40 TAC §800.309
The Texas Workforce Commission (Commission) proposes new §800.309
regarding Commission Evaluation of Board Oversight Capacity.
PART I. INTRODUCTION
A. Purpose
B. Background
C. Coordination Activities
PART II. EXPLANATION OF INDIVIDUAL PROVISIONS
PART III. IMPACT STATEMENTS
PART IV. PROPOSED RULES
PART I. INTRODUCTION
A. Purpose. The purpose of the proposed rule is to set forth the processes
and criteria used by the Commission to evaluate each local workforce development
board's (Board) overall capacity to oversee and manage local funds and the
delivery of local workforce services.
Texas Labor Code, Subchapter C, Chapter 302 was amended by Senate Bill
280, 78th Texas Legislature, Regular Session (2003) to add Section 302.048
entitled "Assessment of Local Workforce Development Board's Capacity to Oversee
and Manage Local Funds and Delivery of Services."
The new section reiterates the Commission's responsibility to oversee and
evaluate Boards, particularly as it relates to their capacity to fulfill their
financial and oversight duties under federal and Texas law and rules.
B. Background. The Commission's strong history of Board oversight has enabled
the Commission and the Boards continuously to improve the delivery of local
workforce services. As part of this oversight, the Commission uses various
monitoring methods to evaluate Board capacity to oversee and manage local
funds and deliver local workforce services. These monitoring efforts are similar
to the methods set out under the Texas Labor Code §302.048. For example,
the Commission's Performance Analysis and Reporting Department reports all
Board and strategic plan performance measures on a monthly basis and makes
them available for Boards, their staffs, and their contractors to use to manage,
monitor, and improve their performance. The Commission also has various monitoring
methods aimed at ensuring that Boards are exhibiting good fiscal management
and oversight practices. Therefore, the Commission has approached development
of this rule with the idea that it should build on existing efforts. Rather
than add yet another bureaucratic and administrative burden to the Boards,
from the beginning of the development of this proposed rule the Commission
views this rule as an opportunity to tie together the results of various existing
monitoring methods into a system to assist the Boards in their oversight and
management of funds and delivery of local workforce services.
In developing the rule, the Commission is seeking to achieve several goals.
The Commission believes that the system should be readily accessible to and
understandable by the Boards, the general public and other interested parties.
It is also important that to the extent possible, the system should rely upon
objectively determinable factors. Additionally, it is important that the system
be implemented without placing a significant burden, financial or otherwise,
on either the Boards, their staff, their contractors, or the Commission. Finally,
the Commission wants to ensure that the system criteria be defined broadly
so that it will allow for growth and improvement over time.
C. Coordination Activities. On January 6, 2004, the Commission notified
the Boards that it was seeking input on criteria to be used to evaluate Board
capacity as required by Texas Labor Code §302.048. Boards were provided
a concept paper which summarized the requirements of Texas Labor Code §302.048
and that laid out various goals that the Commission thought the final rule
needed to achieve.
Boards were given until February 6, 2004 to provide input. On January 30,
2004, Commission staff held a conference call attended by staff from at least
14 Boards. During this call, Boards stated that they believed that the Commission's
oversight activities, particularly those listed under Subchapter H of 40 T.A.C.
Chapter 800, Agency Monitoring Activities, generally covered the duties that
the new statutory language addressed. This was the general consensus of those
participating and was consistent with the Commission's initial thoughts. In
the week that followed the call, staff from seven Boards, including six executive
directors, provided comments generally supporting this direction.
In addition to these initial coordination activities, Boards, along with
other interested parties and individuals, will have the opportunity to provide
input on the rule through the standard public comment process applicable to
all Commission rule proposals.
PART II. EXPLANATION OF INDIVIDUAL PROVISIONS
The proposed new rule, Section 800.309, is proposed to be added to Subchapter
H. Agency Monitoring Activities.
Section 800.309, subsections (a) & (b) outline the process and criteria
used by the Commission to evaluate each Board's overall capacity to oversee
and manage local funds and the delivery of local workforce services. The six
responsibilities listed under Section 800.309(b) correspond to the six areas
of responsibility that Texas Labor Code §302.048 requires to be addressed
by the rule's criteria.
