39760 Federal Register / Vol. 65, No. 124 / Tuesday, June 27, 2000 / Notices

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.

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 OneStop 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:

edonahue@doleta.gov.

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 OneStop 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

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

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

39762 Federal Register / Vol. 65, No. 124 / Tuesday, June 27, 2000 / Notices

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 OneStop 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-towork 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 OneStop 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 OneStop 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 OneStop 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 OneStop structure. The basic types of OneStop 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 OneStop 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

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

39764 Federal Register / Vol. 65, No. 124 / Tuesday, June 27, 2000 / Notices

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 OneStop, 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 OneStop 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 OneStop 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:

Federal Register / Vol. 65, No. 124 / Tuesday, June 27, 2000 / Notices 39765

Total bytes on the intake form

Used by program All

programs 500 A B C

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 OneStop 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 OneStop 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]

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