53786 Federal Register / Vol. 75, No. 169 / Wednesday, September 1, 2010 / Rules and Regulations 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

20 CFR Part 641 

RIN 1205–AB48 and RIN 1205–AB47 

Senior Community Service 

Employment Program; Final Rule 

AGENCY: Employment and Training 

Administration, Labor. 

ACTION: Final rule. 

SUMMARY: The Employment and 

Training Administration (ETA) of the 

Department of Labor (Department) 

issues this final rule to implement 

changes in the Senior Community 

Service Employment Program (SCSEP) 

resulting from the 2006 Amendments to 

title V of the Older Americans Act, and 

to clarify various policies. These 

regulations provide administrative and 

programmatic guidance and 

requirements for the implementation of 

the SCSEP. 

The Department issued an interim 

final rule (IFR) implementing changes in 

the SCSEP performance accountability 

regulations. We issued a notice of 

proposed rulemaking (NPRM) proposing 

changes to the remainder of the SCSEP 

regulations on August 14, 2008. This 

final rule takes into consideration 

comments received on the IFR and the 

NPRM. 

DATES: Effective date: This final rule is 

effective October 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Judith Gilbert, Team Leader, Division of 

Adult Services, Office of Workforce 

Investment, U.S. Department of Labor, 

200 Constitution Avenue, NW., Room 

S–4209, Washington, DC 20210; 

telephone (202) 693–3046 (this is not a 

toll-free number). 

Individuals with hearing or speech 

impairments may access the telephone 

number above via TTY by calling the 

toll-free Federal Information Relay 

Service at 1–800–877–8339. 

SUPPLEMENTARY INFORMATION: 

The preamble to this final rule is 

organized as follows: 

I. Background—provides a brief description 

of the development of the rule. 

II. Summary of the Comments—provides an 

overview of the comments received. 

III. Section-by-Section Review—discusses 

comments on the SCSEP regulations. 

IV. Administrative Information—sets forth 

the applicable regulatory requirements. 

I. Background 

The Older Americans Act (OAA) 

Amendments of 2006, Public Law 109– 

365 (2006 OAA) were signed into law 

on October 17, 2006. This law amended 

the statute authorizing the SCSEP and 

necessitates changes to the SCSEP 

regulations. The 2006 OAA required 

regulations that address performance 

measures by July 1, 2007. To meet this 

deadline, the Department promulgated 

an Interim Final Rule on June 29, 2007. 

72 FR 35832. We issued an NPRM on 

August 14, 2008, to propose changes to 

the remainder of the SCSEP regulations 

in light of the 2006 OAA. 73 FR 47770. 

We invited comments on both the IFR 

and the NPRM, and thoroughly 

evaluated those comments in the 

process of developing this final rule. 

The SCSEP, authorized by title V of 

the OAA, is the only federallysponsored employment and training 

program targeted specifically to lowincome older individuals who want to 

enter or re-enter the workforce. 

Participants must be unemployed, 55 

years of age or older, and have incomes 

no more than 125 percent of the Federal 

poverty level. The program offers 

participants community service 

assignments and training in public and 

non-profit agencies. The dual goals of 

the program are to promote useful 

opportunities in community service 

activities and to also move SCSEP 

participants into unsubsidized 

employment, where appropriate, so that 

they can achieve economic selfsufficiency. In the 2006 OAA, Congress 

expressed its sense of the benefits of the 

SCSEP, stating, ‘‘placing older 

individuals in community service 

positions strengthens the ability of the 

individuals to become self-sufficient, 

provides much-needed support to 

organizations that benefit from 

increased civic engagement, and 

strengthens the communities that are 

served by such organizations.’’ OAA 

§ 516(2). 

Although some of these regulations 

remain unchanged from the 2004 SCSEP 

final rule, this final rule does include 

certain significant changes to the 

program. Perhaps most notably, the new 

48-month limitation on participation 

(OAA § 518(a)(3)(B); § 641.570 of this 

part), and the increase in available 

funds for training and supportive 

services (OAA § 502(c)(6)(C); § 641.874 

of this part). 

The 2006 OAA also increases the 

accountability of national grantees by 

clearly requiring a competitive process 

for grant awards. This final rule 

implements the statute’s requirement 

that the national SCSEP grants be recompeted regularly, generally every four 

years. OAA § 514(a); § 641.490(a) of this 

part. This final rule also implements the 

statute’s requirement that a State 

compete its SCSEP grant if the current 

State grantee fails to meet its core 

performance goals for three consecutive 

years. OAA § 513(d)(3)(B)(iii); § 641.490 

of this part. 

In addition, the 2006 OAA establishes 

new funding opportunities for pilot, 

demonstration, and evaluation projects 

(OAA § 502(e); § 641.600–640 of this 

part), expands the priority-for-service 

categories (OAA § 518(b); § 641.520 of 

this part), and modifies how the 

program determines income eligibility 

(OAA § 518(a)(3)(A); § 641.510 of this 

part). 

Coordination between the SCSEP and 

the programs under the Workforce 

Investment Act of 1998 (WIA), 29 U.S.C. 

2801 et seq., continues to be an 

important objective of the 2006 OAA. 

With the enactment of WIA in 1998, the 

SCSEP became a required partner in the 

workforce investment system. 29 U.S.C. 

2841(b)(1)(B)(vi). In 2000, Congress 

amended the SCSEP to require 

coordination with the WIA One-Stop 

delivery system (Pub. L. 106–501, 

§ 505(c)(1)), including reciprocal use of 

assessment mechanisms and Individual 

Employment Plans (Pub. L. 106–501, 

§ 502(b)(4)). In 2006, Congress 

continued both the requirement to 

coordinate at OAA § 505(c)(1) and the 

reciprocal use of assessments at OAA 

§ 502(b)(3)(B). The underlying notion of 

the One-Stop delivery system is the 

coordination of programs, services, and 

governance structures, so that the 

customer has access to a seamless 

system of workforce investment 

services. 

Consistent with current SCSEP 

practice, both WIA and the 2006 OAA 

require any grantee operating a SCSEP 

project in a local area to negotiate a 

Memorandum of Understanding (MOU) 

with the Local Workforce Investment 

Board. WIA § 121; OAA § 511(b); see 

also OAA § 502(b)(1)(O). The MOU must 

detail the SCSEP project’s involvement 

in the One-Stop delivery system. In 

particular, SCSEP grantees and subrecipients must make arrangements to 

provide their participants, eligible 

individuals the grantees are unable to 

serve, as well as SCSEP-ineligible 

individuals, with access to services 

available in the One-Stop centers. OAA 

§§ 510, 511; §§ 641.210, 641.220, and 

641.230 of this part. 

II. Summary of the Comments 

We have carefully reviewed all of the 

comments received in response to both 

the IFR and to the NPRM. We received 

1,505 comments during the comment 

periods, of which 364 were unique, 959 

were duplicates or ‘‘form’’ letters, and 

one was a petition with 182 signatures. 

The commenters fell into a variety of 


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categories that reflect the broad range of 

constituencies for the SCSEP program, 

including State and national grantees, 

program non-profit host agencies, area 

agencies on aging, WIA providers, and 

program participants. 

A number of commenters requested 

additional time to review and submit 

comments on the changes proposed in 

the NPRM. Many of these commenters 

requested an additional 60 days to 

determine the impact on SCSEP 

stakeholders and participants. Several 

commenters mentioned that many who 

will be impacted by the proposed 

changes are not yet even aware of them. 

Others mentioned that they have had 

insufficient time to contact host 

agencies and obtain their input. One 

commenter pointed out that the SCSEP 

system is a diverse and complex 

network of agencies, and said that 

insufficient time had been allowed to 

seek input from this network. One 

commenter said additional time was 

required to evaluate the impact of the 

recent economic downturn on SCSEP 

participants. A few others suggested that 

the Department put the proposed 

regulations aside and work 

collaboratively with the grantee 

community and with the 

Administration on Aging to draft new 

regulations. 

We reviewed these requests and 

concluded that they presented no novel 

or difficult issues justifying an 

extension of the comment period or a 

withdrawal of the proposed rule In this 

case, the Department provided 60 days 

for notice and comment. We believe the 

time allotted was more than sufficient to 

review this regulation given that most of 

the rule simply reflects changes 

required by the 2006 OAA, or is a 

continuation of policies that were 

published in the 2004 Final Rule. 

Accordingly, the Department did not 

extend the comment period. 

The more substantive comments 

touched on almost every section of the 

proposed regulation. These comments 

are discussed in Section III below. In 

addition, the Department has made 

technical changes to the regulatory text 

for clarity and consistency. Provisions 

that were not the subject of a comment 

or that were not revised for technical 

reasons have been adopted as proposed 

and are not discussed in Section III. 

III. Section-by-Section Review 

In this section, we discuss the 

comments, our responses to them and 

any changes to the regulations that we 

made as a result of comments. In the 

course of reviewing the NPRM, we have 

made some technical or grammatical 

changes to the regulatory text, which are 

not intended to change the meaning or 

intent of the regulatory provisions. 

Generally, we do not discuss these types 

of changes in this section. 

Subpart A—Purpose and Definitions 

What is the SCSEP? (§ 641.110) 

This section of the final rule describes 

the SCSEP as it is defined by the 2006 

OAA. We received several comments on 

this provision. Those commenters 

expressed concern about using the term 

‘‘employment’’ in the phrase 

‘‘community service employment 

assignment’’ as referenced in §§ 641.110 

and 641.120 of the rule. A few 

commenters found that adding the term 

‘‘places undue confusion on both 

grantees and participants.’’ As a result, 

these commenters recommended that 

the regulation only refer to 

‘‘employment’’ in the context of 

unsubsidized employment. Other 

commenters stated that changing the 

name would reverse grantee efforts to 

promote SCSEP as a training program 

rather than an employment program. 

The Department accepts this 

comment. The regulation has been 

revised to use the term ‘‘community 

service assignment’’ throughout. The 

term ‘‘community service employment’’ 

in the rule is consistent with the term 

as it is defined in the 2006 OAA at 

§ 518(a)(2). To remedy any potential 

confusion, the Department notes that 

the terms ‘‘community service 

assignment’’ and ‘‘community service 

employment assignment’’ are the same 

in that they both represent part-time, 

temporary job training through a work 

experience that is paid with grant funds. 

Therefore, the Department recommends 

that grantees continue to clarify the 

nature of the community service 

assignment with participants, which 

should alleviate any potential 

confusion. 

One final comment came from a 

program participant who stated that the 

program should allow for more than 

part-time hours so that participants are 

able to further develop and improve 

their skills. We are unable to 

accommodate the participant’s request, 

because the OAA at § 518(a)(2) defines 

‘‘community service employment’’ as 

‘‘part-time, temporary employment.’’ We 

are pleased to receive comments from 

our program participants, including this 

commenter, and note that developing 

and improving skills does not have to 

end with SCSEP. There are other no-cost 

training resources available to seniors 

(including, in some cases, through the 

One-Stop delivery system) that we hope 

program participants utilize. 

What are the purposes of the SCSEP? 

(§ 641.120) 

This section of the rule outlines the 

purpose of the SCSEP. We received a 

significant number of comments on this 

section. A majority of the commenters 

expressed concern that the Department 

is minimizing the community service 

aspects of the program and placing a 

higher priority on the unsubsidized 

placement goal in this regulation. Many 

of the commenters stated that the NPRM 

does not conform to the 2006 OAA 

because they perceived the Department 

as elevating the importance of 

unsubsidized employment at the 

expense of community service. Several 

commenters referenced the intent of 

Congress when it passed the legislation. 

Those commenters referenced section 

516 of the 2006 OAA, which provides: 

It is the sense of Congress that— 

(1) The older American community 

service employment program described 

in this title was established with the 

intent of placing older individuals in 

community service positions and 

providing job training; and 

(2) placing older individuals in 

community service positions 

strengthens the ability of the individuals 

to become self-sufficient, provides 

much-needed support to organizations 

that benefit from increased civic 

engagement and strengthens the 

communities that are served by such 

organizations. 

Those commenters relied on the 

placement of the words ‘‘community 

service’’ before ‘‘job training’’ to make 

the case that Congress intended for 

community service to have a higher 

priority than job training. Further, some 

of these commenters asserted that ‘‘selfsufficient’’ in this context implies 

emotional and other types of selfsufficiency, and not just economic selfsufficiency. In support of this position, 

the commenters describe the importance 

of placing an older individual into a 

community service assignment as a 

means of improving the person’s sense 

of financial as well as emotional and 

social well-being, while providing a 

useful and needed service in the 

community. Therefore, these 

commenters found that the regulations 

ignore the value of community service 

both to the participant and to the 

community at large. A few commenters 

stressed the importance of working with 

the non-profit sector because they rely 

on the program participants when they 

do not have enough funds to hire staff 

for their organizations. One commenter 

commended the Department for 

stressing the importance of the 


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program’s goal to foster economic selfsufficiency. 

In addition, some commenters 

focused on other language in the 2006 

OAA. In addition to § 516, these 

commenters referenced § 502(a), 

‘‘Establishment of Program’’ and 

§ 518(a), which defines ‘‘community 

service employment.’’ These 

commenters stated that these provisions 

‘‘reinforce[] the primary purpose of 

community service employment, along 

with its dual purpose of placing workers 

into unsubsidized employment.’’ One of 

the commenters noted that the 

Department misinterpreted the 2006 

OAA when it attempted to ‘‘meld 

together’’ four disparate provisions ‘‘to 

support an exclusive focus on job 

placement’’ in the proposed rule. 

The Department appreciates the 

commenters’ concern about the 

perceived changes in the program. 

However, the Department finds that the 

dual purposes of the program— 

community service and appropriate 

employment objectives for 

participants—with its related 

performance goals, are not inconsistent. 

We fully embrace these dual purposes of 

the SCSEP as envisioned by the 

Congress. We recognize the importance 

of the community service aspect of the 

SCSEP. But we do not think that the 

regulation should overemphasize either 

aspect of the program. We have, 

therefore, written this regulation to 

strike an appropriate balance between 

community service and unsubsidized 

employment. Therefore, we have not 

changed this section. 

What definitions apply to this part? 

(§ 641.140) 

This section provides specific or 

contextual definitions for the terms used 

in this part. We received numerous 

comments on this section with 

suggestions on how to better clarify, 

amend, or define the following ten (10) 

definitions: ‘‘co-enrollment,’’ 

‘‘employment,’’ ‘‘equitable distribution 

report,’’ ‘‘host agency,’’ ‘‘individual 

employment plan,’’ ‘‘other participant 

costs,’’ ‘‘state plan,’’ ‘‘sub-recipient,’’ 

‘‘supportive services,’’ and 

‘‘unemployed.’’ In addition, commenters 

asked the Department to add definitions 

for ‘‘community service employment’’ 

and ‘‘job ready.’’ 

As indicated in the preamble to the 

proposed rule, the definition of ‘‘coenrollment’’ was eliminated because it 

related to private sector 502(e) projects 

which are no longer authorized. This 

definition was specific to the 502(e) 

projects and had no bearing on SCSEP 

participants co-enrolling into other 

federally funded programs. Upon 

further reflection, however, the 

Department realized that although this 

definition is no longer applicable to the 

502(e) projects from the 2004 regulation, 

it is still applicable to define the status 

of participants who are enrolled in WIA 

or other employment and training 

programs since SCSEP is a mandatory 

partner in the One-Stop system. 

Therefore, we have reinstated this 

definition with some changes to reflect 

that the participants must be enrolled in 

those other programs to be considered 

co-enrolled. 

Commenters suggested two 

substantial changes to the definition of 

‘‘equitable distribution report.’’ First, the 

commenters suggest the Department 

allow grantees to use other reputable 

and reliable population data in order to 

determine the optimum number of 

participant positions for equitable 

distribution purposes. The Department 

understands the limits of census data 

when determining equitable distribution 

of positions, given that Census data is 

updated only every 10 years. The 

Department also agrees that more timely 

information would help the grantees 

make better decisions for program 

efficiencies (i.e., equitable distribution 

of SCSEP positions), which would allow 

more eligible individuals to participate 

in the program. Furthermore, by 

relaxing the limitations on grantees on 

the data they may use for equitable 

distribution of positions, grantees will 

be able to respond to major changes in 

their programs, such as in the case of a 

natural disaster or other unforeseen 

demographic shifts. Therefore, the 

Department agrees to allow the use of 

other data for equitable distribution 

purposes, as long as that information is 

from a reliable source, comparable in 

quality to the Census data, and grantees 

document the source of the information. 

Other commenters took issue with the 

change of words in the definition from 

‘‘counties’’ to ‘‘jurisdiction.’’ We made 

this change to make the definition more 

inclusive of potentially underserved 

incorporated cities. One commenter 

specifically suggested that the 

Department reverse the change of 

wording, and edit the definition to 

include the term ‘‘incorporated cities.’’ 

The Department accepts these 

commenters’ suggestions and has 

expanded the definition of ‘‘equitable 

distribution report’’ to include these 

suggestions. 

One commenter expressed concern 

with the addition of the word ‘‘training’’ 

within the definition of ‘‘host agency.’’ 

The commenter felt that this term added 

to the confusion participants experience 

when they accept a community service 

assignment. Although the Department 

appreciates the sentiments of this 

commenter, we disagree. We believe 

that the added term ‘‘training’’ helps to 

underscore the fact that the community 

service assignment provides an 

opportunity to train SCSEP participants 

for unsubsidized employment. Congress 

indicates in § 502(a)(1) of the 2006 

OAA, that the SCSEP is designed to 

‘‘[i]ncrease the number of persons who 

may enjoy the benefits of unsubsidized 

employment in both the public and 

private sectors.’’ Further in § 516 of the 

2006 OAA, Congress indicates that the 

SCSEP program ‘‘was established with 

the intent of placing older individuals 

in community service positions and 

providing job training.’’ Thus, the 

Department has decided to retain the 

term ‘‘training’’ in the definition of ‘‘host 

agency.’’ 

We received several comments on the 

definition of ‘‘individual employment 

plan or IEP.’’ One commenter requested 

that the Department include the term 

‘‘mandatory’’ in place of the term 

‘‘appropriate’’ to describe the 

employment goal included in the IEP. 

The Department agrees that one of the 

end goals of an IEP should be 

unsubsidized employment for many 

participants; however, making this a 

mandatory function of the IEP runs 

counter to the statutory language in 

§ 502(b)(1)(N)(ii) of the 2006 OAA, 

which provides that the grantee ‘‘will 

provide training and employment 

counseling to eligible individuals based 

on strategies that identify appropriate 

employment objectives * * * 

developed as a result of [an] assessment 

and service strategy.’’ Thus, the use of 

the word ‘‘appropriate’’ further 

underscores the need to identify a 

strategy in the IEP that is tailored to the 

needs of each participant. 

Additionally, commenters stated that 

the Department did not include 

community service in the definition of 

IEP. These commenters suggested the 

Department change the term IEP to 

‘‘individual service employment 

program’’ or ISEP. Other suggestions 

included ‘‘ISS’’ for Individual Service 

Strategy and ‘‘ITP’’ for Individual 

Training Plan. There is no doubt that 

the community service assignment is an 

important aspect of the IEP, since it 

provides a work environment in which 

to obtain needed job skills. The goal of 

the IEP is to plot the participant’s 

training plan that will lead to an 

appropriate employment objective, 

which includes more than just 

community service. Read together, 

paragraphs (i) and (ii) of § 502(b)(1)(N) 

focus on a strategy aimed at 

employment, and thus the IEP is 

appropriate. However, there is nothing 


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in the definition of IEP or elsewhere that 

prevents grantees from including a 

variety of other services and strategies 

not directly related to the employment 

goal as part of the IEP. For the reasons 

provided, the Department therefore 

finds this change unnecessary and did 

not alter this definition. However, in 

response to these comments we did add 

language to the definition to make it 

clear that, while the first IEP must 

contain an employment goal, later IEPs 

need not, if employment is not a feasible 

outcome for a participant. 

Two commenters found that the term 

‘‘other participant costs’’ contained 

much the same list of activities defined 

under ‘‘supportive services.’’ These 

commenters are correct. The 

Department has elected to keep both 

definitions because the definition of 

‘‘other participant costs’’ contains a 

variety of activities in addition to those 

listed in the definition of ‘‘supportive 

services.’’ In addition, we have clarified 

the definition of ‘‘severely limited 

employment prospects’’ by substituting 

the words ‘‘substantial likelihood’’ for 

the words ‘‘substantially higher 

likelihood.’’ 

One commenter noted that the 

definition of ‘‘sub-recipient,’’ caused 

general confusion by changing from the 

previously defined term, ‘‘subgrantee.’’ 

However, the Department was clear 

about why it changed the various 

definitions and the definition of ‘‘subrecipient’’ in particular in the preamble 

to the proposed rule. The Department 

explained that the previous term, 

‘‘subgrantee,’’ failed to take other 

recipients into account that may have 

grant management responsibilities. The 

term ‘‘sub-recipient,’’ therefore, is 

inclusive of subgrants as well as other 

types of funding awards. For this 

reason, the Department did not make 

any changes to this definition. 

One commenter noted that the cost of 

incidentals was not included in the 

proposed definition of ‘‘supportive 

services,’’ even though incidentals are 

the most widely used supportive 

service. Although the Department used 

the definition in the OAA at § 518(a)(7), 

we have now modified the definition to 

more fully reflect the language on 

supportive services found in section 

502(c)(6)(A)(iv). 

We received a few comments on the 

definition of ‘‘unemployed.’’ One 

commenter disagreed with the 

Department’s interpretation and found 

that the definition unnecessarily 

complicates a grantee’s ability to make 

eligibility decisions. This commenter 

further stated that use of the words the 

‘‘occasional employment’’ works against 

older individuals and particularly those 

who reside in rural areas who take parttime jobs. This definition tracks the 

statutory language, and it is sufficiently 

clear. Therefore, we have not changed 

the definition. 

We also received recommendations 

from commenters to add two definitions 

to this section, and we have adopted 

both. An overwhelming number of 

commenters suggested that the 

Department add the term ‘‘community 

service employment’’ to this regulation. 

The term ‘‘community service 

employment’’ is included in § 518(a)(2) 

of the 2006 OAA and reads as follows: 

The term ‘‘community service 

employment’’ means part-time, temporary 

employment paid with grant funds in 

projects described in section 502(b)(1)(D), 

through which eligible individuals are 

engaged in community service and receive 

work experience and job skills that can lead 

to unsubsidized employment. 

The other definition we adopted in 

this final rule is ‘‘job ready’’ which 

pertains to the rule that prohibits the 

enrollment of job ready participants in 

§§ 641.512 and 641.535(c). The term 

‘‘job ready’’ has been discussed in 

training and in conversations with 

grantees when the Department has 

provided technical assistance. The 

Department has generally meant the 

term to apply to an individual who 

requires no more than just job club or 

job search assistance to be employed. 

The Department discussed its policy in 

the 2004 regulations at 69 FR 19014 at 

19031, 19032, and 19038, Apr. 9, 2004. 

To reiterate the Department’s policy as 

announced in 2004, the purpose of the 

program is to ‘‘assure that grantees 

concentrate their efforts and limited 

funds on providing community service 

work assignments to those older 

[individuals] who are most in need’’ as 

opposed to those who are job ready. 69 

FR 19014 at 19031. Therefore, a simple 

definition of ‘‘job ready’’ is now 

provided. It refers to ‘‘individuals who 

do not require further education or 

training to perform work that is 

available in his or her labor market.’’ 

Thus, it may include an individual who 

is already employed, even if only parttime, or was recently unemployed but 

has a skill set to fill the jobs available 

in his or her area; or who has received 

sufficient training from SCSEP or some 

other employment and training program 

to be able to perform work that is 

available in the labor market. 

Subpart B—Coordination With the 

Workforce Investment Act 

What is the relationship between the 

SCSEP and the Workforce Investment 

Act? (§ 641.200) 

This section provides that SCSEP 

grantees are required to follow all 

applicable rules under WIA and its 

regulations. The WIA operational 

requirements generally do not apply to 

SCSEP operations. As required partners 

under WIA, grantees are obligated to be 

familiar with the WIA requirements 

when they are acting as a WIA/One Stop 

delivery system partner. The only 

proposed changes made in this section 

are to clarify that sub-recipients (and 

not just grantees) are included in the 

requirement to follow all applicable 

WIA rules and regulations, and to make 

certain technical corrections to the 

citations. 

A number of commenters objected to 

the requirement that SCSEP follow all 

applicable rules under WIA and its 

regulations. The commenters cited 

various problems and experiences they 

perceive WIA has in serving older 

workers, and argued that SCSEP is a 

different type of program than WIA and 

should therefore not be required to 

comply with its rules, which they 

believe are burdensome on SCSEP 

grantees. Several commenters said that 

it is unclear which WIA rules and 

regulations are applicable to SCSEP and 

which are not. Several commenters 

asked that the requirement to follow 

applicable WIA rules be removed. Since 

both the OAA and WIA require SCSEP 

to be a One-Stop partner, we cannot 

make the suggested change. 

These commenters also mentioned 

that WIA performance measures create a 

disincentive to serving older workers, 

and cited as evidence findings of an 

April 2008 Government Accountability 

Office report entitled ‘‘Most One-Stop 

Career Centers Are Taking Multiple 

Actions to Link Employers and Older 

Workers.’’ One commenter said the onus 

seems to be on SCSEP to initiate 

collaborative relationships with WIA. 

Another commenter suggested releasing 

a Training and Employment Guidance 

Letter (TEGL) to highlight the 

importance of coordination between 

WIA and SCSEP. 

We appreciate the commenters’ 

concerns about ways to improve 

SCSEP–WIA coordination but none of 

the comments received addressed the 

specific changes to this section 

proposed by the NPRM. The comments 

appear to reflect a concern that the 

coordination requirements of the 2006 

OAA and WIA will have the effect of 

diluting or undercutting the focus and 


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mission of the SCSEP. As we stated in 

response to similar comments in the 

preamble to the 2004 Final Rule, we do 

not intend the regulations to convey this 

message. 69 FR 19017–19019. WIA 

envisions a coordinated workforce 

development system in which a variety 

of programs work more closely together 

to make access to workforce 

development services easier and more 

efficient. WIA includes a number of 

programs that serve special populations 

to be required partners and is very 

careful to assure that program 

boundaries are respected. None of the 

WIA requirements on SCSEP grantees 

have changed from those that applied in 

2004, so we have not changed the 

SCSEP regulations that govern SCSEP– 

WIA coordination. The Department 

intends that the regulations will enable 

grantees and sub-recipients to 

concentrate better on the core missions 

of the SCSEP, providing community 

service assignments to hard-to-serve 

older individuals. The Department 

intends that the One-Stop delivery 

system be used to provide services both 

to older individuals who are not eligible 

for the SCSEP and to those who are 

eligible but need the intensive services 

that the SCSEP is unable to provide. The 

kinds of partnerships that the 

regulations envision will enable SCSEP 

grantees and sub-recipients to focus 

more of their efforts on the core 

population that the SCSEP is intended 

to serve. We did, however, add language 

to make it clear that the requirements of 

the section apply to SCSEP grantees and 

sub-recipients when they are acting in 

their capacities of required One-Stop 

partners. 

What services, in addition to the 

applicable core services, must SCSEP 

grantees and sub-recipients provide 

through the One-Stop delivery system? 

(§ 641.210) 

This section requires SCSEP grantees 

and sub-recipients to make 

arrangements to provide their 

participants, eligible individuals the 

grantees and sub-recipients are unable 

to serve, as well as SCSEP ineligible 

individuals, with access to other 

services available at One-Stop centers. 

We received comments on the second 

clarification made to this provision that 

SCSEP grantees and sub-recipients must 

also make arrangements through the 

One-Stop delivery system to provide 

eligible and ineligible individuals with 

referrals to WIA intensive and training 

services. 

Several commenters objected to this 

requirement and asked that it be 

removed, while others noted problems 

with the requirement. One commenter 

said that it is not always feasible to 

make referrals to WIA intensive or 

training services because many 

participants live long distances from 

One-Stop centers and do not have 

transportation to access services. 

Another commenter noted the absence 

of One-Stop centers in rural areas. 

Another commenter said that even if 

referrals of older individuals for WIA 

services are made, the WIA program 

tends not to serve them. Still another 

commenter said that the One-Stop 

delivery system provides limited or no 

bi-lingual programs that target older 

workers and in many instances are not 

located in proximity to Hispanic and 

minority neighborhoods. Finally, a 

commenter said that the 2006 OAA does 

not require SCSEP to provide core 

services through the WIA One-Stop 

delivery system, but requires potential 

participants to be registered with OneStop centers. 

The Department acknowledges that 

access and referral to WIA services in 

rural areas may present particular 

challenges, as do addressing the special 

needs of older workers who are limitedEnglish proficient. To address these 

challenges, the Department encourages 

coordination with other organizations, 

in addition to One-Stop centers, that 

may be more appropriate. This 

provision reminds grantees and subrecipients that they are required to be 

part of the One-Stop delivery system 

and to participate when appropriate in 

providing access and referral to the 

other services that the One-Stop 

partners offer. Grantees may also decide 

to provide core services outside the 

One-Stop Career Centers. 

Does title I of WIA require the SCSEP to 

use OAA funds for individuals who are 

not eligible for SCSEP services or for 

services that are not authorized under 

the OAA? (§ 641.220) 

This section states that even in the 

One-Stop center environment, SCSEP 

projects are limited to serving SCSEPeligible individuals with title V grant 

funds. The local Workforce Investment 

Board and the One-Stop partners, 

including SCSEP, should negotiate in 

the Memorandum of Understanding 

(MOU) arrangements for referral of 

individuals to WIA who are not eligible 

for SCSEP. 

A single comment on this section 

suggested including language that if a 

Local Workforce Investment Board is a 

SCSEP sub-grantee, then no MOU is 

necessary because the contract between 

the grantee and sub-grantee already 

stipulates arrangements for 

administration of the SCSEP. 

The Department disagrees that an 

MOU is not necessary when the local 

board is a SCSEP sub-grantee, although 

we acknowledge that this situation adds 

a degree of complexity to the 

relationship. As required of all partner 

relationships with the One-Stop 

delivery system, the requirement to 

have an MOU is statutory and therefore, 

still necessary. The relationship the 

local board would have as a subrecipient only mandates services to 

participants under the grant agreement 

but does not ensure that there is a 

written policy for how services would 

be coordinated with the One-Stop 

center. Therefore, we did not make any 

change to this section. 

Must the individual assessment 

conducted by the SCSEP grantee and the 

assessment performed by the One-Stop 

delivery system be accepted for use by 

either entity to determine the 

individual’s need for services in the 

SCSEP and adult programs under 

title I–B of WIA? (§ 641.230) 

The only proposed changes the 

Department made to this section were of 

a technical nature. We received two 

comments recommending the 

Department modify the section to 

include Aging Disability Resource 

Centers or other organizations that 

perform assessments in addition to 

WIA, to assist with the data validation 

requirements. 

This section merely reflects the 

language of the 2006 OAA on the 

acceptance of each others’ assessments 

by the SCSEP and One-Stop delivery 

system. The Department believes the 

SCSEP program will be better served if 

the regulations do not specify what 

other organizations perform 

assessments. The Department 

emphasizes that grantees are responsible 

for determining whether assessments 

performed by other organizations are 

sufficient for the grantee’s and the 

participant’s needs. 

Subpart C—The State Plan 

We received a large number of 

comments on this subpart, although a 

few were outside the scope of this 

rulemaking because they related to 

subpart G, which had a separate 

comment period from the proposed rule. 

Most of the comments were related to 

the 4-year strategy in the State Plan, 

although others discussed participation 

in developing the State Plan, 

community service needs, modifications 

to the State Plan, and equitable 

distribution. We received a few 

comments related to the cost and 

resources needed to complete the State 

Plan, which are addressed in the 


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Administrative Section of this final rule 

under Section D, Unfunded Mandates. 

We also received several comments that 

generally discussed the State Plan 

requirements or discussed the need for 

greater coordination with aging 

programs, which the Department has 

decided to address in this subpart on 

the State Plan requirements. 

What is the State Plan? (§ 641.300) 

This section describes the purpose 

and function of the State Plan. We made 

a number of changes to this section to 

reflect the new provision in the 2006 

OAA, which requires State grantees to 

submit a four-year strategy to the 

Department. 

A few commenters asked the 

Department to consider allowing the 

State grantees to combine the State 

SCSEP strategic plan with the State Unit 

on Aging strategic plan to further the 

goals and efforts of its SCSEP program. 

Some of those commenters specifically 

justified this request by stating that the 

Department allows the State grantees to 

submit the State Plan as a part of the 

WIA Unified Plan, but since SCSEP is 

an OAA program, submitting the State 

Plan with the other OAA programs 

should also be acceptable. 

Although we appreciate the logic of 

these comments, it is not possible for 

the State Plans to be submitted with the 

other OAA strategic plans. According to 

20 U.S.C. 9271, ‘‘a State may develop 

and submit to the appropriate 

Secretaries a State unified plan for 2 or 

more of the activities or programs’’ 

provided in a specific list, and the only 

part of OAA listed is Title V. Therefore, 

20 U.S.C. 9271 does not authorize States 

to include a unified plan that includes 

OAA activities or programs that are 

authorized by a section of OAA other 

than Title V. Such programs are 

governed by their own planning 

requirements. Furthermore, SCSEP is 

unique in that it is the only program 

under the OAA that is administered by 

the Department of Labor. Section 503 of 

the 2006 OAA specifically requires each 

State to submit a State Plan to the 

Secretary of Labor to be eligible for grant 

funding under this program. The 

Department shares the State Plans with 

the Administration on Aging in an effort 

to coordinate with them on older 

American policies. However, if they so 

desire, we do not prevent State grantees 

from also submitting their SCSEP 

strategic plan with their OAA strategic 

plan. 

Many commenters suggested that the 

Department develop regulations that 

require SCSEP grantees to coordinate 

with other programs under the 2006 

OAA, such as State units and area 

agencies on aging, and with other 

Federal programs such as Foster 

Grandparents, Senior Companions, 

Vocational Rehabilitation and several 

others. A few even requested that the 

Administration on Aging and other 

SCSEP providers be involved in writing 

the regulations. These commenters did 

not submit their comments on any 

particular section of the regulation and, 

in fact, some commenters were 

‘‘disappointed’’ because they found the 

regulations ‘‘silent’’ on this issue. 

The regulations are not ‘‘silent’’ on the 

coordination requirement with other 

Federal agencies, and especially the 

other aging programs. There are several 

provisions in this regulation that require 

coordination with aging and other 

resources. The first is in § 641.315, 

which requires the State grantees to seek 

the advice and recommendation of 

representatives from State and area 

agencies on aging, social service 

organizations, and community-based 

organizations in § 641.315(a), and 

permits the State grantee to obtain the 

advice and recommendation of other 

interested organizations and individuals 

in § 641.315(b). In addition, § 641.302(i) 

requires the States to plan actions that 

coordinate activities of SCSEP grantees 

with other public and private entities 

and programs that provide services to 

older Americans. That the Department 

did not mention a specific social service 

or other program by name does not 

exclude it from being a worthy 

organization for collaboration. Given the 

large number of comments that 

addressed this particular concern, the 

Department hopes that grantees will 

now understand the importance of the 

State planning requirements that 

grantees will make a genuine effort to 

include those organizations during State 

planning meetings. The Department 

expects grantees to work with any and 

as many organizations as will help 

achieve the purpose of the program. The 

Department emphasizes that the 

grantees do not need explicit permission 

in the regulations to work with these 

organizations. Finally, at the Federal 

level, the Department will continue to 

coordinate with the Administration on 

Aging on State planning and other major 

policy concerns under the MOU that 

exists between the two Federal agencies. 

What is the four-year strategy? 

(§ 641.302) 

This section outlines the requirements 

for the four-year strategy. We received 

many comments on this section, largely 

in opposition to the various 

requirements. Two comments were of a 

more general nature. 

One commenter was not in favor of 

the four-year strategy because he felt 

that ‘‘[p]lanning beyond funding periods 

exceed[ed] the parameters of the 

grantee’’ particularly in light of the 

requirements to resubmit the plans for 

modification. As discussed below, the 

State grantee is responsible for the 

higher-level oversight of activities in the 

State required by § 503 of the 2006 

OAA. As a practical matter, however, a 

strategy is the pre-planning for what the 

program will accomplish over a period 

of time based on a forecast of events and 

not a mere short-term snapshot of 

activities or actual workload action 

items. The reality is that the State 

program operators provide continuity 

for the program, while other 

organizations may be transient. 

Therefore, the State grantee is in the 

best position to develop a thoughtful 

long-term plan for how activities will be 

provided statewide. 

The other general commenter stated 

that, unlike their WIA program, they do 

not have an economist or the funds to 

hire an economist to provide the 

information that is required for a fouryear strategy. Therefore, this commenter 

argues that the ‘‘[i]nformation submitted 

by the State SCSEP [grantees] are 

assumptions and not factual.’’ 

The Department appreciates the 

desire to be as precise as possible, but 

it does not believe that an economist is 

needed to develop the four-year strategy 

for this program. It is true that it is 

important to have certain data, such as 

information on the growth of the eligible 

population; however, much of this 

information can already be found online from the Bureau of Labor Statistics 

or other resources, such as from the 

State workforce agency, which manages 

SCSEP in a growing number of States. 

One of the requirements of the four-year 

strategy is to describe the planned 

actions to coordinate with other 

programs, including WIA. The 

Department suggests that State grantees 

that are not workforce agencies 

coordinate with their workforce 

agencies first to find out what 

information is already available. Other 

information requirements are granteedependent, such as equitable 

distribution, which requires the type of 

collaboration with the national grantees 

discussed in §§ 641.300 and 641.365. 

Several commenters suggested that 

the State Plan requirements go beyond 

what Congress intended in § 503 of the 

2006 OAA, and found many of the 

requirements duplicative of other 

Department requirements and policies. 

As an example, these commenters cited 

§ 641.302(f) because a ‘‘performance 

system and sanctions system is already 


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in place.’’ These commenters also noted 

that the regulations at § 641.302(a)(3), 

(c), and (d) overlapped with certain 

grant application requirements. 

