References: Title I of the Emergency Unemployment Compensation Act of 1991, P.L. 102-164, as amended by P.L. 102-182 and P.L. 102-244; the Federal-State Extended Unemployment Compensation Act of 1970, as amended; 20 CFR Part 615; GAL 4-92; GAL 4-92, Change 1; GAL 4-92, Change 2; UIPL 9-92 and Changes; UIPLs 16-85, 10-87 and 21-90; The Trade Act of 1974, as amended (19 U.S.C. 2271 et seq.); 20 CFR Part 617. Background: Title I of the Emergency Unemployment Compensation Act of 1991 created the Emergency Unemployment Compensation (EUC) program. The EUC program, as established by P.L. 102-164 (and amended by P.L. 102-182), provided 13 or 20 weeks of benefits depending on the State's total unemployment rate or a combination of the State's insured unemployment rate and exhaustions. P.L. 102-244 amended the EUC Act to increase the maximum duration to 26 or 33 weeks through the week including June 13, 1992. For weeks of unemployment beginning thereafter, individuals filing new claims and certain individuals who established claims prior to the week including June 13 will revert back to the 13 or 20 week maximum. EUC is payable to individuals who have no rights to regular, extended, or additional benefits under any State or Federal law. Except where inconsistent with the operating instructions in GAL 4-92 (and changes thereto), the terms and conditions of State law which apply to claims for extended benefits and to the payment thereof shall apply to claims for EUC. P.L. 102-164 was enacted November 15, 1991 and the EUC program became effective in all States for weeks of unemployment beginning on and after November 17, 1991. The Employment and Training Administration issued controlling guidance for the States and State agencies in the operating instructions in GAL 4-92, dated November 27, 1991; GAL 4-92, Change 1, dated February 10, 1992 and GAL 4- 92, Change 2, dated February 13, 1992. Since the enactment of P.L. 102-244, which was signed by the President on February 7, 1992, and issuance of GAL 4-92, and Changes thereto, many States and cooperating State agencies have had questions concerning the instructions and guidelines issued in Section III.M., Fraud and Overpayment., in Attachment A to the GAL, which has necessitated many verbal responses and responses to questions in UIPL 9-92 and Changes thereto. Therefore, the Department in this Change 3, is providing a revised Section III.M. to replace the original Section III.M. in Attachment A to GAL 4-92, which includes changes to, and clarifications of, the operating instructions in order to assure uniform application of the provisions among the States. Specifically, the Department is clarifying that States have the option to elect implementing a waiver program for non-fraud overpayments, clarifies procedures that must be followed if such election is made, and clarifies restoration of account balances when overpayments are established. In addition, the language of certain paragraphs is changed to parallel the provisions of 20 CFR Part 617, the Department's regulations implementing the Trade Act of 1974, as amended. The Trade Act of 1974 and the EUC Act contain nearly identical provisions related to waivers and offsets. Since both are Federally funded programs, the Department must follow the regulations established for the Trade Act, as such establish the precedents when the statutes parallel one another. If Congress had intended differently, the EUC statute would have contained other provisions. The operating instructions in GAL 4-92, GAL 4-92, Change 1, GAL 4- 92, Change 2, and this Change 3 are issued to the States and the cooperating State agencies, and constitute the controlling guidance provided by the Department of Labor in its role as the principal in the EUC program. As agents of the United States, the States and the cooperating State agencies may not vary from the operating instructions in GAL 4-92, GAL 4-92, Change 1, GAL 4-92, Change 2, or this Change 3 (or any subsequent or supplemental operating instructions) without the prior approval of the Department of Labor. Attachment A--Changes to Operating Instructions: M. Fraud and Overpayment. The Act contains specific provisions with respect to fraud and overpayments of EUC. Provisions of the State law applied to detection and prevention of fraudulent overpayments of EUC will be, as a minimum, commensurate with those applied by the State with respect to regular compensation and which are consistent with the Secretary's "Standard for Fraud and Overpayment Detection" (Employment Security Manual, Part V, Sections 7510, et seq.) 1. Fraudulent Claiming of EUC. Section 105 of the Act provides that, if an individual knowingly has made, or caused to be made by another, a false statement or representation of a material fact, or knowingly has failed, or caused another to fail, to disclose a material fact, and as a result