other individuals authorized by the Attorney General to work in the United States.* -- The Age Discrimination Act of 1975, which provides that no person shall, on the basis of age, be excluded from participation in, denied the benefits of, or otherwise subjected to discrimination under any program or activity receiving financial assistance from DOL. -- The Rehabilitation Act of 1973, as amended, which provides that no otherwise qualified person shall, solely on the basis of physical or mental handicap, be excluded from participation in, denied the benefits of, or otherwise subjected to discrimination under any program or activity receiving financial assistance from DOL. -- Title IX of the Education Amendments of 1972, as amended, which provides that no person shall, on the basis of sex, be excluded from participation in, denied the benefits of, or otherwise be subjected to discrimination under any education or training program or activity receiving financial assistance from DOL. * Since Native American programs are limited by law to individuals of certain race and ethnic origin, recipients may legitimately exclude from the program persons who do not meet the race/ethnic eligibility criteria. The Directorate of Civil Rights (DCR), as the agent of the Secretary of Labor, is responsible for monitoring or reviewing recipients to determine if they are in compliance with the above nondiscrimination provisions, and for conducting investigations when there is reason to believe that discrimination is occurring or has occurred. Employees and participants of the Native American programs who feel discriminated against on any of the grounds described above, may file a complaint with: Directorate of Civil Rights U.S. Department of Labor 200 Constitution Avenue, NW Washington, D.C. 20210 Only complaints alleging discrimination on the basis of handicap shall be processed at the local level, pursuant to 29 CFR Part 32.45. This provision requires that the recipient issue a determination on the complaint within 60 days of the date on which the complaint is filed. If not satisfied with the decision, or if no decision is issued, the complainant or his/her representative may, within 30 days of the local level decision or 90 days from the date the complaint was filed, file a complaint with the Directorate of Civil Rights at the above address. In order to maintain program participants' awareness of the program's nondiscrimination policy, and to explain briefly the procedure for filing a complaint, recipients are required by regulation to display prominently and in reasonable numbers the poster developed by DCR for this purpose. DINAP will issue a supply of posters to all grantees in the near future. Action Required. The information in this directive should be provided to appropriate personnel at the program level with instructions that all discrimination complaints involving U.S. Department of Labor funded JTPA programs, except for handicap complaints, should be referred to the Directorate of Civil Rights. DCR may also conduct on-site equal opportunity compliance reviews of Native American programs to determine compliance with appropriate civil rights statutes and regulations. Grantees will be advised in advance of any review scheduled. Inquiries. Consult your DINAP Federal Representative.

Background. Grantees and their auditing firms frequently request that DINAP provide them financial information related to their grants. DINAP will honor these requests if they conform to the instructions in this bulletin. DINAP will either confirm or point out the error in data submitted to it, but will not initiate the data gathering process. Action. All data to be confirmed must be presented in a neat and orderly fashion, with appropriate dates, grant numbers, titles, etc. indicated. For example, requests for confirmation of drawdown data should be in accordance with the attached sample format, and accurately reflect the data on the Forms SF 5805 that were submitted to draw down the funds. Requests for confirmation of information should be sent to the following address: Herbert Fellman, Chief Division of Indian and Native American Programs Frances Perkins Bldg., Room N-4641 200 Constitution Ave., NW Washington, D.C. 20210 Attn: Drawdown Desk Questions. Consult your DINAP Federal Representative.

