Effective with the July 2005 monthly reports, this Technical Advisory supercedes Technical Advisories 01-18.2, dated August 25, 2004, 01-18.1, dated August 21, 2003 and 01-18, dated June 27, 2001.

Section 667.200(a) of the WIA Rules and Regulations describes the uniform fiscal and administrative requirements that each local area must follow, which includes accurate financial reporting.

Technical assistance regarding ETA employment and training programs was provided by USDOL to states and local areas in December 2004 to clarify the uniform administrative requirements, obligations and accrued expenditures and techniques for reporting on an accrual basis. To facilitate accurate financial reporting, USDOL’s definitions and examples provided in the December training, are attached to this Technical Advisory.

Submission of Monthly Accrued Expenditure Reports

Each LWIA must submit Monthly Accrued Expenditure Reports (AERs) to the New York State Department of Labor (NYSDOL) by the 20th day of the month following the month reported via e-mail to:

Ms. Patricia Jabonaski at Patricia.Jabonaski@labor.state.ny.us, the Local Area’s State Representative, and the Fiscal Oversight and Technical Assistance (FOTA) Representative. Additionally, a printed copy, signed by an authorized signatory for the LWIA, should be mailed to:

Ms. Patricia Jabonaski
NYS Department of Labor
Governor Averell Harriman State Campus
Building 12, Room 425
Albany, New York 12240

Procedures and Penalties for Late and/or Inaccurate Reporting

LWIAs that have not submitted all their WIA and TAA monthly financial reports in accordance with the due date of the 20th day of the following month and/or have submitted reports that are substantially inaccurate within a program year, will be subject to the following:

1. For the first occurrence, the Local Area must submit a written explanation within 5 days of the report due date, outlining the reason(s) for the late or substantially inaccurate submission of the report(s) and a corrective action plan which:
   1. outlines the reason(s) for the late or substantially inaccurate submission of the report(s);
   2. describes the action being taken to remedy the problem;
   3. indicates the date the accurately revised or delinquent report(s) will be submitted to the State for approval. (In no case should the submission of the accurately revised or delinquent report be more than 45 days after the report period. [e.g. July report by September 15th, August report by October 15th, etc.]), and
   4. notes any technical assistance needed to correct the problem.

   The written explanation should be sent to:

   Mr. Paul Miller, Director
   Workforce Development and Training Division
   Office of Contract Review and Expenditure Control
   New York State Department of Labor
   Governor Averell Harriman State Campus
   Building 12, Room 425
   Albany, New York 12240

   with a copy to the Local Area’s FOTA and State Representative.

2. For the second occurrence, the Local Area’s authority to draw cash down will be suspended until receipt of accurate corrected reports by the Department and verified by a fiscal review.

3. For the third occurrence, the Local Area’s ability to draw cash will be subject to FOTA review for appropriateness/reasonableness to ensure no fiscal issues will result from the receipt of the cash based on the inaccurate reporting. This review will continue until such time as FOTA determines the Local Area has taken the necessary steps to provide prompt, accurate reporting on a continuing basis and no further assistance/monitoring is required.

   When a Local Area is developing the monthly accruals, they should include an accrual for each contracted service and should refer to the following clarifications provided by USDOL in the preparation of their monthly reports:

   DEFINITIONS and CLARIFICATIONS

   Accrual as defined in 29 CCFR 97.3 can be an income or an expenditure that was incurred during a given period even if no funds had been exchanged as of the end of the given period. An example: staff payroll earned in one period but not paid until the subsequent period. These payroll costs would be reflected as an Accrual at the end of the given period.

   Expenditure is a “cost” or “outlay” for either goods and other tangible property received, or services performed by employees, contractors, sub grantees, subcontractors, and other payees [20 CFR 97.3]. An example: the cost of a transportation services provider for participant supportive services.

   Obligations are the amounts of orders placed, contracts and sub-grants awarded; goods and services received, and similar transactions during a given period that will require payment by the grantee during the same or a future period [29 CFR 97.3] for which there is a legally binding contractual agreement which includes offer, acceptance and consideration made by an authorized official. An example: a contract entered into with a local college to pay tuition for a participant who is currently enrolled. All expenditures whether accrued or not are obligations, but not all obligations are expenditures. You can incur an obligation without an expenditure being incurred. An example: the WIA grantee contracts for a computer training seminar where the cost is based on the number of participants that attend, there is no minimum guaranteed attendance and the maximum is ten participants. The WIA grantee has an obligation for the possible ten maximum participants but an actual expenditure has not been incurred until the seminar takes place.

   EXAMPLES of the application of the definitions

   Individual Training Accounts (ITAs) are to be obligated at the time the participant is registered/enrolled, not when the ITA is written. The ITA can not be obligated for more than the costs that will be incurred in the current program year. If the ITA contract covers multiple funding program years then the following year’s costs can not be obligated until next year’s funds become available. The accrued expenditure is reported when either an invoice has been received or once services have been rendered, whichever comes first. If the training institution has a drop-out/refund policy in place then this has to be taken into consideration when determining when the costs are to be fully accrued.

   Salaries, wages, and fringe benefits are to be obligated at the time they are earned which also means that the accrued expenditure is to be reported at the same time. The issue of how and when annual leave is to be reported is determined based on whether or not the leave is funded or not. If the leave is funded then it is obligated and accrued at the time it is earned. If it is not funded then it is obligated and accrued when it is taken.

   Maintenance Agreements: If prepayment for these services is considered to be the industry standard and the payment terms are written into the maintenance contract, the costs can be considered an obligation when the contract is signed and an accrued expenditure when the payment is made.

   For leasehold improvements: If a local area has a lease that requires prepayment of more than one month, the lease needs to be awarded so that the prepayment is considered as a security deposit rather than a prepayment of occupancy costs. This will allow the local area to prepay those costs and consider them an outlay at the time they are paid.

   NYSDOL EXAMPLES of substantially inaccurate monthly reports

   1. Obligations are less than or equal to accrued expenditures during the current program year: only in rare circumstances should obligations equal accrued expenditures. When this does occur, the Local Area should attach an explanation to the expenditure report.

   2. Over- and under-estimation of monthly accruals and obligations: this would be determined by a FOTA desk review or on-site review of the current month’s report and a comparison with previous month’s reports.

   3. Inappropriate accrual: a Local Area reports their accrued expenditures against current program year funds instead of the oldest available program year funds.

   4. Omitted/inaccurate data: a Local Area, when reporting their monthly accruals, does not include an accrual for each contracted service; the accrual reported is based on contract funding levels instead of an actual figure; or a Local Area fails to report or completely report an allocation of funds that has been awarded via an NOA by the last day of the month being reported.

Questions concerning this Technical Advisory can be directed to Robin Holmes at (518) 457-1419 or may be sent via e-mail to Robin.Holmes@labor.state.ny.us