of such false statement or representation or of such nondisclosure the individual has received an amount of EUC to which the individual was not entitled, the individual: a. shall be ineligible for further EUC in accordance with the provisions of the applicable State unemployment compensation law relating to fraud in connection with a claim for unemployment compensation, and b. shall be subject to prosecution under Section 1001 of Title 18, U.S.C. Provisions of State law relating to disqualification for fraudulently claiming or receiving a payment of compensation shall apply to claims for and payment of EUC. When a SESA has sufficient facts to make a prima facie case under 18 U.S.C. 1001, it will consider referral for criminal prosecution in accordance with the provisions of the Memorandum of Understanding (MOU) between the Department's Office of Inspector General and the Employment and Training Administration, which was transmitted as an attachment to UIPL 10-87 (also see UIPLs 16-85 and 21-90). If Federal prosecution is recommended, the matter will be referred to the appropriate Regional Office of the U.S. Department of Labor, Office of the Inspector General (OIG). For those cases not meeting the criteria of referral to the OIG for investigation and prosecution, as outlined in the MOU, or if the OIG does not accept the case for investigation, or it is accepted, but is later returned because the U.S. Attorney declines prosecution, the SESA should refer the case for prosecution under State law provisions. 2. Recovery of Overpayments. Under Section 105(b) of the Act each State shall require repayment from individuals who have received any payment of EUC to which they are not entitled (whether fraudulent or non-fraudulent), unless the SESA, under the optional language of Section 105(b), elects to have a program under which it will waive recovery of overpayments. A SESA may elect to have an EUC waiver program even if it has no waiver provisions under State law for regular compensation. If the SESA elects to have an EUC waiver program and has a waiver program under State law, no State law waiver provisions for regular compensation apply to EUC, and the SESA shall follow the guidelines outlined in this section III.M.2. Any SESA electing to have a waiver program may waive recovery of a non-fraudulent EUC overpayment if it determines, in accordance with the guidelines which follow, that-- a. the payment of such EUC was without fault on the part of the individual, and b. such repayment would be contrary to equity and good conscience. (1) In determining whether fault exists, for purposes of section III.M.2.a. above, the following factors shall be considered: (a) Whether a material statement or representation was made by the individual in connection with the application for EUC that resulted in the overpayment, and whether the individual knew or should have known that the statement or representation was inaccurate. (b) Whether the individual failed or caused another to fail to disclose a material fact, in connection with an application for EUC that resulted in the overpayment, and whether the individual knew or should have known that the fact was material. (c) Whether the individual knew or could have been expected to know that the individual was not entitled to the EUC payment. (d) Whether, for any other reason, the overpayment resulted directly or indirectly, and partially or totally, from any act or omission of the individual or of which the individual had knowledge, and which was erroneous or inaccurate or otherwise wrong. (e) Whether there has been a determination of fraud under Section 105 of the Act (paragraph 1 of this section III.M.). An affirmative finding on any one of the factors in section III.M.2.b.(1) (a)-(e) above precludes waiver of overpayment recovery. (2) In determining whether equity and good conscience exists, for purposes of section III.M.2.b. above, the following factors shall be considered: (a) whether the overpayment was the result of a decision on appeal, whether the State agency had given notice to the individual that the case has been appealed and that the individual may be required to repay the overpayment in the event of a reversal on appeal, and whether recovery of the overpayment will not cause extraordinary and lasting financial hardship to the individual. (b) whether recovery of the overpayment will not cause extraordinary financial hardship to the individual, and there has been no affirmative finding under the preceding paragraph (2)(a) with respect to such individual and such overpayment. An affirmative finding on either of the foregoing factors, in preceding paragraphs (2)(a) and 2(b), precludes waiver of recovery of the overpayment. For the purpose of this paragraph (2), an extraordinary financial hardship shall exist if recovery of the overpayment would result directly in the