At the outset, the Department would 

like to point out that the State Plan is 

‘‘statewide.’’ That is to say, it is designed 

to cover all program activities that will 

occur in the State, both those operated 

by the State and those operated by 

national grantees. It is for that reason 

that the State grantees, which have this 

oversight responsibility, are required to 

seek the advice and consultation of 

other organizations in the State, 

including the national grantees. To that 

extent, there are no other vehicles in the 

program that would provide this higher 

level of thoughtful planning for the 

betterment of program services in the 

State. As previously noted, a strategy is 

the pre-planning for what the program 

will accomplish over a period of time 

based on a forecast of events. The main 

reason for a State Plan is the recognition 

that the State grantees are in the best 

position to forge relationships that cross 

programs, communities, and 

organization silos. The best way for any 

State to provide services to its citizens 

is by working with all of the relevant 

partners to lead the State in a direction 

that will produce positive outcomes 

overall. Such coordination requires 

strategic planning. Therefore, a State’s 

individual grant application, even if 

duplicative to some extent, represents 

the more immediate actions the State 

plans to take, which is only one small 

part of the overall strategy for providing 

services in the State. 

We received a few comments on 

§ 641.302(a) on equitable distribution 

and the requirement to address priority 

individuals, comments on § 641.302(f) 

on continuous increase in performance, 

and one comment on § 641.302(g) on 

coordination with WIA. With regard to 

§ 641.302(a)(1), one commenter argued 

that, given the limited ability of the 

State to alter positions between the 

national grantees and the State, creating 

‘‘a long range strategy beyond the scope 

of the Older Americans Act * * * 

reauthorization increases paper work 

without measurable benefits to program 

participants.’’ Another commenter 

mentioned that this paragraph 

‘‘exclude[d] any mention of national 

grantees and the key role they play in 

the distribution process.’’ This 

commenter requested that the 

Department rewrite the section to say: 

‘‘Moves positions from over-served to 

under-served locations within the State 

by working collaboratively with 

national grantees through a 

participatory process.’’ 

In response to the first commenter, we 

disagree that a long range strategy 

increases paperwork without 

measurable benefit to program 

participants because of the limited 

ability of the State to alter positions. 

The four-year State Plan guides the 

annual adjustments that occur with the 

annual Equitable Distribution report, 

which itself insures positions are moved 

from over-served to under-served 

locations. This process helps ensure that 

positions are distributed in the most 

appropriate and least disruptive manner 

to participants and also to grantees. The 

4-year plan outlines the principles for 

determining the need for moving 

positions and when ‘‘swaps’’ will occur. 

As to the point about the State’s limited 

ability to alter positions, the language in 

§ 641.365(f) gives the State the ability to 

influence the movement of positions. 

(‘‘All grantees are required to coordinate 

any proposed changes in position 

distribution with the other grantees in 

the State, including the State project 

director, before submitting the proposed 

changes to the Department for approval. 

The request for the Department’s 

approval must include the comments of 

the State project director, which the 

Department will consider in making its 

decision.’’) The Department intends to 

give significant weight to the State 

project director’s comments in deciding 

whether to approve any proposed 

changes in position distribution. 

As to the second commenter, their 

concern about the exclusion of any 

mention of national grantees is 

addressed in §§ 641.360 and 641.365 on 

equitable distribution. As provided in 

those sections, the State grantees are 

responsible for submitting an equitable 

distribution report at the beginning of 

each fiscal year and that the report is the 

result of consultations with all the 

grantees (including the national 

grantees) in the State to discuss the 

location of their authorized positions. In 

addition to showing where the positions 

are currently located, the equitable 

distribution report reflects an agreement 

among the grantees for how positions 

will gradually shift over time to either 

align with changes in the population 

either through movement of the 

positions to underserved areas by the 

grantees, or through ‘‘swaps.’’ Those 

consultations by their nature already 

require grantees to do some forecasting 

about where positions should be 

located. Therefore, the four-year strategy 

is consistent with the goals and current 

practices for equitable distribution. 

When these provisions are read 

together, it is clear that the Department 

expects the national grantees to have a 

significant role in the equitable 

distribution process. Therefore, 

particularly since § 641.302(a)(1) 

specifically refers to § 641.365, the 

Department does not believe the 

regulation provision needs to be revised 

as suggested. 

We received comments about 

§ 641.302(f) of the proposed rule. One 

commenter stated that because the 

Department sets the minimum levels of 

performance each year, the States have 

minimal input in determining the 

performance levels and are not 

consulted when they are established. 

Another commenter found that the 

regulation provision, as written, implied 

that State grantees were responsible for 

performance of the national grantees. 

This commenter suggested that the 

Department amend the provision to 

read: ‘‘The State strategy, including 

input from national grantees regarding 

their own performance strategies, for 

continuous increase in the level of 

performance for entry into unsubsidized 

employment, and to achieve at a 

minimum, the levels * * *.’’ 

In the Department’s opinion, these 

commenters misunderstood the purpose 

of that provision and the role of the 

State grantee in shepherding the State 

Plan process. As noted in the preamble 

to the proposed rule, the four-year 

strategy is a long-term strategy for 

increasing the level of performance in 

the State. We further stated in the 

NPRM preamble that ‘‘[a]ll grantees 

should strive to continuously improve 

their performance levels to assist 

enrollees in becoming self-sufficient, 

make available opportunities for other 

individuals to enroll in SCSEP, and 

better fulfill the objectives of the 

program.’’ Therefore, the regulation does 

not make the State grantees responsible 

for ensuring that every national grantee 

that operates in the State meet its 

performance goal; rather, the State 

grantees are responsible for planning a 

strategy in collaboration with the 

national grantees to provide better 

services to participants overall, which 

will lead to higher performance for the 

State as a whole. We believe the rule, 

which requires in this section and 

§ 641.315 that the State Plan must be 

developed in consultation with, among 

others, the national grantees in the 

State, is clear on these purposes and 

does not need to be amended. 

Some commenters took issue with 

§ 641.302(g) of the proposed rule. A few 

commenters stated that the programs 

under WIA ‘‘seem to focus on the 

younger generation’’ and full-time 

employment opportunities, which 

makes it difficult to set employment 

expectations for the older workers in 


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collaboration with WIA projects. Other 

commenters did not have an issue with 

the language but echoed these 

sentiments. These commenters wanted 

to know what the Department was doing 

to encourage similar collaborative 

efforts with the WIA programs, 

however, rather than leaving the onus 

on SCSEP to initiate partnering efforts. 

We believe these commenters are 

reading the provision too narrowly. The 

point of the coordination requirement is 

no different from the expectations and 

requirements established in subpart B of 

this final rule. The type and degree of 

coordination will vary depending on the 

geographic location. This provision 

requires the State grantees to develop a 

long-term strategic plan for how those 

activities will be coordinated over a 

period of time for the benefit of the 

program. The Department further notes 

that WIA grantees have a responsibility 

to coordinate with the SCSEP program 

as well, but these regulations are not 

intended to apply to WIA-funded 

recipients. For example, State 

Workforce Investment Boards are 

required to develop linkages among 

One-Stop Partner programs such as 

SCSEP in order to assure coordination 

and avoid duplication of activities. 20 

CFR 661.205(b)(1). For a more in depth 

discussion on the coordination 

requirements, see the discussion of 

subpart B of this final rule. 

Finally, one commenter argued that 

§ 641.302(k) is ‘‘overly prescriptive’’ in 

requiring the State to provide a longterm strategy because it ‘‘presumes the 

necessity for every state to make longterm program design changes in order to 

improve services to participants and 

communities.’’ The commenter argued 

that instead, the State ‘‘should have the 

latitude to plan strategically, within the 

framework of the OAA, for what works 

best * * *.’’ There is nothing in 

§ 641.302(k) that prevents a State from 

planning strategically for what works 

best. Indeed, that is precisely what this 

provision assumes that the States will 

do. This provision does not require 

change for change’s sake, rather, it 

requires that a State take a hard look at 

the SCSEP in the State, determine 

whether changes in the program will 

improve it and develop a plan to move 

toward those changes. Therefore, we 

disagree that § 641.302(k) is overly 

prescriptive, because as explained 

above, we believe that long-term, 4-year 

planning will improve services overall 

in the State. 

May the Governor, or the highest 

government official, delegate 

responsibility for developing and 

submitting the State Plan? (§ 641.310) 

Although we did not receive any 

comments on this section, we made 

technical amendments to this section by 

breaking it into paragraphs to make it 

easier to read. 

Who participates in developing the 

State Plan? (§ 641.315) 

This section describes the required 

participants to the State planning 

process. We received a few comments 

on this section. 

One commenter stated that the 

requirement to seek the advice and 

recommendation of representatives of 

the various organizations involved too 

many people, and that it ‘‘would take an 

entire year just to coordinate those 

efforts.’’ This commenter requested that 

the Department limit the number of 

organizations required to provide input 

to the development of the State Plan. 

This part of the proposed rule did not 

change from the 2004 regulations. In 

addition, the list of organizations and 

individuals is consistent with the 

§ 503(a)(2) of the 2006 OAA. The 

Department commented on this issue in 

the 2004 regulations. At that time the 

Department stated: ‘‘[Although] 

obtaining information on coordination 

may be a bit more complicated whe[n] 

there are several national grantees in a 

State, we believe that if the Governor 

has set up a good consultation process, 

obtaining the information should not be 

difficult.’’ 69 FR 19014, 19022, Apr. 9, 

2004. 

Other commenters found this section 

to be inadequate as written because it 

does not address coordination 

requirements with aging programs. 

Specifically, one commenter noted that 

the SCSEP regulation should ‘‘enforce 

and reflect section 503(b) of the 2006 

OAA, requiring coordination of SCSEP 

with other programs under the Older 

Americans Act, such as state units and 

area agencies on aging, and with other 

Federal programs such as Foster 

Grandparents, Senior Companions, and 

Vocational Rehabilitation.’’ We did not 

make any changes to these sections 

because the regulation lists aging 

organizations in paragraphs (1), (4), (5) 

and (7) and thus clearly requires 

coordination with aging organizations. 

Must all national grantees operating 

within a State participate in a State 

planning process? (§ 641.320) 

This provision explains that all 

national grantees are required to 

participate in the State planning process 

with the exception of grantees serving 

older American Indians or Pacific Island 

and Asian Americans. One commenter 

disagreed with this provision and stated 

that these entities should not be exempt 

from participation. As noted in the 

regulation text at paragraph (b), 

however, that exclusion is mandated by 

Congress at § 503(a)(8) of the 2006 OAA. 

That being said, the Department agrees 

that it would be helpful for these 

organizations to participate in the 

development of the State Plan, which is 

designed to improve services, and we 

believe they have done so in the past. 

Therefore, as noted in the regulation 

provision, the Department will continue 

to encourage these national grantees to 

participate in the State Plan process. 

How should the State Plan reflect 

community service needs? (§ 641.330) 

We received one comment on this 

section; however, because the substance 

of the comment was related to a lack of 

resources, it will be addressed in the 

Administrative section of the preamble 

under Section D, Unfunded Mandates. 

How should the Governor, or the 

highest government official, address the 

coordination of SCSEP services with 

activities funded under title I of WIA? 

(§ 641.335) 

We received several comments on this 

section. These commenters found this 

section inadequate as drafted to address 

coordination requirements with aging 

programs but failed to provide any 

specific regulatory suggestions other 

than to draft more regulations. The 

Department did not make any changes 

to these sections because, as mentioned 

in the discussion of § 641.315, the 

requirements to coordinate with aging 

groups are clear. 

How often must the Governor, or the 

highest government official, update the 

State Plan? (§ 641.340) 

This section discusses the situations 

when the State is required or 

encouraged to update the State Plan. We 

received one comment on this section. 

This commenter stated that requiring 

updates more frequently than every two 

years as specified by the 2006 OAA, 

would convert a long range strategy into 

an annual plan, which is the current 

requirement. Although updates are not 

required more frequently than every two 

years, they are encouraged and should 

be done when circumstances warrant, as 

noted in § 641.345. The State Plan 

process is not an exercise that should be 

done as an item on a ‘‘to do’’ list. Rather, 

it is a thoughtful instrument that is 

designed to lead the State forward to 

achieve positive outcomes. In order for 


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any plan to be effective, it must align 

with current circumstances. Over the 

course of two or four years, it is 

reasonable to think that there could be 

some major shifts in policy, local or 

national economy, employers, 

performance, or community social 

service organizations that may alter the 

State’s direction described in the State 

Plan. Therefore, without monitoring and 

adjusting the State Plan, it would be 

easy for the State Plan to become 

obsolete. Therefore, the Department did 

not make any changes based on this 

comment. However, as a technical 

amendment, we did divide the section 

into two paragraphs to make it easier to 

read. 

What are the requirements for 

modifying the State Plan? (§ 641.345) 

We received several comments on this 

section. One commenter stated that 

modifying the State Plan according to 

§ 641.345(b)(3) would require grantees 

to modify the State Plan every year, 

which is contrary to the four-year 

strategic planning document. This 

commenter stated that almost every 

State and national grantee failed to meet 

at least one goal, and because the 

Department requires grantees to submit 

a performance improvement plan each 

year when one or more goal is not met, 

that effectively results in annual 

modifications. 

We appreciate this comment and 

upon further reflection have decided to 

delete this provision from the final rule. 

Although the assertions that most 

grantees fail to meet at least one goal 

each year and that they are required to 

submit a performance improvement 

plan each year is inaccurate, the 

Department does agree that the 

requirement is unnecessary for 

continuous improvement. As a 

consequence, proposed § 641.345(b)(3) 

has been deleted and § 641.345(b)(4) 

will be renumbered as § 641.345(b)(3). 

Two other commenters reported 

contradictions: One found that 

paragraphs (c) and (d) contradicted each 

other and the other found that 

paragraph (d) contradicted OAA 

§ 503(a)(3). We do not find a 

contradiction in either case. 

Paragraph (c) requires the modified 

State Plan to be published for public 

comment, while paragraph (d) allows 

the grantees to make modifications to 

the plan without seeking the advice and 

recommendation of those entities and 

individuals listed in § 641.315. 

Paragraph (d) addresses the 

development of the modification while 

paragraph (c) addresses the postdevelopment, pre-submission phase of 

the planning process. However, it 

appears that some State grantees have 

used the public comment period as the 

main mechanism for seeking the advice 

and recommendation of those 

organizations and individuals, which is 

not the intent of the statute. Section 

503(a)(2) of the 2006 OAA requires State 

grantees to seek the advice and 

recommendations of those organizations 

and individuals while developing the 

plan. The public comment period 

occurs after the State Plan is developed. 

Although it is a time consuming 

process, as we have stated elsewhere in 

this preamble, the State Plan process is 

not an item on a ‘‘to do’’ list. The State 

Plan process requires the grantee to 

identify and assess the resources 

available in the State, to engage the key 

members of organizations providing 

those resources in the planning process, 

and to provide a roadmap for how the 

State will reach overall projected 

outcomes. Therefore, it is a critical 

document for helping the State provide 

continuously improving services to as 

many eligible individuals possible in 

that State. Thus, if the plan 

development or modification processes 

are being run correctly, there is no 

contradiction in the provisions on 

consultation and public comment. 

The second commenter further stated 

that paragraph (d) negates the role of the 

national grantees in the modification 

process. This commenter recommended 

that the Department strike this provision 

and replace it with a provision that 

reads: ‘‘the Governor, or the highest 

[S]tate official, must seek advice and 

recommendations from each grantee 

operating a SCSEP within the State.’’ 

The Department agrees with this 

comment and has modified the language 

to require the Governor or the highest 

State official to consult with the 

national grantees. In addition, given the 

commenter’s rationale, the Department 

also considered whether this provision 

should be revised to require the full 

consultation of those entities listed at 

§ 641.315 as well. The purpose of the 

State Plan is to draft a plan that will 

improve services across the State and 

this provision relates to major changes 

that will impact services to participants 

statewide, which suggests the 

importance of full consultation even 

when modifying the plan. On the other 

hand, we recognize that the State may 

need some flexibility about which 

organizations it seeks advice from 

during the modification planning 

process because the need for advice 

from particular organizations may vary, 

depending on the event that gave rise to 

the need for a modification. Therefore, 

while the Department strongly 

encourages State grantees to seek the 

advice and recommendation of each 

entity listed in § 641.315 when or if 

modifying the State Plan becomes 

necessary, we have decided not to 

require it except for the national 

grantees in the state. 

How does the State Plan relate to the 

equitable distribution report? 

(§ 641.360) 

This section describes the connection 

between the State Plan and the equitable 

distribution report. The Department 

made one substantive change to this 

section. The Department changed 

‘‘Census data’’ to ‘‘Census or other 

reliable data’’ to be consistent with the 

changes made to the definition of 

‘‘Equitable Distribution Report’’ in 

§ 641.140. 

A commenter stated that the State 

Plan should address competition and 

the authorized positions that could 

change. That commenter further argued 

that the Department should require a 

plan to involve State grantees in the 

finalization of the authorized positions 

to avoid disruptions, or the ability to 

make recommendations to better serve 

areas proportionately. 

We agree with these concerns and it 

is for that reason that the 4-year strategy 

and the meetings on equitable 

distribution are so vitally important to 

the program, as discussed in other 

sections of this final rule. Further, 

§ 641.480 addresses the commenter’s 

other concern that States should have a 

role in determining where positions are 

located during a competitive process. 

Since the commenter’s concerns are 

addressed in that provision, we did 

make any changes to this section. 

How must the equitable distribution 

provisions be reconciled with the 

provision that disruptions to current 

participants should be avoided? 

(§ 641.365) 

This section describes the 

Department’s policy on the movement 

of positions for equitable distribution in 

the context of minimizing disruptions to 

participants. One commenter supported 

the proposed regulation because it 

included language that emphasized the 

coordination of all grantees within the 

State. Another commenter requested 

that the Department require national 

grantees to report to the State when they 

move positions within the State, and 

wanted us to allow the States to 

authorize these changes. This 

commenter felt that this change would 

ensure that ‘‘the maximum number of 

eligible individuals will have an 

opportunity to participate in the 

program and will allow States to 

demonstrate that they are making good 


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faith efforts to correct slot inequities and 

are on track to meet their state plan 

goals.’’ 

We appreciate the comment in 

support of this proposed section as well 

as the sentiments of the commenter, 

who would like to see more State 

authority over any position movement 

within the State. Section 641.365(d) 

requires that national grantees notify the 

State of any position transfers before the 

transfers may be made. Not only are 

national grantees required to participate 

in the equitable distribution and State 

Plan processes, but they are also 

required to notify the State before any 

positions are transferred within the 

State. § 641.365(f). However, to ensure 

that national grantees coordinate with 

the State grantee before submitting a 

request to the Department to move 

positions, we are revising this section to 

require that the national grantee’s 

request to DOL include a 

recommendation from the State grantee 

in which the affected positions are 

located and to indicate that the 

Department will consider those 

comments in reviewing the application. 

As a matter of practice, since the 2004 

regulations, the Department has looked 

for the State’s comments on any 

position relocation request from a 

national grantee and will continue to do 

so. This revision conforms the 

regulation to our established practice 

and ensures that the State’s comment on 

the proposed transfer will be considered 

by the Department in the decision 

making process. Approval authority, 

however, will continue to remain with 

the Department consistent with the 2006 

OAA. 

The Department recognizes that it 

may have been difficult to follow this 

provision and, therefore, has divided 

the section into subparagraphs to make 

it easier to read. The requirements 

discussed above are now reflected in 

new §§ 641.365(a)–(f). The Department 

also made a few technical changes, 

which included changing ‘‘Federal 

Project Officer’’ to ‘‘the Department’’ to 

be more consistent with the statutory 

language; and editing ‘‘Census data’’ to 

read ‘‘Census or other reliable data’’ to 

be consistent with the changes to the 

definition of ‘‘Equitable Distribution 

Report’’ in § 641.140. 

Subpart D—Grant Application and 

Responsibility Review Requirements for 

State and National SCSEP Grants 

We received several comments on this 

subpart. Those comments were related 

to State competition, the use of past 

performance for selecting grantees, State 

involvement in the national 

competition, and the timing of a 

national competition. 

What entities are eligible to apply to the 

Department for funds to administer 

SCSEP projects? (§ 641.400) 

This section describes the entities that 

are eligible to apply for SCSEP grants. 

We received one comment on this 

proposed section on the funding to the 

State for conducting a competition. The 

commenter stated that the regulations 

do not address the funding provided to 

the State to conduct a competition. This 

commenter also stated that the 

Department ‘‘appear[ed] to define the 

State in two distinctly different 

definitions.’’ 

The Department does not provide 

additional funding for the States to 

compete their grant program. States that 

compete their programs will have plenty 

of advance notice that they will have to 

compete because it takes a failure to 

meet performance standards for three 

consecutive years to trigger the 

competition requirement. States 

therefore will have time to plan for the 

possibility of competition and to set 

money aside to fund it. The Department 

suggests that grantees work with their 

Federal Project Officer to determine a 

sufficient amount for administrative 

management of a competitive process 

for State grantees that are required or 

desire to compete their programs. 

In addition, we have amended 

§ 641.420(d) to cross reference 

§ 641.460, which provides that relevant 

past participation will be used as 

scoring criteria, as well as a factor for 

determining an applicant’s eligibility. 

How will the Department examine the 

responsibility of eligible entities? 

(§ 641.450) 

We have amended this section to state 

that in reviewing records, the 

Department may consider ‘‘all relevant’’ 

information including the organization’s 

history in ‘‘managing’’ other grants. 

These changes merely reflect the 

Department’s standard practice in 

reviewing competitive grants. 

What factors will the Department 

consider in selecting national grantees? 

(§ 641.460) 

This section describes the factors the 

Department will consider when it 

competes the national grant funds. We 

received several comments on this 

proposed section. One commenter 

stated that § 641.460 appeared to be at 

odds with § 514(c)(4) of the 2006 OAA 

because the statutory language was 

intended ‘‘to prevent selection bias 

where past performance was 

meritorious.’’ The commenter compared 

the OAA to the NPRM language, in 

which the Department ‘‘propose[d] to 

drop the reference to past performance 

among the rating criteria [it] will 

consider.’’ That same commenter went 

on to request that the Department 

propose more comprehensive 

regulations to address the interrelated 

issues of past performance and the 

manner and timing of the competition 

for SCSEP grants. The commenter based 

this argument on his organization’s 

experience with prior competitions and 

the 2006 Solicitation for Grant 

Applications. See 71 FR 10798, Mar. 2, 

2006. This commenter stated that his 

organization believed the statute only 

provided the Department the authority 

to re-allocate positions from grantees 

that failed to meet national performance 

goals. Another commenter stated that 

written comments should be sought on 

this provision from the Governor or 

designee of the State. 

We do not agree that the statute only 

provides the Department the authority 

to reallocate positions from grantees that 

failed to meet national performance 

goals. While OAA § 513(d)(2)(B)(iii) bars 

grantees which have failed to meet their 

performance goals for four consecutive 

years from participating in the next 

competition, we interpret OAA 

§ 514(a)(1) to require an open 

competition; a competition in which all 

funds and slots available to national 

grantees are competed. As discussed in 

the preamble to the proposed rule, at 

73 FR 47770, 47780, Aug. 14, 2008, the 

proposed change merely took past 

performance out of the rating criteria in 

the Solicitation for Grant Applications 

requirements because it is included 

already as an eligibility criterion under 

§ 514(c)(4), as the commenters point out. 

However, upon further consideration, 

we believe that using past performance 

merely as an eligibility criterion is 

inadequate to give effect to the 

Congressional requirement. Grantees 

that fail to meet their aggregate level of 

performance for four consecutive years 

are precluded by statute from 

participating in the competition. This 

would still allow a grantee with totally 

unacceptable performance in the last 

three years to compete. Therefore, we 

have concluded that consideration of all 

relevant past performance should be 

part of the scoring mechanism and of 

the awarding criteria. Considering all 

relevant experience, and not just SCSEP 

experience, will protect against 

selection bias. What constitutes relevant 

experience and the specific weight 

given to past performance will be 

addressed in the Solicitation for Grant 

Applications published in the Federal 


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Register or other appropriate 

instrument. 

Finally, written comments from the 

Governor or highest elected official are 

provided for under § 641.480, which 

outlines the process by which the 

Governor or highest elected official may 

participate in the national competition 

process. 

When will the Department compete 

SCSEP grant awards? (§ 641.490) 

This section outlines the 

circumstances that govern the 

Department’s decision to compete the 

national grant funds. We received one 

comment on this section. 

The commenter expressed concern 

that having an additional grant year for 

some grantees but not for all would 

create a complicated competitive grant 

cycle. The commenter also thought that 

such a process would remove the 

opportunity for new and incumbent 

organizations to compete with all the 

national organizations and ‘‘would only 

serve to exacerbate the difficulties of 

SCSEP participant transition [from] one 

provider to another.’’ The commenter 

recommended that the Department 

make a decision to hold a national 

SCSEP competition ‘‘using the national 

baseline for all organizations.’’ 

The Department takes this comment 

to mean that a competition should be for 

all available national grant positions 

and that the extension of the grants for 

an additional year as permitted by 

§ 514(a)(2) of the 2006 OAA, should be 

determined by how well all grantees are 

performing at the end of the four-year 

period referenced in § 514(a)(1). 

Although we appreciate the 

commenter’s concerns, we decline to 

address this issue in a regulation, but 

will take it under advisement. The 2006 

OAA requires us to compete the 

program every four years but permits us 

to grant a one-year extension to any 

national grantee that has met its 

performance goals for each year of the 

four-year grant period. Although we 

cannot extend the grants of grantees that 

have failed to meet their expected levels 

of performance, the extension is 

otherwise discretionary. It is 

discretionary in the sense that we could 

decide to compete all of the grants after 

the fourth year, extend all of the grants 

if all the national grantees have met 

their expected levels of performance, or 

compete the funds of only those 

grantees that have failed to meet their 

expected levels of performance. We will 

decide how to structure the future 

competition after reviewing program 

performance toward the end of the fouryear period, and will make the decision 

based on the best interests of the 

participants and our policy of avoiding 

disruptions to the extent possible. 

Subpart E—Services to Participants 

Who is eligible to participate in the 

SCSEP? (§ 641.500) 

This section describes the eligible 

population for participation in the 

program. We received one comment on 

this section. That commenter 

recommended the Department lower the 

age limit of participants to 50 with 

continued priority to those who meet 

the most-in-need characteristics. We did 

not make this change because the 

requirement to serve individuals age 

who are at least 55 years of age is 

statutory. OAA § 502(a)(1). For clarity, 

the Department has added the phrase ‘‘at 

the option of the applicant’’ to the 

sentence about treating a person with a 

disability as a family of one at the end 

of this section. This change is consistent 

with the intent of the statutory 

provision, and conforms to the 

Department’s long-standing 

interpretation of the provision. 

How is applicant income computed? 

(§ 641.507) 

This section describes the procedures 

grantees must follow when making 

income determinations for enrolling 

participants. Most of these requirements 

were previously in administrative 

guidance and were adopted with the 

2006 OAA. 

We received one comment on this 

section related to using either a 12- 

month period of income or a 6-month 

period of annualized income to 

determine participant eligibility. This 

commenter stated that the regulation 

appeared to require the grantee to use 

one or the other and requested that the 

Department allow grantees the 

flexibility to use whichever method was 

most favorable to the participant on a 

case-by-case basis. 

The Department previously stated that 

grantees should use which method of 

calculating income is most favorable to 

the participant and for that reason, the 

preamble to the proposed rule 

acknowledged that we were adopting 

the procedures that were published in 

TEGL No. 12–06 (Dec. 28, 2006), which 

went into effect on January 1, 2007. See 

73 FR 47770, 47781, Aug. 14, 2008. That 

section of the preamble specifically 

allowed grantees to calculate income 

based on either 12 months or 6 months 

annualized. Further, in that section, the 

Department encouraged grantees to 

‘‘choose the computation method that is 

most favorable to each participant, on a 

case-by-case basis, for the broadest 

possible inclusion of the eligible 

applicants.’’ 73 FR at 47781. To 

reinforce this interpretation, the 

Department is changing the language of 

the regulation to remove the word 

‘‘encourages’’ and to track the language 

of TEGL 12–06, which requires the 

grantee to use whichever period is more 

favorable to the participant. 

What types of income are included and 

excluded for participant eligibility 

determinations? (§ 641.510) 

This section generally describes what 

does and does not constitute income for 

purposes of determining participant 

eligibility. We received a few comments 

on this section expressing agreement 

with the provision. One of the 

commenters further stated that the 

regulation should specifically reference 

other income exclusions, such as 

income from training programs, SSI, 

Veterans benefits, and any other 

publicly subsidized program where the 

goal is self-sufficiency. 

The Department declines to make the 

suggested change to this provision for 

the reasons stated in the preamble to the 

proposed rule at 73 FR 47781–47782, 

Aug. 14, 2008. The Department 

encourages grantees to read TEGL No. 

12–06 (Dec. 28, 2007) for the most 

recent information on excludable 

income. The Department also notes that 

that TEGL includes the exclusions 

referenced by this commenter and is 

located on the SCSEP Web site at 

http://www.doleta.gov/seniors under 

Grantee Information, Technical 

Assistance. The income exclusions 

included in the regulation were only 

those exclusions required in the 2006 

OAA. The issue of includable and 

excludable income is one that requires 

some measure of flexibility for good 

program management. It is for that 

reason that the details of the income 

requirements have always been in an 

administrative guidance, as authorized 

by § 641.510(c). 

May grantees and sub-recipients enroll 

otherwise eligible job ready individuals 

and place them directly into 

unsubsidized employment? (§ 641.512) 

This section prohibits grantees from 

enrolling job ready individuals, who can 

be directly placed into unsubsidized 

employment, as SCSEP participants. 

One commenter suggested the 

Department add a definition or criteria 

for ‘‘job ready,’’ which would help the 

providers determine the type of 

individual that is not eligible for SCSEP 

services. The Department agrees and has 

included a definition of ‘‘job ready’’ in 

§ 641.140. As noted in that section of 

the preamble, in general terms, it is an 

individual who requires no more than 


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just job club or job search assistance to 

be employed. Therefore, the definition 

of ‘‘job ready,’’ as now defined at 

§ 641.140, refers to an individual who 

does not require further education or 

training to perform work that is 

available in his or her labor market. For 

further clarity, we have added the word 

‘‘job-ready’’ to the text of § 641.512 to 

describe those individuals ‘‘who can be 

directly placed into unsubsidized 

employment’’ and thus cannot be 

enrolled in SCSEP but should be 

directly referred to the One-Stop system. 

How must grantees and sub-recipients 

recruit and select eligible individuals 

for participation in the SCSEP? 

(§ 641.515) 

This section describes the criteria 

grantees must use when determining the 

eligibility of an individual to receive 

program services. We received a few 

comments on this section specifically 

related to proposed paragraph (b), on 

using the One-Stop delivery system for 

recruiting participants. 

One commenter acknowledged the 

essential relationship that must exist 

between the One-Stop delivery system 

and the SCSEP. However, that 

commenter further stated that 

transferring the responsibility of 

recruitment and selection of all eligible 

participants to the One-Stop appears 

duplicative and eliminates the role of 

SCSEP in participant selection. Several 

other commenters stated that the 

provision is inconsistent with 

§ 502(b)(1)(H). Those commenters 

reasoned that the statutory language did 

not require grantees to use the One-Stop 

delivery system to recruit or select 

eligible individuals because of the use 

of ‘‘will’’ rather than ‘‘must.’’ They 

wanted the regulation to reflect that 

there are other means to recruit and 

select participants. 

We believe these commenters 

misinterpreted that section of the statute 

and the proposed rule. In the context of 

OAA § 502(b), the Department interprets 

the use of the word ‘‘will,’’ to be 

synonymous with the words ‘‘shall,’’ or 

‘‘must.’’ Section 502(b)(1) requires the 

Secretary not to fund programs unless 

she determines that the programs ‘‘will’’ 

do all of the things listed in paragraphs 

(A)–(R). In that context, ‘‘will’’ means 

that the 18 activities listed in § 502(b)(1) 

must be done for a program to be 

funded. That being said, however, we 

do not believe the statute or the 

regulation implies a requirement for an 

exclusive use of the One-Stop delivery 

system as the means to recruit eligible 

participants, as required by § 641.515(b). 

Rather, it is one method that grantees 

must use to recruit eligible participants. 

Moreover, this requirement in the 

regulation is not new to SCSEP; it 

appeared in the 2004 regulations at 20 

CFR 641.515(b). Therefore, the 

Department’s interpretation is 

consistent with the 2006 OAA and the 

2004 regulations and accompanying 

preamble discussion at 69 FR 19014, at 

19029. 

What services must grantees and subrecipients provide to participants? 

(§ 641.535) 

This section describes the types of 

services that are required, permitted, 

and prohibited in the program. We 

received a few comments on this 

section. One commenter requested 

language in proposed paragraph 

(a)(1)(ii), to ensure grantees have the 

flexibility to determine when a 

participant needed to be reassessed. The 

Department does not agree that 

additional language is necessary. The 

regulation text, as written, as well as the 

preamble discussion in the proposed 

rule, already allows for such flexibility 

so long as participants are assessed 

upon entry, and for a total of at least two 

times in a 12-month period. 

In addition, two commenters stated 

that proposed § 641.535(a)(9), as well as 

§§ 641.540(f) and 641.565(a), appeared 

to require projects to pay participants 

for time spent in such training and 

orientation. In particular, one 

commenter stated that orientation 

activities can occur as part of the initial 

assessment process which may be before 

a community service assignment. The 

commenter notes that under the 

proposed rule, such a participant would 

not be required to receive wages, which 

appeared inconsistent with the 

proposed § 641.540(h), and therefore, 

disagreed with the proposed change. 

We do not read this provision as 

narrowly as this commenter. Paragraph 

(a) of § 641.535 specifically states: 

‘‘When individuals are selected for 

participation in the SCSEP’’ the grantee 

is responsible for the activities listed at 

paragraphs (1) through (11) of that 

section. Included on that list is 

paragraph (9) ‘‘Providing participants 

with wages and benefits for time spent 

in the community service employment 

assignment, orientation, and training.’’ 

The Department believes that the 

operative words in this paragraph are 

‘‘selected for participation.’’ The point of 

the regulation is that when a person is 

formally enrolled in the program the 

enrollee must receive paid services. 

Therefore, it is possible, as the 

commenter described, that an 

individual may attend a general 

overview of the program or participate 

in a general assessment for eligibility 

before the individual is enrolled in the 

program. In that case, the individual, 

who is not yet a SCSEP participant, is 

not required to be paid SCSEP wages for 

attending that overview or assessment. 

However, once a participant is enrolled 

in the program, which means the 

individual has been found eligible, has 

been given a community service 

assignment, and is receiving a service, 

paragraph (a)(9) requires that the grantee 

must pay wages for time spent in 

orientation, training, assessment, or in 

receiving any other service. This 

requirement applies even if the 

participant has yet to start his or her 

assigned community service assignment 

at the host agency. 

Further, as one commenter noted, 

participants may continue to receive 

self-development training outside of 

their participation in the SCSEP as 

provided in § 641.540(h). However, the 

regulation does not require grantees to 

pay wages when the participants are 

participating in training that they have 

selected and that is not identified in 

their IEP. 

Another commenter stated that 

proposed paragraph (b) allows the 

Department to increase programmatic 

costs without funding and that, 

‘‘utilizing the administrative guidelines 

appears to circumvent the rule making 

process.’’ The Department disagrees 

with this commenter for a number of 

reasons. Proposed paragraph (b) states 

that ‘‘[t]he Department may issue 

administrative guidance that clarifies 

the requirements of paragraph (a).’’ The 

Department is fully compliant with the 

notice and comment procedures for 

rulemaking under the Administrative 

Procedure Act (5 U.S.C. 551 et seq.). The 

administrative guidance discussed in 

paragraph (b) will merely clarify the 

requirements of paragraph (a) and is not 

intended to create new rules or 

regulations. Such guidance would 

provide further explanation, as 

necessary, of the meaning and 

parameters of the various activities 

required by the regulation and functions 

as a type of technical assistance to 

grantees that sometime struggle to 

understand how they are expected to 

satisfy a regulation. The portion of the 

comment that is related to increasing 

programmatic costs without funding is 

addressed in the Administrative section 

of this preamble under Section D, 

Unfunded Mandates. However we also 

note that rather than increase 

programmatic costs, we anticipate that 

such guidance will actually decrease 

programmatic costs. 

We have also changed the language in 

paragraph (a)(3) by adding a new 

subparagraph (iii) to clarify that the 


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requirement that an appropriate 

unsubsidized employment goal be part 

of the IEP for all participants applies 

only for the first IEP. Thereafter, if it 

becomes apparent that unsubsidized 

employment is not feasible for the 

participant, the IEP should be adjusted 

to reflect other appropriate goals for 

increased self-sufficiency, including the 

transition to other services, as required 

by § 641.570(a)(2). Since it is possible 

that some SCSEP participants will not 

achieve unsubsidized employment 

during or immediately following their 

enrollment in SCSEP, grantees must 

have the flexibility to design an IEP that 

will lead to maximum self-sufficiency 

for the participant and an enhanced 

quality of life after participation in 

SCSEP has ended. 

Finally, we have removed the citation 

in paragraph (a)(1) to the 2006 OAA, 

since OAA § 502 does not specifically 

require a grantee or sub-recipient to 

provide orientation to the SCSEP. 

However, it is the Department’s position 

that requiring the provision of 

orientation is consistent with the 

purpose of title V. Orientation adds 

great value to the participants’ 

experience. Orientation is the ideal 

forum in which to provide participants 

with important information on the 

program; to address expectations and 

desired outcomes; and explain 

participant’s rights and obligations, 

grievance procedures, safety issues, and 

any other information deemed necessary 

to ensure a positive experience. 

What types of training may grantees and 

sub-recipients provide to SCSEP 

participants in addition to the training 

received at the community service 

assignment? (§ 641.540) 

The purpose of this section is to 

describe the types and the timing of 

training services grantees may provide 

to participants. We received several 

comments on this section about on-line 

training and the Department’s 

interpretation of training. 

One commenter requested that the 

Department revise paragraph (b) to be 

more consistent with the 2006 OAA. 

