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References: a. Job Training Partnership Act (JTPA), as amended. b. JTPA Regulations, 20 CFR 626-629 and 631, published in the Federal Register on September 2, 1994. c. Training and Employment Guidance Letter (TEGL) No. 4-95, dated February 21, 1996, and Change 1, dated May 3, 1996. d. Training and Employment Guidance Letter (TEGL) No. 2-95, dated August 10, 1995. e. Training and Employment Information Notice No. 16-94, dated December 13, 1994. f. Training and Employment Guidance Letter (TEGL) No. 1-94, dated August 31, 1994. g. Training and Employment Information Notice No. 5-93, Change 1, dated June 23, 1994. Background: Sec. 106 of JTPA, as amended, provides that each Governor shall prescribe, within parameters established by the Secretary, variations in the performance standards based upon specific economic, geographic and demographic factors in the State and in service delivery areas/substate areas within the State, the characteristics of the population to be served, demonstrated difficulties in serving the population, and the types of services to be provided. The PY 1996 and 1997 national departure points for Governors to use in setting performance standards for the Secretary's six core measures, the Title III measures, and the Section 204(d) measures were transmitted in TEGL 4-95, Appendix G. Clarification of the Secretary's parameters and additional implementing instructions were provided in TEGL 4-95, Change 1. Changes from PY's 1994 and 1995: The PY 96 adjustment models were developed using data from the PY 94 Standardized Program Information Report (SPIR) individual terminee data for the first time (previous years' models were developed using SDA-level aggregate data). The major implication of the use of the SPIR data is that the wealth of information on individual terminees makes it possible to identify considerably more characteristics that have a significant influence on outcomes. As a result, the recommended adjustment models contain more terminee characteristics than previous models. Further, the models for comparable measures (for example, the adult follow-up employment rate and the welfare follow-up employment rate) are themselves more similar, both in the local factors included and in the values of the estimated adjustment weights, than in previous years. Rationale for Adjustment Worksheets: The Department's optional adjustment methodology provides Governors with a systematic adjustment approach which conforms to the Secretary's parameters for setting SDA/SSA standards. This adjustment methodology is periodically revised and improved in light of additional experience and more current data for standard-setting. The optional adjustment models are based on an analysis of the relationship between variation in the performance of SDAs, and variation in the types of clients served and in local economic conditions. The adjustment models indicate how much performance is affected by these factors and adjust the performance standards of each SDA accordingly. These models are intended to "level the playing field" so that SDAs serving a hard-to-serve clientele, or operating in areas with difficult economic conditions, receive lower standards than other SDAs. How the Worksheets Were Developed: The worksheets were generated using multiple regression analysis, a statistical technique that estimates the influence of each local factor on a performance measure, while accounting for the influence of the other local factors. This method estimates the factor weights presented on the worksheets. The weights represent the simultaneous influences of various participant characteristics and local economic conditions on SDA/SSA program performance. The models shown in the worksheets were reviewed by the Performance Standards Workgroup composed of representatives from State and local JTPA programs and public interest groups. When reviewing factors for the recommended adjustment models, the Workgroup was guided by criteria developed by workgroups in previous years, including: -- The statistical significance of the estimated relationships of the individual local factors with the outcomes. -- Inclusion of appropriate factors to hold SDAs harmless for serving hard-to-serve groups. -- Consistency with DOL's policy not to hold SDAs harmless for factors that are related to management quality. -- Ease of using the adjustment model. -- Face validity of the adjustments, meaning that they are consistent with the experience of program operators. (In other words, the sign of adjustments for local factors had to make intuitive sense.) -- Models for similar outcomes should contain similar factors. -- Consistency with the PY 94 models. -- There is wide enough variation in the factor among SDAs. Use of the Worksheets: The Performance Standards Worksheets are included in Appendix A. Instructions for completing the JTPA Performance Standards Worksheets, including the sources of data and computation methods for items on the worksheets, are also in Appendix A. Economic Factors: Appendix B contains local economic data to be used in calculating PY 96 standards with the PY 96 Performance Standards Worksheets. Instructions for calculation of economic factors for PY 96 standards are also included in Appendix B. Action Required: States are to distribute this Guidance Letter Change to all officials within the State who need such information to implement the performance standards policies and requirements for PY 1996 and 1997. It is especially critical that States, State Councils, Private Industry Councils and SDA operational staff become thoroughly familiar with the provisions concerning performance standards.

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