TITLE 40.SOCIAL SERVICES AND ASSISTANCE

Part 1. TEXAS DEPARTMENT OF HUMAN SERVICES

Chapter 12. SPECIAL NUTRITION PROGRAMS

Subchapter A. CHILD AND ADULT CARE FOOD PROGRAM

40 TAC §§12.2, 12.3, 12.8, 12.19

The Texas Department of Human Services (DHS) adopts amendments to §§12.2, 12.3, 12.8, and 12.19 without changes to the proposed text published in the December 8, 2000 issue of the Texas Register (25 TexReg 12165).

Justification for the amendments is to incorporate provisions of the Child and Adult Care Food Program (CACFP) mandated by federal legislation, Federal Crop Insurance Act of 2000 (Public Law 106-224).

The department received no comments regarding adoption of the amendments.

The amendments are adopted under the Human Resources Code, Title 2, Chapters 22 and 33, which provide the department with the authority to administer public and nutritional assistance programs.

The amendments implement the Human Resources Code, §§22.001-22.024 and §§33.001-33.024.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 22, 2001.

TRD-200100395

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Effective date: February 11, 2001

Proposal publication date: December 8, 2000

For further information, please call: (512) 438-3108


Chapter 19. NURSING FACILITY REQUIREMENTS FOR LICENSURE AND MEDICAID CERTIFICATION

Subchapter D. FACILITY CONSTRUCTION

40 TAC §19.303, §19.326

The Texas Department of Human Services (DHS) adopts amendments to §19.303 and §19.326 without changes to the proposed text in the December 8, 2000 issue of the Texas Register (25 TexReg 12167).

Justification for the amendments regarding emergency electrical power and safety operations lessen requirements that are more stringent than necessary to protect resident health and safety. The amended rules require duplex receptacles only when life-support electrical appliances, such as ventilators and suction equipment, are being used.

The department received no comments regarding adoption of the amendments.

The amendments are adopted under the Health and Safety Code, Chapter 242, which authorizes the department to license and regulate nursing facilities.

The amendments implement the Health and Safety Code, §§242.001-242.268.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 22, 2001.

TRD-200100396

Paul Leche

General Counsel, Legal Services

Texas Department of Human Services

Effective date: March 1, 2001

Proposal publication date: November 8, 2000

For further information, please call: (512) 438-3108


Part 3. TEXAS COMMISSION ON ALCOHOL AND DRUG ABUSE

Chapter 143. FUNDING

40 TAC §§143.1 - 143.3, 143.11 - 143.15, 143.17, 143.21, 143.22

The Texas Commission on Alcohol and Drug Abuse adopts amendments to §§143.1-143.3, 143.11-143.15, 143.17, 143.21, and 143.22 concerning Funding. These sections contain information regarding applicability, allocation of funds, service procurement plan, selection criteria, notice, request for proposals, application process, application criteria, funding decisions, and alternative competition. Section 143.22 is adopted with a non-substantive change to the proposed text as published in the November 3, 2000, issue of the Texas Register (25 TexReg 11086). Sections 143.1-143.3, 143.11-143.15, 143.17, and 143.21 are adopted without changes and will not be republished.

These amendments are adopted to update the funding rules, to state them more clearly and concisely and to eliminate unnecessary procedural details. Changes from Chapter 143 include: reference to an overall funding methodology instead of a formula; acceptance of input regarding the annual service procurement plan from all interested parties; the inclusion of service goals in the annual service procurement plan; compliance from all applicants with the Texas Review and Comment System (TRACS) requirements; the requirement for all treatment providers to be appropriately licensed and in good standing by the first effective service day they proposed in their applications; the elimination of unnecessary details regarding contract negotiations and funding decisions; the inclusion of a timeframe for notification of successful applicants; a new streamlined alternative funding process; and updated rules for other funding processes.

No comments were received regarding adoption of these amendments.

These amendments are adopted under the Texas Health and Safety Code, §461.012(a)(15) which provides the Texas Commission on Alcohol and Drug Abuse with the authority to adopt rules governing the functions of the commission, including rules that prescribe the policies and procedures followed by the commission when funding services and §461.0141 which provides the commission with authority to adopt rules regarding purchase of services.