That commenter interpreted 

§ 502(c)(6)(A)(ii) of the 2006 OAA to 

allow training before or after an 

unsubsidized placement. 

We understand how a reader could 

interpret the provision to allow training 

after a participant is placed in 

unsubsidized employment because that 

provision may not be clear; however, we 

do not agree with that interpretation. 

The relevant provision states: 

‘‘participant training * * * which may 

be provided prior to or subsequent to 

placement and which may be provided 

on the job, in a classroom setting, or 

pursuant to other appropriate 

arrangements.’’ We interpret the term 

‘‘placement’’ here to mean a placement 

in a community service assignment. We 

base our interpretation on the latter part 

of that provision, which indicates that 

the training may be provided on the job, 

in a classroom, or through other 

appropriate arrangements. In the 

Department’s opinion, the examples 

listed go hand-in-hand with the types of 

training a grantee would provide while 

a participant is in a community service 

assignment, given that the community 

service assignment is an on-the-job type 

of training. The commenter’s reading is 

not only inconsistent with the SCSEP’s 

policy on services to exited participants, 

but is also inconsistent with the intent 

of the program to help most-in-need, 

older individuals find employment. 

Given the program’s limited 

resources, it is important that grantees 

use grant funds to help current 

participants achieve self-sufficiency. 

Grantees have a responsibility to 

provide training for the participants that 

will make them job ready. In 

appropriate cases, the grantees have an 

obligation to provide or assist 

participants to obtain supportive 

services to make sure the participant 

keeps that job, as the commenter notes. 

We do not, however, define supportive 

services to include training for a 

participant once he or she has exited the 

program. Although there is government 

support for incumbent worker training 

in WIA and TAA, SCSEP’s funds cannot 

be used to provide training after 

unsubsidized employment has been 

attained. SCSEP’s goal is to help 

participants become job-ready through 

community service and approved 

training; therefore, training may occur 

during enrollment but not after 

completion of the program. We have 

revised this provision to clarify that 

training may be provided ‘‘before or 

during’’ a community service 

assignment. 

Other comments were about on-line 

training. One commenter expressed 

support for the approval to use on-line 

instruction for training as discussed in 

the preamble to the proposed rule at 

73 FR 47770, 47784, Aug. 14, 2008. 

Another commenter questioned how the 

Department expected grantees to 

calculate the participant’s time toward 

on-line training for wage purposes and 

who would validate the time spent in 

this activity. 

The Department does not expect online training to be handled any 

differently than any other training. Online training is not new to SCSEP; it is 

not required, but is one of several 

options for how training may be 

provided. It has long been recognized as 

an approved training activity, although 

not expressly mentioned in the 

regulations. Grantees that have 

questions about how to implement online training should contact their 

Federal Project Officer for technical 

assistance. 

Another commenter requested that 

the Department add the language ‘‘and 

any other costs deemed necessary’’ to 

the end of § 641.540(e). We decline to 

make this suggested change. The 

language follows the statutory language 

at 502(c)(6)(A)(ii) of the 2006 OAA and 

is sufficiently inclusive of all costs the 

Department considers part of training. 

Any allowable cost associated with 

training that is not included in 

§ 641.540(e) will fall within the wages 

and other benefits listed in 

§ 502(c)(6)(A)(i) of the 2006 OAA and 

participant supportive services costs 

which are addressed in § 641.540(g). 

Making the suggested change would 

likely lead to unnecessary confusion 

over whether the ‘‘other costs’’ 

associated with training fall within 

§ 641.540(e) or § 641.540(g). Such 

confusion would be especially 

problematic because the statute 

excludes the cost of activities listed in 

§ 641.540(e) from its general rule that 

75% of costs go to wages, while the 

statute includes costs listed in 

§ 641.540(g) within the ‘‘75% of grant 

funds go to wages’’ rule. OAA 

§ 502(c)(6)(B)(i). 

We make one technical change in 

paragraph (a) to clarify that the grantee 

‘‘may’’ pay for appropriate skill training, 

in addition to that provided through the 

community service assignment, ‘‘that is 

realistic and consistent with the 

participant’s IEP, that makes the most 

effective use of the participant’s skills 

and talents, and that prepares them for 

unsubsidized employment.’’ The prior 

mandatory language, ‘‘must,’’ was meant 

to apply to the criteria that have to be 

met before the grantee may pay for such 

skill training. It was not meant to 

require the grantee to pay for such 

training for all participants. Grantees are 

encouraged to arrange or provide for 

such training when appropriate, but 

given the limited funds available for this 

purpose, they are not required to 

provide or pay for training when it is 

not appropriate. 

What supportive services may grantees 

and sub-recipients provide to 

participants? (§ 641.545) 

This section describes the types of 

supportive services grantees may 

provide to participants. We received a 

few comments on this section about the 


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proposed rule language that limits 

supportive services to those services 

that support an employment goal. Those 

commenters asserted that there are 

times when a participant may need 

services in order to be able to participate 

in the SCSEP, and therefore, providing 

those services should not be tied 

specifically to an employment goal. One 

other commenter requested that the 

Department add ‘‘temporary shelter’’ to 

the list of supportive services. 

The regulation as drafted is consistent 

with the historical practice of providing 

supportive services in the program and 

specifically refers to supportive services 

‘‘that are necessary to enable an 

individual to successfully participate in 

a SCSEP project.’’ The regulation’s 

language is consistent with the 

comments about using supportive 

services to assist participants during 

their enrollment in the program. In the 

preamble discussion of 20 CFR 641.545 

of the 2003 Notice of Proposed 

Rulemaking, the Department stated: 

‘‘Grantees/subgrantees should seek to 

ensure that participants receive those 

supportive services necessary for them 

to participate in the program and to 

realize the goals set forth in their SCSEP 

IEPs.’’ 68 FR 22520, 22529, Apr. 28, 

2003. The Department’s position was 

later restated in the 2004 Final Rule 

preamble for 20 CFR 641.545: 

To meet the needs of the seniors the SCSEP 

serves, grantees must make every effort to 

provide them the supportive services they 

need to be able to participate in their 

community service assignments. The 

Department recognizes that SCSEP grantees 

will not be able to provide all needed or 

desirable supportive services with grant 

funds * * *. But the Department expects 

grantees and subgrantees to make every 

reasonable effort to provide participants with 

the supportive services provided for in their 

IEPs. 69 FR 19014, 19032, Apr. 9, 2004. 

We believe the commenters’ concerns 

arise from the requirement in 

§ 641.535(a)(6) for the supportive 

services to be consistent with the 

participant’s IEP. Commenters seem to 

interpret that requirement to mean that 

grantees may not provide supportive 

services during a participant’s 

community service assignment. The fact 

that the IEP, and particularly the initial 

IEP, is tied to an employment goal does 

not mean that the IEP is limited to only 

those services that advance the 

employment goal. The IEP may and 

should assess and consider all of the 

services the participant needs to 

successfully participate in SCSEP, and 

should address supportive services that 

may be required before assignment to 

community service, during assignment, 

and during the first 12 months of 

unsubsidized employment. 

For all these reasons, we find no 

inconsistency between the rule and the 

way the commenters want to provide 

supportive services and thus have not 

changed the final rule. 

On the issue of temporary shelter, we 

agree with the commenter. Accordingly, 

we are revising the regulatory text to be 

more inclusive by saying ‘‘housing, 

including temporary shelter.’’ 

We have also changed the language of 

paragraph (a) to reinforce the idea that 

grantees must assess participants’ need 

for supportive services and must assist 

participants in meeting those needs and 

grantees may directly pay for or arrange 

for supportive services as necessary. 

This change reconciles § 641.545(a) with 

§ 641.535(a)(2) and (a)(6), and clarifies 

that, while paying for supportive 

services directly is optional, grantees 

must assess participants’ supportive 

services needs and must make every 

effort to help participants to meet the 

needs so identified. 

What responsibilities do grantees and 

sub-recipients have to place participants 

in unsubsidized employment? 

(§ 641.550) 

This provision identifies the steps 

that grantees must take to assist 

participants to obtain unsubsidized 

employment. We received two 

comments about the emphasis on 

unsubsidized placements. The first 

commenter found the proposed rule’s 

increased emphasis on placement in 

unsubsidized employment in conflict 

with self-directed job searches which, 

when appropriate, should ‘‘be an 

acceptable alternative for promoting 

placement in unsubsidized 

employment.’’ 

The Department does not construe 

this change in emphasis to restrict the 

grantees from providing this type of 

assistance when it is appropriate. The 

grantees are still required to assess 

participants and to ensure they are 

following their IEP. If a grantee or subrecipient determines that self-directed 

job searches are a reasonable method for 

seeking unsubsidized employment for 

certain participants, the grantee or subrecipient may encourage or assist in 

such efforts in place of more intensive 

placement assistance, but they must still 

document it in the IEP and follow-up 

with the participant. In some cases, 

grantees may need to use a combination 

of methods to help participants locate 

and apply for unsubsidized 

employment. The regulation was not 

meant to prescribe how grantees may 

help participants find employment but 

rather to make it clear that they are 

expected to work with participants to 

help them find unsubsidized 

employment. 

Another commenter disliked the 

changes from ‘‘reasonable’’ effort to 

‘‘every reasonable effort’’ as it relates to 

a grantee’s responsibility to place 

participants in unsubsidized 

employment. The commenter argued 

that a participant could claim that every 

effort was not provided to help him or 

her achieve unsubsidized placement. 

Thus, the commenter, argued, the 

participant could wait for the perfect 

unsubsidized placement and refuse the 

other opportunities. Therefore, the 

commenter concluded that ‘‘[r]easonable 

should be the standard.’’ 

We agree that the language of 

§ 641.550 could be read as imposing an 

obligation on grantees to provide 

unsubsidized employment for all 

participants, even those for whom 

unsubsidized employment is not a goal 

in their IEP, and could be interpreted as 

overstating the extent of reasonable 

effort required. Moreover, helping 

participants find unsubsidized 

employment is not required or possible 

until participants become job-ready. 

Therefore, consistent with the change in 

the language to § 641.535(a)(3), we agree 

with the recommendation. We have 

eliminated the requirement to ‘‘make 

every reasonable effort’’ and section 

641.550 now provides that the 

obligation to help participants achieve 

unsubsidized employment only applies 

to those participants who have 

unsubsidized employment as a goal. 

What policies govern the provision of 

wages and benefits to participants? 

(§ 641.565) 

This section provides the 

requirements for wages and benefits that 

participants may receive. This section 

was updated from the 2004 regulations 

to reflect new statutory provisions. The 

Department received several comments 

on this section, largely related to 

compensation for Federal holidays. One 

commenter, however, noted that the 

acronym ‘‘WIA’’ was missing before the 

word intensive services in proposed 

paragraph (a)(1)(ii). The Department 

appreciates this comment and made the 

change to the regulation so it is now 

consistent with the rule as we described 

it in the preamble to the proposed rule. 

One commenter noted that the 

limitation in proposed paragraph 

(b)(ii)(A) that the results of a physical 

examination be provided only to the 

participant hindered the grantee’s 

ability to meet the Department’s data 

validation requirements for determining 

disability if they were unable to require 

the physical examination results. The 


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commenter misunderstands the data 

validation requirement. Grantees merely 

need to document that a physical was 

offered. That can easily be 

accomplished without having the 

results of the physical. (If the offer is 

declined, grantees must obtain a written 

waiver from the participant.) 

Furthermore, grantees should not use 

the physical examination results to 

document disability for the most-inneed performance requirement. The 

certification of the attending physician 

or official documentation of a disability 

is sufficient. To the extent that a 

participant declines to provide that 

information, the grantee will not be able 

to take credit for it. However, 

participants have an incentive to 

provide that information because 

documentation is required if a 

participant claims family of one status 

for eligibility purposes. To avoid any 

confusion about the use of the results of 

the physical and to clarify that the 

physical itself is a fringe benefit meant 

solely for the benefit of the participant, 

we have deleted the last sentence of 

subparagraph (b)(1)(ii)(A), which stated 

that the participant could provide the 

grantee a copy of the physical 

examination results. There are 

circumstances under which a grantee 

may request documentation of a 

disability or may even require all 

participants assigned to a particular 

community service position to take a 

physical examination. For example, 

documentation is required for family of 

one status, as well as where a 

participant claims an accommodation. A 

physical also can be required of all 

participants who are assigned to 

community service positions that 

require certain physical capability. 

However, those circumstances are 

entirely unrelated to the physical 

examination that must be offered to the 

participant as a fringe benefit under the 

statute. 

The remainder of the comments 

related to the requirement that grantees 

provide compensation for participants 

when the scheduled workday in the 

program falls on a Federal holiday for 

the host agency. Almost all of these 

commenters requested that the 

Department allow flexibility in the 

regulation text to allow participants to 

make up the time. One commenter 

specifically requested that the language 

in the regulation more closely track the 

language of the 2006 OAA, which 

provides for ‘‘employer’’ closure for 

Federal holidays. Another commenter 

stated that having the flexibility to allow 

participants to make up the hours posed 

concerns when program policies could 

vary from grantee to grantee. This 

commenter was concerned that in one 

instance, a program may pay the 

participant for the Federal holiday and 

in another, the program may require the 

participant to make up the hours. This 

commenter also raised a concern about 

adjusting the timesheets and the 

difficulties it would cause for validating 

community service hours. The 

commenter did not address how the 

adjustment of timesheets would be a 

problem. Other commenters approved of 

the flexibility described in the preamble 

of the NPRM that allows the 

participants to make up the time rather 

than pay them for a day off. They 

believe it helps to distinguish the 

participants from being considered 

employees of the host agency. 

The Department appreciates these 

commenters’ concerns, which reflect a 

desire to maintain the participants’ 

status as ‘‘trainees’’ rather than 

‘‘employees’’ at the host agency. Upon 

further reflection, we find that the 

NPRM’s regulation text provision of 

only two categories of participant 

benefits (required and prohibited) failed 

to reflect the flexibility the Department 

intended to provide for Federal holiday 

leave and sick leave. For both of these 

benefits, as indicated in the preamble to 

the NPRM, ‘‘(t)he Department broadly 

interprets the word ‘compensation’ 

* * * to allow for a variety of practices 

* * * The intent of the Department here 

is to allow flexibility in administering 

the SCSEP * * *’’ Unlike the other 

benefits listed in the NPRM regulation 

text as ‘‘required,’’ the NPRM preamble 

noted that Federal holiday and sick 

leave benefits need not be paid in cash 

but must be provided in some fashion. 

Accordingly we have amended the 

regulation to clearly indicate that 

Federal holiday leave and sick leave 

‘‘may be paid or in the form of 

rescheduled work time.’’ 

These modifications and clarifications 

address the concern of perceived 

inequity mentioned by one commenter. 

It is not uncommon for programs to offer 

different services and benefits. We have 

written these regulations to permit each 

grantee to have the maximum available 

flexibility in the design of its benefit 

programs, as long as each grantee 

consistently applies the rules to all of its 

program participants as required in 

§ 641.565(b)(1). We also do not see any 

issues with validating timesheets for 

program accuracy or data validation 

purposes. The timesheets are always 

based on the actual hours the 

participant spends in a community 

service assignment at the host agency. 

To the extent a participant makes up 

hours at the host agency, it will be 

reflected in the total number of hours 

the participant worked at the host 

agency in his or her assignment. 

Finally, we interpret the word 

‘‘employer’’ as meaning a ‘‘host agency’’ 

since that is the only context in which 

this provision would apply. Therefore, 

the Department has not made the 

change the commenter requested. 

Is there a time limit for participation in 

the program? (§ 641.570) 

The Department received a large 

number of comments about this section. 

The NPRM implemented the 48-month 

limitation on individual participation in 

the program as required by 

§ 518(a)(3)(B) of the 2006 OAA. 

Paragraph (c) of this section addressed 

the average participation cap created by 

§ 502(b)(1)(C) of the 2006 OAA. 

Paragraphs (d), (e), and (f) further 

implemented these limits on program 

participation. 

The majority of comments on this 

section pertain to paragraph (b). The 

statute provides for increased periods of 

participation for individuals who meet 

one of the criteria listed in the statute. 

As explained in the NPRM, the 

Department proposed to implement the 

extension as a one-time, one-year 

extension to ensure that SCSEP 

participation is not indefinitely 

extended, thus preventing other eligible 

individuals from benefiting from the 

SCSEP, and to be generally consistent 

with the possible extension of the 

average participation cap which extends 

up to a maximum of only nine 

additional months. 

Most commenters asserted that the 

limit on the extension of the individual 

participation limit to one-time and oneyear ‘‘is both contrary to Congressional 

intent and counterproductive to 

assisting the most vulnerable older 

adults.’’ The commenters noted that 

Congress did not place an absolute time 

limit on individual participation. The 

commenters also argued that limiting 

the potential extension in this way is 

unnecessary to reduce the number of 

long-term SCSEP participants because 

there are several other program features, 

such as the performance measurement 

system, that effectively achieve that 

goal. The commenters also contended 

that restricting the extension to oneyear, one-time would result in 

involuntary terminations from the 

program for older adults who are 

benefiting from the SCSEP and may be 

unable to find any other meaningful 

employment and training assistance 

from other programs. One commenter 

requested that the Department delay the 

implementation of this provision in 

order to consult with other Federal and 

State agencies on alternative programs 


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and resources for terminated 

participants. A few comments, 

including those from participants, noted 

that the time limit could be more costly 

to the government in the long-run and 

would create a financial hardship on 

participants who are on the verge of 

obtaining employment. A few 

commenters agreed generally with time 

limits in the program but disagreed with 

applying it to all participants. 

After considering these comments, the 

Department has decided not to impose 

the proposed one-time, one-year 

restriction on the increased period of 

individual participation. We agree that 

Congress could have included an 

absolute limit on SCSEP participation in 

the 2006 OAA, but did not do so. We 

also are sympathetic to the assertion 

that grantees are in the best position to 

manage their programs to satisfy the 

various aspects of the 2006 OAA and 

this final rule, some of which impose 

other limitations on participation. 

Therefore, we agree that grantees require 

the flexibility to determine the needs of 

individuals, which necessarily means 

that some individuals may be in the 

program longer provided they meet one 

of the waiver factors listed in 

§ 641.570(b), and will continue to 

receive services consistent with their 

IEP. As noted in paragraph (e), the 

Department will issue administrative 

guidance that describes the process for 

grantees to request increased periods of 

individual participation. We expect that 

grantees will make their determinations 

for requesting extensions for individual 

participants who meet the eligibility 

factors in a fair and equitable manner 

and in accordance with applicable civil 

rights laws. This process developed in 

the administrative guidance will reflect 

this expectation. 

Given that the average participation in 

the program is approximately two years 

and that there are other requirements 

designed to limit participation in the 

program, we agree that it is not 

necessary to retain this requirement. 

However, as some commenters pointed 

out, grantees are cautioned that they are 

nevertheless responsible for satisfying 

the average participation cap described 

in paragraph (c) of this section as well 

as the expected levels of performance 

for the core performance measures. 

In addition, we received a number of 

comments on the 27 month cap in 

paragraph (c). One commenter requested 

that the Department edit this regulation 

provision to more accurately reflect the 

law as written. Thus, this commenter 

requested that we revise the rule to read: 

‘‘each grantee must comply with an 

average participation cap for eligible 

individuals (in the aggregate) of 27 

months.’’ Other commenters requested 

that the grantees be consulted on the 

method used to determine the 27 month 

average participation cap. One 

commenter asked for clarification on 

whether the 27 month cap, like the 48 

month time limit, was intended to be 

consecutive or not. 

The Department does not agree that 

the language in the proposed rule 

paragraph (c) requires additional 

clarification. The Department opted to 

draft the language in this way to make 

it more reader-friendly. We do not 

believe there are any inconsistencies 

between the regulatory provision and 

the 2006 OAA, and therefore, did not 

make any changes to this section. 

Finally, the Department will work with 

grantees to implement the participation 

limits. 

May a grantee or sub-recipient establish 

a limit on the amount of time its 

participants may spend at each host 

agency? (§ 641.575) 

This section authorizes grantees to 

adopt a policy under which participants 

are rotated among community service 

assignments. We received several 

comments on this section. One 

commenter stated that moving 

participants around from host agency to 

host agency every 12 months has a 

negative impact on the program and 

considered it to be an arbitrary rule. 

This commenter further claimed that 

this provision did not consider the 

needs of the workers (participants). 

Other commenters echoed this concern 

in one way or another, mostly opposing 

the provision because they find it 

disruptive to the host agency when a 

participant leaves and then they are 

understaffed. 

The Department appreciates these 

commenters’ concerns; however, the 

rule does not require a grantee to adopt 

a rotation policy. Rather, it allows 

grantees to implement a rotation policy 

when the grantee believes it will make 

the program more effective and help 

program participants achieve economic 

self-sufficiency consistent with their 

IEP. This provision has been helpful to 

an increasing number of grantee 

organizations over the years, who find it 

difficult to persuade host agencies that 

they should not expect the SCSEP to 

augment their workforce. More 

importantly, grantee rotation policies 

have allowed participants to acquire 

more job skills, which increase their 

opportunities to find unsubsidized 

employment. However, we do agree that 

rotation of participants among host 

agencies may be disruptive and counterproductive if the participant is still 

effectively acquiring needed skills at his 

or her assignment. Therefore, we are 

revising the regulation to provide that 

no rotation policy will be approved that 

does not require an individualized 

determination that rotation is in the best 

interest of the participant and will 

further the acquisition of skills listed in 

the IEP. 

Is there a limit on community service 

assignment hours? (§ 641.577) 

We received a significant number of 

comments on this section. In the NPRM, 

the Department proposed a limit of 

1,300 hours per year on participants’ 

community service hours. The proposed 

limit is similar to a previous 1,300 hours 

per year limit on all participant paid 

hours. 

Several commenters criticized the 

proposed 1,300 hour limit as ‘‘another 

example of an unnecessary restriction 

on a SCSEP grantee’s capacity to meet 

the needs of individual participants and 

to respond to local conditions.’’ 

Although commenters acknowledged 

that participation in SCSEP is part-time, 

they asserted that the proposed 1,300 

hour limit ‘‘sets an arbitrary cap on 

participation’’ and ‘‘disregards the * * * 

particular needs of a community (such 

as responding to a natural disaster).’’ 

The commenters further asserted that 

although the 1,300 hours is still a good 

benchmark, the restriction limits their 

ability to address the backgrounds, life 

challenges and other circumstances that 

make providing services to each 

participant a unique experience. Still 

other commenters found that a majority 

of participants work less than 1,100 

hours because their higher State 

minimum wage prevents them from 

overspending their budget. One 

commenter stated that if participant 

staff are not allowed to exceed the 20– 

25 hours per week, the grantees’ 

performance measures will suffer. 

The Department has considered these 

comments and has decided to eliminate 

the 1,300 hour limit, as suggested by the 

commenters. We agree that the grantees 

need the flexibility to respond to 

downturns in the economy or natural 

disasters, for example. Therefore, we 

have changed this provision to read that 

the 1,300-hour requirement is not 

required but is still a benchmark and 

good practice that the Department 

strongly encourages grantees to follow. 

This language is consistent with the 

Department’s position on this issue 

published in the preamble to the 2004 

Final Rule, at 69 FR 19014, 19036, Apr. 

9, 2004. The statute defines ‘‘community 

service employment’’ as ‘‘part-time’’ 

work and grantees must ensure that 

community service assignments are 

part-time positions. In addition, the 


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Department cautions grantees about 

allowing participant staff to exceed the 

part-time requirements, which is not 

permitted. 

Under what circumstances may a 

grantee or sub-recipient terminate a 

participant? (§ 641.580) 

This section describes a variety of 

circumstances in which a participant 

may or must be terminated from the 

program and the procedures by which 

terminations must be accomplished. We 

received several comments on this 

section. One commenter asked for an 

explanation of what ‘‘knowingly’’ means 

in paragraph (a). The common legal 

definition of ‘‘knowingly’’ is ‘‘[w]ith 

knowledge; consciously; intelligently; 

willfully; intelligently.’’ Black’s Law 

Dictionary 4th Ed. (1957) West 

Publishing. The Department 

recommends a common-sense 

application of this definition. For 

example, if a participant provided false 

information in order to meet the 

eligibility requirements for the program 

and either knew or should have known 

that the information was false, then 

such provision was done ‘‘knowingly.’’ 

We received two comments on 

paragraph (e) of this proposed section 

which deals with terminations when a 

participant has refused a reasonable 

number of job offers or referrals. One 

commenter requested that the 

Department add language to paragraph 

(e) allowing the grantee to terminate the 

participant for refusal to accept a 

reasonable number of job searches or job 

offers. The other commenter reminded 

the Department that in some cases, 

local, State, or Federal law and/or 

agency policy requires immediate 

termination for cause as described in the 

proposed rule at paragraph (e). 

As to the first comment, the 

Department does not believe the 

commenter’s proposed language is 

necessary. Paragraph (e) already states 

that if a participant refuses to accept a 

reasonable number of job offers or 

referrals to unsubsidized employment, 

the grantee may terminate the 

participant. The only word that appears 

to be different between the comment 

and the regulation is the word 

‘‘searches.’’ It is the Department’s 

opinion that ‘‘job searches’’ are included 

as part of the ‘‘job referral’’ process. 

Therefore, the Department did not make 

this change in the regulation. 

The commenter that disagreed with 

‘‘for cause terminations 30 days after 

written notice’’ may have confused this 

provision with another paragraph in this 

section. Paragraphs (a) and (d) did not 

contain the 30-day termination 

requirement that is found in paragraphs 

(b), (c), and (e) of this final rule. 

However, upon reconsideration, we 

believe that paragraphs (a) and (d) 

should also require 30 days notice 

before a termination for cause may be 

effective. Notice allows a participant 

time to contest the grantee’s 

determination and to offer factors in 

mitigation. Notice is inherent in 

fundamental notions of fairness and is 

arguably more necessary in cases of 

alleged misconduct than in cases where 

a participant was mistakenly 

determined eligible. We already require 

notice in the case of terminations under 

paragraph (e), which is a type of 

termination for cause. We see no reason 

not to expand the notice to all cause 

terminations. 

We note that the requirement for 30 

days notice before termination does not 

require the grantee to permit a 

participant to remain assigned to the 

host agency where the offense is alleged 

to have occurred. In those cases where 

a statute or regulation requires the 

immediate removal of a participant for 

certain specified offenses, the grantee 

may remove the participant from the 

host agency and may assign the 

participant to another host agency 

(including the local project office) or to 

no host agency, depending on the 

circumstance, during the notice period. 

We have made an additional change 

in the notice language in paragraphs (a), 

(d) and (e) to provide that the 

termination after notice is not required 

if additional facts or evidence shows 

that the basis for the termination is 

incorrect. The original intent of this 

provision was that termination could 

not be effected until 30 days had 

elapsed, not that termination was 

always required once 30 days had 

elapsed. Indeed, the notice requirement 

would be rendered largely meaningless 

if the grantee were required to terminate 

the participant at the end of the notice 

period regardless of what information 

the participant might have produced in 

the interval. We thus have added 

language to paragraphs (a)–(e) to make 

it clear that a grantee is not required to 

terminate a participant if the evidence 

shows that the grounds for termination 

were incorrect. We remind grantees, 

however, that if a participant has finally 

been determined to be ineligible (after 

being given 30 days to provide evidence 

of eligibility), the grantee must 

terminate the participant. 

Another commenter questioned how 

the organization would know when a 

participant receives a written notice of 

termination as suggested by paragraphs 

(b), (c), and (e). This commenter 

requested that the language in the 

proposed rule only require grantees to 

provide written notice explaining the 

reasons for termination when the 

termination is the result of an adverse 

action. 

Again, we believe the commenter is 

misreading the intention of these 

regulatory provisions. Each of these 

situations represents circumstances 

where a termination is necessary. 

However, the Department has made a 

change to the regulation to clarify the 

notice requirement. The purpose of the 

notice requirement is that the 

participant would be terminated in 

30 days after either the day notice was 

provided to the participant in person, or 

the day the grantee mailed the 

termination notice. Given the 

propensity for confusion with the 

current language, the Department has 

revised paragraphs (b), (c), and (e) to 

read ‘‘and may terminate the participant 

30 days after it has provided the 

participant with written notice.’’ 

Another commenter criticized the 

termination process as ‘‘indicative of 

micromanagement.’’ This commenter 

further expressed disagreement with the 

single national approach to termination 

because it limited the discretion of 

grantees and sub-recipients. 

In response, the Department notes 

that there are certain requirements to 

which grantees must adhere to in order 

to receive Federal funds. Uniform 

policies are necessary in some cases for 

a program of national scope to ensure all 

participants are treated in a fair and 

consistent manner. The issue of 

termination is one of those necessary 

policies. Grantees may not continue to 

spend grant funds on ineligible 

participants. The rule does allow for 

some flexibility, such as determining 

what constitutes cause for termination, 

which we recognize may vary among 

grantee organizations. Grantees also 

have flexibility to determine whether 

they want to terminate participants for 

failure to accept a reasonable number of 

job offers or referrals and, if they do, 

what constitutes a reasonable number. 

One final commenter raised the issue 

of termination in the context of the 

performance measures and how 

terminations impact a grantee’s ability 

to meet the performance measures. This 

comment is outside the scope of this 

rulemaking as it does not relate to the 

proposed rule. 

What is the employment status of 

SCSEP participants? (§ 641.585) 

This section discusses the 

employment status of program 

participants given that they receive 

work experience training. The 

Department received one comment on 

this section. This commenter requested 


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1Section 513(b)(1) of the 2006 OAA lists, ‘‘[t]he 

number of eligible individuals served, including the 

number of participating individuals described in 

subsection (a)(3)(B)(ii) or (b)(2) of section 518,’’ on 

performance, as a single core indicator. However, as 

discussed in the IFR, 72 FR 35836, June 29, 2007, 

the Department chose to divide it into two separate 

indicators—number of eligible individuals served, 

and number of most-in-need participants. 

2We use the terms ‘‘indicator’’ and ‘‘measure’’ 

interchangeably throughout this rule. 

a ruling on the responsibility of the 

grantees and sub-recipients to conduct 

background checks on SCSEP applicants 

as part of the application process if they 

are not employees of the grantee or subrecipient. 

Although this comment is outside the 

scope of this rulemaking, the 

Department will reiterate its policy here. 

Grantees may take the responsibility of 

providing background checks before 

placing participants in community 

service assignments, provided that the 

background check is conducted because 

of the requirements of a specific 

community service assignment, rather 

than based on a particular participant, 

and is consistently applied to all 

applicants considered for that position. 

We stress that background checks are 

relevant to the assignment of 

participants to particular host agency 

positions only and cannot be used as a 

basis for denying eligibility. In addition, 

grantees should be careful to comply 

with EEOC and any state or local rules 

regarding the use of background checks. 

Subpart F—Pilot, Demonstration, and 

Evaluation Projects 

What is the purpose of the pilot, 

demonstration, and evaluation projects 

authorized under § 502(e) of the OAA? 

(§ 641.600) 

This section describes the purpose of 

the new provisions implementing 

§ 502(e) of the 2006 OAA. The 

Department received one comment that 

asked the Department to clarify whether 

On-the-Job Experience (OJE) projects 

would continue under the new section 

and whether the Department plans to 

introduce new pilot projects or expand 

and improve existing projects. 

The Department is pleased that 

grantees have found the OJE program 

useful and will take that under 

advisement as we explore how best to 

exercise this new flexible authority, as 

we noted in the preamble to the NPRM. 

See 73 FR 47770, 47789, Aug. 14, 2008. 

Should pilot, demonstration, and 

evaluation project entities coordinate 

with SCSEP grantees and sub-recipients, 

including area agencies on aging? 

(§ 641.640) 

This section provides that the 

Department will collaborate with 

appropriate aging organizations when 

developing projects under this section 

and grantees of these projects must also 

consult with appropriate organizations. 

We received several comments related 

to this section. The comments mostly 

suggested that § 641.640, in concert with 

§§ 641.315 and 641.335, were 

inadequate to address the type of 

coordination that should occur between 

SCSEP and other aging programs. One 

commenter stated that the regulation 

should be written to ‘‘requir[e] 

coordination of SCSEP with other 

programs under the Older Americans 

Act, such as state units and area 

agencies on aging, and with other 

Federal programs.’’ Another commenter 

‘‘suggest[ed] that the regulations reflect 

additional coordination requirements 

with disability networks, in order to 

better incorporate person-centered 

planning, Americans with Disability Act 

compliance, and independent living 

philosophy concepts into the provision 

of services.’’ Yet another commenter 

expressed a concern about where the 

funding for these projects would come 

from given that the revised funding 

allocations appear to decrease services 

to participants. That commenter cited 

recent Department actions to reserve 

$5,000,000 for program support 

activities under the Secretary’s 

discretionary authority. 

Section 641.640 has been written to 

follow the statutory language, with the 

addition of a clarification that SCSEP 

grantees and sub-grantees are among the 

entities that must be consulted with. To 

be more prescriptive in this section 

would limit the Department’s and the 

grantees’ ability to use the flexibility 

granted by the statute. Finally, 

comments about the possible effect of 

funding for the pilot, demonstration and 

evaluation projects on the funding of the 

‘‘regular’’ program are outside the scope 

of this rulemaking. 

Subpart G—Performance Accountability 

On June 29, 2007, the Department 

published an IFR that implemented 

changes in the SCSEP performance 

measurement system in light of the 

OAA. This section discusses comments 

on the performance measurement 

system. 

The OAA requires the SCSEP to track 

six 1 core indicators of performance 2

(also called ‘‘core performance 

indicators,’’ or just ‘‘core indicators’’): 

(1) Hours (in the aggregate) of 

community service employment; (2) 

entry into unsubsidized employment; 

(3) retention in unsubsidized 

employment for six months; (4) 

earnings; (5) the number of eligible 

individuals served; and (6) most-in-need 

(the number of barriers per participant 

as listed in subsection (a)(3)(B)(ii) or 

(b)(2) of § 518 of the OAA. Core 

indicators are subject to goal-setting and 

corrective action. The statute also 

requires two additional indicators of 

performance (also called ‘‘additional 

performance indicators,’’ or just 

‘‘additional indicators’’): Retention in 

unsubsidized employment for one year; 

and satisfaction of participants, 

employers, and host agencies with their 

experiences and the services provided. 

Additional indicators are not subject to 

goal-setting and corrective action. The 

OAA gives the Department the authority 

to add other additional indicators that it 

determines to be appropriate to evaluate 

services and performance, but we are 

not adding any other additional 

indicators at this time. 

Under authority of the IFR, grantees 

have been using the common measures 

definitions for the three core indicators 

addressing unsubsidized employment. 

We received a number of comments 

raising concerns about whether the 

common measures are an appropriate 

way to measure participation in SCSEP. 

Changes in the core indicator 

definitions at this point will muddle the 

data we have collected for three 

program years using the existing 

definitions. The Department wants to 

have a consistent body of data over a 

multiyear period through which to be 

able to evaluate both the overall 

performance of the SCSEP, and the 

utility of the performance indicators. In 

addition, any changes would not be 

fully implemented until PY 2011. 

As a result, the Department has 

concluded that to change the definitions 

of the core indicators at this time would 

create a significant administrative 

burden for grantees, which would 

outweigh any benefit of changing those 

definitions. With reauthorization of the 

SCSEP also on the horizon for 2011, it 

would be difficult to conduct 

evaluations of the program and collect 

data for doing so if the definitions were 

changed at this late stage. Moreover, a 

change in the measures at this late date 

would deprive the grantees of valuable 

baseline data that they are using for 

program management and improvement. 

The Department intends to maintain the 

existing definitions for the three core 

indicators on unsubsidized 

employment, under which grantees 

have been working for three years 

already. 

Overview of Comments Received on 

Subpart G 

The Department received eleven 

comments in response to the 


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performance accountability IFR. Some 

commenters urged changes to particular 

performance measures and/or asked 

specific questions about one or more of 

the measures. Such comments 

commonly expressed the view that the 

SCSEP is unique among workforce 

programs primarily because of its 

community service element, and 

therefore use of the common measures 

is neither appropriate nor desirable. 

A second theme common to several of 

the comments is that an emphasis on 

performance accountability may lead to 

unintended consequences. In this view, 

SCSEP grantees and sub-recipients may 

feel pressure to serve individuals who 

are relatively easy to place in 

unsubsidized employment to meet 

performance goals. Such a focus, it was 

argued, would thwart a consistent tenet 

of the SCSEP, reflected in the 2006 

OAA, that the program should prioritize 

individuals with multiple barriers to 

employment. Further, several 

commenters expressed concern that this 

pressure to attain good performance 

outcomes could result in fewer 

minorities being served by the SCSEP. 

Because the definition of the most-inneed indicator changed significantly 

from the 2004 SCSEP final rule, the 

Department treated the 2007 Program 

Year as a baseline year for that indicator 

and did not set sanctionable goals for 

the most-in-need measure. Some 

commenters thought that the 2007 

Program Year should be treated as a 

baseline year for all indicators; that is, 

they thought no goals should be set for 

any of the core indicators for the 

Program Year 2007. 

Other commenters expressed concern 

with one or more of the indicators. One 

commenter requested that the 

Department decrease the number of core 

indicators and increase the number of 

additional indicators. A few 

commenters urged the Department to 

develop the remainder of the regulations 

before finalizing the performance 

accountability requirements. Finally, 

some commenters supported the 

creation of an interagency group to 

provide input on the SCSEP regulations. 

We will discuss all of the comments 

below, beginning with the comments 

that broadly address the performance 

measurement system overall. 

Broad Comments on the Performance 

Measurement System Overall 

A few commenters urged the 

Department to develop the remainder of 

the regulations before finalizing the 

performance accountability 

requirements. Some commenters 

requested that we convene meetings on 

the performance measurement 

regulations before finalizing them. 

Several commenters supported the 

creation of an interagency group to 

provide input on the SCSEP regulations. 

We agree with the commenters who 

urged the Department to develop the 

remainder of the regulations before 

finalizing the performance 

accountability requirements. To that 

end, we published an NPRM on August 

14, 2008, that addressed all aspects of 

the SCSEP regulations other than 

performance measures. We were able to 

carefully consider the comments from 

both the IFR and the NPRM before 

proceeding with this final rule. 

