[Federal Register Volume 65, Number 124 (Tuesday, June 27, 2000)]
[Notices]
[Pages 39760-39765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-16170]



[[Page 39759]]

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Part V





Department of Labor





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Employment and Training Administration



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Resource Sharing for Workforce Investment Act One-Stop Centers: 
Methodologies for Paying or Funding Each Partner Program's Fair Share 
of Allocable One-Stop Costs; Notice

Federal Register / Vol. 65, No. 124 / Tuesday, June 27, 2000 / 
Notices

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DEPARTMENT OF LABOR

Employment and Training Administration


Resource Sharing for Workforce Investment Act One-Stop Centers: 
Methodologies for Paying or Funding Each Partner Program's Fair Share 
of Allocable One-Stop Costs

AGENCY: Employment and Training Administration, Labor.

ACTION: Notice.

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SUMMARY: This notice is intended to provide guidance on resource 
sharing and cost allocation methodologies for the shared costs of a 
One-Stop service delivery system, which is required to be established 
under the Workforce Investment Act of 1998 (WIA) for a number of 
Federal employment and training programs. It is anticipated that the 
primary users of this document will be the financial and accounting 
staff of the One-Stop partner programs and the One-Stop operators. 
However, it is also expected that this document will have a much 
broader audience and will provide program operators and others with a 
fuller understanding of cost allocation principles and possible ways 
through which each partner program can pay for its ``fair share'' of 
common One-Stop costs.
    As the participating programs have come together to work out the 
details of service delivery in a One-Stop setting, a number of 
questions have arisen about how resources can be shared and costs 
allocated. This notice provides a general framework that all One-Stop 
centers and their partner programs will be able to use to establish 
their own system for cost allocation and resource sharing. It describes 
ways to identify and determine One-Stop shared costs and, as a separate 
issue, describes alternative ways to pay for and fund these costs. This 
framework may not be applicable for all One-Stop settings, and 
additional guidance will be provided as needed.
    This notice is the result of a collaborative effort involving 
representatives from the Departments of Agriculture, Education, Health 
and Human Services, as well as the Department of Labor's Employment and 
Training Administration, Office of Cost Determination and Office of 
Inspector General. The Federal partners that participated in the 
preparation of this paper, as well as the Office of Management and 
Budget, accept the principles discussed herein as appropriate 
``resource sharing'' and ``cost allocation'' guidance for WIA One-Stop 
centers.

DATES: Comments must be received by July 27, 2000.

ADDRESSES: Submit written comments to the Employment and Training 
Administration, Office of Financial and Administrative Management, 200 
Constitution Avenue, NW, Room N-4716, Washington, D.C. 20210, 
Attention: Mr. Edward J. Donahue, Jr. at 202-219-6719 ext. 102 (voice), 
202-501-4811 (fax) or e-mail: <a href="/cdn-cgi/l/email-protection#d8bdbcb7b6b9b0adbd98bcb7b4bdacb9f6bfb7ae"><span class="__cf_email__" data-cfemail="086d6c676669607d6d486c67646d7c69266f677e">[email protected]</span></a>.

FOR FURTHER INFORMATION CONTACT: Mr. Edward J. Donahue, Jr. at 202-219-
6719 ext. 102 (This is not a toll-free number) or 1-800-326-2577 (TDD). 
This document may also be found at the website--http://usworkforce.org.

SUPPLEMENTARY INFORMATION:

Background

    Title I of the Workforce Investment Act of 1998 (WIA) requires each 
local workforce investment area to establish a One-Stop system for the 
delivery of certain Federal workforce development services. Entities 
responsible for the administration of separate Federal workforce 
investment, educational, and other human resource programs and funding 
streams (referred to as One-Stop partners) are to collaborate to create 
a seamless delivery system that will enhance access to services and 
improve employment outcomes for individuals receiving services. The 
system must include at least one comprehensive physical center that 
provides core services and access to the other activities carried out 
by the partners. The comprehensive center may be supplemented by 
additional comprehensive centers, a network of affiliated sites, 
technological and physical linkages with the partners, and specialized 
centers.
    The WIA specifies that the required One-Stop partners include 
programs funded by the Departments of Labor (Title I of WIA, Wagner-
Peyser, Unemployment Insurance, Trade Adjustment Assistance, NAFTA 
Transitional Adjustment Assistance, Welfare-to-Work, Senior Community 
Service Employment, and Veterans Workforce Investment programs and 
activities under 38 USC Chapter 41), Education (Vocational 
Rehabilitation, Adult Education, and Postsecondary Vocational 
Education), Health and Human Services (Community Services Block Grant) 
and Housing and Urban Development (Employment and Training activities), 
and authorizes any other appropriate program to serve as a partner, 
including the Temporary Assistance to Needy Families and the Food Stamp 
Employment and Training and Work programs. The partner is the entity 
responsible for the administration of the program in the local area, 
which in many cases may be a State agency, but is not intended to 
include each service provider that contracts with or is a subrecipient 
of the entity responsible for administration.
    The responsibilities of the One-Stop partners, which are elaborated 
below, include:
    1. Making available to participants the core services that are 
applicable to their programs;
    2. Using a portion of their funds to create and maintain the One-
Stop system and to provide applicable core services;
    3. Entering into a Memorandum of Understanding (MOU) with the Local 
Workforce Investment Board (Local Board) regarding the operation of the 
One-Stop system;
    4. Participating in the operation of the One-Stop system in a 
manner consistent with the MOU and the partner's authorizing law; and
    5. Representation on the Local Board.
    The Department of Labor regulations at 20 CFR Part 662 (64 FR 
18662, 18701 (April 15, 1999)) relate to the requirements of the One-
Stop system, and One-Stop requirements are also included in the Notice 
of Proposed Rulemaking issued by the Department of Education relating 
to the Vocational Rehabilitation Services program at 34 CFR Part 361 
(65 FR 10620 (February 28, 2000)).
    Because WIA mandates that several employment and training programs 
funded under different laws by various Federal agencies partner in a 
One-Stop setting, it has become apparent that it is necessary for the 
Federal funding agencies to present a uniform policy position on 
acceptable methodologies for cost allocation and resource sharing 
(methodologies for paying or funding of allocable costs) in the WIA 
One-Stop environment. As a result, the Office of Management and Budget 
(OMB) asked agencies to develop a uniform policy position. The 
Department of Labor's Employment and Training Administration (ETA) took 
the lead in developing this document in consultation with the 
Departments of Agriculture, Education, Health and Human Services, as 
well as Labor's Office of Cost Determination and Office of Inspector 
General.
    The underlying problem for the One-Stop partners is to find an 
appropriate way of accumulating cost information and assuring 
appropriate payment for shared costs as they come together in a single 
location. It must be recognized that cost allocation is a distinctly

[[Page 39761]]

different requirement from resource sharing. Cost allocation is a 
concept that is embedded in the OMB Cost Principles Circulars and one 
which is based on the premise that Federal programs are to bear an 
equitable proportion of shared costs based on the benefit received by 
each program. In contrast, resource sharing is the methodology through 
which One-Stop partner programs pay for, or fund, their equitable share 
of the costs. This document explains both concepts and presents 
acceptable methodologies for both cost allocation and resource sharing.
    While this document does not make any changes to the OMB cost 
principles; it helps to describe the flexibility and limitations under 
those principles for Federal programs to determine equitable 
proportion.

One-Stop Cost Concepts

    Under WIA the local One-Stop center is not a direct recipient of 
Federal awards. Rather, it is the location through which several 
workforce development and education programs operate their programs in 
partnership with other entities and make their services available to 
the program beneficiaries [participants, students, the unemployed, job 
seekers, employers, etc.].
    These One-Stop center partners are recipients of Federal grant 
dollars, either directly or from another recipient. They will, in their 
normal course of business, maintain appropriate accounting and other 
information in accordance with appropriate Federal guidance. This 
normally includes accounting for indirect costs, through indirect cost 
rates or cost allocation plans, as well as for direct costs. All costs 
must be accounted for in accordance with Generally Accepted Accounting 
Principles (GAAP). For the direct funded organizations, this includes 
negotiating the necessary indirect cost rate or obtaining approval of 
their cost allocation plan.
    When individual organizations partner in the One-Stop environment, 
some activities or functions are performed which benefit more than one 
individual organization, e.g., a common reception area, provision of 
information on the services available at the One-Stop, or collection of 
basic information from individuals seeking assistance at the One-Stop. 
When this occurs, the cost of performing these functions must be 
allocated to the benefitting programs or cost objectives (grant). This 
must be done based on benefits received by the benefitting program, and 
not on availability of funds. When that distribution is accomplished, 
the individual partners must include these costs in their total cost 
picture to determine the total cost of operations to perform the 
functions for which they were funded. The following diagram shows the 
relationship of the partner programs to each other and to the ``One-
Stop''.
[GRAPHIC] [TIFF OMITTED] TN27JN00.001

