DINAP BULLETIN 96-15
Section 401 Reallocation Policy
To inform Indian and Native American grantees of the reallocation policy for the JTPA, section 401 program.
2. References. - JTPA section 401 regulations at 20 CFR 632.43. - JTPA titles II and III regulations at 20 CFR 627.410. - JTPA (Public Law 102-367) section 161(b)(1). - DINAP Bulletins Nos. 95-03, 95-12 and 96-05. Background. Prior to the beginning of PY 1996, DINAP informed grantees in DINAP Bulletins 95-03 and 95-12 that all carryover limits previously imposed since 1991 were suspended. Grantees were further informed in bulletin 95-12 that grantees exceeding the former limit [20% of total available funds] would be required to explain why. Failure to provide an acceptable reason for exceeding the former limit would result in the former limit(s) being reimposed on a case-by-case basis. DINAP suspended the former carry-in policy for the following reasons: a. anticipated loss of JTPA title II-B (Summer Youth) funding for 1995; b. significant reductions in appropriations for title IV-A in Program Years 1995 and 1996 (18% in the past two program years); c. impact resulting from the use of 1990 Census data; and, d. facilitate closeout of the 99-1 grants. In addition, DINAP issued Bulletin No. 96-05 on July 19, 1996 to encourage grantees to adjust their Program Year (PY) 1996 spending plans to reflect the total amount of available funds (carry-in plus PY 96 allocation). These actions were taken by DINAP to make available the maximum amount of program funds in recognition of the fact that the PY 96 title IV-A appropriation was at the historically lowest level since the enactment of JTPA. Despite these actions, a small percentage of grantees have maintained excessive levels of unexpended grant funds available to them in their PMS subaccounts. Furthermore, recent experience with processing carry-in modifications and a review of grantee expenditure rates in general, has revealed that a small number of grantees expenditure rates may potentially result in carryover funds far in excess of the former 20 percent carryover limit. Excessive carry over for these few grantees have reached the level(s) which prompted the imposition of carryover limits ten years ago. Policy. To remedy this situation, pursuant to the regulations at 20 CFR 632.43 and the Act at section 161(b)(1), the Department hereby notifies all JTPA section 401 grantees of its Reallocation Policy. The section 401 reallocation policy will recapture excess carryover (more than 20%) from IV-A grants' and reallocate this excess carryover to grantees that have not exceeded this former limit. Recaptured funds will only be reallocated to section 401 grantees that receive title(s) IV-A and/or II-B grant funds. Policy Implementation. The policy will be implemented for PY 97 and involve the following two-step process: STEP 1 - (a) the Notice of Obligation (NOO) for title IV-A issued annually on or about July 1 will provide 75% of the grantee's total formula allotment for that program year; (b) upon receipt of the required financial portion of the PY 96 Annual Status Report (ASR) which is due within 90 days after the end of the Program Year (certified as accurate AND FINAL by an appropriate grantee official), the Department will compare reported expenditure levels to total funds available for the report period; (c) a grantee's unexpended resources in excess of twenty percent (20%) of total available funds will be recaptured from the current Program Year's (PY 97) allocation and will be subject to reallocation. STEP 2 - (a) A second NOO will provide the remainder of the program year's formula allotment for each grantee reduced to reflect funds withheld as excess carryover amounts as identified by the process above, (No prior allocations will be affected by this reallocation process); (b) these "recaptured" amounts will then be added to the NOOs of ALL grantees which did not have excess carry-in, in accordance with the funding formula found at 20 CFR 632.171. Information. The Department will issue notices to those grantees which our analysis indicates are in danger of losing PY 1997 funds as a result of under-expenditure of PY 1996 title IV-A resources. Action. All grantees should immediately assess their rates of expenditure for PY 1996 JTPA title IV-A funds, if they have not recently done so. Grantees should make sure that their current Budget Information Summary (BIS) submitted to the Department accurately reflects the total available funds for PY 1996, including amounts carried forward from the previous grant period. Grantees who receive JTPA title II-B funds should also review expenditure rates for the summer youth program, to ensure that all available resources are being fully utilized to benefit the target population. Effective date. Date of this bulletin. Inquiries. Questions should be addressed to your Federal Representative team or to Greg Gross on (202) 219-7509.
All Indian and Native American Grantees
Thomas M. Dowd Chief Division of Indian and Native American Programs Anna W. Goddard Director Office of Special Targeted Programs