We also received some comments 

requesting that we convene meetings 

with grantees and other interested 

parties as we developed final 

regulations on the performance 

measurement system. We considered 

this suggestion but chose not to adopt it. 

All interested persons were invited to 

participate in the regulatory process by 

submitting comments on the IFR and 

the NPRM, and we considered those 

comments very seriously as we 

developed this rule. 

In the IFR, we stated that we had 

‘‘implemented an interagency group to 

oversee the strategy for implement[ing]’’ 

the performance measurement system 

required by the 2006 OAA. 72 FR 35845, 

June 29, 2007. Some commenters 

interpreted this to mean that the 

Department had convened a group that 

included the Administration on Aging, 

and those commenters applauded such 

efforts. In fact, the group to which we 

were referring was comprised of 

representatives from different agencies 

within the Department. Nevertheless, 

we acknowledge that several 

commenters urged greater coordination 

between the Department and the 

Administration on Aging. The 2006 

OAA already requires the SCSEP to 

coordinate with area agencies on aging 

at the local level, and the Department 

endeavors to mirror that coordination at 

the national level. However, it is clear 

from these comments that some in the 

SCSEP network think that we have not 

done enough coordinating at the Federal 

level. We appreciate that even closer 

coordination may aid the SCSEP overall 

and its participants in particular. To 

that end, we will pursue strengthening 

our relationship with the 

Administration on Aging as we move 

forward. 

We now respond to the comments on 

the IFR that pertain to particular 

regulatory sections within subpart G. 

What performance measures/indicators 

apply to SCSEP grantees? (§ 641.700) 

Several commenters criticized the 

performance measurement system 

implemented in the IFR generally, and 

the common measures in particular. 

Some of the commenters asserted that 

the SCSEP is unique among workforce 

programs primarily because of its 

community service element, and that 

use of the common measures is 

therefore neither appropriate nor 

desirable for the SCSEP. Other 

commenters maintained that an 

emphasis on performance accountability 

may lead to unintended, adverse 

consequences. These commenters 

argued that, in an effort to achieve the 

expected levels of performance for the 

core indicators, SCSEP grantees and 

sub-recipients may feel pressure to serve 

individuals who are relatively easy to 

place in unsubsidized employment. 

This incentive to ‘‘cream’’ from 

applicants contravenes a consistent and 

central theme of the SCSEP, reflected in 

the 2006 OAA, that the program serves 

individuals with barriers to 

employment. Of particular concern to 

some commenters was that a focus on 

performance outcomes would result in a 

reduction of services to disadvantaged 

and minority older adults. 

In the IFR, as well as the NPRM, the 

Department specifically requested that 

the public submit comments addressing 

concerns that the performance 

measurement system implemented by 

the IFR compromises the ability of 

grantees to serve minority individuals. 

We particularly appreciate the 

comments we received on that topic. 

The Department does not, however, 

view the performance measurement 

system required by the 2006 OAA and 

implemented in the IFR as 

inappropriate or undesirable for the 

SCSEP, or as adverse to the SCSEP’s 

traditional focus on serving persons 

with barriers to employment or minority 

individuals. We hold a different view 

from the commenters who argued that 

this performance measurement system 

will lead to a reduction in services to 

persons with barriers to employment, 

including minority individuals. We will 

address these points in turn. 

The Department fully acknowledges 

that community service is integral to the 

SCSEP. Congress gave voice to the 

importance of this aspect of the SCSEP 

in its ‘‘[s]ense of the Congress’’ provision 

in the 2006 OAA: ‘‘placing older 

individuals in community service 

positions strengthens the ability of the 

individuals to become self-sufficient, 

provides much-needed support to 

organizations that benefit from 


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increased civic engagement, and 

strengthens the communities that are 

served by such organizations.’’ OAA 

§ 516(2). We also acknowledge that the 

2006 OAA’s requirement that grantees 

spend a minimum of 65–75 percent of 

their funds on participant wages and 

benefits is a unique program feature, 

and one that clearly assists persons with 

otherwise low incomes. Providing an 

opportunity for low-income older adults 

in need of job training to work at 

community service organizations that 

need operational support is a ‘‘win-win’’ 

situation. 

Some commenters asserted that the 

SCSEP should not align with other 

workforce programs in its use of 

common measures because the SCSEP 

retains this unique community service 

element, and that the common measures 

are limited in providing full evidence of 

the SCSEP’s performance. We also 

received comments noting that initially 

there were plans for common 

performance measures to be applied 

across a wide array of Federal agencies 

and programs. These commenters 

suggest that the scope of the common 

measures has been reduced to ‘‘[F]ederal 

job training and employment programs 

that share similar goals’’ (emphasis 

omitted), and that the SCSEP does not 

share sufficiently similar goals with 

other Federal job training and 

employment programs to make the 

common measures appropriate. 

Other commenters claimed that 

Congress ‘‘overwhelmingly rejected’’ a 

focus by the SCSEP on unsubsidized 

employment outcomes. These 

commenters argued that the Department 

is contravening Congressional intent by 

requiring performance measures that 

focus on unsubsidized employment 

outcomes. 

Congress made both community 

service and its potential to lead to 

unsubsidized employment important 

goals. Congress required the use of 

specified core indicators in the 2006 

OAA, including the entry into 

employment, retention in employment 

for six months, and earnings indicators. 

Along with providing valuable 

community service, then, the SCSEP is 

a training program for low-income 

persons who have not been able to 

obtain employment on their own. 

Congress was well aware of the unique 

nature of the SCSEP, and could have 

chosen separate outcome measures 

unique to the SCSEP as it did in the 

2000 Amendments to the OAA. Instead, 

it specifically mandated that the 

program report on certain core 

indicators, three of which measure 

employment outcomes; therefore, the 

Department must implement those 

indicators as stated in the 2006 OAA to 

achieve the dual purpose of ensuring 

community service opportunities, but 

also making unsubsidized employment 

possible where appropriate for exiting 

SCSEP participants. Furthermore, the 

language Congress used in the 2006 

OAA to mandate the implementation of 

the three core indicators on employment 

outcomes mirrored the common 

measures. It therefore seemed sensible 

to define these three core indicators 

using common measures definitions. 

The 2006 OAA requires the 

Department to implement the three core 

indicators on employment outcomes. 

This requires us to gather consistent 

data on program performance to inform 

reauthorization. Without a body of 

consistent performance data over a 

reasonable number of years, we will not 

be able to determine whether those 

indicators as defined are or are not 

effective performance measures. In 

addition, grantees would be deprived of 

meaningful baseline data for making 

improvements in services, which is the 

primary purpose behind measurement. 

As discussed above, therefore, the 

administrative burden of changing these 

definitions would outweigh the policy 

value of changing them before a good 

body of consistent data has been 

gathered to inform the program 

reauthorization anticipated in 2011. 

This is particularly so since the 

Department anticipates proposing 

another SCSEP additional indicator for 

volunteer work performed after exit 

from the program, which would further 

reinforce the Department’s support for 

community service and volunteer work. 

In addition, several commenters 

asserted that the common measures are 

limited in providing full evidence of the 

SCSEP’s performance, and we agree. 

The common measures do not 

accurately portray the entirety of the 

SCSEP program or its successes. These 

three core measures, which currently 

use common measures definitions 

(entry, six-month retention, and 

earnings), relate most closely to the 

SCSEP’s goal of unsubsidized 

employment. However, Congress also 

required three other core measures 

(number of persons served, most-inneed, and community service), and they 

relate most closely to the community 

service goal of the SCSEP. Accordingly, 

we acknowledge that the common 

measures do not ‘‘tell the whole SCSEP 

story.’’ However, we remain convinced 

that in light of the need to gather data 

for reauthorization and our 

consideration of another additional 

indicator, for now these definitions are 

most sensibly kept as a method to 

capture important data on the success of 

participants in meeting the goals 

deemed appropriate for their personal 

circumstances, as laid out in their IEPs. 

We turn now to the commenters’ 

argument that implementing the 

performance measurement system 

described in the IFR will lead to a 

reduction in services to persons with 

barriers to employment, including 

minority individuals. Some of these 

commenters asserted that the 

introduction of common measures in 

other workforce programs has led to a 

decrease in the number of low-income 

participants and participants with 

barriers to employment in those 

programs. These commenters claim that 

such programs have selected 

participants based on the participants’ 

potential to achieve positive indicator 

outcomes. They contend that, faced 

with the same common measures, 

SCSEP program operators will ‘‘cream’’ 

by selecting those participants who are 

easiest to serve. In this view, persons 

with barriers to employment, including 

minority individuals, will be disfavored 

by SCSEP program operators. Some 

commenters asserted that ‘‘creaming’’ is 

contrary to Congressional intent, 

because in the 2006 OAA Congress 

intended the SCSEP to serve lowincome persons and persons with other 

barriers to employment. Several 

commenters cited a study of WIA 

indicating that, following the 

introduction of common measures in 

WIA, there was a decline in the number 

of WIA participants with low incomes 

or who had barriers to employment, and 

suggested that implementing the 

common measures in the SCSEP would 

lead to similar results. 

For reasons discussed already, the 

Department will continue to implement 

the core indicators of performance. We 

take the commenters’ argument to be 

effectively limited to the core indicators, 

as additional indicators of performance 

are not subject to sanctionable goalsetting. The Department is required to 

implement the indicators mandated in 

the 2006 OAA; we disagree that such 

indicators will lead to ‘‘creaming,’’ or a 

reduction in SCSEP services to lowincome individuals or individuals with 

barriers to employment. We agree with 

the commenters’ assertion that Congress 

clearly intended for the SCSEP to serve 

low-income individuals and to 

prioritize persons most-in-need. 

Moreover, Congress designed the SCSEP 

to have two goals—community service 

and an appropriate employment 

objective for participants whose 

experience in the SCSEP may lead to 

unsubsidized employment. But it is not 

possible for SCSEP program operators to 

reduce the numbers of low-income 


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participants in the SCSEP because, 

unlike WIA, only low-income persons 

are eligible for the SCSEP. Regardless of 

the population characteristics of other 

workforce programs, the SCSEP is 

specifically designed to serve lower 

income older persons with barriers to 

employment. The 2006 OAA requires 

program operators to prioritize persons 

who have barriers to employment such 

as those who have a disability, low 

employment prospects, or limited 

English proficiency. Moreover, SCSEP 

has a counter-balance to any creaming 

that the employment indicators might 

engender because another of the core 

indicators measures, the average 

number of most-in-need characteristics 

per participant. The Department’s view 

is that the SCSEP performance 

measurement system will not disfavor 

people with barriers to employment 

when one of the measures is designed 

to give effect to the statute’s requirement 

that program operators prioritize those 

most in need of SCSEP services. In fact, 

studies for PY 2006 and PY 2007 show 

that minorities are served by SCSEP in 

greater proportions than their incidence 

in the population and have employment 

outcomes no different from those of 

non-minority participants. 

Finally, one commenter requested 

that the Department switch several of 

the core indicators to become additional 

indicators. We are bound by the 2006 

OAA to implement the core and 

additional indicators of performance 

required in the statute; we do not have 

the discretion to reclassify core 

indicators as additional indicators. 

How are the performance indicators 

defined? (§ 641.710) 

In this section the Department defines 

each of the indicators. A few 

commenters suggested that the 

Department use data available from 

unemployment insurance wage records 

to capture data for such indicators as 

entry, retention, and earnings. Some 

commenters stated that it can be 

difficult to obtain this data from 

employers and exited participants. 

The Department agrees that 

unemployment insurance wage records 

are a potentially advantageous method 

of collecting performance data, and we 

are actively pursuing the use of such 

records by the SCSEP. For the reasons 

already stated, however, we have 

decided to retain the performance 

indicator definitions in their current 

form. 

Entry Into Unsubsidized Employment 

One commenter disagreed with the 

existing definition of entry into 

unsubsidized employment as each 

participant who is employed during the 

first quarter after the exit quarter. The 

traditional SCSEP entry indicator 

treated as entered employment any 

participant who worked 30 days within 

the 90 days following their program 

exit. This commenter argued that the 

current definition will make it harder to 

count an exited participant as having 

entered employment because of the later 

qualifying period (the first 90 days after 

exit versus the quarter following the exit 

quarter). 

It is clear that using this definition 

over the past six years has not resulted 

in fewer exited participants being 

counted as having entered unsubsidized 

employment. While the qualifying 

period under the current definition 

occurs later in time than the qualifying 

period under the traditional SCSEP 

entry measure, the former SCSEP entry 

indicator required 30 days of 

employment, but this definition does 

not specify an employment period. A 

participant could be employed for 

significantly fewer than 30 days during 

the relevant quarter, and that person 

would be counted as having entered 

unsubsidized employment under the 

existing definition of entry. In this way, 

the existing definition actually makes it 

more likely that an exited participant 

will be counted as a positive entry 

outcome. Indeed, during each of the 

three years when outcomes for both the 

SCSEP placement measure and the 

existing entry indicator were reported, 

the average entry outcome under the 

existing definition was higher than the 

average SCSEP placement outcome. 

Retention in Unsubsidized Employment 

for Six Months 

We received one comment proposing 

that we revert to the former, SCSEPspecific retention indicator, which 

measured retention for six months at 

180 days after program exit. The current 

definition measures retention for six 

months based on employment in the 

second and third quarters after the exit 

quarter. This commenter asserted that 

the longer qualifying period for this 

indicator increases the difficulty of 

obtaining the information. 

We do not question the commenter’s 

assertion that it can sometimes be 

difficult to obtain this retention 

information. Nevertheless, grantees and 

sub-recipients have been submitting 

data using the current definition since 

the first quarter of Program Year 2005, 

although as an additional rather than a 

core indicator in the early years. We are 

confident that grantees and subrecipients will be able to continue 

obtaining those data in the future. Also, 

as noted previously, we are actively 

pursuing the use of unemployment 

insurance wage records; these records 

would provide significant retention 

data. 

Earnings 

We received one comment on the 

definition of the earnings indicator. This 

commenter urged the use of a simpler 

indicator that captured wages at the 

time of program exit rather than the 

current indicator definition which 

averages the earnings received during 

the second and third quarters after the 

exit quarter. However, this always has 

been a core indicator and the current 

definition is that used by all of ETA. 

The commenter also asked a few 

questions about the description of the 

earnings indicator in TEGL 17–05. This 

commenter asked whether the term 

‘‘exited participants’’ refers to all exited 

participants, or only those who 

achieved unsubsidized employment. If 

the term ‘‘exited participants’’ refers to 

all exited participants, the commenter 

wondered whether that would dilute the 

average earnings figure. 

The term, ‘‘exited participants,’’ refers 

to the pool of individuals who satisfy 

the six months retention indicator, not 

the entire pool of persons who left the 

SCSEP for a variety of reasons during 

the relevant quarter. As implemented, 

the three core indicators may be viewed 

as building upon each other. To arrive 

at the entry outcome, one considers how 

many persons, of the total number who 

exited the SCSEP during the relevant 

exit quarter, were employed during the 

first quarter after the exit quarter. To 

arrive at the retention in six months 

outcome, one considers how many 

persons, of those who satisfied the entry 

indicator, were employed during the 

second and third quarters after the exit 

quarter. To arrive at the earnings 

outcome, one considers what was 

earned by those persons who were 

included the six months retention 

indicator. 

The previous earnings measures 

counted the earnings of exiters who 

achieved entered employment, whether 

or not they were employed in the 

reporting period, and that did have the 

effect of distorting the outcomes of the 

measure. By including those who were 

not employed in the earnings measure, 

it was difficult to determine how much 

those who were employed were actually 

earning. Under this final rule, however, 

only the wages of exiters who entered 

employment and who were employed 

during both quarters of the reporting 

period are included in the earnings 

measure. 


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Most-in-Need 

We received several comments about 

the definition of most-in-need. The 

‘‘most-in-need’’ population is based on 

the fifth core indicator in 2006 OAA 

§ 513(b): ‘‘the number of eligible 

individuals served, including the 

number of participating individuals 

described in subsection (a)(3)(B)(ii) or 

(b)(2) of section 518.’’ One commenter 

advocated reducing and simplifying the 

list of most-in-need characteristics. The 

regulatory definition cannot be reduced 

or simplified any more than it already 

is, because it is taken directly from the 

statute. 

Several commenters were distressed 

that the revised definition of most-inneed ‘‘no longer includes any reference 

to racial minority status.’’ Another 

commenter took issue with the 

characteristic, ‘‘has failed to find 

employment after utilizing services 

provided under title I of [WIA].’’ This 

commenter asserted that most SCSEP 

participants are not even considered for 

services under title I of WIA, and 

proposed that instead the characteristic 

should be, ‘‘[w]ere not considered for 

services under [t]itle I of WIA and/or 

failed to find employment after utilizing 

services under [t]itle I of WIA.’’ 

The 2006 OAA omitted the 

characteristic of ‘‘greatest social need’’ 

from the list of characteristics that 

comprise the ‘‘most-in-need’’ indicator. 

OAA §§ 513(b)(1)(E), 518(a)(3)(B)(ii), 

and 518(b)(2). Whatever the relative 

merits of considering other groups to be 

most in need, Congress defined most in 

need with great specificity, and we have 

no authority to change the statutory 

definition. 

The 2006 OAA does require the 

Department to annually report to 

Congress on the levels of participation 

and performance outcomes of minority 

individuals by grantees, by service area 

and in the aggregate. OAA § 515. The 

analyses conducted for both PY 2006 

and PY 2007 indicate that minorities are 

served in greater numbers than their 

incidence in the population and that 

minorities achieve employment 

outcomes equal to those of nonminorities. Therefore, we have not 

changed the definition of the most-inneed indicator. 

Retention for One Year 

We received one comment on the 

definition of retention for one year. In 

the IFR, we defined this indicator to 

align with the WIA one-year retention 

indicator, which measures retention at 

the end of the fourth quarter after the 

exit quarter. This commenter 

recommended that we instead capture 

retention data at 360 days following 

program exit. 

The Department has considered this 

comment but has decided to retain the 

definition of retention for one-year as 

published in the IFR for the reasons 

already stated. 

Satisfaction of the Participants, 

Employers, and Host Agencies With 

Their Experiences and the Services 

Provided 

We received one comment on this 

indicator. The commenter asserted that 

sub-recipients should not have to be 

involved in gathering data for this 

indicator, including mailing cover 

letters to encourage survey 

participation. 

The Department already provides very 

substantial assistance in obtaining the 

data for this indicator. We request that 

program operators—whether a grantee 

or a sub-recipient—deliver the employer 

survey, which we supply, and which 

ideally is done in person. For the 

participant and host agency surveys, we 

create the survey instrument as well as 

a cover letter explaining the survey and 

requesting its completion; draw the 

samples of those who will be asked to 

complete the survey; and mail it to 

those persons. We ask program 

operators to mail pre-survey letters to 

those participants selected to complete 

the survey to request cooperation with 

the survey, and we provide the presurvey letter text and the mailing list. 

We have considered the commenter’s 

request and have decided not to make 

any changes to the customer satisfaction 

survey process at this time. Given the 

substantial amount of the burden that 

we already shoulder, we ask very little 

of grantees, sub-recipients and host 

agencies. The work we ask them to 

perform is work that we cannot do and 

that we need grantees, sub-recipients, 

and host agencies to manage. 

How will the Department and grantees 

initially determine and then adjust 

expected levels of performance for the 

core performance measures? (§ 641.720) 

We received several comments about 

the expected levels of performance that 

were set for Program Year 2007. In 

general, such concerns must be raised 

during the process of setting the 

expected levels of performance and are 

not appropriate for the regulatory 

comment process as they relate to the 

specifics of each grantee’s situation. We 

will, however, respond to those aspects 

of these comments that have general 

applicability. 

One commenter asserted that the 

statutorily-mandated minimum 

expected level of performance for the 

entry indicator would be difficult for 

sub-grantees to achieve using the 

current definition of entry. The 

Department does not have the discretion 

to set the expected levels of 

performance below those required by 

statute. Further, we hold grantees 

accountable for achieving the expected 

levels of performance, but we do not set 

goals at the sub-recipient level. Having 

said that, we do conduct training 

sessions that are open to all program 

operators and offer technical assistance 

to both grantees and sub-recipients that 

are experiencing difficulty in any aspect 

of program administration. Finally, we 

note that the nationally-averaged 

outcome for the entry indicator at the 

end of Program Year 2007 was 52.4 

percent, greatly in excess of the 

statutorily-mandated goal. Only three 

individual grantees with adequate data 

to permit accurate measurement failed 

to meet at least 80% of their negotiated 

goal, and 62 grantees exceeded 100% of 

their negotiated goal. 

Other commenters suggested that the 

expected levels of performance for the 

entry and earnings indicators for 

Program Year 2007 were too high. These 

commenters noted that the median 

expected level of performance for the 

entry indicator was higher than the 

statutory minimum. They also asserted 

that the earnings and entry indicator 

levels were set so high that program 

operators would be encouraged to 

‘‘cream,’’ which would lead to fewer 

minority participants. 

Although the § 513(a)(2)(E)(ii) of the 

statute sets a minimum percentage for 

the entry indicator, it is in fact merely 

a minimum, and the Department has the 

authority to set expected levels of 

performance above that minimum. The 

Department bases a grantee’s expected 

levels of performance in part on the 

prior performance of the grantee. The 

statute requires that the expected levels 

of performance for the core indicators be 

designed to promote continuous 

improvement in performance. OAA 

§ 513(a)(2)(B). And, as we explained in 

the IFR, the Department has consistently 

established a performance level higher 

than the minimum required by statute 

for many grantees, and expects to 

continue to do so. 

In response to the assertion that the 

expected levels of performance are set 

so high that the Department is 

encouraging ‘‘creaming,’’ we disagree. As 

noted, a grantee’s expected levels of 

performance for a new program year are 

based in part on the prior performance 

of the grantee, so sudden large increases 

in performance goals generally do not 

occur. The expected levels of 

performance are designed to promote 


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continuous improvement; however, the 

Department also takes into account such 

factors as unemployment rates, relative 

poverty levels, and whether the grantee 

is serving a disproportionate share of 

most-in-need individuals. Negotiating 

expected levels of performance is a datadriven process; when a grantee presents 

the Department with relevant data, we 

take that into consideration when 

setting the performance goals. Also, 

expected levels of performance may be 

adjusted during the Program Year if 

circumstances warrant. See § 641.720(b). 

The Department is making three 

technical corrections to this section of 

the regulations none of which are 

intended to change the meaning of the 

section. First, we are removing the word 

‘‘baseline’’ from the first sentence of 

paragraph (a)(1). The word was 

mistakenly included in this paragraph 

in the IFR; the expected level of 

performance initially proposed by the 

Department is more commonly called a 

goal or target, not a baseline. Second, we 

are adding the word ‘‘a’’ at the beginning 

of the third sentence in paragraph (a)(3); 

it was inadvertently omitted from the 

IFR. Finally, we updated the citation 

format in paragraph (a)(2). 

How will the Department assist grantees 

in the transition to the new core 

performance indicators? (§ 641.730) 

In paragraph (a) of this section, the 

Department explained that we would be 

providing technical assistance to help 

certain grantees meet the expected 

levels of performance for the core 

indicators in Program Year 2007. 

Technical assistance was provided to 

those grantees whose performance 

outcomes during Program Year 2006 did 

not achieve the levels expected during 

Program Year 2007. In paragraph (b) of 

this section we created an exception 

from sanctionable goal-setting for 

Program Year 2007 for the most-in-need 

measure because the 2006 OAA so 

changed the list of most-in-need 

characteristics that we determined that 

a year was needed to gather baseline 

data before meaningful goals could be 

established. Some commenters thought 

that Program Year 2007 should have 

been treated as a baseline year for all of 

the indicators; they suggested that no 

sanctionable goals should have been set 

for Program Year 2007. 

Five of the indicators now classified 

as ‘‘core’’ are indicators that the SCSEP 

was already using before the IFR (i.e., 

hours of community service, number of 

individuals served, entry into 

employment, six-month retention in 

employment, and earnings), although 

some of these had been classified as 

additional measures previously. The 

most-in-need indicator was the only 

indicator that changed so significantly 

that we determined that we did not have 

sufficient data to set meaningful goals. 

Therefore, goals were set for the other 

core indicators for Program Year 2007. 

Subpart H—Administrative 

Requirements 

We received several comments on this 

section about non-Federal share, 

participant wages and fringe benefits, 

and performance reporting 

requirements. 

How must SCSEP program income be 

used? (§ 641.806) 

We have inserted clarifying language 

in paragraph (b) of this section to 

provide for a distinction in the 

expenditure of program income for 

grantees with continuing relationships 

with the Department of Labor and allow 

program income to be expended for 1 

additional program year. 

What non-Federal share (matching) 

requirements apply to the use of SCSEP 

funds? (§ 641.809) 

This section describes the 

requirements grantees have to 

contribute a 10 percent match to the 

program. We received one comment on 

this section of the proposed rule that 

disagreed with the provision that 

prohibits grantees from requiring subrecipients to contribute financially to 

the program to meet their match 

requirement. This commenter stated 

that he believed that a financial 

investment from a sub-recipient 

encourages ownership and 

responsibility for the program. This 

commenter suggested that a State’s 

inability to require a sub-recipient to 

provide a 10 percent match shifts all the 

responsibility to the State grantee and 

reduces the commitment of the subrecipient to meet performance goals. 

Although the Department appreciates 

this concern, this requirement was 

added in the 2004 regulations to prevent 

abuses in the program where some 

grantees permitted only those 

organizations with cash contributions to 

be sub-recipients. The fact remains that 

the grantees are the organizations 

responsible for program operations and 

services as evidenced by the grant 

agreement with the Department. 

Further, the Department does not 

believe this limitation is onerous to 

meet. As provided in § 641.809(d), the 

match may be cash, in-kind, or a 

combination of the two. Program data 

indicates that with this flexibility, most 

grantees tend to exceed the match 

requirement for the program. Also, 

paragraph (e) of this section allows subrecipients to voluntarily provide a 

contribution to the program. 

What minimum expenditure levels are 

required for participant wages and 

benefits? (§ 641.873) 

This section outlines the financial 

requirements for wages and fringe 

benefits and expressly adds the new 

statutory provisions that permit grantees 

to reduce the 75 percent requirement to 

65 percent for the wages and fringe 

benefits cost category. We received one 

comment on this section. This 

commenter expressed concern with the 

change that in the past required 75 

percent of grant funds to be spent on 

participant wages and fringe benefits 

(PWFB) based on final expenditures to 

now being 75 percent of the grant funds. 

This commenter noted that there was no 

change from the 2000 OAA to the 2006 

OAA and the Department did not 

provide a rationale in the proposed rule 

to justify this change. The commenter 

noted that ‘‘[t]rying to reach the goal 

based on the award amount changes the 

emphasis from using resources to 

effectively benefit the program to just 

incurring PWFB cost to meet the goal.’’ 

The commenter is correct that the 

OAA did not change the language at 

§ 502(c)(6)(B)(i) from the 2000 

Amendments to the 2006 Amendments. 

The Department made the change in the 

proposed rule to more closely follow the 

statutory language, which requires ‘‘75 

percent of the grant funds [be used] to 

pay for wages, benefits, and other costs.’’ 

However, the Department has 

reconsidered its position and has 

decided not to depart from its 

established practice of measuring 

compliance with this requirement for 

the grantee as a whole, at the conclusion 

of the grant, based upon the total 

amount expended. Accordingly, we are 

withdrawing the proposed revision to 

the regulation, and are retaining the 

existing text of § 641.873(b). 

How will compliance with cost 

limitations and minimum expenditure 

levels be determined? (§ 641.876) 

For clarity, we changed the first word 

in the title for this section. It originally 

asked ‘‘When will compliance with cost 

limitations and minimum expenditure 

levels be determined?’’ Because the 

content of the section does not actually 

discuss a time period but instead the 

method of determining compliance, we 

replaced ‘‘When’’ with ‘‘How.’’ 

What are the financial and performance 

reporting requirements for recipients? 

(§ 641.879) 

This section describes the financial 

and reporting requirements that grantees 


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must submit to the Department. We 

received one comment on this section 

that argued that the financial and 

performance reporting requirements 

conflict with § 514(f) of the 2006 OAA. 

This commenter cited this section of the 

statute, which states the Secretary of 

Labor may not promulgate rules or 

regulations that would significantly 

compromise the ability of the grantees 

to serve their target population of 

minority older individuals. The 

commenter suggested the Department 

add the following language in a new 

§ 641.879(i): ‘‘Collection and validation 

of data should in no way compromise 

the ability of grantees to serve the 

targeted population of most-in-need 

individuals, and significant attention 

should be paid to the unintended 

consequences that documentation may 

cause for minority older individuals, 

particularly those with specific language 

and culture limitations.’’ 

The Department agrees that the 

collection and validation of data should 

not compromise the ability of grantees 

to serve the target population. Although 

it may take more time to obtain the 

required information due to language 

barriers, the statute requires that we 

collect a variety of information on 

program performance, including 

information on the populations and 

subpopulations served. This is 

information that grantees must collect 

and have on file for program 

management and auditing purposes 

anyway. Although collecting 

information may be a burden, it is a 

required part of program management 

and is necessary to show that the 

program meets its statutory goals 

effectively. 

Furthermore, the Department 

monitors services to minorities closely, 

as required by the 2006 OAA. According 

to PY 2006 and PY 2007 data, minorities 

are served by SCSEP in substantially 

greater numbers than their incidence in 

the population and show no differences 

in employment outcomes from nonminority participants. Therefore, there 

is no evidence that minorities are 

underserved in the program. Given that 

this commenter did not provide more 

specific information on how she 

believed minorities would be affected, 

we are not persuaded that any such 

injury would occur from these 

regulations to diminish services to this 

population. 

We are, however, making technical 

changes in paragraphs (b), (d) and (e) to 

clarify that SPARQ is the vehicle by 

which all grantees must report 

information on participants, host 

agencies, and employers, including 

demographic and performance 

information. All grantees are required to 

report the required information in a 

format specified by the Department. We 

have also clarified that grantees may be 

required to report additional 

demographic and performance 

information through means other than 

SPARQ if required by the Department. 

Subpart I—Grievance Procedures and 

Appeals Process 

What grievance procedures must 

grantees make available to applicants, 

employees, and participants? (§ 641.910) 

This section describes the grievance 

procedures that must be in place for 

grantees and that those grantees must 

have in place for program participants. 

We received one comment on this 

section. That commenter stated that he 

found the Department’s requirement to 

submit a copy of the grantee’s appeal 

process with the grant application 

micromanaging. 

As a recipient of Federal funds, 

however, there are certain requirements 

that grantees must adhere to in order to 

receive those funds. See §§ 641.420 and 

430. Prior program experience has 

indicated that the grantees do not 

always have the most up-to-date 

policies, and sometimes, do not have 

policies on file at all. This requirement 

ensures that grantees are meeting their 

obligation without the Department 

having to go to each program office to 

check for these documents. 

IV. Administrative Information 

A. Regulatory Flexibility Analysis, 

Executive Order 13272, Small Business 

Regulatory Enforcement Fairness Act 

The Regulatory Flexibility Act (RFA) 

at 5 U.S.C. 603 requires agencies to 

prepare a regulatory flexibility analysis 

to determine whether a regulation will 

have a significant economic impact on 

a substantial number of small entities. 

Section 605(b) of the RFA allows an 

agency to certify a rule in lieu of 

preparing an analysis if the regulation is 

not expected to have a significant 

economic impact on a substantial 

number of small entities. Section 601 of 

the RFA defines small entities to 

include small businesses, small 

organizations, including not-for-profit 

organizations, and small governmental 

jurisdictions. 

There are approximately 970 SCSEP 

grantees and sub-recipients. Of these, 

more than 50 are States, State agencies, 

or territories and are not small entities 

as defined by the RFA. The vast 

majority of the rest are non-profit 

organizations, many of which may be 

categorized as small entities for RFA 

purposes. The Department does not 

have a precise number of small entities 

that may be impacted by this 

rulemaking, but it requested comments 

on the possible impact of the rule in the 

NPRM. The Department did not receive 

any comments on this section. 

Although there may be a substantial 

number of small entities impacted by 

this rulemaking, the Department has 

determined that the economic impact of 

this final rule is not significant because 

these regulations will not result in any 

additional costs to grantees and subrecipients. The SCSEP is designed so 

that SCSEP funds cover the vast 

majority of the costs of implementing 

this program. Subpart H of this final 

rule provides detailed information to 

grantees on what costs are proper 

program expenditures, how to properly 

categorize those costs, etc. The SCSEP 

statute does require a 10 percent nonFederal match (see § 641.809); however, 

the 10 percent match requirement has 

been in effect in previous SCSEP 

regulations and, therefore, does not 

constitute a new economic burden on 

grantees. Furthermore, the Department’s 

allowance of in-kind contributions in 

lieu of monetary payments significantly 

moderates the economic impact of the 

match requirement. Accordingly, the 

Department certifies that this final rule 

will not have a significant economic 

impact on a substantial number of small 

entities. 

The Department has also determined 

that this rule is not a ‘‘major rule’’ for 

purposes of the Small Business 

Regulatory Enforcement Fairness Act 

(SBREFA), Public Law 104–121 (1996) 

(codified in scattered sections at 5 

U.S.C.). SBREFA requires agencies to 

take certain actions when a ‘‘major rule’’ 

is promulgated. 5 U.S.C. 801. SBREFA 

defines a ‘‘major rule’’ as one that will 

have an annual effect on the economy 

of $100,000,000 or more; that will result 

in a major increase in costs or prices for, 

among other things, State or local 

government agencies; or that will 

significantly and adversely affect the 

business climate, including 

competition, employment, investment, 

and innovation. 5 U.S.C. 804(2). 

This final rule will not significantly or 

adversely affect the business climate. 

First, the rule will not create a 

significant impact on the business 

climate at all because, as discussed 

above, SCSEP grantees are governmental 

jurisdictions and not-for-profit 

enterprises. Moreover, any secondary 

impact of the program on the business 

community would not be adverse. To 

the contrary, the SCSEP functions to 

assist the business community by 

training older Americans to participate 

in the workforce. 


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This final rule will also not result in 

a major increase in costs or prices for 

States or local government agencies. The 

SCSEP has no impact on prices, and as 

discussed above, the only costs that 

could potentially be borne by 

governmental jurisdictions are limited 

to the 10 percent matching share. 

Finally, this final rule will not have an 

annual effect on the economy of 

$100,000,000 or more. 

Therefore, because none of the 

definitions of ‘‘major rule’’ apply in this 

instance, we determine that this final 

rule is not a ‘‘major rule’’ for SBREFA 

purposes. 

B. Executive Order 12866 

Executive Order 12866 requires that 

for each ‘‘significant regulatory action’’ 

taken by the Department, the 

Department conduct an assessment of 

the regulatory action and provide OMB 

with the regulation and the requisite 

assessment prior to publishing the 

regulation. A significant regulatory 

action is defined to include an action 

that will have an annual effect on the 

economy of $100 million or more, as 

well as an action that raises a novel 

legal or policy issue. 

As discussed in the SBREFA analysis 

above, this final rule will not have an 

annual effect on the economy of 

$100,000,000 or more. However, the 

rule does raise novel policy issues 

concerning implementing the 2006 OAA 

in the SCSEP. The key policy changes 

being implemented include the 

introduction of a 48-month limit on 

participation, institution of a regular 

competition for national grants, and an 

increase in the proportion of grant funds 

that can be used for participant training 

and supportive services. Therefore, the 

Department has submitted this final rule 

to the OMB. 

C. Paperwork Reduction Act 

The purposes of the Paperwork 

Reduction Act of 1995 (PRA), 44 U.S.C. 

3501 et seq., include minimizing the 

paperwork burden on affected entities. 

The PRA requires certain actions before 

an agency can adopt or revise the 

collection of information, including 

publishing a summary of the collection 

of information and a brief description of 

the need for and proposed use of the 

information. 44 U.S.C. 3507. 

Because the 2006 OAA necessitated 

changes in many of the SCSEP forms 

used by grantees before the effective 

date of the Act, in July 2007 the 

Department submitted to OMB for 

review and approval in accordance with 

§ 3507(d) of the PRA a modification to 

the SCSEP information collection 

requirements. The four-year strategy 

newly required by the 2006 OAA (see 

§ 641.302) was accounted for in that 

PRA submission. The SCSEP PRA 

submission was assigned OMB control 

number 1205–0040 and was approved 

by OMB in October 2007. The approval 

expires October 31, 2010. This final rule 

neither introduces new nor revises any 

existing information collection 

requirements. 

D. Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act 

(UMRA) of 1995 (Pub. L. 104–4, 2 U.S.C. 

1501 et seq.) requires an agency to 

‘‘prepare a written statement’’ providing 

specific information before 

‘‘promulgating any final rule for which 

a general notice of proposed rulemaking 

was published.’’ The Department has 

done this and, as required by 2 U.S.C. 

1523(b), it includes a summary of the 

statement. For purposes of the UMRA, 

this final rule does not include any 

Federal mandate that may result in 

increased expenditure by State, local, 

and tribal governments in the aggregate 

of more than $100 million, or increased 

expenditures by the private sector of 

more than $100 million. We did, 

however, receive some comments on the 

costs of the rule, to which we respond 

here. 

We received several comments on this 

section from State agencies related to 

the responsibilities in the State Plan 

requirements at subpart C of this rule, 

State competition requirements, and 

administrative guidance related to 

required services to participants. The 

programmatic aspects of these 

comments are discussed in the related 

sections of the preamble. This section is 

limited to a discussion that addresses 

the impact of this rule as an unfunded 

mandate. 

One commenter generally noted that 

its jurisdiction was neither financially 

nor functionally prepared to take on this 

added workload. Several States 

specifically stated that the Department 

was imposing additional requirements 

on State grantees without providing 

additional funding. A few commenters 

stated that they did not have funds to 

hire an economist to provide the data 

required for the State four-year strategy 

as provided in the State WIA program; 

and one commenter said that it did not 

have the funds to obtain the data to 

meet the requirement that State grantees 

identify the types of community 

services that are needed and their 

location statewide. Some commenters 

requested that the Department provide 

additional resources to help States 

develop a comprehensive four-year 

State Plan. Another commenter 

protested that the Department did not 

provide funding for States to conduct a 

competition if, under § 641.400, the 

State fails to meet its expected levels of 

performance for the core indicators for 

three consecutive years. That same 

commenter also stated that the 

requirement in § 641.535(b) (additional 

guidance) has the potential to increase 

program costs without providing 

funding to cover such requirements. 