The code affected by the adopted amendments is the Texas Health and Safety Code, Chapter 461.

§143.22.Other Funding Processes.

(a)

The commission may solicit a proposal from only one source if it is not feasible to use competitive procedures or state law does not require competition.

(b)

One of the following must apply:

(1)

A competitive process failed to elicit acceptable bids.

(2)

The agency awarding or appropriating the funds to the commission either authorized the noncompetitive negotiation or approved the entity to receive funds.

(3)

Because of an emergency, it is necessary to proceed without formal advertising to avoid delay.

(4)

The material or service to be purchased is available from only one source.

(5)

State law does not require competition.

(c)

If the available funds exceed $25,000, a notice that services will be purchased is published on the commission's website and on the state's electronic business daily.

(d)

After a noncompetitive award is made, the commission reserves the right to use a competitive process in subsequent years.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 17, 2001.

TRD-200100333

Karen Pettigrew

General Counsel

Texas Commission on Alcohol and Drug Abuse

Effective date: February 6, 2001

Proposal publication date: November 3, 2000

For further information, please call: (512) 349-6668


40 TAC §§143.16, 146.18, 146.23 - 143.25

The Texas Commission on Alcohol and Drug Abuse adopts the repeal of §§143.16, 143.18, and 143.23-143.25 concerning Funding without changes to the proposal as published in the November 3, 2000, issue of the Texas Register (25 TexReg 10891).

The sections contain the peer review process and procedures for the cancellation or suspension of solicitation, emergency purchase, noncompetitive renewal, and developmental funding.

The repeal is adopted because the requirements contained in these sections have been incorporated into other sections or eliminated because they contain unnecessary procedural details.

No comments were received regarding the repeal of these sections.

The repeal is adopted under the Texas Health and Safety Code, §461.012(a)(15) which provides the Texas Commission on Alcohol and Drug Abuse with the authority to adopt rules governing the functions of the commission, including rules that prescribe the policies and procedures followed by the commission when funding services, and §461.0141 which provides the commission with authority to adopt rules regarding purchase of services.

The code affected by the adopted repeal is the Texas Health and Safety Code, Chapter 461.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 17, 2001.

TRD-200100334

Karen Pettigrew

General Counsel

Texas Commission on Alcohol and Drug Abuse

Effective date: February 6, 2001

Proposal publication date: November 3, 2000

For further information, please call: (512) 349-6668


Chapter 146. INTERAGENCY AGREEMENTS

40 TAC §146.21

The Texas Commission on Alcohol and Drug Abuse adopts new §146.21, concerning Criteria to Measure the Effectiveness of Substance Abuse Prevention Programs. The section is adopted with changes to the proposed text as published in the November 3, 2000, issue of the Texas Register (25 TexReg 10892).

The new section contains the criteria the Texas Commission on Alcohol and Drug Abuse, Texas Juvenile Probation Commission, Texas Youth Commission and Texas Department of Protective and Regulatory Services shall use to measure the effectiveness of substance abuse prevention programs as required by the 76th Legislature, Acts 1999, Chapter 1051, Sections 1 to 3. Each agency shall also require substance abuse prevention programs to submit an annual report describing the program's effectiveness in meeting the criteria. The criteria include targeting problems that are specific to a given community or school, providing social services to children who have a family member with a drug addiction, using strategies that are appropriate for children of different ages, and providing continuity in services and intervention strategies for all grade levels.

The commission received comments from the Texas Youth Commission and the Greater Dallas Council on Alcohol and Drug Abuse, which are summarized below.

Comment: Clarify that the prevention programs referenced throughout the section are substance-abuse related prevention programs.

Response: The commission accepts this comment and the words "substance-abuse" have been added to describe the prevention programs referenced throughout the section.

Comment: The proposed rule states that programs should use "strategies that are appropriate for children of different ages." Chapter 144 of the commission's rules defines "children" as those under 13 years of age. Is it your intention that this item refer to adolescents (ages 13-17) as well?

Response: The text has been revised to refer to both children and adolescents.

Comment: Programs are required to use "the format specified by the funding agency" for evaluation. When do you expect to have that format ready for distribution?

