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FAQs

Competitive Integrated Employment (CIE)

RSA has developed a frequently asked questions document for competitive integrated employment and the changes under WIOA. The FAQs and RSA's responses are below:


Q: What are the criteria that an employment setting must satisfy to be considered an integrated location?

With respect to an employment outcome for purposes of the VR program, under 34 CFR §§361.5(c) (9) (ii) and 361.5(c) (32)(ii), an employment setting must meet two criteria to be considered an integrated location and satisfy the definition of "competitive integrated employment." The employment setting must be:

  • Typically found in the community; and
  • Where the employee with a disability interacts, for the purpose of performing the duties of the position, with other employees within the particular work unit and the entire work site, and, as appropriate to the work performed, other persons (e.g., customers and vendors) who are not individuals with disabilities (not including supervisory personnel or individuals who are providing services to such employee) to the same extent that employees who are not individuals with disabilities and who are in comparable positions interact with these persons.

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Q: Is the regulatory definition of "competitive integrated employment," with respect to the integrated location criteria, consistent with the statutory definition?

Yes, the regulatory definition of the term "competitive integrated employment" is consistent with the statutory definition. The definition of this term in section 7(5) of the Rehabilitation Act, as amended by WIOA, for the most part incorporates the prior regulatory definition of "integrated setting." This latter term and its definition have existed in the VR program regulations since at least 1997 (62 FR 6308, 6337 (February 11, 1997)). Therefore, the substance of the definitions of "competitive integrated employment" in 34 CFR §361.5(c)(9)(ii) and "integrated setting" in 34 CFR §361.5(c)(32)(ii), for purposes of the VR program, with respect to the integrated nature of the employment location is familiar to VR agencies and does not diverge from prior regulations, long-standing Department policy, VR agency practice, and the heightened emphasis on competitive integrated employment throughout the Rehabilitation Act, as amended by WIOA.

Further, there is no indication in the Rehabilitation Act, as amended by WIOA, or the limited legislative history, that Congress intended to alter the scope of the integrated setting criteria of the definition of "competitive integrated employment." Therefore, the definition of "competitive integrated employment" in 34 CFR §361.5(c) (9) (ii), while not verbatim, is nonetheless consistent with the definition of the term at section 7(5) of the Rehabilitation Act, prior regulations, and long-standing Department policy.

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Q: Do the integrated location criteria in the definition of "competitive integrated employment" restrict the informed choice of individuals with disabilities?

No. Two of the core purposes of WIOA are to ensure that: (1) individuals who face barriers to employment, such as individuals with disabilities, receive the services and supports they need to acquire the skills necessary to obtain competitive integrated employment; and (2) employers receive the training, technical assistance, and other services they need to understand and tap into the full potential of individuals with disabilities in the workforce, for example through supported employment or customized employment (see section 100(a)(2) of the Rehabilitation Act). Through these efforts, individuals with disabilities, including those with the most significant disabilities, have more employment opportunities. However, if an individual chooses to pursue employment in a non-integrated setting, he or she may still do so with assistance from other programs, as has been true since October 1, 2001, when the Department limited the definition of "employment outcome," for purposes of the VR program, to jobs in integrated settings (see 66 FR 7249, 7252 (January 22, 2001)). In addition, section 102(b) (4) of the Rehabilitation Act, as amended by WIOA, and 34 CFR §361.46(a) (1) require that each individualized plan for employment contain an employment goal consistent with the general goal of competitive integrated employment (see also 34 CFR §361.45(b) (2)). Thus, individuals have the opportunity to exercise informed choice in the selection of employment goals that satisfy the definition of "employment outcome" and "competitive integrated employment," consistent with section 102(d) of the Rehabilitation Act and 34 CFR §361.52 (Informed choice).

The overarching objective is to enable all individuals with disabilities participating in the VR program to pursue competitive integrated employment, and still exercise informed choice as to the kind of employment they want to pursue. Under 34 CFR §361.37(b), VR agencies must refer individuals with disabilities to appropriate programs and service providers best suited to address the specific rehabilitation, independent living, and employment needs of an individual with a disability who makes an informed choice not to pursue an employment outcome under the VR program (i.e., competitive integrated employment or supported employment), as defined in 34 CFR §361.5(c)(15). Prior to making the referrals, VR agencies must: (1) explain to the individuals that the purpose of the VR program is to assist individuals to achieve an employment outcome as defined in §361.5(c)(15); (2) provide the individuals with information concerning the availability of employment options, and of VR services, to assist the individuals to achieve an appropriate employment outcome; (3) inform the individuals that services under the VR program can be provided to eligible individuals in an extended employment setting if necessary for purposes of training or otherwise preparing for employment in an integrated setting; (4) inform the individuals that, if they initially choose not to pursue an employment outcome as defined in §361.5(c)(15), they can seek services from the VR agency at a later date if, at that time, they choose to pursue an employment outcome; and (5) refer the individuals, as appropriate, to the Social Security Administration in order to obtain information concerning the ability of individuals with disabilities to work while receiving benefits from the Social Security Administration (34 CFR §361.37(b)(1) through (5)).