The Department disagrees that any of 

these requirements impose an unfunded 

mandate. The requirements in this final 

rule are funded by SCSEP grant funds 

and fall under the category of either 

administrative costs or programmatic 

costs. Section 502(c)(3) allows grantees 

to request an increase in administrative 

costs from 13.5 percent to 15 percent, if 

the grantee demonstrates that such 

increase is necessary to carry out the 

program. There are several States that 

take advantage of this provision by 

submitting applications meeting the 

criteria listed in § 641.870. We have no 

evidence that the additional 

administrative funds they receive are 

insufficient to oversee sub-recipient 

operations and perform the 

requirements of subpart B for State 

Planning. Further, to the extent that the 

Department has always expected 

grantees to take the State planning 

process seriously and formulate a 

projection for how services would be 

provided, the requirements in this final 

rule are not new. They are merely more 

descriptive and now in regulations 

where before the requirements were 

listed in a Training and Employment 

Guidance Letter (TEGL No. 16–07): 

http://www.doleta.gov/Seniors/pdf/

TEGL16-07.pdf. 

Finally, the catch-all provision in 

§ 641.535 that informs grantees that they 

may be expected to provide services to 

participants according to administrative 

guidelines does not impose more 

responsibilities that require additional 

grant funds. The administrative 

guidance discussed in that section 

relates to further explanation or 

clarification for how the services listed 

in that section or in the 2006 OAA can 

be carried out. For example, past 

guidance has provided the Federal 

poverty levels which are adjusted each 

year. This guidance is important 

because it provides the framework for 

determining participant eligibility in the 

program. Other past guidance has 

allowed grantees the option of providing 

On-the-Job Experience or OJE training 

and established the parameters for using 

that training option. 

Department-issued guidance is 

designed to inform the grantees about 

ways to serve participants within 

program parameters and do not rise to 


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the level of creating an unfunded 

mandate for the program. To avoid 

ambiguity, we changed the regulatory 

text in § 641.535(b) to reflect that further 

guidance may be issued to clarify 

existing requirements. The Department 

may also from time-to-time request that 

grantees provide certain information to 

program participants, such as 

information about Earned Income Tax 

Credit program services. We have found 

that as a general matter, grantees are 

eager to provide information to the 

participants when it is in the 

participants’ best interest, and do so 

willingly. Furthermore, although 

carrying out the obligations of the 

statute and regulations may require 

careful management, the duties imposed 

by the regulations flow from the specific 

requirements of the statute as well as 

the Congressional purposes expressed in 

the statute. Although the regulations 

may provide more specifics on how 

those duties and purposes are to be 

carried out, the regulations do not do 

anything more than flesh out the 

requirements on how to properly 

implement and manage the SCSEP. 

Therefore, for the reasons described 

above, the Department believes that the 

requirements of this final rule do not 

impose any unfunded mandates. 

E. Executive Order 13132 

The Department has reviewed this 

final rule in accordance with Executive 

Order 13132 on federalism and has 

determined that the Final Rule does not 

have ‘‘policies that have federalism 

implications.’’ As explained at § 1(a) of 

the Order, ‘‘ ‘Policies that have 

federalism implications’ refers to 

regulations, legislative comments or 

proposed legislation, and other policy 

statements or actions that have 

substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government.’’ This rule does 

not ‘‘have substantial direct effects on 

the States, on the relationship between 

the national government and the States, 

or on the distribution of power and 

responsibilities among the various 

levels of government’’ because the 

requirements in this final rule flow 

directly from the 2006 OAA. Whatever 

federalism implications these 

regulations have on the States is merely 

indirect. Moreover, these grants are, by 

definition, voluntary. States are not 

required to take the grant funds if they 

do not approve of the conditions 

attached to the funds. Therefore, the 

rule does not have a ‘‘substantial direct 

effect’’ on the States, nor will it alter the 

relationship, power, or responsibilities 

between the Federal and State 

governments. The relationship, power, 

or responsibilities were already 

established in the authorizing 

legislation. 

Finally, the Department received no 

comments on this provision. 

Accordingly, we conclude that this rule 

does not have federalism implications 

for the purposes of Executive Order 

13132. 

F. Executive Order 13045 

Executive Order 13045 concerns the 

protection of children from 

environmental health risks and safety 

risks. This final rule addresses the 

SCSEP, a program for older Americans, 

and has no impact on safety or health 

risks to children. 

G. Executive Order 13175 

Executive Order 13175 addresses the 

unique relationship between the Federal 

Government and Indian tribal 

governments. The order requires Federal 

agencies to take certain actions when 

regulations have ‘‘tribal implications.’’ 

Required actions include consulting 

with tribal governments prior to 

promulgating a regulation with tribal 

implications and preparing a tribal 

impact statement. The Order defines 

regulations as having ‘‘tribal 

implications’’ when they have 

substantial direct effects on one or more 

Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes, or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

The Department has reviewed this 

final rule and concludes that it does not 

have tribal implications. Although tribes 

are sub-recipients of national SCSEP 

grant funds, this final rule will not have 

a substantial direct effect on those 

tribes, because, as outlined in the 

Regulatory Flexibility section of the 

preamble, there are no new costs 

associated with implementing this final 

rule. This regulation does not affect the 

relationship between the Federal 

Government and the tribes, nor does it 

affect the distribution of power and 

responsibilities between the Federal 

Government and tribal governments. 

These grants are, by definition, 

voluntary and tribes are not required to 

take the grant funds if they do not 

approve of the conditions attached to 

the funds. 

Finally, the Department received no 

comments on this issue. Accordingly, 

we conclude that this rule does not have 

tribal implications for the purposes of 

Executive Order 13175. 

H. Environmental Impact Assessment 

The Department has reviewed this 

final rule in accordance with the 

requirements of the National 

Environmental Policy Act (NEPA) of 

1969 (42 U.S.C. 4321 et seq.), the 

regulations of the Council on 

Environmental Quality (40 CFR part 

1500), and the Department’s NEPA 

procedures (29 CFR part 11). The rule 

will not have a significant impact on the 

quality of the human environment, and, 

thus, the Department has not prepared 

an environmental assessment or an 

environmental impact statement. 

I. Assessment of Federal Regulations 

and Policies on Families 

Section 654 of the Treasury and 

General Government Appropriations 

Act, enacted as part of the Omnibus 

Consolidated and Emergency 

Supplemental Appropriations Act of 

1999 (Pub. L. 105–277, 112 Stat. 2681), 

requires the Department to assess the 

impact of this rule on family well-being. 

A rule that is determined to have a 

negative effect on families must be 

supported with an adequate rationale. 

The Department has assessed this 

final rule and determines that it will not 

have a negative effect on families. 

Indeed, we believe the SCSEP 

strengthens families by providing job 

training and support services to lowincome older Americans. 

J. Executive Order 12630 

Executive Order 12630, Governmental 

Actions and Interference with 

Constitutionally Protected Property 

Rights, is not relevant to this Final Rule 

because the rule does not involve 

implementation of a policy with takings 

implications. 

K. Executive Order 12988 

This final rule has been drafted and 

reviewed in accordance with Executive 

Order 12988, Civil Justice Reform, and 

will not unduly burden the Federal 

court system. The Department has 

written the regulation so as to minimize 

litigation and provide a clear legal 

standard for affected conduct, and has 

carefully reviewed it to eliminate 

drafting errors and ambiguities. 

L. Executive Order 13211 

This final rule is not subject to 

Executive Order 13211 because the rule 

will not have a significant adverse effect 

on the supply, distribution, or use of 

energy. 

M. Plain Language 

The Department drafted this rule in 

plain language. 


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List of Subjects in 20 CFR Part 641 

Aged, Employment, Government 

contracts, Grant programs—Labor, 

Reporting and recordkeeping 

requirements. 

■ For the reasons discussed in the 

preamble, the Department of Labor 

amends 20 CFR part 641 as follows: 

PART 641—PROVISIONS GOVERNING 

THE SENIOR COMMUNITY SERVICE 

EMPLOYMENT PROGRAM 

Subpart A—Purpose and Definitions 

Sec. 

641.100 What does this part cover? 

641.110 What is the SCSEP? 

641.120 What are the purposes of the 

SCSEP? 

641.130 What is the scope of this part? 

641.140 What definitions apply to this 

part? 

Subpart B—Coordination With the 

Workforce Investment Act 

641.200 What is the relationship between 

the SCSEP and the Workforce Investment 

Act? 

641.210 What services, in addition to the 

applicable core services, must SCSEP 

grantees and sub-recipients provide 

through the One-Stop delivery system? 

641.220 Does title I of WIA require the 

SCSEP to use OAA funds for individuals 

who are not eligible for SCSEP services 

or for services that are not authorized 

under the OAA? 

641.230 Must the individual assessment 

conducted by the SCSEP grantee or subrecipient and the assessment performed 

by the One-Stop delivery system be 

accepted for use by either entity to 

determine the individual’s need for 

services in the SCSEP and adult 

programs under title I–B of WIA? 

641.240 Are SCSEP participants eligible for 

intensive and training services under 

title I of WIA? 

Subpart C—The State Plan 

641.300 What is the State Plan? 

641.302 What is a four-year strategy? 

641.305 Who is responsible for developing 

and submitting the State Plan? 

641.310 May the Governor, or the highest 

government official, delegate 

responsibility for developing and 

submitting the State Plan? 

641.315 Who participates in developing 

the State Plan? 

641.320 Must all national grantees 

operating within a State participate in 

the State planning process? 

641.325 What information must be 

provided in the State Plan? 

641.330 How should the State Plan reflect 

community service needs? 

641.335 How should the Governor, or the 

highest government official, address the 

coordination of SCSEP services with 

activities funded under title I of WIA? 

641.340 How often must the Governor, or 

the highest government official, update 

the State Plan? 

641.345 What are the requirements for 

modifying the State Plan? 

641.350 How should public comments be 

solicited and collected? 

641.355 Who may comment on the State 

Plan? 

641.360 How does the State Plan relate to 

the equitable distribution report? 

641.365 How must the equitable 

distribution provisions be reconciled 

with the provision that disruptions to 

current participants should be avoided? 

Subpart D—Grant Application and 

Responsibility Review Requirements for 

State and National SCSEP Grants 

641.400 What entities are eligible to apply 

to the Department for funds to 

administer SCSEP projects? 

641.410 How does an eligible entity apply? 

641.420 What are the eligibility criteria 

that each applicant must meet? 

641.430 What are the responsibility 

conditions that an applicant must meet? 

641.440 Are there responsibility conditions 

that alone will disqualify an applicant? 

641.450 How will the Department examine 

the responsibility of eligible entities? 

641.460 What factors will the Department 

consider in selecting national grantees? 

641.465 Under what circumstances may 

the Department reject an application? 

641.470 What happens if an applicant’s 

application is rejected? 

641.480 May the Governor, or the highest 

government official, make 

recommendations to the Department on 

national grant applications? 

641.490 When will the Department 

compete SCSEP grant awards? 

641.495 When must a State compete its 

SCSEP award? 

Subpart E—Services to Participants 

641.500 Who is eligible to participate in 

the SCSEP? 

641.505 When is eligibility determined? 

641.507 How is applicant income 

computed? 

641.510 What types of income are included 

and excluded for participant eligibility 

determinations? 

641.512 May grantees and sub-recipients 

enroll otherwise eligible job ready 

individuals and place them directly into 

unsubsidized employment? 

641.515 How must grantees and subrecipients recruit and select eligible 

individuals for participation in the 

SCSEP? 

641.520 Are there any priorities that 

grantees and sub-recipients must use in 

selecting eligible individuals for 

participation in the SCSEP? 

641.535 What services must grantees and 

sub-recipients provide to participants? 

641.540 What types of training may 

grantees and sub-recipients provide to 

SCSEP participants in addition to the 

training received at the community 

service assignment? 

641.545 What supportive services may 

grantees and sub-recipients provide to 

participants? 

641.550 What responsibility do grantees 

and sub-recipients have to place 

participants in unsubsidized 

employment? 

641.565 What policies govern the provision 

of wages and benefits to participants? 

641.570 Is there a time limit for 

participation in the program? 

641.575 May a grantee or sub-recipient 

establish a limit on the amount of time 

its participants may spend at a host 

agency? 

641.577 Is there a limit on community 

service assignment hours? 

641.580 Under what circumstances may a 

grantee or sub-recipient terminate a 

participant? 

641.585 What is the employment status of 

SCSEP participants? 

Subpart F—Pilot, Demonstration, and 

Evaluation Projects 

641.600 What is the purpose of the pilot, 

demonstration, and evaluation projects 

authorized under § 502(e) of the OAA? 

641.610 How are pilot, demonstration, and 

evaluation projects administered? 

641.620 How may an organization apply 

for pilot, demonstration, and evaluation 

project funding? 

641.630 What pilot, demonstration, and 

evaluation project activities are 

allowable under § 502(e)? 

641.640 Should pilot, demonstration, and 

evaluation project entities coordinate 

with SCSEP grantees and sub-recipients, 

including area agencies on aging? 

Subpart G—Performance Accountability 

641.700 What performance measures/ 

indicators apply to SCSEP grantees? 

641.710 How are the performance 

indicators defined? 

641.720 How will the Department and 

grantees initially determine and then 

adjust expected levels of performance for 

the core performance measures? 

641.730 How will the Department assist 

grantees in the transition to the new core 

performance indicators? 

641.740 How will the Department 

determine whether a grantee fails, meets, 

or exceeds the expected levels of 

performance for the core indicators and 

what will be the consequences of failing 

to meet expected levels of performance? 

641.750 Will there be performance-related 

incentives? 

Subpart H—Administrative Requirements 

641.800 What uniform administrative 

requirements apply to the use of SCSEP 

funds? 

641.803 What is program income? 

641.806 How must SCSEP program income 

be used? 

641.809 What non-Federal share 

(matching) requirements apply to the use 

of SCSEP funds? 

641.812 What is the period of availability 

of SCSEP funds? 

641.815 May the period of availability be 

extended? 

641.821 What audit requirements apply to 

the use of SCSEP funds? 

641.824 What lobbying requirements apply 

to the use of SCSEP funds? 


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641.827 What general nondiscrimination 

requirements apply to the use of SCSEP 

funds? 

641.833 What policies govern political 

patronage? 

641.836 What policies govern political 

activities? 

641.839 What policies govern union 

organizing activities? 

641.841 What policies govern nepotism? 

641.844 What maintenance of effort 

requirements apply to the use of SCSEP 

funds? 

641.847 What uniform allowable cost 

requirements apply to the use of SCSEP 

funds? 

641.850 Are there other specific allowable 

and unallowable cost requirements for 

the SCSEP? 

641.853 How are costs classified? 

641.856 What functions and activities 

constitute administrative costs? 

641.859 What other special rules govern 

the classification of costs as 

administrative costs or programmatic 

activity costs? 

641.861 Must SCSEP recipients provide 

funding for the administrative costs of 

sub-recipients? 

641.864 What functions and activities 

constitute programmatic activity costs? 

641.867 What are the limitations on the 

amount of SCSEP administrative costs? 

641.870 Under what circumstances may 

the administrative cost limitation be 

increased? 

641.873 What minimum expenditure levels 

are required for participant wages and 

benefits? 

641.874 What conditions apply to a SCSEP 

grantee request to use additional funds 

for training and supportive service costs? 

641.876 When will compliance with cost 

limitations and minimum expenditure 

levels be determined? 

641.879 What are the financial and 

performance reporting requirements for 

recipients? 

641.881 What are the SCSEP recipient’s 

responsibilities relating to awards to subrecipients? 

641.884 What are the grant closeout 

procedures? 

Subpart I—Grievance Procedures and 

Appeals Process 

641.900 What appeal process is available to 

an applicant that does not receive a 

grant? 

641.910 What grievance procedures must 

grantees make available to applicants, 

employees, and participants? 

641.920 What actions of the Department 

may a grantee appeal and what 

procedures apply to those appeals? 

641.930 Is there an alternative dispute 

resolution process that may be used in 

place of an OALJ hearing? 

Authority: 42 U.S.C. 3056 et seq.; Pub. L. 

109–365. 

Subpart A—Purpose and Definitions 

§ 641.100 What does this part cover? 

Part 641 contains the Department of 

Labor’s regulations for the Senior 

Community Service Employment 

Program (SCSEP), authorized under title 

V of the Older Americans Act (OAA), 42 

U.S.C. 3056 et seq., as amended by the 

Older Americans Act Amendments of 

2006, Public Law 109–365. This part 

and other pertinent regulations set forth 

the regulations applicable to the SCSEP. 

(a) Subpart A of this part contains 

introductory provisions and definitions 

that apply to this part. 

(b) Subpart B of this part describes the 

required relationship between the OAA 

and the Workforce Investment Act of 

1998 (WIA), 29 U.S.C. 2801 et seq. 

These provisions discuss the 

coordinated efforts to provide services 

through the integration of the SCSEP 

within the One-Stop delivery system. 

(c) Subpart C of this part sets forth the 

requirements for the State Plan, such as 

the four-year strategy, required 

coordination efforts, public comments, 

and equitable distribution. 

(d) Subpart D of this part establishes 

grant planning and application 

requirements, including grantee 

eligibility and responsibility review 

provisions that apply to the 

Department’s award of SCSEP funds for 

State and national grants. 

(e) Subpart E of this part details 

SCSEP participant services. 

(f) Subpart F of this part provides the 

rules for pilot, demonstration, and 

evaluation projects. 

(g) Subpart G of this part outlines the 

performance accountability 

requirements. This subpart establishes 

requirements for performance measures, 

defines such measures, and establishes 

corrective actions for failure to meet 

core performance measures. 

(h) Subpart H of this part sets forth 

the administrative requirements for 

SCSEP funds. 

(i) Subpart I of this part describes the 

grievance and appeals processes and 

requirements. 

§ 641.110 What is the SCSEP? 

The Senior Community Service 

Employment Program (SCSEP) is a 

program administered by the 

Department of Labor that serves 

unemployed low-income persons who 

are 55 years of age and older and who 

have poor employment prospects by 

training them in part-time community 

service assignments and by assisting 

them in developing skills and 

experience to facilitate their transition 

to unsubsidized employment. 

§ 641.120 What are the purposes of the 

SCSEP? 

The purposes of the SCSEP are to 

foster individual economic selfsufficiency and promote useful parttime opportunities in community 

service assignments for unemployed 

low-income persons who are 55 years of 

age or older, particularly persons who 

have poor employment prospects, and 

to increase the number of older persons 

who may enjoy the benefits of 

unsubsidized employment in both the 

public and private sectors. (OAA 

§ 502(a)(1)). 

§ 641.130 What is the scope of this part? 

The regulations in this part address 

the requirements that apply to the 

SCSEP. More detailed policies and 

procedures are contained in 

administrative guidelines issued by the 

Department. Throughout this part, 

phrases such as, ‘‘according to 

instructions (procedures) issued by the 

Department’’ or ‘‘additional guidance 

will be provided through administrative 

issuance’’ refer to the documents issued 

under the Secretary’s authority to 

administer the SCSEP, such as Training 

and Employment Guidance Letters 

(TEGLs), Training and Employment 

Notices (TENs), previously issued 

SCSEP Older Worker Bulletins that are 

still in effect, technical assistance 

guides, and other SCSEP guidance. 

§ 641.140 What definitions apply to this 

part? 

The following definitions apply to 

this part: 

Additional indicators mean retention 

in unsubsidized employment for one 

year; satisfaction of participants, 

employers and their host agencies with 

their experiences and the services 

provided; and any other indicators of 

performance that the Secretary 

determines to be appropriate to evaluate 

services and performance. (OAA 

§ 513(b)(2)). 

At risk for homelessness means an 

individual is likely to become homeless 

and the individual lacks the resources 

and support networks needed to obtain 

housing. 

Authorized position level means the 

number of SCSEP enrollment 

opportunities that can be supported for 

a 12-month period based on the average 

national unit cost. The authorized 

position level is derived by dividing the 

total amount of funds appropriated for 

a Program Year by the national average 

unit cost per participant for that 

Program Year as determined by the 

Department. The national average unit 

cost includes all costs of administration, 

other participant costs, and participant 

wage and benefit costs as defined in 

§ 506(g) of the OAA. 

Co-enrollment applies to any 

individual who meets the qualifications 

for SCSEP participation and is also 


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53814 Federal Register / Vol. 75, No. 169 / Wednesday, September 1, 2010 / Rules and Regulations 

enrolled as a participant in WIA or 

another employment and training 

program, as provided in the Individual 

Employment Plan. 

Community service means: 

(1) Social, health, welfare, and 

educational services (including literacy 

tutoring), legal and other counseling 

services and assistance, including tax 

counseling and assistance and financial 

counseling, and library, recreational, 

and other similar services; 

(2) Conservation, maintenance, or 

restoration of natural resources; 

(3) Community betterment or 

beautification; 

(4) Antipollution and environmental 

quality efforts; 

(5) Weatherization activities; 

(6) Economic development; and 

(7) Other such services essential and 

necessary to the community as the 

Secretary determines by rule to be 

appropriate. (OAA § 518(a)(1)). 

Community service assignment means 

part-time, temporary employment paid 

with grant funds in projects at host 

agencies through which eligible 

individuals are engaged in community 

service and receive work experience and 

job skills that can lead to unsubsidized 

employment. (OAA § 518(a)(2)). 

Core indicators means hours (in the 

aggregate) of community service 

employment; entry into unsubsidized 

employment; retention in unsubsidized 

employment for six months; earnings; 

the number of eligible individuals 

served; and most-in-need (the number of 

individuals described in § 518 

(a)(3)(B)(ii) or (b)(2) of the OAA). (OAA 

§ 513(b)(1)). 

Core Services means those services 

described in § 134(d)(2) of WIA. 

Department or DOL means the United 

States Department of Labor, including 

its agencies and organizational units. 

Disability means a disability 

attributable to a mental or physical 

impairment, or a combination of mental 

and physical impairments, that results 

in substantial functional limitations in 

one or more of the following areas of 

major life activity: 

(1) Self-care; 

(2) Receptive and expressive 

language; 

(3) Learning; 

(4) Mobility; 

(5) Self-direction; 

(6) Capacity for independent living; 

(7) Economic self-sufficiency; 

(8) Cognitive functioning; and 

(9) Emotional adjustment. 

(42 U.S.C. 3002(13)). 

Equitable distribution report means a 

report based on the latest available 

Census or other reliable data, which 

lists the optimum number of participant 

positions in each designated area in the 

State, and the number of authorized 

participant positions each grantee serves 

in that area, taking into account the 

needs of underserved counties and 

incorporated cities as necessary. This 

report provides a basis for improving 

the distribution of SCSEP positions. 

Frail means an individual 55 years of 

age or older who is determined to be 

functionally impaired because the 

individual— 

(1)(i) Is unable to perform at least two 

activities of daily living without 

substantial human assistance, including 

verbal reminding, physical cueing, or 

supervision; or 

(ii) At the option of the State, is 

unable to perform at least three such 

activities without such assistance; or 

(2) Due to a cognitive or other mental 

impairment, requires substantial 

supervision because the individual 

behaves in a manner that poses a serious 

health or safety hazard to the individual 

or to another individual. (42 U.S.C. 

3002(22)). 

Grant period means the time period 

between the effective date of the grant 

award and the ending date of the award, 

which includes any modifications 

extending the period of performance, 

whether by the Department’s exercise of 

options contained in the grant 

agreement or otherwise. This is also 

referred to as ‘‘project period’’ or ‘‘award 

period.’’ 

Grantee means an entity receiving 

financial assistance directly from the 

Department to carry out SCSEP 

activities. The grantee is the legal entity 

that receives the award and is legally 

responsible for carrying out the SCSEP, 

even if only a particular component of 

the entity is designated in the grant 

award document. Grantees include 

public and nonprofit private agencies 

and organizations, agencies of a State, 

tribal organizations, and Territories, that 

receive SCSEP grants from the 

Department. (OAA §§ 502(b)(1), 

506(a)(2)). As used here, ‘‘grantee’’ 

includes ‘‘grantee’’ as defined in 29 CFR 

97.3 and ‘‘recipient’’ as defined in 29 

CFR 95.2(gg). 

Greatest economic need means the 

need resulting from an income level at 

or below the poverty guidelines 

established by the Department of Health 

and Human Services and approved by 

the Office of Management and Budget 

(OMB). (42 U.S.C. 3002(23)). 

Greatest social need means the need 

caused by non-economic factors, which 

include: Physical and mental 

disabilities; language barriers; and 

cultural, social, or geographical 

isolation, including isolation caused by 

racial or ethnic status, which restricts 

the ability of an individual to perform 

normal daily tasks or threatens the 

capacity of the individual to live 

independently. (42 U.S.C. 3002(24)). 

Homeless includes: 

(1) An individual who lacks a fixed, 

regular, and adequate nighttime 

residence; and 

(2) An individual who has a primary 

nighttime residence that is: 

(i) A supervised publicly or privately 

operated shelter designed to provide 

temporary living accommodations 

(including welfare hotels, congregate 

shelters, and transitional housing for the 

mentally ill); 

(ii) An institution that provides a 

temporary residence for individuals 

intended to be institutionalized; or 

(iii) A public or private place not 

designed for, or ordinarily used as, 

regular sleeping accommodations for 

human beings. (42 U.S.C. 11302(a)). 

Host agency means a public agency or 

a private nonprofit organization exempt 

from taxation under § 501(c)(3) of the 

Internal Revenue Code of 1986 which 

provides a training work site and 

supervision for one or more 

participants. Political parties cannot be 

host agencies. A host agency may be a 

religious organization as long as the 

projects in which participants are being 

trained do not involve the construction, 

operation, or maintenance of any facility 

used or to be used as a place for 

sectarian religious instruction or 

worship. (OAA § 502(b)(1)(D)). 

Indian means a person who is a 

member of an Indian tribe. (42 U.S.C. 

3002(26)). 

Indian tribe means any tribe, band, 

nation, or other organized group or 

community of Indians (including Alaska 

Native village or regional or village 

corporation as defined in or established 

pursuant to the Alaska Native Claims 

Settlement Act, 43 U.S.C. 1601 et seq.) 

which: (1) Is recognized as eligible for 

the special programs and services 

provided by the United States to Indians 

because of their status as Indians; or (2) 

is located on, or in proximity to, a 

Federal or State reservation or 

Rancheria. (42 U.S.C. 3002(27)). 

Individual employment plan (IEP) 

means a plan for a participant that is 

based on an assessment of that 

participant conducted by the grantee or 

sub-recipient, or a recent assessment or 

plan developed by another employment 

and training program, and a related 

service strategy. The IEP must include 

an appropriate employment goal (except 

that after the first IEP, subsequent IEPs 

need not contain an employment goal if 

such a goal is not feasible), objectives 

that lead to the goal, a timeline for the 

achievement of the objectives; and be 


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Federal Register / Vol. 75, No. 169 / Wednesday, September 1, 2010 / Rules and Regulations 53815 

jointly agreed upon with the participant. 

(OAA § 502(b)(1)(N)). 

Intensive services means those 

services authorized by § 134(d)(3) of the 

Workforce Investment Act. 

Jobs for Veterans Act means Public 

Law 107–288 (2002). Section 2(a) of the 

Jobs for Veterans Act, codified at 38 

U.S.C. 4215(a), provides a priority of 

service for Department of Labor 

employment and training programs for 

veterans, and certain spouses of 

veterans, who otherwise meet the 

eligibility requirements for 

participation. Priority is extended to 

veterans. Priority is also extended to the 

spouse of a veteran who died of a 

service-connected disability; the spouse 

of a member of the Armed Forces on 

active duty who has been listed for a 

total of more than 90 days as missing in 

action, captured in the line of duty by 

a hostile force, or forcibly detained by 

a foreign government or power; the 

spouse of any veteran who has a total 

disability resulting from a serviceconnected disability; and the spouse of 

any veteran who died while a disability 

so evaluated was in existence. (See 

§ 641.520(b)). 

Job ready refers to individuals who do 

not require further education or training 

to perform work that is available in their 

labor market. 

Limited English proficiency means 

individuals who do not speak English as 

their primary language and who have a 

limited ability to read, speak, write, or 

understand English. 

Local Workforce Investment Area or 

local area means an area designated by 

the Governor of a State under § 116 of 

the Workforce Investment Act. 

Local Board means a Local Workforce 

Investment Board established under 

§ 117 of the Workforce Investment Act. 

Low employment prospects means the 

likelihood that an individual will not 

obtain employment without the 

assistance of the SCSEP or another 

workforce development program. 

Persons with low employment prospects 

have a significant barrier to 

employment. Significant barriers to 

employment may include but are not 

limited to: Lacking a substantial 

employment history, basic skills, and/or 

English-language proficiency; lacking a 

high school diploma or the equivalent; 

having a disability; being homeless; or 

residing in socially and economically 

isolated rural or urban areas where 

employment opportunities are limited. 

Low literacy skills means the 

individual computes or solves 

problems, reads, writes, or speaks at or 

below the 8th grade level or is unable 

to compute or solve problems, read, 

write, or speak at a level necessary to 

function on the job, in the individual’s 

family, or in society. 

Most-in-need means participants with 

one or more of the following 

characteristics: Have a severe disability; 

are frail; are age 75 or older; are ageeligible but not receiving benefits under 

title II of the Social Security Act; reside 

in an area with persistent 

unemployment and have severely 

limited employment prospects; have 

limited English proficiency; have low 

literacy skills; have a disability; reside 

in a rural area; are veterans; have low 

employment prospects; have failed to 

find employment after using services 

provided under title I of the Workforce 

Investment Act of 1998 (29 U.S.C. 2801 

et seq.); or are homeless or at risk for 

homelessness. (OAA § 513(b)(1)(E)). 

National grantee means a public or 

non-profit private agency or 

organization, or Tribal organization, that 

receives a grant under title V of the 

OAA (42 U.S.C. 3056 et seq.) to 

administer a SCSEP project. (See OAA 

§ 506(g)(5)). 

OAA means the Older Americans Act, 

42 U.S.C. 3001 et seq., as amended. 

One-Stop Center means the One-Stop 

Center system in a WIA local area which 

must include a comprehensive OneStop Center through which One-Stop 

partners provide applicable core 

services and which provides access to 

other programs and services carried out 

by the One-Stop partners. (See WIA 

§ 134(c)(2)). 

One-Stop delivery system means a 

system under which employment and 

training programs, services, and 

activities are available through a 

network of eligible One-Stop partners, 

which assures that information about 

and access to core services is available 

regardless of where the individuals 

initially enter the workforce investment 

system. (See WIA § 134(c)(2)). 

One-Stop partner means an entity 

described in § 121(b)(1) of the 

Workforce Investment Act, i.e., required 

partners, or an entity described in 

§ 121(b)(2) of the Workforce Investment 

Act, i.e., additional partners. 

Other participant (enrollee) costs 

means the costs of participant training, 

including the payment of reasonable 

costs to instructors, classroom rental, 

training supplies, materials, equipment, 

and tuition, and which may be provided 

before or during a community service 

assignment, in a classroom setting, or 

under other appropriate arrangements; 

job placement assistance, including job 

development and job search assistance; 

participant supportive services to enable 

a participant to successfully participate 

in a project, including the payment of 

reasonable costs of transportation, 

health care and medical services, 

special job-related or personal 

counseling, incidentals (such as work 

shoes, badges, uniforms, eyeglasses, and 

tools), child and adult care, temporary 

shelter, and follow-up services; and 

outreach, recruitment and selection, 

intake orientation, and assessments. 

(OAA § 502(c)(6)(A)(ii)–(v)). 

Pacific Island and Asian Americans 

means Americans having origins in any 

of the original peoples of the Far East, 

Southeast Asia, the Indian 

Subcontinent, or the Pacific Islands. 

(OAA § 518(a)(5)). 

Participant means an individual who 

is determined to be eligible for the 

SCSEP, is given a community service 

assignment, and is receiving any service 

funded by the program as described in 

subpart E. 

Persistent unemployment means that 

the annual average unemployment rate 

for a county or city is more than 20 

percent higher than the national average 

for two out of the last three years. 

Poor employment prospects means 

the significant likelihood that an 

individual will not obtain employment 

without the assistance of the SCSEP or 

another workforce development 

program. Persons with poor 

employment prospects have a 

significant barrier to employment; 

significant barriers to employment 

include but are not limited to: lacking 

a substantial employment history, basic 

skills, and/or English-language 

proficiency; lacking a high school 

diploma or the equivalent; having a 

disability; being homeless; or residing in 

socially and economically isolated rural 

or urban areas where employment 

opportunities are limited. 

Program operator means a grantee or 

sub-recipient that receives SCSEP funds 

from a SCSEP grantee or a higher-tier 

SCSEP sub-recipient and performs the 

following activities for all its 

participants: Eligibility determination, 

participant assessment, and 

development of and placement into 

community service assignments. 

Program Year means the one-year 

period beginning on July 1 and ending 

on June 30. 

Project means an undertaking by a 

grantee or sub-recipient in accordance 

with a grant or contract agreement that 

provides service to communities and 

training and employment opportunities 

to eligible individuals. 

Recipient means grantee. As used 

here, ‘‘recipient’’ includes ‘‘recipient’’ as 

defined in 29 CFR 95.2(gg) and ‘‘grantee’’ 

as defined in 29 CFR 97.3. 

Residence means an individual’s 

declared dwelling place or address as 


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demonstrated by appropriate 

documentation. 

Rural means an area not designated as 

a metropolitan statistical area by the 

Census Bureau; segments within 

metropolitan counties identified by 

codes 4 through 10 in the Rural Urban 

Commuting Area (RUCA) system; and 

RUCA codes 2 and 3 for census tracts 

that are larger than 400 square miles and 

have population density of less than 30 

people per square mile. 

SCSEP means the Senior Community 

Service Employment Program 

authorized under title V of the OAA. 

Secretary means the Secretary of the 

U.S. Department of Labor. 

Service area means the geographic 

area served by a local SCSEP project in 

accordance with a grant agreement. 

Severe disability means a severe, 

chronic disability attributable to mental 

or physical impairment, or a 

combination of mental and physical 

impairments, that— 

(1) Is likely to continue indefinitely; 

and 

(2) Results in substantial functional 

limitation in 3 or more of the following 

areas of major life activity: 

(i) Self-care; 

(ii) Receptive and expressive 

language; 

(iii) Learning; 

(iv) Mobility; 

(v) Self-direction; 

(vi) Capacity for independent living; 

(vii) Economic self-sufficiency. 

(42 U.S.C. 3002(48)). 

Severely limited employment 

prospects means the substantial 

likelihood that an individual will not 

obtain employment without the 

assistance of the SCSEP or another 

workforce development program. 

Persons with severely limited 

employment prospects have more than 

one significant barrier to employment; 

significant barriers to employment may 

include but are not limited to: Lacking 

a substantial employment history, basic 

skills, and/or English-language 

proficiency; lacking a high school 

diploma or the equivalent; having a 

disability; being homeless; or residing in 

socially and economically isolated rural 

or urban areas where employment 

opportunities are limited. 

State Board means a State Workforce 

Investment Board established under 

WIA § 111. 

State grantee means the entity 

designated by the Governor, or the 

highest government official, to enter 

into a grant with the Department to 

administer a State or Territory SCSEP 

project under the OAA. Except as 

applied to funding distributions under 

§ 506 of the OAA, this definition applies 

to the 50 States, Puerto Rico, the District 

of Columbia and the following 

Territories: Guam, American Samoa, 

U.S. Virgin Islands, and the 

Commonwealth of the Northern Mariana 

Islands. 

State Plan means a plan that the 

Governor, or the highest government 

official, of a State must submit to the 

Secretary that outlines a four-year 

strategy, and describes the planning and 

implementation process, for the 

statewide provision of community 

service employment and other 

authorized activities for eligible 

individuals under SCSEP. (See 

§ 641.300). 

Sub-recipient means the legal entity to 

which a sub-award of financial 

assistance is made by the grantee (or by 

a higher-tier sub-recipient), and that is 

accountable to the grantee for the use of 

the funds provided. As used here, ‘‘subrecipient’’ includes ‘‘sub-grantee’’ as 

defined in 29 CFR 97.3 and ‘‘subrecipient’’ as defined in 29 CFR 95.2(kk). 

Supportive services means services, 

such as transportation, health and 

medical services, special job-related or 

personal counseling, incidentals (such 

as work shoes, badges, uniforms, eyeglasses, and tools), child and adult care, 

housing, including temporary shelter, 

follow up services, and needs-related 

payments, which are necessary to 

enable an individual to participate in 

activities authorized under the SCSEP. 

(OAA § 502(c)(6)(A)(iv) and 518(a)(7)). 

Title V of the OAA means 42 U.S.C. 

3056 et seq., as amended. 

Training services means those 

services authorized by WIA § 134(d)(4). 

Tribal organization means the 

recognized governing body of any 

Indian tribe, or any legally established 

organization of Indians which is 

controlled, sanctioned, or chartered by 

such governing body. (42 U.S.C. 

3002(54)). 

Unemployed means an individual 

who is without a job and who wants and 

is available for work, including an 

individual who may have occasional 

employment that does not result in a 

constant source of income. (OAA 

518(a)(8)). 

Veteran means an individual who is 

a ‘‘covered person’’ for purposes of the 

Jobs for Veterans Act, 38 U.S.C. 

4215(a)(1). 

Workforce Investment Act (WIA) 

means the Workforce Investment Act of 

1998 (Pub. L. 105–220 (Aug. 7, 1998)), 

29 U.S.C. 2801 et seq., as amended. 

Workforce Investment Act (WIA) 

regulations means regulations at 20 CFR 

part 652, subpart D and parts 660–671. 

Subpart B—Coordination With the 

Workforce Investment Act 

§ 641.200 What is the relationship between 

the SCSEP and the Workforce Investment 

Act? 

The SCSEP is a required partner 

under the Workforce Investment Act. As 

such, it is a part of the One-Stop 

delivery system. When acting in their 

capacity as WIA partners, SCSEP 

grantees and sub-recipients are required 

to follow all applicable rules under WIA 

and its regulations. (29 U.S.C. 