Response: Each funding agency is responsible for defining the format. Chapter 144 of the commission's rules directs commission-funded programs to use Prevention Plus III as the format for program evaluation.

The new section is adopted under the Texas Health and Safety Code, §461.012(a)(15) which authorizes the Texas Commission on Alcohol and Drug Abuse to adopt rules governing the functions of the commission, including rules that prescribe the policies and procedures followed by the commission in administering any commission programs.

The code affected by the adopted rule is the Texas Health and Safety Code, Chapter 461.

§146.21.Criteria Established to Measure the Effectiveness of Substance Abuse Prevention Programs.

(a)

Texas Commission on Alcohol and Drug Abuse, Texas Juvenile Probation Commission, Texas Youth Commission and Texas Department of Protective and Regulatory Services have agreed on the following criteria as measures of a substance abuse prevention program's effectiveness. According to the 76th Legislature, Acts 1999, Chapter 1051, Section 2, all funded substance abuse prevention programs shall:

(1)

Target problems that are specific to a given community or school.

(A)

The provider shall determine what population(s) the program is designed to serve: universal, selective or indicated.

(i)

Universal programs reach the general population (such as all students in a school).

(ii)

Selective programs target a subset of the general population which is at high risk for substance abuse (such as children of drug users).

(iii)

Indicated programs are designed for those who may already be experimenting with drugs or who exhibit other problem-related behaviors.

(B)

The program shall identify and describe the primary and secondary target populations including specific information about:

(i)

age, gender, and ethnicity;

(ii)

risk and protective factors;

(iii)

patterns of substance use;

(iv)

social and cultural characteristics;

(v)

knowledge, beliefs, values, and attitudes; and,

(vi)

needs.

(C)

The program shall identify long-range goals which:

(i)

address identified risks, needs and/or problems of the primary and secondary target populations;

(ii)

are designed to enhance protective factors;

(iii)

clearly describe behavioral and/or societal changes to be achieved; and

(iv)

are realistic in relation to available resources.

(D)

The program shall establish objectives for each contract period that are linked to the goals. Objectives must be realistic, outcome oriented, measurable and time-specific.

(2)

Provide social services to children who have a family member with a drug addiction.

(A)

The program shall identify needs that cannot be met by the program and help the participant access appropriate support systems and community resources. The program shall maintain a current list of referral resources, including other services provided by the organization.

(B)

The program shall provide information, referrals and follow-up for participant and/or family needs that cannot be met by the program.

(3)

Use strategies that are appropriate for children and adolescents of different ages. The program design, content, communications and materials shall:

(A)

be available in the primary language of the target population;

(B)

be appropriate to the literacy level, gender, race, ethnicity, sexual orientation, age and developmental level of the target population; and

(C)

recognize the cultural identification (context) of the family unit.

(4)

Provide continuity in services and intervention strategies for all grade levels as stipulated in any contracts the program enters into with the agencies in this interagency agreement.

(A)

The substance abuse prevention program shall be designed to build on and support other related prevention and intervention efforts in the community. The program shall secure and maintain the support of key decision makers and leaders and shall establish formal linkages and coordinate with other community resources.

(B)

Each substance abuse prevention program that provides activities within this strategy shall work with other service providers, organizations, individuals and families to promote substance abuse services and improve the community's ability to prevent substance abuse and related problems.

(C)

The program must use existing community services and resources effectively to enhance the substance abuse prevention program.

(D)

The program must establish formal linkages with other service providers to build a continuum of substance abuse services in the community. The program shall document active participation in collaborations to support community resource development.

(E)

The program shall provide information, referrals and follow-up for participant and/or family needs that cannot be met by the program.

(b)

In addition, according to the 76th Legislature, Acts 1999, Chapter 1051, Section 3, each agency shall require the substance abuse prevention program to submit an annual report that describes the program's effectiveness in meeting established criteria.

(1)

The program shall perform self-evaluation to verify, document and quantify program activities and effectiveness.

(2)

The program shall submit a written evaluation report using the format specified by the funding agency. The provider must submit the report at the end of each contract period, no later than September 30, unless otherwise stipulated in the contract.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 17, 2001.