individual's loss of or inability to obtain minimal necessities of food, medicine, and shelter for a substantial period of time; and an extraordinary and lasting financial hardship shall be extraordinary as described above and may be expected to endure for the foreseeable future. In applying this test in the case of attempted recovery by repayment, a substantial period of time shall be 30 days, and the foreseeable future shall be at least three months. In applying this test in the case of proposed recoupment from other benefits, a substantial period of time and the foreseeable future shall be the longest potential period of benefit entitlement as seen at the time of the request for a waiver determination. In making these determinations, the State agency shall take into account all potential income of the individual and the individual's family and all cash resources available or potentially available to the individual and the individual's family in the time period being considered. (3) Determinations granting or denying waivers of overpayments shall be made only on request for a waiver determination. Such request shall be made on a form which shall be furnished to the individual by the State agency. Notices of determination of overpayments shall include an accurate description of the waiver provisions of this paragraph (2), if the SESA has elected to allow waivers of EUC overpayments. (4) Unless an EUC overpayment is otherwise recovered, or is waived under paragraph (2) of this section, the SESA shall, during the three-year period after the date the individual received the payment of EUC to which the individual was not entitled, recover the overpayment by deductions from any sums payable to the individual under: (a) the Act and this GAL 4-92 and changes; (b) any Federal unemployment compensation law administered by the SESA; or (c) any other Federal law administered by the SESA which provides for the payment of any unemployment assistance or an allowance with respect to unemployment. (5) No single deduction under this section III.M.2., shall exceed 50 percent of the amount otherwise payable to the individual, and when a deduction is made it shall be 50 percent of the amount otherwise payable. (6) To the extent permitted under State law, an EUC overpayment may be recovered by offset, within the 50 percent and three-year limitations provided in paragraphs (4) and (5) above, from benefits payable under the State unemployment compensation law. (7) At the end of the three-year limitation, the SESA may remove the overpayment from its accounting record. Although no further active collection efforts by the SESA are required, the SESA shall maintain an administrative record during the subsequent three-year period to provide for possible collection through methods other than offset. After the subsequent three-year period, the SESA may dispose of the overpayment record. (8) No repayment may be required, and no deduction may be made, under this section III.M.2. until a determination under paragraph 2. of this section by the State agency has been made, notice of the determination and an opportunity for a fair hearing thereon has been given to the individual concerned, and the determination has become final. (9) EUC overpayment recovery shall be enforced by any action or proceeding which may be brought under State or Federal law, unless recovery of the overpayment is waived in accordance with the Act and the instructions in this section III.M. (10) Overpayments of EUC recovered in any manner shall be deposited into the fund from which payment was made. (11) If a State has an agreement in effect with the Secretary to implement the cross-program offset provisions of Section 303(g)(2) of the SSA, EUC payments shall be used to offset State regular compensation or EB overpayments and State regular compensation or EB payments shall be used to offset EUC overpayments. Determinations under this section III.M.2., shall be subject to the determination and appeal and hearing provisions of sections III.I. and J. (12) An individual who has an overpayment established under paragraph 2. of this section may have the amount of such overpayment restored to the EUC account established for such individual in accordance with the State law for regular compensation. No restoration is permitted nor shall such occur until the determination of overpayment is final in accordance with paragraph (8) of this section. (13) If the SESA elects to implement an EUC waiver program, it may not put such election into effect unless it previously elected to allow waiver of nonfraudulent EUC overpayments and has published agency instructions on such election. Action Required: SESA Administrators shall provide the above controlling guidance to appropriate staff and assure that any changes required in the State's EUC fraud and overpayment procedures are implemented.