2841(b)(1)(B)(vi) and 20 CFR 662.200 

through 662.280). 

§ 641.210 What services, in addition to the 

applicable core services, must SCSEP 

grantees and sub-recipients provide 

through the One-Stop delivery system? 

In addition to providing core services, 

as defined at 20 CFR 662.240 of the WIA 

regulations, SCSEP grantees and subrecipients must make arrangements 

through the One-Stop delivery system to 

provide eligible and ineligible 

individuals with referrals to WIA 

intensive and training services and 

access to other activities and programs 

carried out by other One-Stop partners. 

§ 641.220 Does title I of WIA require the 

SCSEP to use OAA funds for individuals 

who are not eligible for SCSEP services or 

for services that are not authorized under 

the OAA? 

No, SCSEP requirements continue to 

apply. Title V resources may not be 

used to serve individuals who are not 

SCSEP-eligible. The Workforce 

Investment Act creates a seamless 

service delivery system for individuals 

seeking workforce development services 

by linking the One-Stop partners in the 

One-Stop delivery system. Although the 

overall effect is to provide universal 

access to core services, SCSEP resources 

may only be used to provide services 

that are authorized and provided under 

the SCSEP to eligible individuals. Note, 

however, that one allowable SCSEP cost 

is a SCSEP project’s proportionate share 

of One-Stop costs. See § 641.850(d). 

Title V funds can be used to pay wages 

to SCSEP participants receiving 

intensive and training services under 

title I of WIA provided that the SCSEP 

participants have each received a 

community service assignment. All 

other individuals who are in need of the 

services provided under the SCSEP, but 

who do not meet the eligibility criteria 

to enroll in the SCSEP, should be 

referred to or enrolled in WIA or other 

appropriate partner programs. WIA 

§ 121(b)(1). These arrangements should 

be negotiated in the Memorandum of 

Understanding (MOU), which is an 

agreement developed and executed 


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between the Local Workforce 

Investment Board, with the agreement of 

the chief local elected official, and the 

One-Stop partners relating to the 

operation of the One-Stop delivery 

system in the local area. The MOU is 

further described in the WIA regulations 

at 20 CFR §§ 662.300 and 662.310. 

§ 641.230 Must the individual assessment 

conducted by the SCSEP grantee or subrecipient and the assessment performed by 

the One-Stop delivery system be accepted 

for use by either entity to determine the 

individual’s need for services in the SCSEP 

and adult programs under title I–B of WIA? 

Yes, § 502(b)(3) of the OAA provides 

that an assessment or IEP completed by 

the SCSEP satisfies any condition for an 

assessment, service strategy, or IEP 

completed at the One-Stop and viceversa. (OAA § 502(b)(3)). These 

reciprocal arrangements and the 

contents of the SCSEP IEP and WIA IEP 

should be negotiated in the MOU. 

§ 641.240 Are SCSEP participants eligible 

for intensive and training services under 

title I of WIA? 

(a) Although SCSEP participants are 

not automatically eligible for intensive 

and training services under title I of 

WIA, local boards may deem SCSEP 

participants, either individually or as a 

group, as satisfying the requirements for 

receiving adult intensive and training 

services under title I of WIA. 

(b) SCSEP participants who have been 

assessed and for whom an IEP has been 

developed have received an intensive 

service under 20 CFR 663.240(a) of the 

WIA regulations. In order to enhance 

skill development related to the IEP, it 

may be necessary to provide training 

beyond the community service 

assignment to enable participants to 

meet their unsubsidized employment 

objectives. The SCSEP grantee or subrecipient, the host agency, the WIA 

program, or another One-Stop partner 

may provide training as appropriate and 

as negotiated in the MOU. (See 

§ 641.540 for a further discussion of 

training for SCSEP participants.) 

Subpart C—The State Plan 

§ 641.300 What is the State Plan? 

The State Plan is a plan, submitted by 

the Governor, or the highest government 

official, in each State, as an independent 

document or as part of the WIA Unified 

Plan, that outlines a four-year strategy 

for the statewide provision of 

community service employment and 

other authorized activities for eligible 

individuals under the SCSEP as 

described in § 641.302. The State Plan 

also describes the planning and 

implementation process for SCSEP 

services in the State, taking into account 

the relative distribution of eligible 

individuals and employment 

opportunities within the State. The 

State Plan is intended to foster 

coordination among the various SCSEP 

grantees and sub-recipients operating 

within the State and to facilitate the 

efforts of stakeholders, including State 

and local boards under WIA, to work 

collaboratively through a participatory 

process to accomplish the SCSEP’s 

goals. (OAA § 503(a)(1)). The State Plan 

provisions are listed in § 641.325. 

§ 641.302 What is a four-year strategy? 

The State Plan must outline a fouryear strategy for the statewide provision 

of community service employment and 

other authorized activities for eligible 

individuals under the SCSEP program. 

(OAA § 503(a)(1)). The four-year strategy 

must specifically address the following: 

(a) The State’s long-term strategy for 

achieving an equitable distribution of 

SCSEP positions within the State that: 

(1) Moves positions from over-served 

to underserved locations within the 

State, under § 641.365; 

(2) Equitably serves rural and urban 

areas; and 

(3) Serves individuals afforded 

priority for service, pursuant to 

§ 641.520; 

(b) The State’s long-term strategy for 

avoiding disruptions to the program 

when new Census or other reliable data 

become available, or when there is overenrollment for any other reason; 

(c) The State’s long-term strategy for 

serving minority older individuals 

under SCSEP; 

(d) Long-term projections for job 

growth in industries and occupations in 

the State that may provide employment 

opportunities for older workers, and 

how those relate to the types of 

unsubsidized jobs for which SCSEP 

participants will be trained, and the 

types of skill training to be provided; 

(e) The State’s long-term strategy for 

engaging employers to develop and 

promote opportunities for the placement 

of SCSEP participants in unsubsidized 

employment; 

(f) The State’s strategy for continuous 

improvement in the level of 

performance for entry into unsubsidized 

employment, and to achieve, at a 

minimum, the levels specified in 

§ 513(a)(2)(E)(ii) of the OAA; 

(g) Planned actions to coordinate 

activities of SCSEP grantees with the 

activities being carried out in the State 

under title I of WIA, including plans for 

using the WIA One-Stop delivery 

system and its partners to serve 

individuals aged 55 and older; 

(h) Planned actions to coordinate 

activities of SCSEP grantees with the 

activities being carried out in the State 

under other titles of the OAA; 

(i) Planned actions to coordinate the 

SCSEP with other public and private 

entities and programs that provide 

services to older Americans, such as 

community and faith-based 

organizations, transportation programs, 

and programs for those with special 

needs or disabilities; 

(j) Planned actions to coordinate the 

SCSEP with other labor market and job 

training initiatives; and 

(k) The State’s long-term strategy to 

improve SCSEP services, including 

planned longer-term changes to the 

design of the program within the State, 

and planned changes in the use of 

SCSEP grantees and program operators 

to better achieve the goals of the 

program; this may include 

recommendations to the Department, as 

appropriate. 

§ 641.305 Who is responsible for 

developing and submitting the State Plan? 

The Governor, or the highest 

governmental official, of each State is 

responsible for developing and 

submitting the State Plan to the 

Department. 

§ 641.310 May the Governor, or the highest 

government official, delegate responsibility 

for developing and submitting the State 

Plan? 

(a) Yes, the Governor, or the highest 

governmental official of each State, may 

delegate responsibility for developing 

and submitting the State Plan, provided 

that any such delegation is consistent 

with State law and regulations. 

(b) To delegate responsibility, the 

Governor, or the highest government 

official, must submit to the Department 

a signed statement indicating the 

individual and/or organization that will 

be submitting the State Plan on his or 

her behalf. 

§ 641.315 Who participates in developing 

the State Plan? 

(a) In developing the State Plan the 

Governor, or the highest government 

official, must seek the advice and 

recommendations of representatives 

from: 

(1) The State and area agencies on 

aging; 

(2) State and local boards under the 

Workforce Investment Act (WIA); 

(3) Public and private nonprofit 

agencies and organizations providing 

employment services, including each 

grantee operating a SCSEP project 

within the State, except as provided in 

§ 641.320(b); 


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(4) Social service organizations 

providing services to older individuals; 

(5) Grantees under title III of the OAA; 

(6) Affected communities; 

(7) Unemployed older individuals; 

(8) Community-based organizations 

serving older individuals; 

(9) Business organizations; and 

(10) Labor organizations. 

(b) The Governor, or the highest 

government official, may also obtain the 

advice and recommendations of other 

interested organizations and 

individuals, including SCSEP program 

participants, in developing the State 

Plan. (OAA § 503(a)(2)). 

§ 641.320 Must all national grantees 

operating within a State participate in the 

State planning process? 

(a) The eligibility provision at OAA 

§ 514(c)(6) requires national grantees to 

coordinate activities with other 

organizations at the State and local 

levels. Therefore, except as provided in 

paragraph (b) of this section, any 

national grantee that does not 

participate in the State planning process 

may be deemed ineligible to receive 

SCSEP funds in the following Program 

Year. 

(b) National grantees serving older 

American Indians, or Pacific Island and 

Asian Americans, with funds reserved 

under OAA § 506(a)(3), are exempted 

from the requirement to participate in 

the State planning processes under 

§ 503(a)(8) of the OAA. Although these 

national grantees may choose not to 

participate in the State planning 

process, the Department encourages 

their participation. Only those grantees 

using reserved funds are exempt; if a 

grantee is awarded one grant with 

reserved funds and another grant with 

non-reserved funds, the grantee is 

required under paragraph (a) of this 

section to participate in the State 

planning process for purposes of the 

non-reserved funds grant. 

§ 641.325 What information must be 

provided in the State Plan? 

The Department issues instructions 

detailing the information that must be 

provided in the State Plan. At a 

minimum, the State Plan must include 

the State’s four-year strategy, as 

described in § 641.302, and information 

on the following: 

(a) The ratio of eligible individuals in 

each service area to the total eligible 

population in the State; 

(b) The relative distribution of: 

(1) Eligible individuals residing in 

urban and rural areas within the State; 

(2) Eligible individuals who have the 

greatest economic need; 

(3) Eligible individuals who are 

minorities; 

(4) Eligible individuals who are 

limited English proficient; and 

(5) Eligible individuals who have the 

greatest social need; 

(c) The current and projected 

employment opportunities in the State 

(such as by providing information 

available under § 15 of the WagnerPeyser Act (29 U.S.C. 491–2) by 

occupation), and the types of skills 

possessed by eligible individuals; 

(d) The localities and populations for 

which projects of the type authorized by 

title V are most needed; 

(e) Actions taken and/or planned to 

coordinate activities of SCSEP grantees 

in the State with activities carried out in 

the State under title I of WIA; 

(f) A description of the process used 

to obtain advice and recommendations 

on the State Plan from representatives of 

organizations and individuals listed in 

§ 641.315, and advice and 

recommendations on steps to coordinate 

SCSEP services with activities funded 

under title I of WIA from representatives 

of organizations listed in § 641.335; 

(g) A description of the State’s 

procedures and time line for ensuring 

an open and inclusive planning process 

that provides meaningful opportunity 

for public comment as required by 

§ 641.350; 

(h) Public comments received, and a 

summary of the comments; 

(i) A description of the steps taken to 

avoid disruptions to the greatest extent 

possible as provided in § 641.365; and 

(j) Such other information as the 

Department may require in the State 

Plan instructions. (OAA § 503(a)). 

§ 641.330 How should the State Plan 

reflect community service needs? 

The Governor, or the highest 

government official, must ensure that 

the State Plan identifies the types of 

community services that are needed and 

the places where these services are most 

needed. The State Plan should 

specifically identify the needs and 

locations of those individuals most in 

need of community services and the 

groups working to meet their needs. 

(OAA § 503(a)(4)(E)). 

§ 641.335 How should the Governor, or the 

highest government official, address the 

coordination of SCSEP services with 

activities funded under title I of WIA? 

The Governor, or the highest 

government official, must seek the 

advice and recommendations from 

representatives of the State and area 

agencies on aging in the State and the 

State and local boards established under 

title I of WIA. (OAA § 503(a)(2)). The 

State Plan must describe the steps that 

are being taken to coordinate SCSEP 

activities within the State with activities 

being carried out under title I of WIA. 

(OAA § 503(a)(4)(F)). The State Plan 

must describe the steps being taken to 

ensure that the SCSEP is an active 

partner in each One-Stop delivery 

system and the steps that will be taken 

to encourage and improve coordination 

with the One-Stop delivery system. 

§ 641.340 How often must the Governor, or 

the highest government official, update the 

State Plan? 

(a) Under instructions issued by the 

Department, the Governor, or the 

highest government official, must 

review the State Plan and submit an 

update to the State Plan to the Secretary 

for consideration and approval not less 

often than every two years. OAA 

§ 503(a)(1). States are encouraged to 

review their State Plan more frequently 

than every two years, however, and 

make modifications as circumstances 

warrant, under § 641.345. 

(b) Before development of the update 

to the State Plan, the Governor, or the 

highest government official, must seek 

the advice and recommendations of the 

individuals and organizations identified 

in § 641.315 about what, if any, changes 

are needed, and must publish the State 

Plan, showing the changes, for public 

comment. OAA § section 503(a)(2), 

503(a)(3). 

§ 641.345 What are the requirements for 

modifying the State Plan? 

(a) Modifications may be submitted 

anytime circumstances warrant. 

(b) Modifications to the State Plan are 

required when: 

(1) There are changes in Federal or 

State law or policy that substantially 

change the assumptions upon which the 

State Plan is based; 

(2) There are significant changes in 

the State’s vision, four-year strategy, 

policies, performance indicators, or 

organizational responsibilities; or 

(3) There is a change in a grantee or 

grantees. 

(c) Modifications to the State Plan are 

subject to the same public comment 

requirements that apply to the 

development of the State Plan under 

§ 641.350. 

(d) States are not required to seek the 

advice and recommendations of the 

individuals and organizations identified 

in § 641.315 when modifying the State 

Plan, except that States must seek the 

advice and recommendations of any 

national grantees operating in the State. 

While not required, states are strongly 

encouraged to seek the advice and 

recommendation of the relevant entities 

listed in § 641.315 when or if modifying 

the State Plan becomes necessary. 


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(e) The Department will issue 

additional instructions for the 

procedures that must be followed when 

requesting modifications to the State 

Plan. 

§ 641.350 How should public comments be 

solicited and collected? 

The Governor, or the highest 

government official, should follow 

established State procedures to solicit 

and collect public comments. The State 

Plan must include a description of the 

State’s procedures and schedule for 

ensuring an open and inclusive 

planning process that provides 

meaningful opportunity for public 

comment. 

§ 641.355 Who may comment on the State 

Plan? 

Any individual or organization may 

comment on the Plan. 

§ 641.360 How does the State Plan relate 

to the equitable distribution report? 

The two documents address some of 

the same areas, but are prepared at 

different points in time. The equitable 

distribution report is prepared by State 

grantees at the beginning of each fiscal 

year and provides a ‘‘snapshot’’ of the 

actual distribution of all of the 

authorized positions within the State, 

grantee-by-grantee, and the optimum 

number of participant positions in each 

designated area based on the latest 

available Census or other reliable data. 

The State Plan is prepared by the 

Governor, or the highest government 

official, and covers many areas in 

addition to equitable distribution, as 

discussed in § 641.325, and sets forth a 

proposed plan for distribution of 

authorized positions in the State. Any 

distribution or redistribution of 

positions made as a result of a State 

Plan proposal will be reflected in the 

next equitable distribution report, 

which then forms the basis for the 

proposed distribution in the next State 

Plan update. This process is iterative in 

that it moves the authorized positions 

from overserved areas to underserved 

areas over a period of time. 

§ 641.365 How must the equitable 

distribution provisions be reconciled with 

the provision that disruptions to current 

participants should be avoided? 

(a) Governors, or highest government 

officials, must describe in the State Plan 

the steps that are being taken to comply 

with the statutory requirement to avoid 

disruptions in the provision of services 

for participants. (OAA § 503(a)(6)). 

(b) When there is new Census or other 

reliable data indicating that there has 

been a shift in the location of the 

eligible population or when there is 

over-enrollment for any other reason, 

the Department recommends a gradual 

shift in positions as they become vacant 

to areas where there has been an 

increase in the eligible population. 

(c) The Department does not define 

disruptions to mean that participants 

are entitled to remain in a subsidized 

community service assignment 

indefinitely. As discussed in § 641.570, 

there is a time limit on SCSEP 

participation, thus permitting positions 

to be transferred over time. 

(d) Grantees and sub-recipients must 

not transfer positions from one 

geographic area to another without first 

notifying the State agency responsible 

for preparing the State Plan and 

equitable distribution report. 

(e) Grantees must submit, in writing, 

any proposed changes in distribution 

that occur after submission of the 

equitable distribution report to the 

Department for approval. 

(f) All grantees are required to 

coordinate any proposed changes in 

position distribution with the other 

grantees in the State, including the State 

project director, before submitting the 

proposed changes to the Department for 

approval. The request for the 

Department’s approval must include the 

comments of the State project director, 

which the Department will consider in 

making its decision. 

Subpart D—Grant Application and 

Responsibility Review Requirements 

for State and National SCSEP Grants 

§ 641.400 What entities are eligible to 

apply to the Department for funds to 

administer SCSEP projects? 

(a) National Grants. Entities eligible to 

apply for national grants include 

nonprofit organizations, Federal public 

agencies, and tribal organizations. These 

entities must provide information to 

establish that they are capable of 

administering a multi-State program, as 

required by the Secretary. State and 

local agencies may not apply for these 

funds. 

(b) State Grants. 

(1) Section 506(e) of the OAA requires 

the Department to award each State a 

grant to provide SCSEP services. 

Governors, or highest government 

officials, designate an individual State 

agency as the organization to administer 

SCSEP funds. 

(2) If the State fails to meet its 

expected levels of performance for the 

core indicators for three consecutive 

years, it is not eligible to designate an 

agency to administer SCSEP funds in 

the following year. Instead, the State 

must conduct a competition to select an 

organization as the grantee of the funds 

allotted to the State under § 506(e). 

Public and nonprofit private agencies 

and organizations, State agencies other 

than the previously designated, failed 

agency, and tribal organizations, are 

eligible to be selected as a grantee for 

the funds. Other States may not be 

selected as a grantee for this funding. 

§ 641.410 How does an eligible entity 

apply? 

(a) General. An eligible entity must 

follow the application guidelines issued 

by the Department. The Department will 

issue application guidelines announcing 

the availability of national funds and 

State funds, whether they are awarded 

on a competitive or noncompetitive 

basis. The guidelines will contain 

application due dates, application 

instructions, evaluation criteria, and 

other necessary information. 

(b) National Grant Applicants. All 

applicants for SCSEP national grant 

funds, except for applications for grants 

proposing to serve older Indians and 

Pacific Island and Asian Americans 

with funds reserved under OAA 

§ 506(a)(3), must submit their 

applications to the Governor, or the 

highest government official, of each 

State in which projects are proposed so 

that he or she has a reasonable 

opportunity to make the 

recommendations described in 

§ 641.480, before submitting the 

application to the Department. (OAA 

§ 503(a)(5)). 

(c) State Applicants. A State that 

submits a Unified Plan under § 501 of 

WIA may include the State’s SCSEP 

grant application in its Unified Plan. 

Any State that submits a SCSEP grant 

application as part of its WIA Unified 

Plan must address all of the application 

requirements as published in the 

Department’s instructions. Sections 

641.300 through 641.365 address State 

Plans and modifications. 

§ 641.420 What are the eligibility criteria 

that each applicant must meet? 

To be eligible to receive SCSEP funds, 

each applicant must demonstrate: 

(a) An ability to administer a program 

that serves the greatest number of 

eligible participants, giving particular 

consideration to individuals with 

greatest economic need, individuals 

with greatest social need, and 

individuals described in § 641.570(b) or 

§ 641.520(a)(2) through (a)(8). 

(b) An ability to administer a program 

that provides employment in 

community service assignments for 

eligible individuals in communities in 

which they reside, or in nearby 

communities, that will contribute to the 

general welfare of the community; 


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(c) An ability to administer a program 

that moves eligible participants into 

unsubsidized employment; 

(d) Where the applicant has 

previously received a SCSEP grant, the 

applicant’s prior performance in 

meeting SCSEP core measures of 

performance and addressing SCSEP 

additional measures of performance; 

and where the applicant has not 

received a SCSEP grant, the applicant’s 

prior performance under other Federal 

or State programs; relevant past 

performance will also be used for 

scoring criterion and will be set forth 

more fully in the Solicitation for Grant 

Applications (see § 641.460); 

(e) An ability to move participants 

with multiple barriers to employment, 

including individuals described in 

§ 641.570(b) or § 641.520(a)(2) through 

(a)(8), into unsubsidized employment; 

(f) An ability to coordinate activities 

with other organizations at the State and 

local levels, including the One-Stop 

delivery system; 

(g) An ability to properly manage the 

program, as reflected in its plan for 

fiscal management of the SCSEP; 

(h) An ability to administer a project 

that provides community service; 

(i) An ability to minimize program 

disruption for current participants and 

in community services provided if there 

is a change in project sponsor and/or 

location, and its plan for minimizing 

disruptions; 

(j) Any additional criteria that the 

Department deems appropriate to 

minimize disruptions for current 

participants. (OAA § 514(c)). 

§ 641.430 What are the responsibility 

conditions that an applicant must meet? 

Subject to § 641.440, each applicant 

must meet the listed responsibility 

‘‘tests’’ by not having committed the 

following acts: 

(a) The Department has been unable 

to recover a debt from the applicant, 

whether incurred by the applicant or by 

one of its sub-recipients, or the 

applicant has failed to comply with a 

debt repayment plan to which it agreed. 

In this context, a debt is established by 

final agency action, followed by three 

demand letters to the applicant, without 

payment in full by the applicant. 

(b) Established fraud or criminal 

activity of a significant nature within 

the applicant’s organization. 

(c) Serious administrative deficiencies 

identified by the Department, such as 

failure to maintain a financial 

management system as required by 

Federal regulations. 

(d) Willful obstruction of the auditing 

or monitoring process. 

(e) Failure to provide services to 

applicants as agreed to in a current or 

recent grant or to meet applicable core 

performance measures or address other 

applicable indicators of performance. 

(f) Failure to correct deficiencies 

brought to the grantee’s attention in 

writing as a result of monitoring 

activities, reviews, assessments, or other 

activities. 

(g) Failure to return a grant closeout 

package or outstanding advances within 

90 days after the grant expiration date 

or receipt of closeout package, 

whichever is later, unless an extension 

has been requested and granted. 

(h) Failure to submit required reports. 

(i) Failure to properly report and 

dispose of Government property as 

instructed by the Department. 

(j) Failure to have maintained 

effective cash management or cost 

controls resulting in excess cash on 

hand. 

(k) Failure to ensure that a subrecipient complies with applicable audit 

requirements, including OMB Circular 

A–133 and the audit requirements 

specified at § 641.821. 

(l) Failure to audit a sub-recipient 

within the period required under 

§ 641.821. 

(m) Final disallowed costs in excess 

of five percent of the grant or contract 

award if, in the judgment of the Grant 

Officer, the disallowances are egregious 

findings. 

(n) Failure to establish a mechanism 

to resolve a sub-recipient’s audit in a 

timely fashion. (OAA § 514(d)(4)). 

§ 641.440 Are there responsibility 

conditions that alone will disqualify an 

applicant? 

(a) Yes, an applicant may be 

disqualified if 

(1) Either of the first two 

responsibility tests, a or b, listed in 

§ 641.430 is not met, or 

(2) The applicant substantially, or 

persistently for two or more consecutive 

years, fails one of the other 

responsibility tests listed in § 641.430. 

(b) The second responsibility test 

addresses ‘‘fraud or criminal activity of 

a significant nature.’’ The Department 

will determine the existence of 

significant fraud or criminal activity 

which typically will include willful or 

grossly negligent disregard for the use or 

handling of, or other fiduciary duties 

concerning, Federal funding, where the 

grantee has no effective systems, checks, 

or safeguards to detect or prevent fraud 

or criminal activity. Additionally, 

significant fraud or criminal activity 

will typically include coordinated 

patterns or behaviors that pervade a 

grantee’s administration or are 

committed by the higher levels of a 

grantee’s management or authority. The 

Department will determine whether 

‘‘fraud or criminal activity of a 

significant nature’’ has occurred on a 

case-by-case basis, regardless of what 

party identifies the alleged fraud or 

criminal activity. 

§ 641.450 How will the Department 

examine the responsibility of eligible 

entities? 

The Department will review available 

records to assess each applicant’s 

overall fiscal and administrative ability 

to manage Federal funds. The 

Department’s responsibility review may 

consider all relevant information, 

including the organization’s history of 

managing other grants awarded by the 

Department or by other Federal 

agencies. (OAA § 514(d)(1) and (d)(2)). 

§ 641.460 What factors will the Department 

consider in selecting national grantees? 

The Department will select national 

grantees from among applicants that are 

able to meet the eligibility and 

responsibility review criteria at § 514 of 

the OAA. (Section 641.420 contains the 

eligibility criteria and §§ 641.430 and 

641.440 contain the responsibility 

criteria.) The Department also will take 

the rating criteria described in the 

Solicitation for Grant Applications or 

other instrument into consideration. 

These rating criteria will include 

relevant past performance. 

§ 641.465 Under what circumstances may 

the Department reject an application? 

(a) The Department may question any 

proposed project component of an 

application if it believes that the 

component will not serve the purposes 

of the SCSEP. The Department may 

reject the application if the applicant 

does not submit or negotiate an 

acceptable alternative. 

(b) The Department may reject any 

application that the Grant Officer 

determines unacceptable based on the 

content of the application, rating score, 

past performance, fiscal management, or 

any other factor the Grant Officer 

believes serves the best interest of the 

program, including the application’s 

comparative rating in a competition. 

§ 641.470 What happens if an applicant’s 

application is rejected? 

(a) Any entity whose application is 

rejected in whole or in part will be 

informed that it has not been selected. 

The non-selected entity may request an 

explanation of the Department’s basis 

for its rejection. If requested, the 

Department will provide the entity with 

feedback on its proposal. The nonselected entity may follow the 

procedures in § 641.900. 


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(b) Incumbent grantees will not have 

an opportunity to obtain technical 

assistance provided by the Department 

under OAA § 513(d)(2)(B)(i) to cure, in 

an open competition, any deficiency in 

a proposal because that will create 

inequity in favor of incumbents. Nor, 

during an open competition, will the 

Department provide assistance to any 

applicant to improve its application. 

(c) If the Administrative Law Judge 

(ALJ) rules, under § 641.900, that the 

organization should have been selected, 

in whole or in part, the matter must be 

remanded to the Grant Officer. The 

Grant Officer must, within 10 working 

days, determine whether the 

organization continues to meet the 

requirements of this part, and whether 

the positions which are the subject of 

the ALJ’s decision will be awarded, in 

whole or in part, to the organization and 

the timing of the award. In making this 

determination, the Grant Officer must 

take into account disruption to 

participants, disruption to grantees, and 

the operational needs of the SCSEP. 

(d) In the event that the Grant Officer 

determines that it is not feasible to 

award any positions to the appealing 

applicant, the applicant will be awarded 

its bid preparation costs, or a pro rata 

share of those costs if the Grant Officer’s 

finding applies to only a portion of the 

funds that would be awarded. If 

positions are awarded to the appealing 

applicant, that applicant is not entitled 

to the full grant amount but will only 

receive the funds remaining in the grant 

that have not been expended by the 

current grantee through its operation of 

the grant and its subsequent closeout. 

The available remedy in a SCSEP nonselection appeal is neither retroactive 

nor immediately effective selection; 

rather it is the potential to be selected 

as a SCSEP grantee as quickly as 

administratively feasible in the future, 

for the remainder of the grant cycle. 

(e) In the event that any party notifies 

the Grant Officer that it is not satisfied 

with the Grant Officer’s decision, the 

Grant Officer must return the decision 

to the ALJ for review. 

(f) Any organization selected and/or 

funded as a SCSEP grantee is subject to 

having its positions reduced or to being 

removed as a SCSEP grantee if an ALJ 

decision so orders. The Grant Officer 

provides instructions on transition and 

closeout to both the newly designated 

grantee and to the grantee whose 

positions are affected or which is being 

removed. All parties must agree to the 

provisions of this paragraph as a 

condition of being a SCSEP grantee. 

§ 641.480 May the Governor, or the highest 

government official, make 

recommendations to the Department on 

national grant applications? 

(a) Yes, in accordance with 

§ 641.410(b), each Governor, or highest 

government official, will have a 

reasonable opportunity to make 

comments on any application to operate 

a SCSEP project located in the 

Governor’s, or the highest government 

official’s, State before the Department 

makes a final decision on a grant award. 

The Governor’s, or the highest 

government official’s, comments should 

be directed to the Department and may 

include the anticipated effect of the 

proposal on the overall distribution of 

program positions within the State; 

recommendations for redistribution of 

positions to underserved areas as 

vacancies occur in previously 

encumbered positions in other areas; 

and recommendations for distributing 

any new positions that may become 

available as a result of an increase in 

funding for the State. The Governor’s, or 

the highest government official’s, 

recommendations should be consistent 

with the State Plan. (OAA § 503(a)(5)). 

(b) The Governor, or the highest 

government official, has the option of 

making the authorized 

recommendations on all applications or 

only on those applications proposed for 

award following the rating process. It is 

incumbent on each Governor, or the 

highest government official, to inform 

the Department of his or her intent to 

review the applications before or after 

the rating process. 

§ 641.490 When will the Department 

compete SCSEP grant awards? 

(a)(1) The Department will hold a full 

and open competition for national 

grants every four years. (OAA 

§ 514(a)(1)). 

(2) If a national grantee meets the 

expected level of performance for each 

of the core indicators for each of the 

four years, the Department may provide 

an additional one-year grant to the 

national grantee. (OAA § 514(a)(2)). 

§ 641.495 When must a State compete its 

SCSEP award? 

If a State grantee fails to meet its 

expected levels of performance for three 

consecutive Program Years, the State 

must hold a full and open competition, 

under such conditions as the Secretary 

may provide, for the State SCSEP funds 

for the full Program Year following the 

determination of consecutive failure. 

(OAA § 513(d)(3)(B)(iii)). The 

incumbent (failed) grantee is not eligible 

to compete. Other states are also not 

eligible to compete for these funds. 

§ 641.400(b)(2). 

Subpart E—Services to Participants 

§ 641.500 Who is eligible to participate in 

the SCSEP? 

Anyone who is at least 55 years old, 

unemployed (as defined in § 641.140), 

and who is a member of a family with 

an income that is not more than 125 

percent of the family income levels 

prepared by the Department of Health 

and Human Services and approved by 

OMB (Federal poverty guidelines) is 

eligible to participate in the SCSEP. 

(OAA § 518(a)(3), (8)). A person with a 

disability may be treated as a ‘‘family of 

one’’ for income eligibility 

determination purposes at the option of 

the applicant. 

§ 641.505 When is eligibility determined? 

Initial eligibility is determined at the 

time individuals apply to participate in 

the SCSEP. Once individuals become 

SCSEP participants, the grantee or subrecipient is responsible for verifying 

their continued eligibility at least once 

every 12 months. Grantees and subrecipients may also verify an 

individual’s eligibility as circumstances 

require, including instances when 

enrollment is delayed. 

§ 641.507 How is applicant income 

computed? 

An applicant’s income is computed 

by calculating the includable income 

received by the applicant during the 12- 

month period ending on the date an 

individual submits an application to 

participate in the SCSEP, or the 

annualized income for the 6-month 

period ending on the application date. 

The Department requires grantees to use 

whichever method is more favorable to 

the individual. (OAA § 518(a)(4)). 

§ 641.510 What types of income are 

included and excluded for participant 

eligibility determinations? 

(a) With certain exceptions, the 

Department will use the definition of 

income from the U.S. Census Bureau’s 

Current Population Survey (CPS) as the 

standard for determining SCSEP 

applicant income eligibility. 

(b) Any income that is unemployment 

compensation, a benefit received under 

title XVI of the Social Security Act (42 

U.S.C. 1381 et seq.), a payment made to 

or on behalf of veterans or former 

members of the Armed Forces under the 

laws administered by the Secretary of 

Veterans Affairs, or 25 percent of a 

benefit received under title II of the 

Social Security Act (42 U.S.C. 401 et 

seq.), must be excluded from SCSEP 

income eligibility determinations. (OAA 

§ 518(a)(3)(A)). 

(c) The Department has issued 

administrative guidance on income 


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inclusions and exclusions and 

procedures for determining SCSEP 

income eligibility. This guidance may 

be updated periodically. 

§ 641.512 May grantees and sub-recipients 

enroll otherwise eligible job ready 

individuals and place them directly into 

unsubsidized employment? 

No, grantees and sub-recipients may 

not enroll as SCSEP participants jobready individuals who can be directly 

placed into unsubsidized employment. 

Such individuals should be referred to 

an employment provider, such as the 

One-Stop Center for job placement 

assistance under WIA or another 

employment program. 

§ 641.515 How must grantees and subrecipients recruit and select eligible 

individuals for participation in the SCSEP? 

(a) Grantees and sub-recipients must 

develop methods of recruitment and 

selection that assure that the maximum 

number of eligible individuals have an 

opportunity to participate in the 

program. To the extent feasible, grantees 

and sub-recipients should seek to enroll 

minority and Indian eligible 

individuals, eligible individuals with 

limited English proficiency, and eligible 

individuals with greatest economic 

need, at least in proportion to their 

numbers in the area, taking into 

consideration their rates of poverty and 

unemployment. (OAA § 502(b)(1)(M)). 

(b) Grantees and sub-recipients must 

use the One-Stop delivery system as one 

method in the recruitment and selection 

of eligible individuals to ensure that the 

maximum number of eligible 

individuals have an opportunity to 

participate in the project. (OAA 

§ 502(b)(1)(H)). 

(c) States may enter into agreements 

among themselves to permit crossborder enrollment of eligible 

participants. Such agreements should 

cover both State and national grantee 

positions and must be submitted to the 

Department for approval in the grant 

application or a modification of the 

grant. 

§ 641.520 Are there any priorities that 

grantees and sub-recipients must use in 

selecting eligible individuals for 

participation in the SCSEP? 

(a) Yes, in selecting eligible 

individuals for participation in the 

SCSEP, priority must be given to 

individuals who have one or more of the 

following characteristics: 

(1) Are 65 years of age or older; 

(2) Have a disability; 

(3) Have limited English proficiency 

or low literacy skills; 

(4) Reside in a rural area; 

(5) Are veterans (or, in some cases, 

spouses of veterans) for purposes of 

§ 2(a) of the Jobs for Veterans Act, 38 

U.S.C. 4215(a) as set forth in paragraph 

(b) of this section; 

(6) Have low employment prospects; 

(7) Have failed to find employment 

after using services provided through 

the One-Stop delivery system; or 

(8) Are homeless or are at risk for 

homelessness. 

(OAA § 518(b)). 

(b) Section 2(a) of the Jobs for 

Veterans Act creates a priority for 

service for veterans (and, in some cases, 

spouses of veterans) who otherwise 

meet the program eligibility criteria for 

the SCSEP. 38 U.S.C. 4215(a). Priority is 

extended to veterans. Priority is also 

extended to the spouse of a veteran who 

died of a service-connected disability; 

the spouse of a member of the Armed 

Forces on active duty who has been 

listed for a total of more than 90 days 

as missing in action, captured in the 

line of duty by a hostile force, or 

forcibly detained by a foreign 

government or power; the spouse of any 

veteran who has a total disability 

resulting from a service-connected 

disability; and the spouse of any veteran 

who died while a disability so evaluated 

was in existence. 

(c) Grantees and sub-recipients must 

apply these priorities in the following 

order: 

(1) Persons who qualify as a veteran 

or qualified spouse under § 2(a) of the 

Jobs for Veterans Act, 38 U.S.C. 4215(a), 

and who possess at least one of the 

other priority characteristics; 

(2) Persons who qualify as a veteran 

or qualified spouse under § 2(a) of the 

Jobs for Veterans Act, 38 U.S.C. 4215(a), 

who do not possess any other of the 

priority characteristics; 

(3) Persons who do not qualify as a 

veteran or qualified spouse under § 2(a) 

of the Jobs for Veterans Act (nonveterans), and who possess at least one 

of the other priority characteristics. 

§ 641.535 What services must grantees 

and sub-recipients provide to participants? 

(a) When individuals are selected for 

participation in the SCSEP, the grantee 

or sub-recipient is responsible for: 

(1) Providing orientation to the 

SCSEP, including information on 

project goals and objectives, community 

service assignments, training 

opportunities, available supportive 

services, the availability of a free 

physical examination, participant rights 

and responsibilities, and permitted and 

prohibited political activities; 

(2) (i) Assessing participants’ work 

history, skills and interests, talents, 

physical capabilities, aptitudes, needs 

for supportive services, occupational 

preferences, training needs, potential for 

performing community service 

assignments, and potential for transition 

to unsubsidized employment; 

(ii) Performing an initial assessment 

upon program entry, unless an 

assessment has already been performed 

under title I of WIA as provided in 

§ 641.230. Subsequent assessments may 

be made as necessary, but must be made 

no less frequently than two times during 

a twelve month period (including the 

initial assessment); 

(3)(i) Using the information gathered 

during the initial assessment to develop 

an IEP that includes an appropriate 

employment goal for each participant, 

except that if an assessment has already 

been performed and an IEP developed 

under title I of WIA, the WIA 

assessment and IEP will satisfy the 

requirement for a SCSEP assessment 

and IEP as provided in § 641.230; 

(ii) Updating the IEP as necessary to 

reflect information gathered during the 

subsequent participant assessments 

(OAA § 502(b)(1)(N)); 

(iii) The initial IEP should include an 

appropriate employment goal for each 

participant. Thereafter, if the grantee 

determines that the participant is not 

likely to obtain unsubsidized 

employment, the IEP must reflect other 

approaches to help the participant 

achieve self-sufficiency, including the 

transition to other services or programs. 