    It should be noted that the unshaded center area is comprised of 
the shared costs that are applicable to two or more of the partner 
entities. A does for A, B, C and D; B does for B, C, D and A; and D 
does for D, A, B and C. Allocating these costs to the benefitting 
activities (grants/programs) does not necessarily relate to the 
methodology used for payment. Payment of these costs will be discussed 
later in this document. Allocating ``One-Stop'' costs is no different 
from allocating costs incurred by grantees for their individual grant 
programs. The ``One-Stop'' costs have

[[Page 39762]]

effectively been pooled. The question is what is the best basis for 
equitable distribution of shared costs without incurring unnecessary 
additional burden.
    While the physical One-Stop center itself is not required to have a 
Federally approved negotiated indirect cost rate or cost allocation 
plan, this does not mean that there is no need for cost allocation. The 
WIA requires that a portion of the funds provided under the various 
Federal laws authorizing the required partner programs be used to pay 
for the creation and maintenance of the One-Stop delivery system, and 
the provision of core services that are applicable to the individual 
partner programs, and requires participation in the operation of the 
One-Stop system, in a manner consistent with the terms of the MOU and 
the partner's authorizing law [WIA sec. 121(b)(1)(A) and 134(1)(B)]. 
The core services include:
    1. Eligibility determination under WIA Title I formula programs;
    2. Outreach, intake and orientation to the information and other 
services available through the One-Stop delivery system;
    3. Initial assessment of skill levels, aptitudes, abilities, and 
supportive service needs;
    4. Job search and placement assistance, and career counseling;
    5. Employment statistics information;
    6. Providing performance and cost information on WIA title I, adult 
education, postsecondary vocational education and vocational 
rehabilitation providers;
    7. Providing information on the performance of the local One-Stop 
delivery system;
    8. Providing information on the availability of supportive 
services;
    9. Providing information on the filing of UI claims;
    10. Providing assistance in establishing eligibility for welfare-
to-work activities and for programs of financial aid assistance for 
training and education programs not funded under WIA; and
    11. Providing follow up services for WIA title I participants who 
are placed in unsubsidized employment
    At a minimum, the core services that are applicable to a partner's 
program (i.e., are authorized and provided under the program) and that 
are in addition to the basic labor exchange services traditionally 
provided in the local area under the Wagner-Peyser Act must be made 
available by the partner at the comprehensive One-Stop center. (It 
should be noted the Adult and Dislocated Worker programs authorized 
under WIA title I must make all the core services available at the One-
Stop center). It should also be emphasized that this list of core 
services is the minimum required to be provided at the comprehensive 
center, and the partners are encouraged to provide such additional 
services through such One-Stop centers as may allow them to better 
serve their customers. For example, providing for a common intake and 
eligibility determination system, including the development and use of 
a common application form, can be used for a number of the partner 
programs at the center to enhance access to the programs. Such a system 
would be customer friendly, and result in administrative efficiencies. 
The same cost allocation methods are applicable irrespective of the 
scope of services provided at a center.
    The cost allocation that is necessary relates to the common costs 
of the One-Stop system, which may include such items as space and 
occupancy costs, utilities, telephone systems, common supplies and 