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References: Public Law 102-367, JTPA and Public Law 103-171 Older Americans Act (OAA) Technical Amendments. OW 94-1, "Technical Amendment to Title V of the OAA". Background: On February 8, 1994, Older Worker Bulletin 94-1, was jointly issued by the JTPA and SCSEP offices at the Employment and Training Administration. The issuance quoted a technical amendment to Title V and provided guidance on implementing this new amendment. The amendment extended eligibility for SCSEP eligible individuals in joint programs to section 204(d) of JTPA. The previous joint program eligibility provision for SCSEP enrollees under section 203 was published at 628.605(e) of the JTPA Interim Final regulation on December 29, 1992. The new OAA amendments extended the same coverage to the 204(d) program. While the OAA amendment itself was straight forward, a number of questions regarding implementation were raised. To respond to such questions, the attached questions and answers (Qs&As) are being provided. Action: JTPA operators should review the attached Qs&As dealing with JTPA and the SCSEP dual eligibility and take the steps necessary to implement the dual eligibility policy in their jurisdictions.

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Reference. UI Information Bulletin 5-94.

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Reference: Training and Employment Guidance Letter (TEGL) No. 5-93 (April 11, 1994): "Summer Challenge II: A Program of Work and Learning for America's Youth." Background: As stated in TEGL No. 5-93, the Department of Labor contracted with Brandeis University and Johns Hopkins University to produce several technical assistance guides (TAGs) on various aspects of the summer program. The following worksite supervisor training handbooks, designed to promote the integration of work and learning, were developed containing techniques that incorporate SCANS foundations and competencies on the job: a. Developing Learning-Rich Clerical Tasks b. Developing Learning-Rich Tasks for Parks, Recreation, and Natural Resource Management Action: States are requested to share this information with their Service Delivery Areas as soon as possible.

References. DINAP Bulletins 90-35, 91-13, and 91-27. Background. As of this date, most Section 401 grantees have submitted the required modifications needed to transfer obligational authority from the 99-7/9 grants to the 99-1 grants, by title. These modifications are being reviewed and will be approved if consistent with the closeout figures. Once the modifications are signed by the Grant Officer, ETANS Division of Accounting will transfer the remaining obligational authority from the 1987 grant to the 1991 grant. If a grantee has drawn down Federal payments in excess of the costs reported in the closeout package, it will have to transfer those excess payments from the 1987 grant to the 1991 grant. To summarize, ETA transfers the obligational authority and if necessary the grantee transfers Federal payments. It is assumed that any remaining Title IV-A unexpended obligations in the 1987 grant are from PY 1990. That PMS subaccount ends in 741 (example B1234741). All funds in the PMS system must be identified by title and program year. Therefore, any PY 1990 carry-in obligations will have a separate subaccount in the 1991 grant. That subaccount ends in 141 (example B1234141). If a grantee has to transfer IV-A payments, it will credit (a negative draw) its subaccount ending in 741 and debit its subaccount ending in 141. Likewise, it is assumed that any remaining Title II-B funds are from PY 1989. That PMS subaccount ends in 736 (example B1234736). Any PY 1989 carry-in funds will have a separate subaccount in the 1991 grant that ends in 136 (example B1234136). If a grantee has to transfer 11-B payments, it will credit (a negative draw) its subaccount ending in 736 and debit its subaccount ending in 136. The examples on the following pages cover any situation involving carry-in which the grantee can encounter. Action. All grantees on the PMS should review the following examples to determine which one(s) fit their particular carry-in situation, by title. Note: In all cases where a grantee has drawn down Federal payments in excess of its reported costs as reflected on the closeout documents, these excess payments must be transferred by the grantees from the 1987 PMS subaccount to the 1991 PMS subaccount created to handle that carry-in, by title. The following examples cover all possible situations and should clarify the procedures. The examples use only Title IV-A but the procedures would be exactly the same for Title II-B. 1. The grantees obligations, federal payments, and costs are all equal. PY 1990 TITLE IV-A FUNDS OBLIGATIONS COSTS PAYMENTS $100,000 $100,000 $100,000 In this situation, there will be no unexpended obligations to carry in and no transfer of payments is necessary. 