(4) Placing participants in appropriate 

community service assignments in the 

community in which they reside, or in 

a nearby community (OAA 

§ 502(b)(1)(B)); 

(5) Providing or arranging for training 

identified in participants’ IEPs and 

consistent with the SCSEP’s goal of 

unsubsidized employment (OAA 

§ 502(a)(1), 502(b)(1)(B), 502(b)(1)(I), 

502(b)(1)(N)(ii)); 

(6) Assisting participants in obtaining 

needed supportive services identified in 

their IEPs (OAA § 502(b)(1)(N)); 

(7) Providing appropriate services for 

participants, or referring participants to 

appropriate services, through the OneStop delivery system established under 

WIA (OAA § 502(b)(1)(O)); 

(8) Providing counseling on 

participants’ progress in meeting the 

goals and objectives identified in their 

IEPs, and in meeting their supportive 

service needs (OAA § 502(b)(1)(N)(iii)); 

(9) Providing participants with wages 

and benefits for time spent in the 

community service assignment, 

orientation, and training (OAA 

§ 502(b)(1)(I), 502(b)(1)(J), 

502(c)(6)(A)(i)) (see also §§ 641.565 and 

641.540(f), addressing wages and 

benefits); 

(10) Ensuring that participants have 

safe and healthy working conditions at 


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their community service employment 

worksites (OAA § 502(b)(1)(J)); 

(11) Assisting participants in 

obtaining unsubsidized employment, 

including providing or arranging for 

employment counseling in support of 

their IEPs; 

(b) The Department may issue 

administrative guidance that clarifies 

the requirements of paragraph (a). 

(c) Grantees may not use SCSEP funds 

for job ready individuals who only need 

job search assistance or job referral 

services. Grantees may provide job 

search assistance and job club activities 

to participants who are enrolled in the 

SCSEP and are assigned to community 

service assignments. (See also 

§ 641.512). 

§ 641.540 What types of training may 

grantees and sub-recipients provide to 

SCSEP participants in addition to the 

training received at a community service 

assignment? 

(a) In addition to the training 

provided in a community service 

assignment, grantees and sub-recipients 

may arrange skill training provided that 

it: 

(1) Is realistic and consistent with the 

participants’ IEP; 

(2) Makes the most effective use of the 

participant’s skills and talents; and 

(3) Prepares the participant for 

unsubsidized employment. 

(b) Training may be provided before 

or during a community service 

assignment. 

(c) Training may be in the form of 

lectures, seminars, classroom 

instruction, individual instruction, 

online instruction, on-the-job 

experiences. Training may be provided 

by the grantee or through other 

arrangements, including but not limited 

to, arrangements with other workforce 

development programs such as WIA. 

(OAA § 502(c)(6)(A)(ii)). 

(d) Grantees and sub-recipients are 

encouraged to obtain training through 

locally available resources, including 

host agencies, at no cost or reduced cost 

to the SCSEP. 

(e) Grantees and sub-recipients may 

pay for participant training, including 

the payment of reasonable costs of 

instructors, classroom rental, training 

supplies, materials, equipment, and 

tuition. (OAA § 502(c)(6)(A)(ii)). 

(f) Participants must be paid wages 

while in training, as described in 

§ 641.565(a). (OAA § 502(b)(1)(I)). 

(g) As provided in § 641.545, grantees 

and sub-recipients may pay for costs 

associated with supportive services, 

such as transportation, necessary to 

participate in training. (OAA 

§ 502(b)(1)(L)). 

(h) Nothing in this section prevents or 

limits participants from engaging in selfdevelopment training available through 

other sources, at their own expense, 

during hours when not performing their 

community service assignments. 

§ 641.545 What supportive services may 

grantees and sub-recipients provide to 

participants? 

(a) Grantees and sub-recipients are 

required to assess all participants’ need 

for supportive services and to make 

every effort to assist participants in 

obtaining needed supportive services. 

Grantees and sub-recipients may 

provide directly or arrange for 

supportive services that are necessary to 

enable an individual to successfully 

participate in a SCSEP project, 

including but not limited to payment of 

reasonable costs of transportation; 

health and medical services; special jobrelated or personal counseling; 

incidentals such as work shoes, badges, 

uniforms, eyeglasses, and tools; 

dependent care; housing, including 

temporary shelter; needs-related 

payments; and follow-up services. (OAA 

§§ 502(c)(6)(A)(iv), 518(a)(7)). 

(b) To the extent practicable, the 

grantee or sub-recipient should arrange 

for the payment of these expenses from 

other resources. 

(c) Grantees and sub-recipients are 

encouraged to contact placed 

participants throughout the first 12 

months following placement to 

determine if they have the necessary 

supportive services to remain in the job 

and to provide or arrange to provide 

such services if feasible. 

§ 641.550 What responsibility do grantees 

and sub-recipients have to place 

participants in unsubsidized employment? 

For those participants whose IEPs 

include a goal of unsubsidized 

employment, grantees and subrecipients are responsible for working 

with participants to ensure that the 

participants are receiving services and 

taking actions designed to help them 

achieve this goal. Grantees and subrecipients must contact private and 

public employers directly or through the 

One-Stop delivery system to develop or 

identify suitable unsubsidized 

employment opportunities. They must 

also encourage host agencies to assist 

participants in their transition to 

unsubsidized employment, including 

unsubsidized employment with the host 

agency. 

§ 641.565 What policies govern the 

provision of wages and benefits to 

participants? 

(a) Wages. 

(1)(i) Grantees and sub-recipients 

must pay participants the highest 

applicable required wage for time spent 

in orientation, training, and community 

service assignments. 

(ii) SCSEP participants may be paid 

the highest applicable required wage 

while receiving WIA intensive services. 

(2) The highest applicable required 

wage is either the minimum wage 

applicable under the Fair Labor 

Standards Act of 1938; the State or local 

minimum wage for the most nearly 

comparable covered employment; or the 

prevailing rate of pay for persons 

employed in similar public occupations 

by the same employer. 

(3) Grantees and sub-recipients must 

make any adjustments to minimum 

wage rates payable to participants as 

may be required by Federal, State, or 

local statute during the grant term. 

(b) Benefits. 

(1) Required benefits. Except as 

provided in paragraph (b)(2) of this 

section, grantees and sub-recipients 

must ensure that participants receive 

such benefits as are required by law. 

(i) Grantees and sub-recipients must 

provide benefits uniformly to all 

participants within a project or 

subproject, unless the Department 

agrees to waive this provision due to a 

determination that such a waiver is in 

the best interests of applicants, 

participants, and project administration. 

(ii) Grantees and sub-recipients must 

offer participants the opportunity to 

receive physical examinations annually. 

(A) Physical examinations are a 

benefit, and not an eligibility criterion. 

The examining physician must provide, 

to the participant only, a written report 

of the results of the examination. 

(B) Participants may choose not to 

accept the physical examination. In that 

case, the grantee or sub-recipient must 

document this refusal, through a signed 

statement, within 60 workdays after 

commencement of the community 

service assignment. Each year thereafter, 

grantees and sub-recipients must offer 

the physical examination and document 

the offer and any participant’s refusal. 

(C) Grantees and sub-recipients may 

use SCSEP funds to pay the costs of 

physical examinations. 

(iii) When participants are not 

covered by the State workers’ 

compensation law, the grantee or subrecipient must provide participants with 

workers’ compensation benefits equal to 

those provided by law for covered 

employment. OAA § 504(b). 

(iv) If required by State law, grantees/ 

sub-recipients must provide 

unemployment compensation coverage 

for participants. 


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(v) Grantees and sub-recipients must 

provide compensation for scheduled 

work hours during which a host 

agency’s business is closed for a Federal 

holiday, which may be paid or in the 

form of rescheduled work time. 

(vi) Grantees and sub-recipients must 

provide necessary sick leave that is not 

part of an accumulated sick leave 

program, which may be paid or in the 

form of rescheduled work time. 

(2) Prohibited wage and benefits costs. 

(i) Participants may not carry over 

allowable benefits from one Program 

Year to the next; 

(ii) Grantees and sub-recipients may 

not provide payment or otherwise 

compensate participants for unused 

benefits such as sick leave or holidays; 

(iii) Grantees and sub-recipients may 

not use SCSEP funds to cover costs 

associated with the following 

participant benefits: 

(A) Retirement. Grantees and subrecipients may not use SCSEP funds to 

provide contributions into a retirement 

system or plan, or to pay the cost of 

pension benefits for program 

participants. 

(B) Annual leave. 

(C) Accumulated sick leave. 

(D) Bonuses. 

(OAA § 502(c)(6)(A)(i)). 

§ 641.570 Is there a time limit for 

participation in the program? 

(a) Individual time limit. (1) Eligible 

individuals may participate in the 

program for a maximum duration of 48 

months in the aggregate (whether or not 

consecutive), from the later of July 1, 

2007, or the date of the individual’s 

enrollment in the program. 

(2) At the time of enrollment, the 

grantee or sub-recipient must inform the 

participant of this time limit and the 

possible extension available under 

paragraph (b) of this section, and the 

grantee or sub-recipient must provide 

for a system to transition participants to 

unsubsidized employment or other 

assistance before the maximum 

enrollment duration has expired. 

Provisions for transition must be 

reflected in the participant’s IEP. 

(3) If requested by a grantee or subrecipient, the Department will authorize 

an extension for individuals who meet 

the criteria in paragraph (b) of this 

section. Notwithstanding any individual 

extensions granted, grantees and subrecipients must ensure that projects do 

not exceed the overall average 

participation cap for all participants, as 

described in paragraph (c) of this 

section. 

(b) Increased periods of individual 

participation. If requested by a grantee, 

the Department will authorize increased 

periods of participation for individuals 

who: 

(1) Have a severe disability; 

(2) Are frail or are age 75 or older; 

(3) Meet the eligibility requirements 

related to age for, but do not receive, 

benefits under title II of the Social 

Security Act (42 U.S.C. 401 et seq.); 

(4) Live in an area with persistent 

unemployment and are individuals with 

severely limited employment prospects; 

or 

(5) Have limited English proficiency 

or low literacy skills. 

(c) Average grantee participation cap. 

(1) Notwithstanding any individual 

extension authorized under paragraph 

(b) of this section, each grantee must 

manage its SCSEP project in such a way 

that the grantee does not exceed an 

average participation cap for all 

participants of 27 months (in the 

aggregate). 

(2) A grantee may request, and the 

Department may authorize, an extended 

average participation period of up to 36 

months (in the aggregate) for a particular 

project area in a given Program Year if 

the Department determines that 

extenuating circumstances exist to 

justify an extension, due to one more of 

the following factors: 

(i) High rates of unemployment or of 

poverty or of participation in the 

program of block grants to States for 

temporary assistance for needy families 

established under part A of title IV of 

the Social Security Act, in the areas 

served by a grantee, relative to other 

areas of the State involved or the 

Nation; 

(ii) Significant downturns in the 

economy of an area served by the 

grantee or in the national economy; 

(iii) Significant numbers or 

proportions of participants with one or 

more barriers to employment, including 

‘‘most-in-need’’ individuals described in 

§ 641.710(a)(6), served by a grantee 

relative to such numbers or proportions 

for grantees serving other areas of the 

State or Nation; 

(iv) Changes in Federal, State, or local 

minimum wage requirements; or 

(v) Limited economies of scale for the 

provision of community service 

employment and other authorized 

activities in the areas served by the 

grantee. 

(3) For purposes of the average 

participation cap, each grantee will be 

considered to be one project. 

(d) Authorized break in participation. 

On occasion a participant takes an 

authorized break in participation from 

the program, such as a formal leave of 

absence necessitated by personal 

circumstances or a break caused because 

a suitable community service 

assignment is not available. Such an 

authorized break, if taken under a 

formal grantee policy allowing such 

breaks and formally entered into the 

SCSEP Performance and Results 

Quarterly Performance Reporting 

(SPARQ) system, will not count toward 

the individual time limit described in 

paragraph (a) or the average 

participation cap described in paragraph 

(c) of this section. 

(e) Administrative guidance. The 

Department will issue administrative 

guidance detailing the process by which 

a grantee may request increased periods 

of individual participation, and the 

process by which a grantee may request 

an extension of the average participation 

cap. The process will require that the 

determination of individual participant 

extension requests is made in a fair and 

equitable manner. 

(f) Grantee authority. Grantees may 

limit the time of participation for 

individuals to less than the 48 months 

described in paragraph (a) of this 

section, if the grantee uniformly applies 

the lower participation limit, and if the 

grantee submits a description of the 

lower participation limit policy in its 

grant application or modification of the 

grant and the Department approves the 

policy. (OAA §§ 502(b)(1)(C), 

518(a)(3)(B)). 

§ 641.575 May a grantee or sub-recipient 

establish a limit on the amount of time its 

participants may spend at a host agency? 

Yes, grantees and sub-recipients may 

establish limits on the amount of time 

that participants spend at a particular 

host agency, and are encouraged to 

rotate participants among different host 

agencies, or to different assignments 

within the same host agency, as such 

rotations may increase participants’ 

skills development and employment 

opportunities. Such limits must be 

established in the grant agreement or 

modification of the grant, and approved 

by the Department. The Department will 

not approve any limit that does not 

require an individualized determination 

that rotation is in the best interest of the 

participant and will further the 

acquisition of skills listed in the IEP. 

Host agency rotations have no effect on 

either the individual participation limit 

or the average participation cap. 

§ 641.577 Is there a limit on community 

service assignment hours? 

While there is no specific limit on the 

number of hours that may be worked in 

a community service assignment, a 

community service assignment must be 

a part-time position. However, the 

Department strongly encourages 

grantees to use 1,300 hours as a 


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benchmark and good practice for 

monitoring community service hours. 

§ 641.580 Under what circumstances may 

a grantee or sub-recipient terminate a 

participant? 

(a) If, at any time, a grantee or subrecipient determines that a participant 

was incorrectly declared eligible as a 

result of false information knowingly 

given by that individual, the grantee or 

sub-recipient must give the participant 

immediate written notice explaining the 

reason(s) for termination and may 

terminate the participant 30 days after it 

has provided the participant with 

written notice. 

(b) If, during eligibility verification 

under § 641.505, a grantee or subrecipient finds a participant to be no 

longer eligible for enrollment, the 

grantee or sub-recipient must give the 

participant written notice explaining the 

reason(s) for termination and may 

terminate the participant 30 days after it 

has provided the participant with 

written notice. 

(c) If, at any time, the grantee or subrecipient determines that it incorrectly 

determined a participant to be eligible 

for the program through no fault of the 

participant, the grantee or sub-recipient 

must give the participant immediate 

written notice explaining the reason(s) 

for termination and may terminate the 

participant 30 days after it has provided 

the participant with written notice. 

(d) A grantee or sub-recipient may 

terminate a participant for cause. 

Grantees must include their policies 

concerning for-cause terminations in the 

grant application and obtain the 

Department’s approval. The grantee or 

sub-recipient must give the participant 

written notice explaining the reason(s) 

for termination and may terminate the 

participant 30 days after it has provided 

the participant with written notice. 

(e) A grantee or sub-recipient may 

terminate a participant if the participant 

refuses to accept a reasonable number of 

job offers or referrals to unsubsidized 

employment consistent with the IEP and 

there are no extenuating circumstances 

that would hinder the participant from 

moving to unsubsidized employment. 

The grantee or sub-recipient must give 

the participant written notice explaining 

the reason(s) for termination and may 

terminate the participant 30 days after it 

has provided the participant with 

written notice. 

(f) When a grantee or sub-recipient 

makes an unfavorable determination of 

enrollment eligibility under paragraph 

(b) or (c) of this section, it should refer 

the individual to other potential sources 

of assistance, such as the One-Stop 

delivery system. When a grantee or subrecipient terminates a participant under 

paragraph (d) or (e) of this section, it 

may refer the individual to other 

potential sources of assistance, such as 

the One-Stop delivery system. 

(g) Grantees and sub-recipients must 

provide each participant at the time of 

enrollment with a written copy of its 

policies for terminating a participant for 

cause or otherwise, and must verbally 

review those policies with each 

participant. 

(h) Any termination, as described in 

paragraphs (a) through (e) of this 

section, must be consistent with 

administrative guidelines issued by the 

Department and the termination notice 

must inform the participant of the 

grantee’s grievance procedure, and the 

termination must be subject to the 

applicable grievance procedures 

described in § 641.910. 

(i) Participants may not be terminated 

from the program solely on the basis of 

their age. Grantees and sub-recipients 

may not impose an upper age limit for 

participation in the SCSEP. 

§ 641.585 What is the employment status 

of SCSEP participants? 

(a) Participants are not considered 

Federal employees solely as a result of 

their participation in the SCSEP. (OAA 

§ 504(a)). 

(b) Grantees must determine whether 

or not a participant qualifies as an 

employee of the grantee, sub-recipient, 

local project, or host agency, under 

applicable law. Responsibility for this 

determination rests with the grantee 

even when a Federal agency is a grantee 

or host agency. 

Subpart F—Pilot, Demonstration, and 

Evaluation Projects 

§ 641.600 What is the purpose of the pilot, 

demonstration, and evaluation projects 

authorized under § 502(e) of the OAA? 

The purpose of the pilot, 

demonstration, and evaluation projects 

authorized under § 502(e) of the OAA is 

to develop and implement techniques 

and approaches, and to demonstrate the 

effectiveness of these techniques and 

approaches, in addressing the 

employment and training needs of 

individuals eligible for SCSEP. 

§ 641.610 How are pilot, demonstration, 

and evaluation projects administered? 

The Department may enter into 

agreements with States, public agencies, 

nonprofit private organizations, or 

private business concerns, as may be 

necessary, to conduct pilot, 

demonstration, and evaluation projects. 

§ 641.620 How may an organization apply 

for pilot, demonstration, and evaluation 

project funding? 

Organizations applying for pilot, 

demonstration, and evaluation project 

funding must follow the instructions 

issued by the Department. Instructions 

for these unique funding opportunities 

are published in TEGLs available at 

http://www.doleta.gov/Seniors. 

§ 641.630 What pilot, demonstration, and 

evaluation project activities are allowable 

under § 502(e)? 

Allowable pilot, demonstration and 

evaluation projects include: 

(a) Activities linking businesses and 

eligible individuals, including activities 

providing assistance to participants 

transitioning from subsidized activities 

to private sector employment; 

(b) Demonstration projects and pilot 

projects designed to: 

(1) Attract more eligible individuals 

into the labor force; 

(2) Improve the provision of services 

to eligible individuals under One-Stop 

delivery systems established under title 

I of WIA; 

(3) Enhance the technological skills of 

eligible individuals; and 

(4) Provide incentives to SCSEP 

grantees for exemplary performance and 

incentives to businesses to promote 

their participation in the SCSEP; 

(c) Demonstration projects and pilot 

projects, as described in paragraph (b) of 

this section, for workers who are older 

individuals (but targeted to eligible 

individuals) only if such demonstration 

projects and pilot projects are designed 

to assist in developing and 

implementing techniques and 

approaches in addressing the 

employment and training needs of 

eligible individuals; 

(d) Provision of training and technical 

assistance to support a SCSEP project; 

(e) Dissemination of best practices 

relating to employment of eligible 

individuals; and 

(f) Evaluation of SCSEP activities. 

§ 641.640 Should pilot, demonstration, and 

evaluation project entities coordinate with 

SCSEP grantees and sub-recipients, 

including area agencies on aging? 

(a) To the extent practicable, the 

Department will provide an 

opportunity, before the development of 

a demonstration or pilot project, for the 

appropriate area agency on aging and 

SCSEP grantees and sub-grantees to 

submit comments on the project in 

order to ensure coordination of SCSEP 

activities with activities carried out 

under this subpart. 

(b) To the extent practicable, entities 

carrying out pilot, demonstration, and 

evaluation projects must consult with 


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appropriate area agencies on aging, 

SCSEP grantees and sub-grantees, and 

other appropriate agencies and entities 

to promote coordination of SCSEP and 

pilot, demonstration, and evaluation 

activities. (OAA § 502(e)). 

Subpart G—Performance 

Accountability 

§ 641.700 What performance measures/ 

indicators apply to SCSEP grantees? 

(a) Indicators of performance. There 

are currently eight performance 

measures, of which six are core 

indicators and two are additional 

indicators. Core indicators (defined in 

§ 641.710) are subject to goal-setting and 

corrective action (described in 

§ 641.720); that is, performance level 

goals for each core indicator must be 

agreed upon between the Department 

and each grantee before the start of each 

program year, and if a grantee fails to 

meet the performance level goals for the 

core indicators, that grantee is subject to 

corrective action. Additional indicators 

(defined in § 641.710) are not subject to 

goal-setting and are, therefore, also not 

subject to corrective action. 

(b) Core Indicators. Section 513(b)(1) 

of the 2006 OAA establishes the 

following core indicators of 

performance: 

(1) Hours (in the aggregate) of 

community service employment; 

(2) Entry into unsubsidized 

employment; 

(3) Retention in unsubsidized 

employment for six months; 

(4) Earnings; 

(5) The number of eligible individuals 

served; and 

(6) The number of most-in-need 

individuals served (the number of 

participating individuals described in 

§ 518(a)(3)(B)(ii) or (b)(2) of the OAA). 

(c) Additional indicators. Section 

513(b)(2) of the 2006 OAA establishes 

the following additional indicators of 

performance: 

(1) Retention in unsubsidized 

employment for one year; and 

(2) Satisfaction of the participants, 

employers, and their host agencies with 

their experiences and the services 

provided. 

(3) Any other indicators of 

performance that the Secretary 

determines to be appropriate to evaluate 

services and performance. 

(d) Affected entities. The core 

indicators of performance and 

additional indicators of performance are 

applicable to each grantee without 

regard to whether the grantee operates 

the program directly or through subcontracts, sub-grants, or agreements 

with other entities. Grantees must 

assure that their sub-grantees and lowertier sub-grantees are collecting and 

reporting program data. 

(e) Required evaluation and reporting. 

An agreement to be evaluated on the 

core indicators of performance and to 

report information on the additional 

indicators of performance is a 

requirement for application for, and is a 

condition of, all SCSEP grants. 

§ 641.710 How are the performance 

indicators defined? 

(a) The core indicators are defined as 

follows: 

(1) ‘‘Hours of community service 

employment’’ is defined as the total 

number of hours of community service 

provided by SCSEP participants divided 

by the number of hours of community 

service funded by the grantee’s grant, 

after adjusting for differences in 

minimum wage among the States and 

areas. Paid training hours are excluded 

from this measure. 

(2) ‘‘Entry into unsubsidized 

employment’’ is defined by the formula: 

Of those who are not employed at the 

date of participation: The number of 

participants who are employed in the 

first quarter after the exit quarter 

divided by the number of adult 

participants who exit during the quarter. 

(3) ‘‘Retention in unsubsidized 

employment for six months’’ is defined 

by the formula: Of those who are 

employed in the first quarter after the 

exit quarter: The number of adult 

participants who are employed in both 

the second and third quarters after the 

exit quarter divided by the number of 

adult participants who exit during the 

quarter. 

(4) ‘‘Earnings’’ is defined by the 

formula: Of those participants who are 

employed in the first, second and third 

quarters after the exit quarter: Total 

earnings in the second quarter plus total 

earnings in the third quarter after the 

exit quarter divided by the number of 

participants who exit during the quarter. 

(5) ‘‘The number of eligible 

individuals served’’ is defined as the 

total number of participants served 

divided by a grantee’s authorized 

number of positions, after adjusting for 

differences in minimum wage among 

the States and areas. 

(6) ‘‘Most-in-need’’ or the number of 

participating individuals described in 

§ 518(a)(3)(B)(ii) or (b)(2) is defined by 

counting the total number of the 

following characteristics for all 

participants and dividing by the number 

of participants served. Participants are 

characterized as most-in-need if they: 

(i) Have a severe disability; 

(ii) Are frail; 

(iii) Are age 75 or older; 

(iv) Meet the eligibility requirements 

related to age for, but do not receive, 

benefits under title II of the Social 

Security Act (42 U.S.C. 401 et seq.); 

(v) Live in an area with persistent 

unemployment and are individuals with 

severely limited employment prospects; 

(vi) Have limited English proficiency; 

(vii) Have low literacy skills; 

(viii) Have a disability; 

(ix) Reside in a rural area; 

(x) Are veterans; 

(xi) Have low employment prospects; 

(xii) Have failed to find employment 

after utilizing services provided under 

title I of the Workforce Investment Act 

of 1998 (29 U.S.C. 2801 et seq.); or 

(xiii) Are homeless or at risk for 

homelessness. 

(b) The additional indicators are 

defined as follows: 

(1) ‘‘Retention in unsubsidized 

employment for 1 year’’ is defined by 

the formula: Of those who are employed 

in the first quarter after the exit quarter: 

The number of participants who are 

employed in the fourth quarter after the 

exit quarter divided by the number of 

participants who exit during the quarter. 

(2) ‘‘Satisfaction of the participants, 

employers, and their host agencies with 

their experiences and the services 

provided’’ is defined as the results of 

customer satisfaction surveys 

administered to each of these three 

customer groups. The Department will 

prescribe the content of the surveys. 

§ 641.720 How will the Department and 

grantees initially determine and then adjust 

expected levels of performance for the core 

performance measures? 

(a) Initial agreement. Before the 

beginning of each Program Year, the 

Department and each grantee will 

undertake to agree upon expected levels 

of performance for each core indicator, 

except as provided in paragraph (b) of 

§ 641.730. 

(1) As a first step in this process, the 

Department proposes a performance 

level for each core indicator, taking into 

account any statutory performance 

requirements, the need to promote 

continuous improvement in the program 

overall and in each grantee, the 

grantee’s past performance, and the 

statutory adjustment factors articulated 

in paragraph (b) of this section. 

(2) A grantee may request a revision 

to the Department’s initial performance 

level goal determination. The request 

must be based on data that supports the 

revision request. The data supplied by 

the grantee at this stage may concern the 

statutory adjustment factors articulated 

in paragraph (b) of this section, but is 

not limited to those factors; it is 

permissible for a grantee to supply data 


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on ‘‘other appropriate factors as 

determined by the Secretary.’’ (OAA 

§ 513(a)(2)(C)). 

(3) The Department may revise the 

performance level goal in response to 

the data provided. The Department then 

sets the expected levels of performance 

for the core indicators. At this point, 

agreement is reached by the parties and 

funds may be awarded. If a grantee does 

not agree with the offered expected level 

of performance, agreement is not 

reached and no funds may be awarded. 

A grantee may submit comments to the 

Department about the grantee’s 

satisfaction with the expected levels of 

performance. 

(4) Funds may not be awarded under 

the grant until such agreement is 

reached. 

(5) At the conclusion of performance 

level negotiations with all grantees, the 

Department will make available for 

public review the final negotiated 

expected levels of performance for each 

grantee, including any comments 

submitted by the grantee about the 

grantee’s satisfaction with the 

negotiated levels. 

(6) The minimum percentage for the 

expected level of performance for the 

entry into unsubsidized employment 

core indicator is: 

(i) 21 percent for Program Year 2007; 

(ii) 22 percent for Program Year 2008; 

(iii) 23 percent for Program Year 2009; 

(iv) 24 percent for Program Year 2010; 

and 

(v) 25 percent for Program Year 2011. 

(b) Adjustment during the Program 

Year. After the Department and grantees 

reach agreement on the core indicator 

levels, those levels may only be revised 

in response to a request from a grantee 

based on data supporting one or more of 

the following statutory adjustment 

factors: 

(1) High rates of unemployment or of 

poverty or of participation in the 

program of block grants to States for 

temporary assistance for needy families 

established under part A of title IV of 

the Social Security Act (42 U.S.C. 601 

et seq.), in the areas served by a grantee, 

relative to other areas of the State 

involved or Nation. 

(2) Significant downturns in the 

economy of the areas served by the 

grantee or in the national economy. 

(3) Significant numbers or proportions 

of participants with one or more barriers 

to employment, including individuals 

described in § 518(a)(3)(B)(ii) or (b)(2) of 

the 2006 OAA (most-in-need), served by 

a grantee relative to such numbers or 

proportions for grantees serving other 

areas of the State or Nation. 

(4) Changes in Federal, State, or local 

minimum wage requirements. 

(5) Limited economies of scale for the 

provision of community service 

employment and other authorized 

activities in the areas served by the 

grantee. 

§ 641.730 How will the Department assist 

grantees in the transition to the new core 

performance indicators? 

(a) General transition provision. As 

soon as practicable after July 1, 2007, 

the Department will determine if a 

SCSEP grantee has, for Program Year 

2006, met the expected levels of 

performance for the Program Year 2007. 

If the Department determines that the 

grantee failed to meet Program Year 

2007 goals in Program Year 2006, the 

Department will provide technical 

assistance to help the grantee meet those 

expected levels of performance in 

Program Year 2007. 

(b) Exception for most-in-need for 

Program Year 2007. Because the 2006 

OAA Amendments expanded the list of 

most-in-need characteristics, neither the 

Department nor the grantees have 

sufficient data to set a goal for 

measuring performance. Accordingly, 

Program Year 2007 will be treated as a 

baseline year for the most-in-need 

indicator so that the grantees and the 

Department may collect sufficient data 

to set a meaningful goal for this measure 

for Program Year 2008. 

§ 641.740 How will the Department 

determine whether a grantee fails, meets, or 

exceeds the expected levels of performance 

for the core indicators and what will be the 

consequences of failing to meet expected 

levels of performance? 

(a) Aggregate calculation of 

performance. Not later than 120 days 

after the end of each Program Year, the 

Department will determine if a national 

grantee has met the expected levels of 

performance (including any adjustments 

to such levels) by aggregating the 

grantee’s core indicators. The aggregate 

is calculated by combining the 

percentage of goal achieved on each of 

the individual core indicators to obtain 

an average score. A grantee will fail to 

meet its performance measures when it 

is does not meet 80 percent of the 

agreed-upon level of performance for 

the aggregate of all the core indicators. 

Performance in the range of 80 to 100 

percent constitutes meeting the level for 

the core performance measures. 

Performance in excess of 100 percent 

constitutes exceeding the level for the 

core performance measures. 

(b) Consequences— 

(1) National grantees. (i) If the 

Department determines that a national 

grantee fails to meet the expected levels 

of performance in a Program Year, the 

Department, after each year of such 

failure, will provide technical assistance 

and will require such grantee to submit 

a corrective action plan not later than 

160 days after the end of the Program 

Year. 

(ii) The corrective action plan must 

detail the steps the grantee will take to 

meet the expected levels of performance 

in the next Program Year. 

(iii) Any national grantee that has 

failed to meet the expected levels of 

performance for 4 consecutive years 

(beginning with Program Year 2007) 

will not be allowed to compete in the 

subsequent grant competition, but may 

compete in the next grant competition 

after that subsequent competition. 

(2) State Grantees. (i) If the 

Department determines that a State fails 

to meet the expected levels of 

performance, the Department, after each 

year of such failure, will provide 

technical assistance and will require the 

State to submit a corrective action plan 

not later than 160 days after the end of 

the Program Year. 

(ii) The corrective action plan must 

detail the steps the State will take to 

meet the expected levels of performance 

in the next Program Year. 

(iii) If the Department determines that 

the State fails to meet the expected 

levels of performance for 3 consecutive 

Program Years (beginning with Program 

Year 2007), the Department will require 

the State to conduct a competition to 

award the funds allotted to the State 

under § 506(e) of the OAA for the first 

full Program Year following the 

Department’s determination. The new 

grantee will be responsible for 

administering the SCSEP in the State 

and will be subject to the same 

requirements and responsibilities as had 

been the State grantee. 

(c) Evaluation. The Department will 

annually evaluate, publish and make 

available for public review, information 

on the actual performance of each 

grantee with respect to the levels 

achieved for each of the core indicators 

of performance, compared to the 

expected levels of performance, and the 

actual performance of each grantee with 

respect to the levels achieved for each 

of the additional indicators of 

performance. The results of the 

Department’s annual evaluation will be 

reported to Congress. 

§ 641.750 Will there be performancerelated incentives? 

The Department is authorized by 

§§ 502(e)(2)(B)(iv) and 517(c)(1) of the 

2006 OAA to use recaptured SCSEP 

funds to provide incentive awards. The 

Department will exercise this authority 

at its discretion. 


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Subpart H—Administrative 

Requirements 

§ 641.800 What uniform administrative 

requirements apply to the use of SCSEP 

funds? 

(a) SCSEP recipients and subrecipients must follow the uniform 

administrative requirements and 

allowable cost requirements that apply 

to their type of organization. (OAA 

§ 503(f)(2)). 

(b) Governments, State, local, and 

Indian tribal organizations that receive 

SCSEP funds under grants or 

cooperative agreements must follow the 

common rule implementing OMB 

Circular A–102, ‘‘Grants and 

Cooperative Agreements with State and 

Local Governments’’ (10/07/1994) 

(further amended 08/29/1997), codified 

at 29 CFR part 97. 

(c) Nonprofit and commercial 

organizations, institutions of higher 

education, hospitals, other nonprofit 

organizations, and commercial 

organizations that receive SCSEP funds 

under grants or cooperative agreements 

must follow the common rule 

implementing OMB Circular A–110, 

codified at 29 CFR part 95. 

§ 641.803 What is program income? 

Program income, as described in 29 

CFR 97.25 (State and local governments) 

and 29 CFR 95.2(bb) (non-profit and 

commercial organizations), is income 

earned by the recipient or sub-recipient 

during the grant period that is directly 

generated by an allowable activity 

supported by grant funds or earned as 

a result of the award of grant funds. 

Program income includes income 

earned from license fees and royalties 

for copyrighted material, patents, patent 

applications, trademarks, and 

inventions produced under an award. 

(See 29 CFR 95.24(e) (non-profit and 

commercial organizations) and 29 CFR 

97.25(e) (State and local governments)). 

Costs of generating SCSEP program 

income may be deducted from gross 

income received by SCSEP recipients 

and sub-recipients to determine SCSEP 

program income earned or generated 

provided these costs have not been 

charged to the SCSEP. 

§ 641.806 How must SCSEP program 

income be used? 

(a) SCSEP recipients that earn or 

generate program income during the 

grant period must add the program 

income to the Federal and non-Federal 

funds committed to the SCSEP and must 

use it to further the purposes of the 

program and in accordance with the 

terms and conditions of the grant award. 

Program income may only be spent 

during the grant period in which it was 

earned (except as provided for in 

paragraph (b)), as provided in 29 CFR 

95.24(a) (non-profit and commercial 

organizations) or 29 CFR 97.25(g) (2) 

(State and local governments), as 

applicable. 

(b)(1) Except as provided for in 

paragraph (b)(2), recipients that 

continue to receive a SCSEP grant from 

the Department must spend program 

income earned from SCSEP-funded 

activities in the Program Year in which 

the earned income was received. 

(b)(2) Any program income remaining 

at the end of the Program Year in which 

it was earned will remain available for 

expenditure in the subsequent Program 

Year only. Any program income 

remaining after the second Program 

Year must be remitted to the 

Department. 

(c) Recipients that do not continue to 

receive a SCSEP grant from the 

Department must remit unexpended 

program income earned during the grant 

period from SCSEP funded activities to 

the Department at the end of the grant 

period. These recipients have no 

obligation to the Department for 

program income earned after the end of 

the grant period. 

§ 641.809 What non-Federal share 

(matching) requirements apply to the use of 

SCSEP funds? 

(a) The Department will pay no more 

than 90 percent of the total cost of 

activities carried out under a SCSEP 

grant. (OAA sec. 502(c)(1)). 

(b) All SCSEP recipients, including 

Federal agencies if there is no statutory 

exemption, must provide or ensure that 

at least 10 percent of the total cost of 

activities carried out under a SCSEP 

grant (non-Federal share of costs) 

consists of allowable costs paid for with 

non-Federal funds, except as provided 

in paragraphs (e) and (f) of this section. 

(c) Recipients must determine the 

non-Federal share of costs in accordance 

with 29 CFR 97.24 for governmental 

units, or 29 CFR 95.23 for nonprofit and 

commercial organizations. 

(d) The non-Federal share of costs 

may be provided in cash, or in-kind, or 

a combination of the two. (OAA 

§ 502(c)(2)). 

(e) A recipient may not require a subrecipient or host agency to provide nonFederal resources for the use of the 

SCSEP project as a condition of entering 

into a sub-recipient or host agency 

relationship. This does not preclude a 

sub-recipient or host agency from 

voluntarily contributing non-Federal 

resources for the use of the SCSEP 

project. 

(f) The Department may pay all of the 

costs of activities in an emergency or 

disaster project or a project in an 

economically distressed area. (OAA 

§ 502(c)(1)(B)). 

§ 641.812 What is the period of availability 

of SCSEP funds? 

(a) Except as provided in § 641.815, 

recipients must expend SCSEP funds 

during the Program Year for which they 

are awarded (July 1–June 30). (OAA 

§ 517(b)). 

(b) SCSEP recipients must ensure that 

no sub-agreement provides for the 

expenditure of any SCSEP funds before 

the start of the grant year, or after the 

end of the grant period, except as 

provided in § 641.815. 

§ 641.815 May the period of availability be 

extended? 

SCSEP recipients may request in 

writing, and the Department may grant, 

an extension of the period during which 

SCSEP funds may be obligated or 

expended. SCSEP recipients requesting 

an extension must justify that an 

extension is necessary. (OAA § 517(b)). 

The Department will notify recipients in 

writing of the approval or disapproval of 

any such requests. 

§ 641.821 What audit requirements apply 

to the use of SCSEP funds? 

(a) Recipients and sub-recipients 

receiving Federal awards of SCSEP 

funds must follow the audit 

requirements in paragraphs (b) and (c) 

of this section that apply to their type 

of organization. As used here, Federal 

awards of SCSEP funds include Federal 

financial assistance and Federal costreimbursement contracts received 

directly from the Department or 

indirectly under awards by SCSEP 

recipients or higher-tier sub-recipients. 

(OAA § 503(f)(2)). 

(b) All governmental and nonprofit 

organizations that are recipients or subrecipients must follow the audit 

requirements of OMB Circular A–133. 

These requirements are codified at 29 

CFR parts 96 and 99 and referenced in 

29 CFR 97.26 for governmental 

organizations and in 29 CFR 95.26 for 

institutions of higher education, 

hospitals, and other nonprofit 

organizations. 