TRD-200100332

Karen Pettigrew

General Counsel

Texas Commission on Alcohol and Drug Abuse

Effective date: February 6, 2001

Proposal publication date: November 3, 2000

For further information, please call: (512) 349-6668


Part 20. TEXAS WORKFORCE COMMISSION

Chapter 800. GENERAL ADMINISTRATION

The Texas Workforce Commission adopts amendments to Subchapter H, §§800.301-800.307 and new §800.308, relating to Agency Monitoring Activities. Section 800.302 and §800.303 are adopted with changes to the proposed text as published in the October 27, 2000, issue of the Texas Register (25 TexReg 10714) and will be republished. Section 800.301 and §§800.304-800.308 are adopted without changes and will not be republished.

The Texas Workforce Commission adopts amendments to Subchapter I, §§800.351-800.355 and §§800.357-800.359, and new §800.360, relating to Subrecipient and Contract Service Provider Monitoring Activities. Sections 800.352, 800.353, 800.355, 800.357, and 800.359 are adopted with changes to the proposed text as published in the October 27, 2000, issue of the Texas Register (25 TexReg 10714) and will be republished. Sections 800.351, 800.354, 800.358, and 800.360 are adopted without changes and will not be republished.

Concurrent with this proposal, the Commission adopts the review of Subchapters H and I of Chapter 800 relating to Monitoring in accordance with Texas Government Code §2001.039, without changes to the proposed text as published in the October 27, 2000, issue of the Texas Register (25 TexReg 10773). No comments were received on the proposed review.

The term "Agency" when used in these rules refers to the state agency which operates the integrated workforce development system. The term "Commission" is used to refer to the three member governance body authorized to adopt rules by Texas Labor Code §301.061.

Purpose: The purpose of the amendments is to include in the rules the monitoring requirements imposed by the Workforce Investment Act (WIA) (29 U.S.C.A. §§2801 et seq.), and to clarify the use of some of the terms in the rules.

Background. Regarding general amendments to both Subchapter H and Subchapter I, the proposed rules included changes to clarify the definitions of "contract service provider" and "subrecipient." Likewise, the proposed language amended the definitions section to delete the term Board and Commission as unnecessary.

The purpose of the rules and proposed changes to Subchapter H include the following:

Section 800.303 clarifies the provisions relating to program and fiscal monitoring.

Section 800.304 describes the requirement that records involving the use of funds administered by the Agency be made available by Boards, other subrecipients and contract service providers to the Agency. Record-keeping and documentation requirements are based on OMB Circular A-133 and the Agency's Financial Grants and Contracts Manual.

Section 800.305 was amended to clarify the processes and procedures used to determine performance.

Section 800.306 describes the fiscal monitoring activities of the Agency including evaluation of compliance with appropriate uniform administrative requirements and cost principles. The rules also include provisions regarding compliance with the requirements of WIA cost categories and cost limitations.

Section 800.307 was amended to clarify the provisions relating to resolution activities, and the appeal process.

Section 800.308 describes the Agency resolution process including the applicability of sanctions.

Concurrent with this adoption is an error correction that reflects that the proposed section "300.308" is properly cited as "800.308".

The purpose of the rules and proposed changes to the rules in Subchapter I include the following:

Section 800.352 sets forth the applicable definitions and modifies the terms "contract service providers" and "subrecipients";

Section 800.353 describes subrecipient and contract service provider monitoring requirements.

Section 800.354 describes required risk assessment activities.

Section 800.355 describes the monitoring plan.

Section 800.356 is intentionally skipped.

Section 800.357 lists the required controls over monitoring.

Section 800.358 describes reporting and resolution requirements.

Section 800.359 is revised to remove an unnecessary provision and describes the independent audit requirements.

Section 800.360 sets forth the requirements relating to access to records.

The Commission received comments on the rules from the Gulf Coast Workforce Development Board and from the West Central Workforce Development Board. Following each comment is the Commission's response. The commenters made suggestions regarding the rules but did not state whether they were for or against the rules.

Comment: Regarding §800.302 and §800.352, one commenter suggested that the change in the definition of service provider would create an adverse financial impact on entities contracting with Boards if these entities were required to monitor program activities. Even though monitoring costs are allowable, if not budgeted, sufficient funds may not be available to adequately monitor program activities. Local Boards should be allowed to determine the scope and extent to which contract service providers must conduct monitoring.