2. The grantee's costs are less than obligations and payments are equal to costs. PY 1990 TITLE IV-A FUNDS OBLIGATIONS COSTS PAYMENTS $100,000 $80,000 $80,000 In this situation, there are $20,000 of unexpended obligations that may be available for carry-in. But, because payments do not exceed costs in the 1987 grant, no transfer of payments is necessary. 3. The grantees costs are less than obligations and payments exceed costs. PY 1990 TITLE IV-A FUNDS (BXXXX741) OBLIGATIONS COSTS PAYMENTS $100,000 $80,000 $90,000 In this situation, there are $20,000 of unexpended obligations that may be available for carry-in. Because payments exceed costs by $10,000 in the 1987 grant, they must be moved into the 1991 grant. NOTE BENE!!!! These payments are NOT being transferred into the subaccount for the PY 1991 Title IV-A funds (BXXXX177). PMS requires that funds be drawn by program year and title, so a new account for PY 1990 Title IV-A funds will be set up (BXXXX141). (The only difference is the "7" and "1" in the sixth position.) Procedures for Transferring Payments Before the transfer, the two subaccounts would appear as follows: 1987 GRANT (BXXXX741) 1991 GRANT (BXXXX141) PMS SUBACCOUNT FOR PMS SUBACCOUNT FOR PY 1990 TITLE IV-A FUNDS PY 1990 TITLE IV-A FUNDS Obligations $100,000 Obligations $0 Payments 90,000 Payments 0 Assuming that the grantees will carry in the full $20,000, the Division of Accounting will transfer the authorization (obligation) from the 1987 grant subaccount to the 1991 grant subaccount so that the two subaccounts will appear as follows: 1987 GRANT (BXXXX741) 1991 GRANT (BXXXX141) PMS SUBACCOUNT FOR PMS SUBACCOUNT FOR PY 1990 TITLE IV-A FUNDS PY 1990 TITLE IV-A FUNDS Obligations $80,000 Obligations $20,000 Payments 90,000 Payments 0 The next time the grantee does a PMS request for funds, it must transfer $10,000 of payments from the 1987 grant (BXXXX741) to the 1991 grant (BXXXX141) by reducing payments in the 1987 grant and increasing payments in the 1991 grant in the following manner: PY 90 IV A in 87 grant subaccount $10,000> (negative) PY 90 IV A in 87 grant subaccount $10,000 (positive) (Because the PMS cannot accept a request that nets to $0, there must be a draw against a third subaccount or the draw against the 91 grant subaccount must be more than $10,000.) After the transfer, the two subaccounts will appear as follows: 1987 GRANT (BXXXX741) 1991 GRANT (BXXXX141) PMS SUBACCOUNT FOR PMS SUBACCOUNT FOR PY 1990 TITLE IV-A FUNDS PY 1990 TITLE IV-A FUNDS OBLIGATIONS $80,000 OBLIGATIONS $20,000 PAYMENTS 80,000 PAYMENTS 10,000 The following two examples will not require a transfer between subaccounts but do involve payments. 4. The costs are equal to total obligations so there is no carry-in involved but the grantee has not drawn down all the payments. PY 1990 TITLE IV-A FUNDS (BXXXX741) OBLIGATIONS COSTS PAYMENTS $100,000 $100,000 $90,000 The Division of Accounting will open up the PY 1990 Title IV-A subaccount so that the grantee can draw down the remaining $10,000. 5. The costs are less than obligations so there is a potential carry-in involved but the grantee has not drawn down sufficient funds to cover its expenditures under the 1987 grant. PY 1990 TITLE IV-A FUNDS (BXXXX741) OBLIGATIONS COSTS PAYMENTS $100,000 $80,000 $70,000 The Division of Accounting will open up the PY 1990 Title IV-A subaccount with sufficient funds ($10,000 in this case) for the grantee to cover its expenditures under the 1987 grant. The following example does require a transfer between subaccounts. 