(c) (1) The Department is responsible 

for audits of SCSEP recipients that are 

commercial organizations. 

(2) Commercial organizations that are 

sub-recipients under the SCSEP and that 

expend more than the minimum level 

specified in OMB Circular A–133 

($500,000, for fiscal years ending after 

December 31, 2003) must have either an 

organization-wide audit or a programspecific financial and compliance audit 


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conducted in accordance with OMB 

Circular A–133. 

§ 641.824 What lobbying requirements 

apply to the use of SCSEP funds? 

SCSEP recipients and sub-recipients 

must comply with the restrictions on 

lobbying codified in the Department’s 

regulations at 29 CFR part 93. (Also 

refer to § 641.850(c), ‘‘Lobbying costs.’’) 

§ 641.827 What general nondiscrimination 

requirements apply to the use of SCSEP 

funds? 

(a) SCSEP recipients, sub-recipients, 

and host agencies are required to 

comply with the nondiscrimination 

provisions codified in the Department’s 

regulations at 29 CFR parts 31 and 32 

and the provisions on the equal 

treatment of religious organizations at 

29 CFR part 2 subpart D. 

(b) Recipients and sub-recipients of 

SCSEP funds are required to comply 

with the nondiscrimination provisions 

codified in the Department’s regulations 

at 29 CFR part 37 if: 

(1) The recipient: 

(i) Is a One-Stop partner listed in 

§ 121(b) of WIA, and 

(ii) Operates programs and activities 

that are part of the One-Stop delivery 

system established under WIA; or 

(2) The recipient otherwise satisfies 

the definition of ‘‘recipient’’ in 29 CFR 

37.4. 

(c) Recipients must ensure that 

participants are provided informational 

materials relating to age discrimination 

and/or their rights under the Age 

Discrimination in Employment Act of 

1975 that are distributed to recipients by 

the Department as required by 

§ 503(b)(3) of the OAA. 

(d) Questions about or complaints 

alleging a violation of the 

nondiscrimination requirements cited in 

this section may be directed or mailed 

to the Director, Civil Rights Center, U.S. 

Department of Labor, Room N–4123, 

200 Constitution Avenue, NW., 

Washington, DC, 20210, for processing. 

(See § 641.910(d)). 

(e) The specification of any right or 

protection against discrimination in 

paragraphs (a) through (d) of this section 

must not be interpreted to exclude or 

diminish any other right or protection 

against discrimination in connection 

with a SCSEP project that may be 

available to any participant, applicant 

for participation, or other individual 

under any applicable Federal, State, or 

local laws prohibiting discrimination, or 

their implementing regulations. 

§ 641.833 What policies govern political 

patronage? 

(a) A recipient or sub-recipient must 

not select, reject, promote, or terminate 

an individual based on political services 

provided by the individual or on the 

individual’s political affiliations or 

beliefs. In addition, as provided in 

§ 641.827(b), certain recipients and subrecipients of SCSEP funds are required 

to comply with WIA nondiscrimination 

regulations in 29 CFR part 37. These 

regulations prohibit discrimination on 

the basis of political affiliation or belief. 

(b) A recipient or sub-recipient must 

not provide, or refuse to provide, funds 

to any sub-recipient, host agency, or 

other entity based on political 

affiliation. 

(c) SCSEP recipients must ensure that 

every entity that receives SCSEP funds 

through the recipient is applying the 

policies stated in paragraphs (a) and (b) 

of this section. 

§ 641.836 What policies govern political 

activities? 

(a) No project under title V of the 

OAA may involve political activities. 

SCSEP recipients must ensure 

compliance with the requirements and 

prohibitions involving political 

activities described in paragraphs (b) 

and (c) of this section. 

(b) State and local employees 

involved in the administration of SCSEP 

activities may not engage in political 

activities prohibited under the Hatch 

Act (5 U.S.C. chapter 15), including: 

(1) Seeking partisan elective office; 

(2) Using official authority or 

influence for the purpose of affecting 

elections, nominations for office, or 

fund-raising for political purposes. 

(5 U.S.C. 1502). 

(c) SCSEP recipients must provide all 

persons associated with SCSEP 

activities with a written explanation of 

allowable and unallowable political 

activities under the Hatch Act. A notice 

explaining these allowable and 

unallowable political activities must be 

posted in every workplace in which 

SCSEP activities are conducted. The 

Department will provide the form and 

content of the notice and explanatory 

material by administrative issuance. 

(OAA § 502(b)(l)(P)). 

(d) SCSEP recipients must ensure 

that: 

(1) No SCSEP participants or staff 

persons engage in partisan or 

nonpartisan political activities during 

hours for which they are being paid 

with SCSEP funds. 

(2) No participants or staff persons 

engage in partisan political activities in 

which such participants or staff persons 

represent themselves as spokespersons 

for the SCSEP. 

(3) No participants are employed or 

out-stationed in the offices of a Member 

of Congress, a State or local legislator, 

or on the staff of any legislative 

committee. 

(4) No participants are employed or 

out-stationed in the immediate offices of 

any elected chief executive officer of a 

State or unit of general government, 

except that: 

(i) Units of local government may 

serve as host agencies for participants, 

provided that their assignments are nonpolitical; and 

(ii) While assignments may place 

participants in such offices, such 

assignments actually must be concerned 

with program and service activities and 

not in any way involved in political 

functions. 

(5) No participants are assigned to 

perform political activities in the offices 

of other elected officials. Placement of 

participants in such offices in nonpolitical assignments is permissible, 

however, provided that: 

(i) SCSEP recipients develop 

safeguards to ensure that participants 

placed in these assignments are not 

involved in political activities; and 

(ii) These safeguards are described in 

the grant agreement and are approved 

by the Department and are subject to 

review and monitoring by the SCSEP 

recipient and by the Department. 

§ 641.839 What policies govern union 

organizing activities? 

Recipients must ensure that SCSEP 

funds are not used in any way to assist, 

promote, or deter union organizing. 

§ 641.841 What policies govern nepotism? 

(a) SCSEP recipients must ensure that 

no recipient or sub-recipient hires, and 

no host agency serves as a worksite for, 

a person who works in a SCSEP 

community service assignment if a 

member of that person’s immediate 

family is engaged in a decision-making 

capacity (whether compensated or not) 

for that project, subproject, recipient, 

sub-recipient, or host agency. The 

Department may exempt worksites on 

Native American reservations and in 

rural areas from this requirement 

provided that adequate justification can 

be documented, such as that no other 

persons are eligible and available for 

participation in the program. 

(b) To the extent that an applicable 

State or local legal nepotism 

requirement is more restrictive than this 

provision, SCSEP recipients must 

ensure that the more restrictive 

requirement is followed. 

(c) For purposes of this section, 

‘‘immediate family’’ means wife, 

husband, son, daughter, mother, father, 

brother, sister, son-in-law, daughter-inlaw, mother- in-law, father-in-law, 

brother-in-law, sister-in-law, aunt, 


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uncle, niece, nephew, stepparent, 

stepchild, grandparent, or grandchild. 

§ 641.844 What maintenance of effort 

requirements apply to the use of SCSEP 

funds? 

(a) A community service assignment 

for a participant under title V of the 

OAA is permissible only when specific 

maintenance of effort requirements are 

met. 

(b) Each project funded under title V: 

(1) Must not reduce the number of 

employment opportunities or vacancies 

that would otherwise be available to 

individuals not participating in the 

program; 

(2) Must not displace currently 

employed workers (including partial 

displacement, such as a reduction in the 

hours of non-overtime work, wages, or 

employment benefits); 

(3) Must not impair existing contracts 

or result in the substitution of Federal 

funds for other funds in connection 

with work that would otherwise be 

performed; and 

(4) Must not employ or continue to 

employ any eligible individual to 

perform the same work or substantially 

the same work as that performed by any 

other individual who is on layoff. (OAA 

§ 502(b)(1)(G)). 

§ 641.847 What uniform allowable cost 

requirements apply to the use of SCSEP 

funds? 

(a) General. Unless specified 

otherwise in this part or the grant 

agreement, recipients and sub-recipients 

must follow the uniform allowable cost 

requirements that apply to their type of 

organization. For example, a local 

government sub-recipient receiving 

SCSEP funds from a nonprofit 

organization must use the allowable cost 

requirements for governmental 

organizations in OMB Circular A–87. 

The Department’s regulations at 29 CFR 

95.27 (non-profit and commercial 

organizations) and 29 CFR 97.22 (State 

and local governments) identify the 

Federal principles for determining 

allowable costs that each kind of 

organization must follow. The 

applicable Federal principles for each 

kind of organization are described in 

paragraphs (b)(1) through (b)(5) of this 

section. (OAA § 503(f)(2)). 

(b) Allowable costs/cost principles. 

(1) Allowable costs for State, local, 

and Indian tribal government 

organizations must be determined under 

OMB Circular A–87, ‘‘Cost Principles for 

State, Local and Indian Tribal 

Governments.’’ 

(2) Allowable costs for nonprofit 

organizations must be determined under 

OMB Circular A–122, ‘‘Cost Principles 

for Non-Profit Organizations.’’ 

(3) Allowable costs for institutions of 

higher education must be determined 

under OMB Circular A–21, ‘‘Cost 

Principles for Educational Institutions.’’ 

(4) Allowable costs for hospitals must 

be determined in accordance with 

appendix E of 45 CFR part 74, 

‘‘Principles for Determining Costs 

Applicable to Research and 

Development Under Grants and 

Contracts with Hospitals.’’ 

(5) Allowable costs for commercial 

organizations and those nonprofit 

organizations listed in Attachment C to 

OMB Circular A–122 must be 

determined under the provisions of the 

Federal Acquisition Regulation (FAR), 

at 48 CFR part 31. 

§ 641.850 Are there other specific 

allowable and unallowable cost 

requirements for the SCSEP? 

(a) Yes, in addition to the generally 

applicable cost principles in 

§ 641.847(b), the cost principles in 

paragraphs (b) through (g) of this section 

apply to SCSEP grants. 

(b) Claims against the Government. 

For all types of entities, legal expenses 

for the prosecution of claims against the 

Federal Government, including appeals 

to an Administrative Law Judge, are 

unallowable. 

(c) Lobbying costs. In addition to the 

prohibition contained in 29 CFR part 93, 

SCSEP funds must not be used to pay 

any salaries or expenses related to any 

activity designed to influence legislation 

or appropriations pending before the 

Congress of the United States or any 

State legislature. (See § 641.824). 

(d) One-Stop Costs. Costs of 

participating as a required partner in the 

One-Stop delivery system established in 

accordance with § 134(c) of the WIA are 

allowable, provided that SCSEP services 

and funding are provided in accordance 

with the MOU required by the WIA and 

OAA § 502(b)(1)(O), and costs are 

determined in accordance with the 

applicable cost principles. The costs of 

services provided by the SCSEP, 

including those provided by 

participants/enrollees, may comprise a 

portion or the total of a SCSEP project’s 

proportionate share of One-Stop costs. 

(e) Building repairs and acquisition 

costs. Except as provided in this 

paragraph and as an exception to the 

allowable cost principles in 

§ 641.847(b), no SCSEP funds may be 

used for the purchase, construction, or 

renovation of any building except for 

the labor involved in: 

(1) Minor remodeling of a public 

building necessary to make it suitable 

for use for project purposes; 

(2) Minor repair and rehabilitation of 

publicly used facilities for the general 

benefit of the community; and 

(3) Repair and rehabilitation by 

participants of housing occupied by 

persons with low incomes who are 

declared eligible for such services by 

authorized local agencies. 

(f) Accessibility and reasonable 

accommodation. Recipients and subrecipients may use SCSEP funds to meet 

their obligations under § 504 of the 

Rehabilitation Act of 1973, as amended, 

and the Americans with Disabilities Act 

of 1990, as amended, and any other 

applicable Federal disability 

nondiscrimination laws, to provide 

physical and programmatic accessibility 

and reasonable accommodation/ 

modifications for, and effective 

communications with, individuals with 

disabilities. (29 U.S.C. 794). 

(g) Participants’ benefit costs. 

Recipients and sub-recipients may use 

SCSEP funds for participant benefit 

costs only under the conditions set forth 

in § 641.565. 

§ 641.853 How are costs classified? 

(a) All costs must be classified as 

‘‘administrative costs’’ or ‘‘programmatic 

activity costs.’’ (OAA § 502(c)(6)). 

(b) Recipients and sub-recipients must 

assign participants’ wage and benefit 

costs and other participant (enrollee) 

costs such as supportive services to the 

programmatic activity cost category. 

(See § 641.864). When a participant’s 

community service assignment involves 

functions whose costs are normally 

classified as administrative costs, 

compensation provided to the 

participants must be charged as 

programmatic activity costs instead of 

administrative costs, since participant 

wage and benefit costs are always 

charged to the programmatic activity 

cost category. 

§ 641.856 What functions and activities 

constitute administrative costs? 

(a) Administrative costs are that 

allocable portion of necessary and 

reasonable allowable costs of recipients 

and program operators that are 

associated with those specific functions 

identified in paragraph (b) of this 

section and that are not related to the 

direct provision of programmatic 

activities specified in § 641.864. These 

costs may be both personnel and nonpersonnel and both direct and indirect 

costs. 

(b) Administrative costs are the costs 

associated with: 

(1) Performing general administrative 

and coordination functions, including: 

(i) Accounting, budgeting, financial, 

and cash management functions; 


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(ii) Procurement and purchasing 

functions; 

(iii) Property management functions; 

(iv) Personnel management functions; 

(v) Payroll functions; 

(vi) Coordinating the resolution of 

findings arising from audits, reviews, 

investigations, and incident reports; 

(vii) Audit functions; 

(viii) General legal services functions; 

(ix) Developing systems and 

procedures, including information 

systems, required for these 

administrative functions; 

(x) Preparing administrative reports; 

and 

(xi) Other activities necessary for 

general administration of government 

funds and associated programs. 

(2) Oversight and monitoring 

responsibilities related to administrative 

functions; 

(3) Costs of goods and services used 

for administrative functions of the 

program, including goods and services 

such as rental or purchase of equipment, 

utilities, office supplies, postage, and 

rental and maintenance of office space; 

(4) Travel costs incurred for official 

business in carrying out administrative 

activities or the overall management of 

the program; 

(5) Costs of information systems 

related to administrative functions (for 

example, personnel, procurement, 

purchasing, property management, 

accounting, and payroll systems) 

including the purchase, systems 

development, and operating costs of 

such systems and; 

(6) Costs of technical assistance, 

professional organization membership 

dues, and evaluating results obtained by 

the project involved against stated 

objectives. 

(OAA § 502(c)(4)). 

§ 641.859 What other special rules govern 

the classification of costs as administrative 

costs or programmatic activity costs? 

(a) Recipients and sub-recipients must 

comply with the special rules for 

classifying costs as administrative costs 

or programmatic activity costs set forth 

in paragraphs (b) through (e) of this 

section. 

(b)(1) Costs of awards by recipients 

and program operators that are solely for 

the performance of their own 

administrative functions are classified 

as administrative costs. 

(2) Costs incurred by recipients and 

program operators for administrative 

functions listed in § 641.856(b) are 

classified as administrative costs. 

(3) Costs incurred by vendors and 

sub-recipients performing the 

administrative functions of recipients 

and program operators are classified as 

administrative costs. (See 29 CFR 99.210 

for a discussion of factors differentiating 

sub-recipients from vendors.) 

(4) Except as provided in paragraph 

(b)(3) of this section, all costs incurred 

by all vendors, and only those subrecipients below program operators, are 

classified as programmatic activity 

costs. (See 29 CFR 99.210 for a 

discussion of factors differentiating subrecipients from vendors.) 

(c) Personnel and related nonpersonnel costs of staff who perform 

both administrative functions specified 

in § 641.856(b) and programmatic 

services or activities must be allocated 

as administrative or programmatic 

activity costs to the benefiting cost 

objectives/categories based on 

documented distributions of actual time 

worked or other equitable cost 

allocation methods. 

(d) The allocable share of indirect or 

overhead costs charged to the SCSEP 

grant are to be allocated to the 

administrative and programmatic 

activity cost categories in the same 

proportion as the costs in the overhead 

or indirect cost pool are classified as 

programmatic activity or administrative 

costs. 

(e) Costs of the following information 

systems including the purchase, systems 

development and operating (e.g., data 

entry) costs are charged to the 

programmatic activity cost category: 

(1) Tracking or monitoring of 

participant and performance 

information; 

(2) Employment statistics information, 

including job listing information, job 

skills information, and demand 

occupation information; and 

(3) Local area performance 

information. 

§ 641.861 Must SCSEP recipients provide 

funding for the administrative costs of subrecipients? 

(a) Recipients and sub-recipients must 

obtain funding for administrative costs 

to the extent practicable from nonFederal sources. (OAA § 502(c)(5)). 

(b) SCSEP recipients must ensure that 

sufficient funding is provided for the 

administrative activities of subrecipients that receive SCSEP funding 

through the recipient. Each SCSEP 

recipient must describe in its grant 

application the methodology used to 

ensure that sub-recipients receive 

sufficient funding for their 

administrative activities. (OAA 

§ 502(b)(1)(R)). 

§ 641.864 What functions and activities 

constitute programmatic activity costs? 

Programmatic activity costs include, 

but are not limited to, the costs of the 

following functions: 

(a) Participant wages, such benefits as 

are required by law (such as workers’ 

compensation or unemployment 

compensation), the costs of physical 

examinations, compensation for 

scheduled work hours during which a 

host agency is closed for a Federal 

holiday, and necessary sick leave that is 

not part of an accumulated sick leave 

program, except that no amounts 

provided under the grant may be used 

to pay the cost of pension benefits, 

annual leave, accumulated sick leave, or 

bonuses, as described in § 641.565; 

(b) Outreach, recruitment and 

selection, intake, orientation, 

assessment, and preparation and 

updating of IEPs; 

(c) Participant training, as described 

in § 641.540, which may be provided 

before commencing or during a 

community service assignment, and 

which may be provided at a host 

agency, in a classroom setting, or using 

other appropriate arrangements, which 

may include reasonable costs of 

instructors’ salaries, classroom space, 

training supplies, materials, equipment, 

and tuition; 

(d) Subject to the restrictions in 

§ 641.535(c), job placement assistance, 

including job development and job 

search assistance, job fairs, job clubs, 

and job referrals; and 

(e) Participant supportive services, to 

enable an individual to successfully 

participate in a SCSEP project, as 

described in § 641.545. 

(OAA § 502(c)(6)(A)). 

§ 641.867 What are the limitations on the 

amount of SCSEP administrative costs? 

(a) Except as provided in paragraph 

(b), no more than 13.5 percent of the 

SCSEP funds received for a Program 

Year may be used for administrative 

costs. 

(b) The Department may increase the 

amount available for administrative 

costs to not more than 15 percent, in 

accordance with § 641.870. 

(OAA § 502(c)(3)). 

§ 641.870 Under what circumstances may 

the administrative cost limitation be 

increased? 

(a) SCSEP recipients may request that 

the Department increase the amount 

available for administrative costs. The 

Department may honor the request if: 

(1) The Department determines that it 

is necessary to carry out the project; and 

(2) The recipient demonstrates that: 

(i) Major administrative cost increases 

are being incurred in necessary program 

components, such as liability insurance, 

payments for workers’ compensation for 

staff, costs associated with achieving 

unsubsidized placement goals, and 


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other operation requirements imposed 

by the Department; 

(ii) The number of community service 

assignment positions in the project or 

the number of minority eligible 

individuals participating in the project 

will decline if the amount available for 

paying the cost of administration is not 

increased; or 

(iii) The size of the project is so small 

that the amount of administrative costs 

incurred to carry out the project 

necessarily exceeds 13.5 percent of the 

grant amount. 

(OAA § 502(c)(3)). 

(b) A request by a recipient or 

prospective recipient for an increase in 

the amount available for administrative 

costs may be submitted as part of the 

grant application or as a separate 

submission at any time after the grant 

award. 

§ 641.873 What minimum expenditure 

levels are required for participant wages 

and benefits? 

(a) Except as provided in § 641.874 or 

in paragraph (c) of this section, not less 

than 75 percent of the SCSEP funds 

provided under a grant from the 

Department must be used to pay for 

wages and benefits of participants as 

described in § 641.864(a). (OAA 

§ 502(c)(6)(B)). 

(b) A SCSEP recipient is in 

compliance with this provision if at 

least 75 percent of the total expenditure 

of SCSEP funds provided to the 

recipient was for wages and benefits, 

even if one or more sub-recipients did 

not expend at least 75 percent of their 

SCSEP sub-recipient award for wages 

and benefits. 

(c) A SCSEP grantee may submit to 

the Department a request for approval to 

use not less than 65 percent of the grant 

funds to pay wages and benefits under 

§ 641.874. 

§ 641.874 What conditions apply to a 

SCSEP grantee request to use additional 

funds for training and supportive service 

costs? 

(a) A grantee may submit to the 

Department a request for approval— 

(1) To use not less than 65 percent of 

the grant funds to pay the wages and 

benefits described in § 641.864(a); 

(2) To use the percentage of grant 

funds specified in § 641.867 to pay for 

administrative costs as described in 

§ 641.856; 

(3) To use the 10 percent of grant 

funds that would otherwise be devoted 

to wages and benefits under § 641.873 to 

provide participant training (as 

described in § 641.540(e)) and 

participant supportive services to enable 

participants to successfully participate 

in a SCSEP project (as described in 

§ 641.545), in which case the grantee 

must provide (from the funds described 

in this paragraph) the wages for those 

individual participants who are 

receiving training from the funds 

described in this paragraph, but may not 

use the funds described in this 

paragraph to pay for any administrative 

costs; and 

(4) To use the remaining grant funds 

to provide participant training, job 

placement assistance, participant 

supportive services, and outreach, 

recruitment and selection, intake, 

orientation and assessment. 

(b) In submitting the request the 

grantee must include in the request— 

(1) A description of the activities for 

which the grantee will spend the grant 

funds described in paragraphs (a)(3) and 

(a)(4) of this section; 

(2) An explanation documenting how 

the provision of such activities will 

improve the effectiveness of the project, 

including an explanation of whether 

any displacement of eligible individuals 

or elimination of positions for such 

individuals will occur, information on 

the number of such individuals to be 

displaced and of such positions to be 

eliminated, and an explanation of how 

the activities will improve employment 

outcomes for the individuals served, 

based on the assessment conducted 

under § 641.535(a)(2); and 

(3) A proposed budget and work plan 

for the activities, including a detailed 

description of how the funds will be 

spent on the activities described in 

paragraphs (a)(3) and (a)(4) of this 

section. 

(c)(1) If a grantee wishes to amend an 

existing grant agreement to use 

additional funds for training and 

supportive service costs, the grantee 

must submit such a request not later 

than 90 days before the proposed date 

of implementation contained in the 

request. Not later than 30 days before 

the proposed date of implementation, 

the Department will approve, approve 

as modified, or reject the request, on the 

basis of the information included in the 

request. 

(2) If a grantee submits a request to 

use additional funds for training and 

supportive service costs in the grant 

application, the request will be accepted 

and processed as a part of the grant 

review process. 

(d) Grantees may apply this provision 

to individual sub-recipients but need 

not provide this opportunity to all their 

sub-recipients. 

§ 641.876 How will compliance with cost 

limitations and minimum expenditure levels 

be determined? 

The Department will determine 

compliance by examining expenditures 

of SCSEP funds. The cost limitations 

and minimum expenditure level 

requirements must be met at the time all 

such funds have been expended or the 

period of availability of such funds has 

expired, whichever comes first. 

§ 641.879 What are the financial and 

performance reporting requirements for 

recipients? 

(a) In accordance with 29 CFR 97.41 

(State and local governments) or 29 CFR 

95.52 (non-profit and commercial 

organizations), each SCSEP recipient 

must submit a SCSEP Financial Status 

Report (FSR, ETA Form 9130) in 

electronic format to the Department via 

the Internet within 45 days after the 

ending of each quarter of the Program 

Year. Each SCSEP recipient must also 

submit a final closeout FSR to the 

Department via the Internet within 90 

days after the end of the grant period. 

The Department will provide 

instructions for the preparation of this 

report. (OAA § 503(f)(3)). 

(1) Financial data must be reported on 

an accrual basis, and cumulatively by 

funding year of appropriation. Financial 

data may also be required on specific 

program activities as required by the 

Department. 

(2) If the SCSEP recipient’s 

accounting records are not normally 

kept on the accrual basis of accounting, 

the SCSEP recipient must develop 

accrual information through an analysis 

of the documentation on hand. 

(b) In accordance with 29 CFR 97.40 

(State and local governments) or 29 CFR 

95.51 (non-profit and commercial 

organizations), each SCSEP recipient 

must submit updated data on 

participants (including data on 

demographic characteristics and data 

regarding the performance measures), 

host agencies, and employers in an 

electronic format specified by the 

Department via the Internet within 30 

days after the end of each of the first 

three quarters of the Program Year, on 

the last day of the fourth quarter of the 

Program Year, and within 90 days after 

the last day of the Program Year. 

Recipients wishing to correct data errors 

or omissions for their final Program 

Year report must do so within 90 days 

after the end of the Program Year. The 

Department will generate SCSEP 

Quarterly Progress Reports (QPRs), as 

well as the final QPR, as soon as 

possible after receipt of the data. (OAA 

§ 503(f)(3)). 


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(c) Each State agency receiving title V 

funds must annually submit an 

equitable distribution report of SCSEP 

positions by all recipients in the State. 

The Department will provide 

instructions for the preparation of this 

report. (OAA § 508). 

(d) In addition to the data required to 

be submitted under paragraph (b) of this 

section, each SCSEP recipient may be 

required to collect data and submit 

reports on the performance measures. 

See subpart G. The Department will 

provide instructions detailing these 

measures and how recipients must 

prepare this report. 

(e) In addition to the data required to 

be submitted under paragraph (b) of this 

section, each SCSEP recipient may be 

required to collect data and submit 

reports about the demographic 

characteristics of program participants. 

The Department will provide 

instructions detailing these measures 

and how recipients must prepare these 

reports. 

(f) Federal agencies that receive and 

use SCSEP funds under interagency 

agreements must submit project 

financial and progress reports in 

accordance with this section. Federal 

recipients must maintain the necessary 

records that support required reports 

according to instructions provided by 

the Department. (OAA § 503(f)(3)). 

(g) Recipients may be required to 

maintain records that contain any other 

information that the Department 

determines to be appropriate in support 

of any other reports that the Department 

may require. (OAA § 503(f)(3)). 

(h) Grantees submitting reports that 

cannot be validated or verified as 

accurately counting and reporting 

activities in accordance with the 

reporting instructions may be treated as 

failing to submit reports, which may 

result in failing one of the responsibility 

tests outlined in § 641.430 and OAA 

§ 514(d). 

§ 641.881 What are the SCSEP recipient’s 

responsibilities relating to awards to subrecipients? 

(a) Recipients are responsible for 

ensuring that all awards to subrecipients are conducted in a manner to 

provide, to the maximum extent 

practicable, full and open competition 

in accordance with the procurement 

procedures in 29 CFR 95.43 (non-profit 

and commercial organizations) and 29 

CFR 97.36 (State and local 

governments). 

(b) The SCSEP recipient is responsible 

for all grant activities, including the 

performance of SCSEP activities by subrecipients, and ensuring that subrecipients comply with the OAA and 

this part. (See also OAA § 514(d) and 

§ 641.430 of this part on responsibility 

tests). 

(c) Recipients must follow their own 

procedures for allocating funds to other 

entities. The Department will not grant 

funds to another entity on the 

recipient’s behalf. 

(d)(1) National grantees that receive 

grants to provide services in an area 

where a substantial population of 

individuals with barriers to employment 

exists must, in selecting sub-recipients, 

give special consideration to 

organizations (including former national 

grant recipients) with demonstrated 

expertise in serving such individuals. 

(OAA § 514(e)(2)). 

(2) For purposes of this section, the 

term ‘‘individuals with barriers to 

employment’’ means minority 

individuals, Indian individuals, 

individuals with greatest economic 

need, and most-in-need individuals. 

(OAA § 514(e)(1)). 

§ 641.884 What are the grant closeout 

procedures? 

SCSEP recipients must follow the 

grant closeout procedures at 29 CFR 

97.50 (State and local governments) or 

29 CFR 95.71 (non-profit and 

government organizations), as 

appropriate. The Department will issue 

supplementary closeout instructions to 

OAA title V recipients as necessary. 

Subpart I—Grievance Procedures and 

Appeals Process 

§ 641.900 What appeal process is available 

to an applicant that does not receive a 

multi-year grant? 

(a) An applicant for financial 

assistance under title V of the OAA that 

is dissatisfied because it was not 

awarded financial assistance in whole 

or in part may request that the Grant 

Officer provide an explanation for not 

awarding financial assistance to that 

applicant. The request must be filed 

within 10 days of the date of 

notification indicating that financial 

assistance would not be awarded. The 

Grant Officer must provide the 

protesting applicant with feedback 

concerning its proposal within 21 days 

of the protest. Applicants may appeal to 

the U.S. Department of Labor, Office of 

Administrative Law Judges (OALJ), 

within 21 days of the date of the Grant 

Officer’s feedback on the proposal, or 

within 21 days of the Grant Officer’s 

notification that financial assistance 

would not be awarded if the applicant 

does not request feedback on its 

proposal. The appeal may be for a part 

or the whole of the denied funding. This 

appeal will not in any way interfere 

with the Department’s decisions to fund 

other organizations to provide services 

during the appeal period. 

(b) Failure to file an appeal within the 

21 days provided in paragraph (a) of this 

section constitutes a waiver of the right 

to a hearing. 

(c) A request for a hearing under this 

section must state specifically those 

issues in the Grant Officer’s notification 

upon which review is requested. Those 

provisions of the Grant Officer’s 

notification not specified for review are 

considered resolved and not subject to 

further review. 

(d) A request for a hearing must be 

transmitted by certified mail, return 

receipt requested, to the Chief 

Administrative Law Judge, U.S. 

Department of Labor, Suite 400 North, 

800 K Street, NW., Washington, DC 

20001, with one copy to the 

Departmental official who issued the 

determination. 

(e) The decision of the ALJ constitutes 

final agency action unless, within 21 

days of the decision, a party dissatisfied 

with the ALJ’s decision, in whole or in 

part, has filed a petition for review with 

the Administrative Review Board (ARB) 

(established under Secretary’s Order No. 

2–96, published at 61 FR 19978, May 3, 

1996), specifically identifying the 

procedure, fact, law, or policy to which 

exception is taken. The mailing address 

for the ARB is 200 Constitution Ave., 

NW., Room N5404, Washington, DC 

20210. The Department will deem any 

exception not specifically urged to have 

been waived. A copy of the petition for 

review must be sent to the grant officer 

at that time. If, within 30 days of the 

filing of the petition for review, the ARB 

does not notify the parties that the case 

has been accepted for review, then the 

decision of the ALJ constitutes final 

agency action. Any case accepted by the 

ARB must be decided within 180 days 

of acceptance. If not so decided, the 

decision of the ALJ constitutes final 

agency action. 

(f) The Rules of Practice and 

Procedures for Administrative Hearings 

Before the Office of Administrative Law 

Judges, at 29 CFR part 18, govern the 

conduct of hearings under this section, 

except that: 

(1) The appeal is not considered a 

complaint; and 

(2) Technical rules of evidence, such 

as the Federal Rules of Evidence and 

subpart B of 29 CFR part 18, will not 

apply to any hearing conducted under 

this section. However, rules designed to 

assure production of the most credible 

evidence available and to subject 

testimony to test by cross-examination 

will be applied when the ALJ 

conducting the hearing considers them 

reasonably necessary. The certified copy 


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53834 Federal Register / Vol. 75, No. 169 / Wednesday, September 1, 2010 / Rules and Regulations 

of the administrative file transmitted to 

the ALJ by the official issuing the 

notification not to award financial 

assistance must be part of the 

evidentiary record of the case and need 

not be moved into evidence. 

(g) The ALJ should render a written 

decision no later than 90 days after the 

closing of the record. 

(h) The remedies available are 

provided in § 641.470. 

§ 641.910 What grievance procedures 

must grantees make available to applicants, 

employees, and participants? 

(a) Each grantee must establish, and 

describe in the grant agreement, 

grievance procedures for resolving 

complaints, other than those described 

by paragraph (d) of this section, arising 

between the grantee, employees of the 

grantee, sub-recipients, and applicants 

or participants. 

(b) The Department will not review 

final determinations made under 

paragraph (a) of this section, except to 

determine whether the grantee’s 

grievance procedures were followed, 

and according to paragraph (c) of this 

section. 

(c) Allegations of violations of Federal 

law, other than those described in 

paragraph (d) of this section, which are 

not resolved within 60 days under the 

grantee’s procedures, may be filed with 

the Chief, Division of Adult Services, 

Employment and Training 

Administration, U.S. Department of 

Labor, 200 Constitution Avenue, NW., 

Washington, DC 20210. Allegations 

determined to be substantial and 

credible will be investigated and 

addressed. 

(d) Questions about, or complaints 

alleging a violation of, the 

nondiscrimination requirements of title 

VI of the Civil Rights Act of 1964, § 504 

of the Rehabilitation Act of 1973, § 188 

of the Workforce Investment Act of 1998 

(WIA), or their implementing 

regulations, may be directed or mailed 

to the Director, Civil Rights Center, U.S. 

Department of Labor, Room N–4123, 

200 Constitution Avenue, NW., 

Washington, DC 20210. In the 

alternative, complaints alleging 

violations of WIA § 188 may be filed 

initially at the grantee level. See 29 CFR 

37.71, 37.76. In such cases, the grantee 

must use complaint processing 

procedures meeting the requirements of 

29 CFR 37.70 through 37.80 to resolve 

the complaint. 

§ 641.920 What actions of the Department 

may a grantee appeal and what procedures 

apply to those appeals? 

(a) Appeals from a final disallowance 

of costs as a result of an audit must be 

made under 29 CFR 96.63. 

(b) Appeals of suspension or 

termination actions taken on the 

grounds of discrimination are processed 

under 29 CFR 31 or 29 CFR 37, as 

appropriate. 

(c) Protests and appeals of decisions 

not to award a grant, in whole or in part, 

will be handled under § 641.900. 

(d) Upon a grantee’s receipt of the 

Department’s final determination 

relating to costs (except final 

disallowance of costs as a result of an 

audit, as described in paragraph (a) of 

this section), payment, suspension or 

termination, or the imposition of 

sanctions, the grantee may appeal the 

final determination to the Department’s 

Office of Administrative Law Judges, as 

follows: 

(1) Within 21 days of receipt of the 

Department’s final determination, the 

grantee may transmit by certified mail, 

return receipt requested, a request for a 

hearing to the Chief Administrative Law 

Judge, United States Department of 

Labor, Suite 400 North, 800 K Street, 

NW., Washington, DC 20001 with a 

copy to the Department official who 

signed the final determination. 

(2) The request for hearing must be 

accompanied by a copy of the final 

determination, and must state 

specifically those issues of the 

determination upon which review is 

requested. Those provisions of the 

determination not specified for review, 

or the entire determination when no 

hearing has been requested within the 

21 days, are considered resolved and 

not subject to further review. 

(3) The Rules of Practice and 

Procedures for Administrative Hearings 

Before the Office of Administrative Law 

Judges, at 29 CFR part 18, govern the 

conduct of hearings under this section, 

except that: 

(i) The appeal is not considered as a 

complaint; and 

(ii) Technical rules of evidence, such 

as the Federal Rules of Evidence and 

subpart B of 29 CFR part 18, will not 

apply to any hearing conducted under 

this section. However, rules designed to 

assure production of the most credible 

evidence available and to subject 

testimony to test by cross-examination 

will be applied when the 

Administrative Law Judge conducting 

the hearing considers them reasonably 

necessary. The certified copy of the 

administrative file transmitted to the 

Administrative Law Judge by the official 

issuing the final determination must be 

part of the evidentiary record of the case 

and need not be moved into evidence. 

(4) The Administrative Law Judge 

should render a written decision no 

later than 90 days after the closing of the 

record. In ordering relief, the ALJ may 

exercise the full authority of the 

Secretary under the OAA. 

(5) The decision of the ALJ constitutes 

final agency action unless, within 21 

days of the decision, a party dissatisfied 

with the ALJ’s decision, in whole or in 

part, has filed a petition for review with 

the ARB (established under Secretary’s 

Order No. 2–96), specifically identifying 

the procedure, fact, law, or policy to 

which exception is taken. The mailing 

address for the ARB is 200 Constitution 

Ave., NW., Room N5404, Washington, 

DC 20210. The Department will deem 

any exception not specifically argued to 

have been waived. A copy of the 

petition for review must be sent to the 

grant officer at that time. If, within 30 

days of the filing of the petition for 

review, the ARB does not notify the 

parties that the case has been accepted 

for review, then the decision of the ALJ 

constitutes final agency action. Any case 

accepted by the ARB must be decided 

within 180 days of acceptance. If not so 

decided, the decision of the ALJ 

constitutes final agency action. 

§ 641.930 Is there an alternative dispute 

resolution process that may be used in 

place of an OALJ hearing? 

(a) Parties to a complaint that has 

been filed according to the requirements 

of § 641.920 (a), (c), and (d) may choose 

to waive their rights to an 

administrative hearing before the OALJ. 

Instead, they may choose to transfer the 

settlement of their dispute to an 

individual acceptable to all parties who 

will conduct an informal review of the 

stipulated facts and render a decision in 

accordance with applicable law. A 

written decision must be issued within 

60 days after submission of the matter 

for informal review. 

(b) Unless the parties agree in writing 

to extend the period, the waiver of the 

right to request a hearing before the 

OALJ will automatically be revoked if a 

settlement has not been reached or a 

decision has not been issued within the 

60 days provided in paragraph (a) of this 

section. 

(c) The decision rendered under this 

informal review process will be treated 

as the final agency decision. 

Signed at Washington, DC, this 19th day of 

August 2010. 

Jane Oates, 

Assistant Secretary, Employment and 

Training Administration. 

[FR Doc. 2010–21139 Filed 8–31–10; 8:45 am] 

BILLING CODE 4510–FN–P 


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