The Commission believes that standards, criteria, and requirements relating
to the six listed responsibilities from §302.048(b) and incorporated
into Section 800.309(b) are addressed in state and federal laws and regulations,
the provisions of Board contracts and plans, and official directives issued
by governing authorities. Examples of these directives include such documents
as U.S. Department of Labor Training and Employment Guidance Letters, U.S.
Department of Labor Training and Employment Informational Notices, U.S. Department
of Health and Human Services Guidance Letters, and Texas Workforce Commission
Workforce Development Letters.
These requirements change over time as laws, rules, and guidance directives
are amended, repealed, or replaced or as new initiatives are implemented.
Therefore, listing each statute, rule, or directive in this rule would be
both redundant and inefficient. As Board responsibilities evolve based on
actions of state and federal lawmakers and oversight agencies, the Commission
would be faced with amending this rule to reference changes made elsewhere.
Further, regardless of whether these requirements are specifically enumerated
in this rule, they apply to the Boards. As such, Section 800.309(b) of the
proposed rule explains that the Agency will conduct oversight activities,
such as the monitoring process, that evaluate Board performance and compliance
and mentions these governing laws, regulations, and directives and make findings
as appropriate.
While each of the six responsibilities listed in §302.048 and incorporated
into Section 800.309(b) are important components of oversight and management,
the Commission believes that one of the best ways that the Boards can demonstrate
competence in these areas is by achieving desired outcomes. That is, nothing
demonstrates a Board's capacity to succeed as much as the Board's success
itself. With that in mind, while the criteria being outlined in this rule
addresses the six areas of responsibility, the Commission will focus much
of its monitoring and management efforts and ultimate Board ratings on performance
and financial outcomes rather than administrative processes.
Section 800.309(c) outlines the four ratings that the Commission shall
apply to the Boards. The ratings are based on performance outcomes, disallowed
costs, and findings of noncompliance with applicable statutes, rules, directives
and other governing documents such as Board Plan and Contract requirements.
The four ratings, in descending order, are "Above Standards," "Within Standards,"
"Below Standards," and "Well Below Standards."
While Section 800.309(c) references achieving targets on performance measures,
the Commission did not specify the measures in the rule. The Commission generally
does not believe that it is appropriate to specify performance measures in
rules. Doing so makes it more difficult to change measures or improve methodologies
as statutes, priorities, or responsibilities change.
Finally, Section 800.309(d) provides that the Commission will post performance
information and the results of its Board evaluations and the Board ratings
on its website. This addresses requirements set out in §302.048(f) to
post this information for the public. The legislation does not set out how
often the Commission is to review and update performance information about
Boards. Therefore, the Commission is interested in comments regarding how
often the Commission should conduct reviews and update performance information.
Moreover, the Commission is interested in comments about whether there should
be a different review schedule for conducting follow-up reviews for Boards
that receive a "Below Standards" or "Well Below Standards" rating.
PART III. IMPACT STATEMENTS
Randy Townsend, Chief Financial Officer, has determined that for each year
of the first five years the rule will be in effect, the following statements
will apply:
There are no additional estimated costs to the state and to local governments
expected as a result of enforcing or administering the rule;
There are no estimated reductions in costs to the state and to local governments
as a result of enforcing or administering the rule;
There are no estimated losses or increases in revenue to the state or to
local governments as a result of enforcing or administering the rule;
There are no foreseeable implications relating to costs or revenue of the
state or local governments as a result of enforcing or administering the rule;
and
There is no anticipated impact on small businesses because the Boards are
provided local funds to implement the program locally and the reasonable and
necessary costs of performing under a contract by a contracted workforce service
provider would be paid through the contract.
Mark Hughes, Director of Labor Market and Career Information, has determined
that there is no foreseeable negative impact upon employment conditions in
this state as a result of the proposed rule amendments and new rules.
Joann Benton, Director of Subrecipient Monitoring, has determined that
for each year of the first five years the rules are in effect, the public
benefit anticipated as a result of enforcing the new rules will be greater
accountability and quality of oversight by Boards, particularly relating to
fiscal, program, and performance management.
Comments on the proposed section may be submitted to John Moore, General
Counsel, Texas Workforce Commission, 101 East 15th Street, Room 608, Austin,
Texas 78778; Fax Number 512-463-2220; or e-mailed to john.moore@twc.state.tx.us.