equipment, a common resource center or library, perhaps a common 
receptionist or centralized intake and eligibility determination staff.
    It must be understood that each local One-Stop center is unique and 
that this document, which intends to share some of the principles and 
some basic models of One-Stop resource sharing and cost allocation, 
does not propose to impose a single methodology on the entire WIA One-
Stop system. The fact that the resource sharing and cost allocation 
methodology used in a particular One-Stop system is not discussed in 
this document does not, on its face, mean that the methodology is 
inappropriate or unallowable. The cost allocation methodology that is 
used, however, must be consistent with:
    1. GAAP:
    2. The applicable OMB cost principles and administrative 
requirements; and
    3. Be accepted by each partner's independent auditors to satisfy 
the audit testing required under the Single Audit Act and OMB Circular 
A-133.
    Whatever methodology is used, it must be supported by actual cost 
data. Further, the methodology must not permit the shifting of costs 
that are not allocable to or do not benefit a specific program to said 
program.
    In the local One-Stop, the idea of sharing resources and allocating 
costs can be viewed:
    1. In the aggregate, i.e., covering all of the One-Stop center's 
shared costs;
    2. On an activity basis where all of the partners pay their 
allocable share of the total costs of an activity or function (e.g., a 
common intake and eligibility determination system); or
    3. on an item of cost basis where all programs pay their allocable 
share of each item of cost (e.g., rent).
    It could also be some combination of the above, e.g., when a 
particular or a number of functions are treated on an activity basis 
and the remaining items of cost are treated on an aggregate or 
individual item of cost basis.
    The WIA regulations require that each partner must contribute a 
``fair share'' of operating costs of the One-Stop delivery system 
proportionate to the use of the system by individuals attributable to 
the partner's program. This requirement is intended to establish an 
equitable principle, but it is not intended to prescribe a single 
method for allocating costs. The regulation goes on to say that there 
are a number of methods, consistent with the relevant OMB circulars, 
that may be used for allocating costs among the partners. Any of the 
methodologies described in this paper may be used in implementing the 
regulatory requirement. Any methodology used must:
    1. Result in an equitable distribution of costs and not result in 
any partner paying a disproportionate share of the shared One-Stop 
costs;
    2. Correspond to the types of costs being allocated;
    3. Be efficient to use; and
    4. Be consistently applied over time.
    The methodology used may vary dependent upon the nature of the One-
Stop structure. The basic types of One-Stop systems include:
    1. Simple Co-location with Coordinated Delivery of Services: 
Several partner agencies coordinate the delivery of their individual 
programs and share space. Each partner retains its own identity and 
controls its own resources. Each partner provides services in a 
coordinated manner with other funding sources while paying for its own 
fixed and variable costs as direct charges to its own funds. The 
partners pool only those costs that are shared jointly with the other 
agencies.
    2. Full Integration: All partner programs are coordinated and 
administered under one management structure and accounting system. Full 
integration is the vision of future One-Stop systems. Under full 
integration, there is joint delivery of program services and the 
operation is customer focused. Since resources are combined, the 
corresponding costs are often collected into cost pools. Pooled costs 
are later allocated back to individual grant programs using an 
appropriate method of allocation. Any grant-specific cost and/or 
administrative constraints