Non-integrated employment remains a viable, interim option for purposes of preparing participants in the VR program for employment in integrated settings, and continues to be a long-term employment option through sources other than the VR program for those individuals who prefer to work in these employment settings. For these reasons, providers of non-integrated employment have served, and will continue to serve, as a source of employment for individuals with significant disabilities. The definition of "competitive integrated employment reflects the heightened emphasis throughout the Act, as amended by WIOA, that individuals with disabilities, including those with the most significant disabilities, can achieve employment in the community and economic self-sufficiency if provided appropriate services and supports. Because VR agencies have been unable to assist individuals with disabilities to obtain sheltered employment through the VR program since October 2001, the vast majority of individuals have accessed sheltered employment through other sources or on their own initiative. Therefore, §361.5(c) (9) will not affect the availability of sheltered employment for individuals who choose this form of employment, or for whom it is a legitimate and necessary option.

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Q: Who is responsible for determining whether an employment setting is in an integrated location and satisfies the definition of "competitive integrated employment"?

VR agencies - not OSERS - must determine on a case-by-case basis in light of the facts presented whether an employment setting meets both criteria for an integrated location. VR agencies have the ability to visit employment sites and gather the facts necessary for these determinations. Therefore, the VR agency is responsible for determining whether the jobs performed by individuals with disabilities employed by community rehabilitation programs satisfy the definition of "competitive integrated employment" when individuals seek the VR agency's assistance in obtaining these positions. If the VR agency, after applying the criteria to the facts related to the particular job, determines that a position is in non-integrated employment, under 34 CFR §361.37(b), it must refer the individual interested in the position to other programs, including community rehabilitation programs, for assistance in obtaining his or her chosen employment goal. In considering whether a position is in non-integrated employment, VR agencies should consider the guidance provided in the preamble to the 2016 final regulations (81 FR at 55641-55645) as summarized in pertinent part in these FAQs.

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Q: What is meant by "typically found in the community," as used in the definition of "competitive integrated employment"?

Employment settings that are "typically found in the community" are those in the competitive labor market (81 FR at 55642). Settings established by community rehabilitation programs specifically for the purpose of employing individuals with disabilities (e.g., sheltered workshops) do not constitute integrated settings because these settings are not typically found in the competitive labor market--the first of two criteria that must be satisfied if a VR agency is to determine that a work setting is an integrated location under 34 CFR §361.5(c) (9).

The Department has long considered several factors that generally would result in a business being considered "not typically found in the community," which include: (1) the funding of positions through Javits-Wagner-O'Day (JWOD) Act contracts or State purchase programs; (2) allowances under the Fair Labor Standards Act for compensatory subminimum wages; and (3) compliance with a mandated direct labor-hour ratio of persons with disabilities. It is the responsibility of the VR agency to take these factors into account when determining if a position in a particular work location is an integrated setting.

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Q: What does RSA mean by "work unit," as used in the definition of "competitive integrated employment"?

The use of the phrase "work unit" in the definition of "competitive integrated employment," is consistent with the Department's long-standing policy on integrated settings. The term "work unit" properly focuses the consideration of the interaction of the individual with the disability with employees without disabilities on the particular job and the environment in which the work is performed. As used in the definition, "work unit" may refer to all employees in a particular job category or to a group of employees working together to accomplish tasks, depending on the employer's organizational structure (81 FR at 55643). The level of integration experienced by all individuals with disabilities employed by a community rehabilitation program is not the same and is dependent on the circumstances of the particular job within each work unit of the organization. Therefore, some employment opportunities offered by community rehabilitation programs may be considered to be in "integrated locations," and thus satisfy the definition of "competitive integrated employment," while others may not.

For example, a community rehabilitation program may consist of two divisions or "work units." In one division, individuals with disabilities are congregated together to perform work in a call center under JWOD contracts. Such a work unit would not likely satisfy the integrated location criteria of the definition of "competitive integrated employment" because it is operated for the express purpose of employing individuals with disabilities under JWOD contracts and, thus, is not typically found in the community. In addition, the high percentage of individuals with disabilities employed with these entities most likely would result in little to no opportunities for interaction between individuals with disabilities and non-disabled individuals. Conversely, the other division in the community rehabilitation program employs individuals with disabilities to provide vocational and independent living services, but the sole purpose of the division is not to employ individuals with disabilities. Such work unit would likely satisfy the integrated location criteria of the definition of "competitive integrated employment" because it is not operated for the primary purpose of employing persons with disabilities, but rather to provide services to individuals with disabilities.