Comments must be received by the Agency no later than thirty (30) days from
the date this proposal is published in the
Texas
Register
.
The new rules are proposed in response to and under the authority
of the following sections:
Texas Labor Code §302.048 Assessment of Local Workforce Development
Board's Capacity to Oversee and Manage Local Funds and Delivery of Services,
added by §4.07 of Senate Bill 280, 78th Texas Legislature, Regular Session
(2003). The Commission is required to adopt rules not later than May 1, 2004,
to establish criteria to be used to evaluate each local workforce development
board, and shall implement Texas Labor Code §302.048 not later than September
1, 2004.
Additionally, §301.0015, Texas Labor Code, provides that the Commission
has authority to adopt rules necessary to administer the Commission's policies,
including rules necessary for the administration of Title 4, Texas Labor Code,
relating to employment services and unemployment.
Section 302.002(d), Texas Labor Code, authorizes the Commission to adopt,
amend, or repeal such rules in accordance with Chapter 2001, Texas Government
Code, as necessary for the proper administration of the Workforce Development
Division.
Section 302.021, Texas Labor Code, which consolidated under the jurisdiction
of the Commission job-training, employment, and employment-related educational
programs and other functions listed in this section including, but not limited
to, the programs funded under the Workforce Investment Act of 1998 as amended
(29 U.S.C. §2801 et seq.).
Texas Labor Code, Title 4, and primarily Chapters 301 and 302, will be
affected by the proposed new rule.
§800.309.Commission Evaluation of Board Oversight Capacity.
(a)
Purpose - This rule outlines the process and criteria used
by the Commission to evaluate Board capacity to oversee and manage local funds
and the delivery of local workforce services.
(b)
The Commission shall use oversight methods outlined in
this chapter and elsewhere in the statute and rules to evaluate each Board's
performance and compliance with applicable laws, regulations, provisions of
contracts and Board plans, and official directives. Examples of official directives
include such documents as U.S. Department of Labor Training and Employment
Guidance Letters, U.S. Department of Labor Training and Employment Informational
Notices, U.S. Department of Health and Human Services Guidance Letters, and
Texas Workforce Commission Workforce Development Letters. In particular, the
Commission shall evaluate and make findings as appropriate relating to Board
fulfillment of responsibilities relating to:
(1)
developing, maintaining, and upgrading comprehensive fiscal
management and accountability systems;
(2)
hiring, training, and retaining qualified staff to carry
out the Board's oversight activities;
(3)
selection and oversight of local contractors to improve
delivery of workforce services;
(4)
oversight and improvement of operation of local career
development centers in the area served by the Board;
(5)
managing contractors' performance across multiple Board
programs and achieving required performance standards; and
(6)
identifying and resolving long-standing oversight problems
of the Board and performance problems of contract providers.
(c)
The Commission shall rate each Board's capacity as Above
Standards, Within Standards, Below Standards or Well Below Standards. The
following criteria shall be used to set the rating.
(1)
A Board will be rated as Above Standards if:
(A)
the Board's performance on 90% of contracted measures is
at or above 95% of target with no single measure at less than 90% of target;
(B)
there are no disallowed costs; and
(C)
there are no repeat findings.
(2)
A Board will be rated as Within Standards if:
(A)
the Board's performance on 80% of contracted measures is
at or above 95% of target with no single measure at less than 85% of target;
(B)
disallowed costs do not exceed 1% of allocation; and
(C)
there are no repeat findings.
(3)
A Board will be rated as Below Standards if the Board is
found to not be Above or Within Standards.
(4)
Notwithstanding subsection (c)(3), a Board shall be rated
as Well Below Standards if:
(A)
the Board is found not to be Above or Within Standards
for two consecutive years;
(B)
the Board's performance on 25% of contracted measures is
below 80% of target based on the end of year report;
(C)
disallowed costs exceed 3% of allocation; or
(D)
there are significant findings.
(d)
At least annually, the Commission shall post the results
of its evaluation of each Board and each Board's performance on its internet
site with explanation of the rating, rating criteria, and performance measures
in a format that is readily accessible to and understandable by a member of
the public.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State on February 26, 2004.
TRD-200401465
John D. Moore
General Counsel
Texas Workforce Commission
Earliest possible date of adoption: April 11, 2004
For further information, please call: (512) 463-2573