[[Page 39763]]

are still valid for the individual grantees.
    3. Electronic Data Sharing (through satellite offices): Only 
program information is provided and there are no co-located staff 
assigned.
    While the principles discussed in this document may be applied to 
all three types of structures, the focus of the paper is to address the 
most typical structure of co-located programs with shared space and 
some common functions or activities.

Allocation of One-Stop Shared Costs

    While the physical One-Stop center itself is not a specific direct 
recipient of Federal awards as an entity, it is expected that many 
program operators within a local One-Stop center, perhaps including the 
One-Stop operator, are direct recipients of Federal awards and do have 
negotiated indirect cost rates or approved cost allocation plans.
    As previously stated, the costs of a One-Stop may be categorized 
as: (1) Direct costs that benefit one particular cost objective, (2) 
shared direct costs that can be readily allocated to the sharing cost 
objectives, and (3) indirect costs incurred for common or joint 
purposes benefitting more than one cost objective but are not readily 
assignable to the benefitting cost objective.
    Cost pooling may be used to distribute both shared direct costs and 
indirect costs. Cost pooling involves the accumulation of costs to 
pools for later allocation to final cost objectives. It is appropriate 
to use cost pooling when direct charging requires disproportionate 
effort in order to determine the amount that should be charged to the 
individual cost objectives. It may be used for any type of common 
costs, administrative or program, incurred in a One-Stop center.
    After One-Stop shared costs are identified, they may be accumulated 
by line-item expense categories (also referred to as ``natural expense 
classifications'' and ``object expense categories''). Some examples of 
line-item expenses are salaries, occupancy costs, telephone, postage 
and shipping, printing and duplication, and supplies. Shared costs may 
also be accumulated or grouped by service department such as data 
processing and management information (MIS), printing and duplicating, 
mailing and shipping, purchasing and procurement, payroll, personnel, 
and general legal services. Another method may be accumulating costs 
based on function or activity such as eligibility determination; 
outreach, intake and orientation; initial assessment; job search and 
placement assistance, and career counseling; and follow up services. 
Whichever grouping or accumulation method it used, it is the actual 
incurred costs that are accumulated.
    Once the costs have been accumulated, they need to be allocated to 
the benefiting cost objectives (for One-Stop allocation, the final cost 
objectives will most often be the partner programs) on some basis that 
will provide for an equitable distribution. The most commonly used 
allocation bases include:
    1. Direct-staff salaries: Percentage of total salary costs of staff 
assigned to activities.
    2. Direct-staff hours: Percentage of time spent by staff assigned 
to activities.
    3. Modified total direct costs: Percentage of total direct costs 
for activities, less distorting items (e.g., equipment purchases, flow 
through funds, etc.)
    4. Total direct costs: Percentage of total direct costs for 
activities. (Normally inappropriate unless there are no distorting 
items. See item 3 above.)
    5. Units of service: Percentage of units of service provided.
    6. Usage: Percentage of usage of space, equipment, or other assets 
by activities.
    Allocations may be made on a single basis for all categories of 
costs or on multiple bases that vary by category. When reliable, using 
a single basis for allocating common costs can be less burdensome. 
Direct staff salaries is often appropriate when salaries alone 
represent about half of an entity's total costs and other categories of 
costs tend to vary according to staff salaries. Cumulative cost pool 
allocations for the reporting period are often preferable to monthly 
allocations in achieving equitable sharing among grant funded 
activities because of various grant periods during the grantee fiscal 
year. Monthly allocations can be misleading as to results because all 
costs do not occur evenly on a monthly basis. Regardless of the 
methodology used, allocations could be accomplished monthly but must be 
done no less frequently than the required financial reporting period, 
usually quarterly.

Funding or Paying for Allocated Share of One-Stop Costs

    Under WIA, the One-Stop partners are required to enter into a 
written Memorandum of Understanding (MOU) with the Local Board, prior 
to starting operations. The MOU must include provisions that describe:
    1. The services to be provided through the One-Stop delivery 
system;
    2. How the cost of those services and the operating costs of the 
One-Stop delivery system will be funded (paid for);
    3. The methods that will be used to refer individuals between the 
One-Stop operator(s) and the One-Stop partners for the provision of 
appropriate services and activities; and
    4. The duration of the MOU as well as the procedures for amending 
it during the term or period covered by the MOU.
    In order for the MOU to describe how the costs of services and One-
Stop operations will be paid for, the partners will first need to 
identify those costs and prepare a budget for the ``One-Stop'' 
activities. This budget will not only describe the costs of the One-
Stop system in total, but will also include estimates of how much of 
the total cost (personnel, space, telecommunications, etc.) of the 
``One-Stop'' is allocable to each partner. The budget development 
process involves all of the One-Stop partners and the One-Stop 
operator. The budget document does not need to be included in or 
attached to the MOU. On a periodic basis, no less frequently than 
quarterly, the actual costs and the allocation among the partner 
programs will need to be reviewed. At that time, the budget document, 
including the allocable partner shares of the One-Stop costs, may need 
to be adjusted to conform to actual circumstances. An adjustment to the 
budget will not necessarily require a modification of the MOU unless 
the terms of the MOU are affected.
    After the budget is prepared, all of the partners will then agree 
how each will pay its allocable fair share. One partner may furnish 
only personnel; another partner may furnish space and 
telecommunications, etc., or each partner may use its grant funds to 
pay for its allocable portion of shared costs. This agreement about how 
the allocable shares of One-Stop shared costs are to be funded (paid 
for) must be included in the MOU that is to be followed during the 
operating period.
    For many of the partner programs, including the WIA title I-B 
program, the Federal funds are awarded or passed through to State and 
local governmental entities subject to the cost principles of OMB 
Circular A-87. OMB Circular A-87, Attachment A, paragraph C.3.c. 
states, ``Any cost allocable to a particular Federal award or cost 
objective under the principles provided for in this Circular may not be 
charged to other Federal awards to overcome fund deficiencies, to avoid 
restrictions imposed by law or terms of the Federal awards, or for 
other reasons. However, this prohibition would not preclude 
governmental units from shifting costs