Response: The Commission agrees that Boards should be allowed to determine the extent to which monitoring activities are conducted by contract service providers. While the definition of contract service provider was amended for clarification, it was not intended that the scope of the definition extend beyond that in the original definition. Additionally, §800.353 of the original rule requires contract service providers to monitor entities that receive public funds, i.e., all subcontractors without regard to size. The proposed amendment allows more flexibility by requiring that contract service providers "assure" that monitoring activities occur. The proposed rules allows contract service providers to reach an agreement with the Board on how best to handle monitoring activities. The Board can elect to meet all monitoring responsibilities by including contract service provider coverage in the Board's monitoring plan and risk assessment and delineating the division of monitoring responsibilities in contracts with contract service providers and subrecipients.

Comment: Regarding §800.303 and §800.353, one commenter suggested that the rules be amended to limit required compliance with official directions such as Texas Workforce Commission Workforce Development Letters and U.S. Department of Labor Information Notices to only the mandatory policies contained within the documents. The commenter noted that such documents often provide guidance rather than policy and in such cases the Boards should have the opportunity to adopt alternate policies and procedures that better suit the needs of the local areas.

Response: The Commission agrees that Boards are not required to adopt all policies and procedures which are suggested in official "guidance," but rather are required to read and consider such guidance before developing policies and procedures for local areas. The proposed changes to §800.303 and §800.353 were not intended to require Boards to comply with all suggestions and "best practices" contained in authoritative pronouncements, but rather to provide examples of types of authoritative pronouncements. Because guidances may reference and include interpretations of requirements of law, the Commission does not agree with removing the reference from the rules.

Comment: Regarding §800.306, one commenter suggested that the Commission include a timeframe for reports to be issued; such as "within 60 days of completion of monitoring activities" or similar language. The commenter suggested that this would further ensure and demonstrate the Commission's commitment and practice of providing feedback within a reasonable time period.

Response: The Agency agrees that reporting timelines are necessary and has already established such in written internal agency operating procedures. However, since the detailed monitoring findings may vary significantly, the Commission does not agree with setting forth a rigid timeline in the rule language.

Comment: Regarding §800.307, one commenter recommended that the Commission include a timeframe for response and resolution activities in the section. The commenter also stated that the addition of timeframes for response from the Board and issuance of initial determinations would seem to be necessary in relationship to the timeframe in §800.307(2).

Response: The proposed rule requires completion of response and resolution activities by a date specified by the Agency rather than establishing a fixed timeframe for all situations. It is important that Boards, subrecipients, and contract service providers have the opportunity to respond fully and adequately to monitoring findings. Identifying due dates for such responses allows consideration of individual circumstances while respecting the need to complete the process in a timely manner.

Comment: Regarding §800.355, one commenter asked that the section be clarified because as written, the commenter suggested that the section could be read to require that Boards monitor Agency-funded activities even when the activities occur under a contract between the Agency and a third party. The commenter suggested that the section be amended to indicate clearly that subrecipients and contract service providers are only responsible for monitoring Agency-funded activities provided by entities which acted under a contract funded directly or indirectly by the subrecipient or service provider.

Response: The Agency agrees that the proposed rule as written could be misinterpreted. The rule will be changed accordingly.

Comment: Regarding §800.356, which is numbered as §800.357 in the text of the proposed rules, one commenter questioned the need for the requirement that all providers brief the Board or Board subcommittee on monitoring activities. The commenter suggested that this requirement would result in a significant number of reports to the Board or Board subcommittee. The commenter suggested that it would be more appropriate to provide a briefing on Board monitoring activities, which would include a review of contract monitoring. The commenter proposed that the section be amended to apply only to subrecipients or Boards.

