2005 ADOPTED RESOLUTIONS
WORKFORCE DEVELOPMENT

MAINTAIN FUNCTION-BASED ACCOUNTING IN THE WORKFORCE INVESTMENT ACT (WIA) AND WIA REAUTHORIZATION

WHEREAS, Congress’s vision under the Workforce Investment Act of 1998 was to design and build a revised workforce system that is comprehensive, relevant, easily accessible, dedicated to the workforce needs of business, workers and jobseekers, and universally accessible through the one-stop system; and

WHEREAS, in order to achieve this vision, mayors or chief elected officials and their local workforce investment boards were charged with integrating the resources and services of all workforce development activities through the local workforce system; and

WHEREAS, as part of system integration, mayors or chief elected officials and their local workforce investment boards were charged with establishing the One-Stop delivery system as the central delivery mechanism for providing locally designed and delivered workforce services to businesses, workers, and jobseekers; and

WHEREAS, with the expanded vision of WIA, the functions to carry out this vision also expanded to include system integration, system design, strategic planning, operation of the local One-Stop system, implementing innovative programs and strategies designed to meet the needs of business, quality assurance, providing information to the public, and many other functions; and

WHEREAS, current regulations provide a method for the workforce system to account for the costs of these functions consistent with accounting practices used by business, which is outlined in the definition of administrative costs; and

WHEREAS, the current definition of administrative costs in WIA was:

  • Built upon Generally Accepted Accounting Principles;
  • Based on function vs. independent activities;
  • Carefully negotiated and tested in a multi-state/local demonstration;
  • Supported by the U.S. Department of Labor’s Inspector General; and

    WHEREAS, in Program Year (PY) 2002, the local WIA system only used an average of eight percent of its local WIA funding for administrative costs, less than the statutory limit, according to data published by USDOL; and

    WHEREAS, during consideration of WIA reauthorization in the 108th Congress, the Administration proposed the redefinition of administrative costs in WIA; and

    WHEREAS, this proposed redefinition would have completely restructured how the workforce system accounts for its costs – from a “function-based” to an “activity-based” cost accounting system; and

    WHEREAS, such a shift in cost classification would move a number of important activities of the system into the “administrative” category, which would most likely force the closure of many One-Stops as well as the elimination of and/or reduction of many vital services; and

    WHEREAS, Congress expressed their concern about the Administration’s proposed changes to the business based cost accounting system of WIA in both the House Appropriations and Senate Appropriations Committees Reports on the FY 2005 Labor, Health and Human Services appropriations bill, which included language that restricted the Department of Labor from taking action on redefining administrative cost for WIA in fiscal year 2005 until reauthorization is enacted,

    NOW, THEREFORE, BE IT RESOLVED, that The U.S. Conference of Mayors calls on Congress and the Administration to retain the current “function-based” definition of administrative costs in WIA, consistent with how businesses account for costs; and

    BE IT FURTHER RESOLVED, that The U.S. Conference of Mayors calls on Congress to codify the current “function-based” definition of administrative costs in WIA reauthorization legislation; and

    BE IT FURTHER RESOLVED, that The U.S. Conference of Mayors stands ready to work with Congress on any necessary clarifications in the “function-based” definition of administrative costs in WIA.

  • ©2005 The U.S. Conference of Mayors
    Tom Cochran, Executive Director
    1620 Eye Street, NW, Washington, DC 20006
    Tel. 202.293.7330 ~ Fax 202.293.2352
    info@usmayors.org