[[Page 39764]]

that are allowable under two or more awards in accordance with existing 
program agreements''. Question 2-16 in ASMB C-10, the implementation 
guide for OMB Circular A-87, clarifies that the intent of this 
paragraph is to distinguish between cost allocation and funding 
allocation. The C-10 goes on to say ``* * * The term `cost shifting' 
should not have been used, because cost shifting is unallowable, per 
se.] A function or activity within the government organization that 
benefits two or more programs may be set up as a single cost objective. 
Costs allocable to that cost objective would be allowable under any of 
the involved programs which benefit from these activities/costs. The 
government can make a business decision regarding what combination of 
funds made available under these programs would be applied to this cost 
objective.''
    This same concept is applicable to the WIA One-Stop environment 
even when all program service providers are not governed by OMB 
Circular A-87, provided that its use is consistent with a program's 
governing statutes and regulations and is agreed to in the MOU by the 
partners. As an example of the application of this Circular to a One-
Stop, an individual might be eligible for the Food Stamps and TANF Work 
programs as well as the WIA title I-B adult employment and training 
program. Further, the services provided to that individual, such as 
acquiring transportation to the job site, could be allowable under any 
of the three programs. Where these conditions exist, the cost objective 
is transportation services for individuals meeting ``X'' criteria. The 
grantees for these programs can choose which program to charge for the 
cost of transportation services for these individuals because they are 
equally eligible under several programs for essentially the same 
services. As expressed in the A-87 implementation guide, the reference 
relates to the management decision of an organization concerning which 
program will pay for a cost which is allowable under and allocable to 
more than one program in accordance with existing program requirements. 
These grantee decisions and agreements are to be reflected in the MOU.
    The One-Stop environment also permits partner program operators to 
agree through their local MOU how they pay their total allocable share 
of common One-Stop costs (Operator A may provide and pay for 100% of 
rent and Operator B may provide and pay for 100% of some other shared 
cost(s) where each partner is ``paying'' an amount equal to their 
respective share of total allowable/allocable costs). This does not 
allow a program that receives no benefit from a cost to claim 
incurrence of that cost; it merely provides flexibility in the payment 
method of each program operator for its fair share of costs according 
to benefits received. Under no circumstances may any partner program 
pay more than its total allocable share of total allowable costs. 
Further, no program may pay for costs that are not allowable under its 
governing statutes and regulations. Below are examples of situations 
for which this provision might be used.
    1. Services provided prior to determining eligibility for any given 
program(s) are allocable to the program(s) for which they are 
allowable. However, in accordance with the above, any program can pay 
for those services entirely, to the extent they are allowable, provided 
that the total payments from any given program do not exceed the total 
costs for various activities and services that were allocated to that 
program.
    2. Similarly, a receptionist is typically a common cost allocable 
to all programs. However, the salary costs of the receptionist may be 
borne by any given program where such costs are allowable, provided 
that the reimbursements or payments made by that program do not exceed, 
in total, the total organization-wide allocations made to that program.
    However, some caution must be exercised and care taken to draw the 
line in situations when:
    1. The activity begins to serve a specific program purpose instead 
of being general service to the public; or
    2. Only one program directly benefits.
    When a staff function that is common to more than one but not 
necessarily all of the One-Stop partner programs, such as intake and 
eligibility determination, is included in the One-Stop shared costs, it 
may be more equitable for ``payment'' of the program share of the 
activity to be based on the notion of full time equivalent (FTE) staff 
position rather than on the aggregate total of staff salaries. The 
staff of programs in a One-Stop center will likely include State 
employees, county and/or city employees, as well as employees of 
educational institutions, non-profit community-based organizations, and 
for profit commercial entities. Staff who perform the same function for 
the One-Stop operation will be on different pay scales and pay levels. 
If all of the programs that require the same specific function provide 
FTE staff to perform that function in the same proportion as the 
relative number of individuals attributable to the partner's program 
(e.g., the referrals to its program), then each would have provided its 
equitable share of the function. In order to establish the appropriate 
FTE contribution for each partner, it is first necessary to establish 
the proportionate share of each of the partner programs. The 
proportionate share could be established based upon the number of 
individuals referred to the program compared with the total number of 
individuals served by the common function. Another methodology, 
discussed in the paragraph below, establishes the proportionate share 
of each program based on the number of data elements, included in a 
common intake and eligibility determination form, that are applicable 
to and used for the individual partner program. When these programs 
were operating independently of the One-Stop, such staff would have 
conducted an intake interview and determined that the individual was 
not eligible for the program and, hopefully, referred the individual to 
the appropriate program where they would go through the intake process 
all over again. In a One-Stop environment using a standardized intake 
process, it will only be necessary for a client to go through the 
process once. This will result in a cost savings for the program that 
actually provides the program services as well as the programs which 
previously would have incurred the intake cost and not provided 
service. Obviously, if a particular partner's program is not able to 
use and does not benefit from the common staff function, then it cannot 
and should not bear any share of the cost of such function.
    An alternative method for determining the proportionate share of a 
common intake and eligibility system for each of the partner programs 
could be based on an approach that considers the benefit of individual 
data elements to each of the benefitting program partners. This can be 
accomplished by analyzing the data elements and computing the 
appropriate percentage of effort applicable to each benefitting partner 
as follows:

[[Page 39765]]



----------------------------------------------------------------------------------------------------------------
                                                                   Used by program
          Total bytes on the intake form        ----------------------------------------------------     All
                                                     500           A            B            C         programs
----------------------------------------------------------------------------------------------------------------
Bytes for Name.................................           40           40           40           40          120
Bytes for Street Address.......................           80           80           80           80          240
Bytes for City Address.........................           25           25           25           25           75
Bytes for State Address........................            2            2            2            2            6
Bytes for Zip Code.............................           10           10           10           10           30
Bytes for Other Information....................          343          143          183          203          529
                                                ----------------------------------------------------------------
    Total Bytes................................          500          300          340          360        1,000
                                                ----------------------------------------------------------------
    Percentage of Cost to Bear by Program......  ...........           30           34           36          100
----------------------------------------------------------------------------------------------------------------

    In the above table, the total number of bytes of information for 
each item on the form is indicated in the first column. The data in the 
columns headed ``A'', ``B'', and ``C'', indicates the number of bytes 
of information used by each of the individual programs. All programs 
require the data elements related to name and address, but each uses 
different amounts of the remaining data elements. The fifth column in 
the table represents the total usage of all of the data elements by all 
of the participating programs and constitutes the denominator, or base, 
upon which the proportionate share of the individual program use is 
calculated.
    The FTE methodology discussed above works best in those situations 
when the common function (e.g., intake and eligibility determination) 
is being allocated to the sharing partners separate from the other 
shared costs. When common functions are being allocated as part of the 
process of allocating total shared costs, use of the FTE methodology 
for a portion of the total may result in inequitable distribution of 
the total costs. In such cases, it may be better to base the 
proportionate share allocation on the actual staff salary cost rather 
than on FTEs.

Conclusion

    This document has described the framework created under the 
Workforce Investment Act which creates the need for resource sharing 
and cost allocation methodologies for the shared costs of a One-Stop 
system. It has been a collaborative effort involving comments and 
discussions among representatives from the Departments of Agriculture, 
Education, Health and Human Services, as well as the Department of 
Labor's Employment and Training Administration, Office of Cost 
Determination and Office of Inspector General. This document separates 
the identification and determination of One-Stop shared costs from the 
discussion of how those costs are paid for or funded. While there may 
be unique One-Stop settings that will require additional guidance, this 
document provides a useful framework that all One-Stop centers will be 
able to use to establish their own system for cost allocation and 
resource sharing. The Federal partners that participated in the 
preparation of this paper, as well as the Office of Management and 
Budget, accept the principles discussed herein as appropriate 
``resource sharing'' and ``cost allocation'' guidance for WIA One-Stop 
centers.

    Signed at Washington, D.C., this 21st day of June, 2000.
Raymond L. Bramucci,
Assistant Secretary of Labor, Employment and Training Administration.
[FR Doc. 00-16170 Filed 6-26-00; 8:45 am]
BILLING CODE 4510-30-U


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