Response: Regarding §800.357 and §800.358, the Commission intends that the Boards be briefed so they are informed of the results of monitoring activities because of the Boards' ultimate responsibility for oversight of all activities funded through the Boards. The Commission does not agree with removing the requirement that the Board be fully informed of all monitoring activities. The rules consistently require that monitoring information be provided to the Boards. Section 800.358(c) states that copies of all monitoring reports be provided to Boards. Section 800.357 requires that reports on monitoring activities be presented to the Board at a regularly scheduled meeting of the Board or Board subcommittee. The purpose of §800.357 is to ensure that the Board or a committee of the Board is briefed on the results of monitoring activities at regularly scheduled meetings by an appropriate party. Section 800.357 was not intended to require briefings by all the individual providers themselves, and so the Commission agrees to clarify that a person other than the provider or subrecipient may provide the briefing. Section 800.357 will be changed to clarify this point.

Subchapter H. AGENCY MONITORING ACTIVITIES

40 TAC §§800.301 - 800.308

The rules are adopted under Texas Labor Code §301.061 and §302.002, which provide the Texas Workforce Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of Agency services and activities.

§800.302.Definitions.

In addition to the definitions found in §800.2, the following words or terms when used in this subchapter shall have the following meanings, unless the context clearly indicates otherwise.

(1)

Contract Service Provider--An entity other than a vendor as defined in the Office of Management and Budget Circular A-133 engaged to provide goods, services, or both under a contract with a subrecipient, or other provider of services pursuant to an executed contract that is funded with funds administered by the Agency.

(2)

Subrecipient--An entity other than a vendor as defined in the Office of Management and Budget Circular A-133 receiving funds through a direct contract with the Agency. Boards are subrecipients.

§800.303.Program and Fiscal Monitoring.

(a)

Subrecipients shall cooperate with the Agency's program and fiscal monitoring activities, site visits, reviews of documentation and requests for information. The Agency is committed to ensuring the accountability of subrecipients and contract service providers. Therefore, monitoring activities have been developed to:

(1)

ensure programs achieve intended results;

(2)

ensure resources are efficiently and effectively used for authorized purposes and are protected from waste, fraud, and abuse; and

(3)

ensure reliable and timely information is captured and reported to serve as the basis to improve decision-making.

(b)

Comprehensive monitoring activities are conducted by the Agency to assess subrecipient and contract service provider progress in achieving program goals and maintaining fiscal accountability. Program and fiscal monitoring activities include site visits, desk reviews, and analyses of both financial and program outcomes to help identify potential weaknesses before such weaknesses result in substandard performance or questioned costs. Monitoring activities shall assess a subrecipient's or contract service provider's compliance with applicable laws, regulations, contract provisions, and official directives including 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. The Agency shall assess the subrecipient's or contract service provider's compliance with the appropriate uniform administrative requirements for grants and agreements applicable to the type of entity receiving funds, as promulgated in the circulars or rules of the Office of Management and Budget. Monitoring activities shall encompass both financial and programmatic monitoring and shall be evaluated on a periodic basis. Monitoring reviews result in recommendations that provide practical solutions used to take immediate corrective action.

(c)

Subrecipients and contract service providers are subject to audit and review by the Agency. The Agency may audit and review all relevant records or a sample of the records as needed to determine subrecipient and contract service provider performance.

(d)

Failure to comply with this subchapter shall result in corrective action and possible sanctions pursuant to Chapter 800, of this title, Subchapter E, (relating to Sanctions).

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 19, 2001.

TRD-200100359

John Moore

Assistant General Counsel

Texas Workforce Commission

Effective date: February 8, 2001

Proposal publication date: October 27, 2000

For further information, please call: (512) 463-3041


Subchapter I. SUBRECIPIENT AND CONTRACT SERVICE PROVIDER MONITORING ACTIVITIES

40 TAC §§800.351 - 800.355, 800.357 - 800.360

The rule is adopted under Texas Labor Code, Title 4, which provides the Commission with the authority to adopt, amend, or repeal such rules as it deems necessary for the effective administration of the Agency's services and activities.

§800.352.Definitions.

In addition to the definitions found in §800.2, the following words or terms when used in this subchapter shall have the following meanings, unless the context clearly indicates otherwise.

(1)

Contract Service Providers--An entity other than a vendor as defined in the Office of Management and Budget Circular A-133 engaged to provide goods, services, or both under a contract with a subrecipient or other provider of services pursuant to an executed contract that is funded with funds administered by the Agency.