6. Because the PY 1990 IV-A funds in the 1987 grant (BXXXX741) were frozen until the completion of the closeout process, some grantees have drawn down funds from the PY 91 IV-A in the 1991 grant (BXXXXI77) to cover costs in the 1987 grant. This is in violation of the Payments Management System regulations which require separation of obligations, payments, and expenditures by title and program year. In those cases, the PMS subaccounts for PY 1990 Title IV-A funds and the PY 1991 Title IV-A will appear as follows: PY 1990 TITLE IV-A FUNDS (BXXXX741) OBLIGATIONS COSTS PAYMENTS $100,000 $100,000 $90,000 and for the moment assuming there is only one $10,000 draw against 1991 grant to cover the costs in the 1987 grant, the PY 1991 IV-A subaccount would appear as PY 1991 TITLE IV-A FUNDS (BXXXX177) OBLIGATIONS COSTS PAYMENTS $100,000 $ $10,000 In this case, when the subaccount for the PY 1990 Title IV-A is opened up, the grantee must do an adjustment between the two subaccounts increasing the payments in the PY 1990 Title IV-A subaccount and decreasing the payments in the PY 1991 Title IV-A subaccount so that those accounts appear as PY 1990 Title IV-A funds (BXXXX741) OBLIGATIONS COSTS PAYMENTS $100,000 $100,000 $90,000 +$ 10,000 $100,000 PY 1991 TITLE IV-A FUNDS (BXXXXI77) OBLIGATIONS COSTS PAYMENTS $100,000 $10,000 $0 minus$10,000> Questions. Address any questions to Barbara Manning on (202)535-8798 or Greg Gross on (202) 535-0509.

References: The Wagner-Peyser Act, as amended (P.L. 97-300); 20 CFR 652; TEGL No. 5-92. Background: The Secretary of Labor is issuing final planning allotments for each State's share of PY 1993 funds for basic labor exchange activities. These allotments (Attachment I) are based on the FY 1993 Appropriation of $810,960,000 and are distributed by the statutory formula described in Section 6 of the Act. The allotments will be published in the Federal Register. The data used are Calendar Year 1992 averages of civilian labor force (CLF) and number of unemployed individuals. Section 6(b)(4) of the Act authorizes the Secretary of Labor to reserve up to 3 percent of the total fund availability to assure that each State will have sufficient resources to maintain statewide employment service (ES) activities. The setaside for distribution through an administrative formula for this program year is $23,754,639. The 3 percent distribution is included in the total final allotment. The setaside was distributed in two steps to States whose relative share of resources declined from the previous year. In Step 1, those States with a CLF below one million and that are also below the median CLF density were held harmless at 100 percent of their prior year relative share of resources. The remainder was distributed in Step 2 in pro rata shares to all other States that lost in relative share from the prior year but did not meet the size criteria for Step 1. Differences between preliminary and final planning estimates are caused by the use of Calendar Year data as opposed to the earlier data used for preliminary planning estimates. Ten percent of the total sums allotted to each State shall be reserved for use by the Governor to provide performance incentives for public ES offices; services for groups with special needs; and for the extra costs of exemplary models for delivering job services. Postage Costs: Postage costs incurred by States during the conduct of ES activities are billed directly to the Department of Labor by the U.S. Postal Service. The total planning allotment includes $19,138,700, or 2.36 percent of the total amount available, withheld from distribution to finance postage costs associated with the conduct of ES business. States will implement direct accountability (i.e., actual count and costs of postage pieces) using penalty mail systems through all of FY 1994. The Department of Labor will continue to pay the U.S. Postal Service directly for all State postage costs during that period. The Department proposes to issue revised regulations which will eliminate the use of penalty mail systems in FY 1995. The proposal would include the distribution of postage resources to States, who would pay costs directly to their local post offices. The proposed regulations will provide for comments by the public on the proposed changes. The State-by-State postage allocation shown in Attachment II is for information purposes only. It provides States with estimates of the amount annually withheld from their ES allotments to maintain central postage reserves for payment of postage costs. Action: State planning activities are to be guided by the process described in 20 CFR 652 and Training and Employment Guidance Letter No. 5-92.

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