References. 20 CFR 632.37(b), OMB Circular A-87 and A-122. Background. The JTPA regulations at 20 CFR 632.37(b), and the Federal cost principles contained in OMB Circulars A-87 and A-122 state that all costs charged to a grant, whether indirect or direct, to be allowable, must be necessary, reasonable and allocable to the grant. Some examples of possible indirect costs are: rent, telephone, office equipment and supplies, utilities and printing. Almost all grantees have more than one funding source and in most cases the indirect costs are spread among all of them. It is unlikely that any grantee would have only its JTPA grant, or that a grantee with more than one funding source would not spread the indirect costs among all the benefitting grants. In all cases where a grantee has more than one source of funds and spreads the indirect costs among them it must have either an indirect cost proposal or a cost allocation plan approved by its cognizant Federal agency. This requirement is stated for federally recognized tribes in OMB Circular A-87 in Attachment A, Section J, and for non-profit organizations in OMB Circular A-122 in Section E. Grantees should contact their nearest Department of Health and Human Services regional office to obtain copies of OASMB-5, "A Guide for Nonprofit Organizations" and OASC-10, "A Guide for State and Local Government Agencies" (applicable to tribes); these documents provide guidelines for the preparation of indirect cost rate proposals and cost allocation plans. Definitions. For purposes of this directive the definitions contained in OMB Circular A-87 and A-122 will govern. Policy. If the grantee intends to charge its JTPA Section 401 grant for indirect costs, a cost allocation plan or an indirect cost proposal is required. A cost allocation plan or indirect cost proposal and the methodology used in their computation must be negotiated with and approved by the cognizant Federal agency annually. The portion of the salaries and expenses of the chief executive and the executive staff of a Federally recognized Indian tribal government that is attributable to managing and operating the JTPA program is allowable and can be included among the indirect costs. The allowable portion of the salary and expenses of the chief executive and staff will be determined on a reasonable basis. These and all other costs covered by a cost allocation plan or an indirect cost proposal must be identifiable and are subject to audit. In all instances where indirect costs are administrative, they will be charged to the administrative cost category. Because Section 632.263 of the JTPA regulations limits administrative costs to 20 percent of the amount allocated to the grantee, a combination of direct and indirect administrative costs cannot exceed the 20 percent limitation. If the total of direct and indirect administrative costs exceeds 20 percent, the difference must be paid from non-JTPA funds. Grantees' funding levels are not increased as the result of an approved indirect cost proposal or cost allocation plan. The Negotiation Process. When a grantee is the recipient of other Federal, State and/or local funds, and wishes to charge the JTPA program for indirect costs, it is required to establish a cost allocation plan or an indirect cost proposal. The cost allocation plan or indirect cost rate proposal will be approved by the grantee's cognizant Federal agency. The cognizant Federal agency is usually the agency which provides the largest sum of money to the grantee. The Division of Cost Determination (DCD) of the Department of Labor (DOL), is available to provide technical assistance when requested. In addition, DCD will negotiate an indirect cost rate for those grantees for which DOL is the cognizant Federal agency. Summary. The negotiation of a cost allocation plan or an indirect cost rate is based on the regulations and instructions cited throughout this directive. The rate established by the Federal cognizant agency will generally be accepted by DOL. The total of direct administrative and indirect administrative costs that can be charged to the JTPA grant cannot exceed twenty (20) percent of the total amount of the grant. A cost allocation plan or an indirect cost proposal and the methodology used in its development must be approved annually by the cognizant agency. The proposal and supporting data and all costs claimed, both direct and indirect, are subject to audit. During monitoring visits, the DINAP Federal Representative will verify that services reimbursed through application of the indirect cost rate are actually being provided. If any questions arise concerning the negotiated indirect cost, rate and how it should be applied to a JTPA Section 401 grant, DCD should be contacted. See attached listing of DCD contacts. Action Required. A grantee that does not have an approved cost allocation plan or indirect cost rate, but requires one, should contact its cognizant Federal agency. Grantees who already have approved indirect cost rates should obtain renewals in accordance with this bulletin and the applicable OMB Circulars, and they should start the renewal process as soon as possible after being advised of their new funding level when an indirect cost rate is approved for a grantee, the type of rate and the rate itself is to be reported in the comment section of all the financial status reports submitted by the grantee to DINAP. In those cases where DOL is the cognizant agency, a new grantee should submit an indirect cost proposal or cost allocation plan to a DOL regional office (see attachment) for review and approval within 90 days after it has been designated a JTPA grantee. Existing JTPA grantees for whom DOL is the cognizant agency should apply for a renewal within six months after completion of any grantee Fiscal Year. Please note the reference to "grantee Fiscal Year," which may or may not correspond to the Federal Government's Fiscal Year. Inquiries. Questions should be directed to your DINAP Federal Representative.

References. DINAP Bulletin No. 85-16. Background. The Single Audit Act was passed by Congress in 1984 and DINAP issued its first bulletin on the subject on March 21, 1986. The attached set of questions and answers was prepared by the Office of Management and Budget and covers areas which are in addition to the areas covered by DINAP Bulletin No. 85-16, which is still valid. Grantees are reminded that OMB Circular A-128, which implements the Single Audit Act, states that it applies to, Federally recognized tribes. OMB Circular A-110, Attachment F, was written to apply to non-profit organizations. However, DOL made OMB Circular A-128 apply to non-profit organizations when it issued 29 CFR Part 96. The reference is at 96.202. Action. Grantees should study the attached questions and answers and apply the knowledge gained to their operations. Questions. Consult your DINAP Federal Representative.