(2)

Subrecipient--An entity other than a vendor as defined in the Office of Management and Budget Circular A-133 receiving funds through a direct contract with the Agency. Boards are subrecipients.

§800.353.Subrecipient and Contract Service Provider Monitoring.

(a)

Subrecipients and contract service providers shall assure that regular oversight of their own activities and regular monitoring of the activities of their contract service providers which receive public funds administered by the Agency, is conducted and completed. Monitoring shall include monitoring of both the fiscal and program performance of the entities or contract service providers administering and delivering services. These monitoring activities should be designated to ensure programs achieve intended results and resources are efficiently and effectively used for authorized purposes and are protected from waste, fraud, and abuse. Monitoring activities must be planned to focus on areas of highest risk to help ensure the most effective use of monitoring resources.

(b)

Monitoring activities shall assess a contract service provider's compliance with applicable laws, regulations, contract provisions, and official directives including 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. The subrecipient shall assess the contract service provider's compliance with the appropriate uniform administrative requirements for grants and agreements applicable to the type of entity receiving funds, as promulgated in the circulars or rules of the Office of Management and Budget. These activities shall encompass both financial and programmatic monitoring and shall be evaluated on a periodic basis. Each subrecipient and contract service provider shall conduct regular oversight and monitoring of its subrecipients and contractors in order to:

(1)

determine that expenditures have been charged to the cost categories and within the cost limitations specified in the applicable laws and regulations;

(2)

determine whether or not there is compliance with other provisions of applicable laws and regulations; and

(3)

provide technical assistance as necessary and appropriate.

(c)

The monitoring function shall include the development and implementation of:

(1)

a risk assessment tool;

(2)

a monitoring plan;

(3)

a monitoring program, including established policies and procedures; and

(4)

reporting and resolution processes.

(d)

The subrecipient shall develop and implement written policies and procedures that describe and support the monitoring process.

§800.355.Monitoring Plan.

(a)

Subrecipients and contract service providers shall develop their own local-level monitoring plan based on the results of the risk assessment. This monitoring plan shall incorporate all of the following:

(1)

a schedule or timetable for monitoring Agency funded activities, subrecipients, and contract service providers receiving funds under a contract with the subrecipient or contract service provider or a subcontractor of a subrecipient or contract service provider based upon risk assessment results;

(2)

identification of the type of review planned for each subrecipient and contract service provider, such as on-site review, comparative financial analysis, desk review, staff analysis, or other type of appropriate review; and

(3)

the estimated time budgeted to perform each review.

(b)

Subrecipients and contract service providers may perform monitoring reviews either formally or informally, but shall incorporate the risk assessment results in scheduling decisions.

§800.357.Controls Over Monitoring.

To ensure comprehensive and effective monitoring, subrecipients and contract service providers shall:

(1)

require periodic reports from their contract service providers outlining monitoring reviews, noncompliance issues, and the status of corrective actions;

(2)

ensure that a briefing regarding monitoring activities and findings is provided to the Board or appropriate Board subcommittee at regularly scheduled meetings;

(3)

require an annual evaluation of the monitoring function to determine its effectiveness, by a person or entity independent of the monitoring function; and

(4)

develop a written monitoring procedure to be used in monitoring both program and fiscal operations.

§800.359.Independent Audit Requirements.

(a)

Subrecipients and contract service providers subject to the Single Audit Act must have an independent audit performed in compliance with the Office of Management and Budget Circular A-133 .

(b)

Subrecipients shall submit to the Agency for review and acceptance a complete copy of the audit within nine months of the end of the designated fiscal year. Contract service providers shall submit to the Board, from which contract funds originated, for review and acceptance a complete copy of the audit within nine months of the end of the designated fiscal year.

(c)

Subrecipients and contract service providers may be reimbursed by the Agency for their share of audit expenses if:

(1)

funding is available and reimbursement is permitted by applicable funding sources;

(2)

the audit is found to be acceptable upon review by the Agency; and

(3)

the audit and reimbursement request follows Agency policies and procedures.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on January 19, 2001.

TRD-200100360

John Moore

Assistant General Counsel

Texas Workforce Commission

Effective date: February 8, 2001

Proposal publication date: October 27, 2000

For further information, please call: (512) 463-3041