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4.16 35% Direct Cost Services Expenditure Goal for Program Year Formula Allocations


4.16.1 Overview

Effective Date: January 1, 2023; Compliance will be evaluated beginning with PY2023 funding allocations

The Workforce Innovation and Opportunity Act (WIOA) is designed to help job seekers and workers, particularly those with barriers to employment, enter and/or advance in the labor market.1 WIOA also serves to match employers with the skilled workers they need to compete in the global economy.2 These purposes are accomplished through the provision of career, training, and supportive services to Adult and Dislocated Worker Program participants, and the provision of the 14 program elements to Youth Program participants.

The purpose of this expenditure goal is to ensure that a reasonable amount of WIOA funding is spent on direct-to-participant costs, including, but not limited to, training-related expenses and supportive services. Providing ample financial supports will serve to improve participant outcomes and overall program success.

4.16.2 Requirements for the 35% Expenditure Goal

Effective Date: January 1, 2023; Compliance will be evaluated beginning with PY2023 funding allocations

Local Workforce Development Boards (WDBs) should spend at least 35% of their annual formula program funding allotment1 for each of the Adult, Dislocated Worker, and Youth programs on direct-to-participant costs. Meeting this goal will ensure that program resources are focused on successfully preparing participants to enter and/or advance in the workforce. This will also allow participants to access the financial supports necessary for them to participate in program services and activities reasonably and successfully without incurring debt.

WDBs may include in the direct cost services calculation all expenditures paid directly to, or on behalf of, a participant, such as:

The 35 percent expenditure goal is calculated using only programmatic funding. Neither the numerator nor the denominator of this calculation includes administrative costs.

Programmatic costs that fund staff wages and benefits for the coordination of such services3 shall not be included in the numerator of this calculation.

  • 1 This does not include administrative funds.
  • 2 This differs from the expenses allowable when calculating the 20 percent expenditure requirement for youth work experience, which allows the inclusion of staff costs for certain work experience related activities.
  • 3 DWD-DET considers such activities to be "case management" and does not consider "case management" to be a direct participant cost.

4.16.3 Reporting Requirements

Effective Date: January 1, 2023; Compliance will be evaluated beginning with PY2023 funding allocations

Local WDBs shall maintain accounting records to accurately identify and account for the 35% direct-to-participant costs expenditures. WDBs must report the costs they count toward the 35% expenditure goal monthly in the Contract Management and Expenditure Tracking (COMET) System as memo activities. These costs should be reported in COMET at the time they are incurred.

NOTE: A participant does not have to complete the related service for the associated costs to count toward the goal.

To evaluate achievement of this goal, the amounts reported in COMET will be compared to total program expenditures over the life of each grant (e.g., the PY21 Adult and Dislocated Worker formula allocations). In the event that funds are transferred between programs, the 35% goal will be evaluated against the modified grant amounts.

4.16.4 Monitoring Implications

Effective Date: January 1, 2023; Compliance will be evaluated beginning with PY2023 funding allocations

As this is a goal, and not a requirement, DWD-DET will not apply sanctions to local WDBs that do not meet the goal. However, the local WDB's progress toward achieving the goal will be evaluated during DWD-DET's annual coordinated monitoring. In cases where the goal is not met, or satisfactory progress toward achieving the goal in a given program year is not realized, DWD-DET will identify this as an area of concern. The local WDB will be asked to provide an explanation of the factors impacting spending on direct cost services and any actions taken to increase spending. DWD-DET may require that WDBs and their service providers participate in mandatory technical assistance to identify and/or develop strategies to increase spending on direct-to-participant costs.

Direct-to-participant costs

Effective date: October 1, 2022

DWD-DET defines direct-to-participant costs as those costs that are paid directly to, or on behalf of, a participant, including costs for training services, supportive services, certain youth program elements, and certain individualized career services. This excludes basic career services and costs associated with staff time.

Administrative Costs

Effective date: TBD

Administrative Costs are expenditures incurred in the performance of administrative function and in carrying out activities under [WIOA] title I that are not related to the direct provision of workforce investment services (including services to participants and employers). Such costs include both personnel and nonpersonnel costs and both direct and indirect costs.

These include:

  • Accounting, budgeting, financial and cash management functions;
  • Procurement and purchasing functions;
  • Property management functions;
  • Personnel management functions;
  • Payroll functions;
  • Coordinating the resolution of findings arising from audits, reviews, investigations, and incident reports;
  • Audit functions;
  • General legal services functions;
  • Developing systems and procedures, including information systems, required for these administrative functions;
  • Fiscal agent responsibilities;
  • Performing oversight and monitoring responsibilities related to WIOA administrative functions;
  • Cost of goods and services required for administrative functions of the programs, including rental or purchase of equipment, utilities, office supplies, postage, and rental or maintenance of office space;
  • Travel costs incurred for official business in carrying out administrative activities;
  • Cost of information system related to administrative functions such as personnel, procurement, purchasing, property management, accounting, and payroll systems, and including the purchase, systems development, and operating costs of such systems; and
  • Awards to subrecipients or contractors solely for the performance of administrative functions.

WIOA Sec. 3(1); 20 CFR 683.205


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