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Q: Do group employment settings, such as janitorial crews in which individuals with disabilities earn competitive wages, satisfy the definition of "competitive integrated employment"?

Under 34 CFR §361.5(c)(9)(ii)(B), through application of the integrated location criteria, individuals with disabilities hired by community rehabilitation programs to perform work under service contracts, either alone, in mobile work crews, or in other group settings (e.g., landscaping or janitorial crews) whose interaction with persons without disabilities (other than their supervisors and service providers), while performing job responsibilities, is with persons working in or visiting the work locations (and not with employees of the community rehabilitation programs without disabilities in similar positions) would not be performing work in an integrated setting. Even if such group employment in a community rehabilitation program provides for competitively paid wages, this fact does not change the non-integrated nature of the employment and may result in a less desirable level of integration (e.g., interaction with non-disabled co-workers), which supports the autonomy and self-sufficiency of individuals with disabilities.

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Supported Employment (SE)

RSA has developed a frequently asked questions document for the Supported Employment program and the changes under WIOA. The FAQs and RSA's responses are below:

State Supported Employment Services Program

RSA has developed the following nine questions and answers concerning requirements under the State Supported Employment Services Program as imposed by the Workforce Innovation and Opportunity Act


Q: How must a State calculate the amount it must reserve for the provision of supported employment services, including extended services, to youth with the most significant disabilities?

Section 603(d) of the Rehabilitation Act of 1973 (Rehabilitation Act), as amended by the Workforce Innovation and Opportunity Act (WIOA), requires a State to reserve and expend half of its State allotment, under the State Supported Employment (SE) Services grant (CFDA 84.187A), for the provision of SE services, including extended services, to youth with the most significant disabilities. It reads:

SEC. 603. ALLOTMENTS.
(d) Services for Youth with the Most Significant Disabilities. - A State that receives an allotment under this title shall reserve and expend half of such allotment for the provision of supported employment services, including extended services, to youth with the most significant disabilities in order to assist those youth in achieving an employment outcome in supported employment.

The State allotment, which forms the basis for the reservation of funds requirement, refers to the Federal SE funds awarded pursuant to section 603(a) of the Rehabilitation Act. Section 603(b) of the Rehabilitation Act makes clear that funds received during reallotment are considered an increase to the State's allotment for that Federal fiscal year (FFY). Consequently, receiving additional funds during reallotment will mean that the State will need to calculate a proportionate increase to the amount of funds it must reserve for the provision of SE services, including extended services, to youth with the most significant disabilities. Similarly, funds relinquished during reallotment are considered a reduction to the State's allotment. Relinquishing funds during reallotment will mean that the State may calculate a proportionate decrease to the amount of funds it must reserve for the provision of SE services, including extended services, to youth with the most significant disabilities. In the case of a State either receiving additional funds or relinquishing funds during reallotment, the State is still obligated to reserve 50 percent of the State's increased or decreased allotment for that fiscal year for the provision of SE services, including extended services, to youth with the most significant disabilities.

In calculating the 50 percent minimum amount to be reserved, States must base the percentage on the total amount allotted to the State in the fiscal year of appropriation. In other words, a State should use the amount listed on the State's Grant Award Notification (GAN) as the basis for ensuring that it has reserved 50 percent of that amount for the provision of SE services, including extended services, to youth with the most significant disabilities. See Example 1 below. A State may choose to adjust its calculations with each GAN it receives during the fiscal year of appropriation, taking into account adjustments made throughout the FFY for continuing resolutions and allotment fund increases or decreases through the reallotment process, for this purpose. See Examples 2 and 3 below. The important point to note is that a State's final calculation of its reserve must be based on the final sum of its allotments listed on all of the GANs it received during the fiscal year of appropriation. Deobligation of SE funds, as opposed to relinquishment through reallotment, either requested by the State or as a result of grant closeout after September 30 of the year of appropriation will not affect the amount of the required 50 percent reserve determined at the end of the year of appropriation based on the State's allotment identified in its GAN. See Example 4 below.

The following are examples of how a State may calculate the amount to be reserved for the provision of SE services, including extended services, to youth with the most significant disabilities.

Example 1: A State receives only one GAN for the FFY for $100,000. The State must reserve 50 percent of that amount, or $50,000, for the provision of SE services, including extended services, to youth with the most significant disabilities.

Example 2: A State receives two GANs - one at the beginning of the FFY for $100,000 and a second during the reallotment process for an additional $10,000. The State must reserve 50 percent ($55,000) of the total funds allotted ($110,000) during that FFY. This means the amount to be reserved was adjusted upwards to account for the additional funds received during reallotment.