Background. The FBP originated as a Department of Labor (DOL) pilot project in 1966. It was created when it became apparent that a significant number of persons participating in Federally financed training, counseling, work-training, or work-experience programs could not move into the job market because they could not qualify for fidelity bond coverage. A fidelity bond is insurance an employer carries as protection against employee theft or dishonesty. Employees who handle money or valuable tools or goods are frequently required to be bonded. Insurance companies routinely refuse to cover individuals with a record of arrest, conviction, probation, imprisonment, parole, drug or alcohol abuse, or poor credit. The pilot project provided coverage to eligible job seekers through an insurance company, the Aetna Casualty and Security Company, which issued bonds for these high-risk potential employees. In 1971, no longer a pilot project, the FBP was expanded and made available through local Public Employment Service offices throughout the U.S. Under the FBP, more than 21,000 persons have been successfully placed in jobs they could not have obtained without fidelity bonding; and the "default rate," that is, the percentage of participants who have claims paid against them, has remained constant at less than 2%--fewer than 1 bondee in 50. Key Features of the FBP. The FBP provides individual fidelity bond coverage for ex-offenders; persons with a history of drug or alcohol abuse; persons with poor or no credit history; veterans with dishonorable discharges; persons who have been bankrupt; and other high-risk job applicants normally ineligible for fidelity bonding. Eligibility. Bonds are available to any individual who is qualified for a specific job and is not commercially bondable; who has a firm job offer of fulltime, steady work, with a reasonable expectation of permanence, and is not self-employed. Amount of Bonds. Bonds are available in increments of $500 up to a maximum, in most cases, of $10,000. In specific cases, coverage can be obtained up to $25,000. Most bonds are written for amounts in the $1,000--$8,000 range. The bond must be "tailored" to fit only the actual amount of risk (the amount of cash, merchandise, or equipment the employee can access) on the job. Bonds above $10,000 must be authorized individually by the FBP National Coordinator before they are issued. (This can be done by phone). Administration. Either the job applicant or the potential employer may apply for the bond at any local Public Employment Service office. If the applicant and the job meet the eligibility criteria, the authorized local office staff will certify the bond. The bond will become effective on the day the applicant begins work. The bond itself will be mailed to the employer by the McLaughlin Company, which acts as agent for the Aetna Casualty & Surety Company, that contracts with DOL to insure the bond. Length of Coverage. The bond is issued for six months. The employer may extend the coverage for another six months by writing to the FBP in Washington, D.C., one month prior to the expiration date to request a renewal. At the end of the 12 months, if there has been no claim against the bond, Aetna will sell coverage to the employer or bondee at regular rates. Cost of the Bonds. The FBP covers the total bonding costs for 12 months. After that, the premium must be paid either by the employer or the bondee. Bond rates will vary depending on the amount of risk to the employer and type of business. How JTPA Officials Can Use the FBP. Since 1966, the FBP has been administered through local Public Employment Service offices. Recently, however, a number of JTPA staff have indicated an interest in having more direct access to the program. This can be done in two ways: a. Public Employment Service Access. JTPA staff contact the local Public Employment Service office and work closely with them--by phone or in person--to provide the information needed for bond certification. The local office staff will handle the paperwork and certify the bond by letter to the employer the same day. When the certification request (application) is received by the McLaughlin Company in Washington, D.C., the bond will be mailed to the employer. b. JTPA FBP Designated Authorized Representative (DAR). In addition to working through Public Employment Service offices, JTPA personnel can be authorized to act as representatives of the FBP. After training provided by the FBP National Coordinator, JTPA staff would complete the certification request themselves and send it directly to the McLaughlin Company in Washington, D.C., issue a letter certifying the bond to the potential employer, and forward a copy of the certification request to the State Coordinator for the FBP. As above, the McLaughlin Company will mail the bond to the employer. How to Get Involved. JTPA personnel interested in becoming DARs should write for full information on the program to: Mr. Bill Throckmorton National Coordinator or Ms. Trudy Brisendine, Assistant National Coordinator The Federal Bonding Program 2000 L Street, N.W., Suite 803 Washington, D.C. 20036 Telephone: (202) 293-5566 Questions. Consult your DINAP Federal Representative.