Example 3: The State receives a GAN for $100,000, but relinquishes $10,000 for reallotment to other States later in the year. As a result of the decrease in funds, the State receives a second GAN showing a total allotment for the year of $90,000. This means that the State must reserve 50 percent of the $90,000 in SE funds it received that year, or $45,000. In other words, the amount to be reserved was adjusted downward from the amount that would have been based on the initial allotment of $100,000 to take into account the amount of funds relinquished during the reallotment process.

Example 4: A State receives only one GAN for $100,000. However, at the end of the year of appropriation, the State has $10,000 remaining in unexpended Federal funds. The State did not relinquish these funds during the reallotment period in the year of appropriation. In this case, the GAN in the year of appropriation still reflects an allotment of $100,000. The State must reserve the full 50 percent, or $50,000, based on the total allotment to the State in the year of appropriation - not the amount of funds actually used. Any reduction to the SE allotment that occurs after the year of appropriation through deobligation, including the deobligation of Federal funds carried over into the subsequent fiscal year in accordance with section 19(a)(1) of the Rehabilitation Act, will not reduce the 50 percent reserve calculated at the end of the year of appropriation (4th quarter).

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Q: How does a State calculate the 10 percent match requirement for the 50 percent reserve of SE funds for the provision of SE services, including extended services, to youth with the most significant disabilities?

Section 606(b)(7)(I) of the Rehabilitation Act requires States to provide a match of at least 10 percent in non-Federal expenditures for the total amount of expenditures incurred with the half of the allotment reserved to provide SE services, including extended services, to youth with the most significant disabilities. This section reads:

SEC. 606. STATE PLAN.

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(b) CONTENTS.—Each such plan supplement shall—

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(7) provide assurances that—

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(I) with respect to supported employment services provided to youth with the most significant disabilities pursuant to section 603(d), the designated State agency will provide directly, or indirectly through public or private entities, non-Federal contributions in an amount that is not less than 10 percent of the costs of carrying out such services;

The statutory 10 percent match requirement applies to the costs of carrying out the provision of SE services, including extended services, to youth with the most significant disabilities. This means that the 10 percent is applied to total expenditures, including both the Federal and non-Federal shares, incurred for this purpose, and that the non-Federal share MUST also be spent on the provision of SE services, including extended services, to youth with the most significant disabilities. (Note: This is different than the State Vocational Rehabilitation (VR) Services' 15 percent pre-employment transition services award reserve, for which the non-Federal share is not required to be expended solely for the provision of pre-employment transition services to students with disabilities).

Example 1: A State receives only one GAN for the FFY for $100,000. The State must reserve 50 percent of that amount, or $50,000 (representing the Federal share), for the provision of SE services, including extended services, to youth with the most significant disabilities. To determine the total expenditures for carrying out the reserve, the $50,000 (Federal share) is divided by 0.90, resulting in $55,556. The non-Federal share amount is then determined by multiplying the $55,556, ( total expenditures for SE reserve purposes) by 0.10 (10 percent match), resulting in a non-Federal share amount of $5,556 in non-Federal funds that must be spent on the provision of SE services, including extended services, to youth with the most significant disabilities.

Example 2: A State receives two GANs - one at the beginning of the FFY for $100,000 and a second during the reallotment process for an additional $10,000. The State must reserve 50 percent ($55,000) of the total funds allotted ($110,000) during that FFY. This means the amount to be reserved was adjusted upwards to account for the additional funds received during reallotment. To determine the total expenditures for carrying out the reserve, the $55,000 is divided by 0.90, equaling $61,111. The non-Federal share amount is then determined by multiplying the $61,111 (total expenditures for SE reserve purposes) by 0.10 (10 percent match), resulting in $6,111 in non-Federal funds that must be spent on the provision of SE services, including extended services, to youth with the most significant disabilities.

Example 3: The State receives a GAN for $100,000, but relinquishes $10,000 for reallotment to other States later in the year. As a result, the State receives a second GAN showing a total allotment for the year of $90,000. This means that the State must reserve 50 percent of the $90,000 in SE funds it received that year, or $45,000. Note the amount to be reserved was adjusted downward from the amount that the State would have had to reserve ($50,000) based on the initial allotment of $100,000 to take into account the amount of funds relinquished during the reallotment process. To determine the total expenditures for carrying out the reserve, the $45,000 is divided by 0.90, equaling $50,000. The non-Federal share amount is then determined by multiplying the $50,000 (total expenditures for SE reserve purposes), resulting in $5,000 in non-Federal funds that must be spent on the provision of SE services, including extended services, to youth with the most significant disabilities.

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Q: Can a State carry over any portion of its SE allotment, whether for SE reserve purposes or not?

The half of the SE award that is NOT reserved for the provision of SE services, including extended services, to youth with the most significant disabilities does not have a match requirement. Therefore, any unobligated portion of these unreserved funds may be carried over into the succeeding FFY for obligation and expenditure.

Similar to the VR award funds, the 50 percent reserve of SE funds for the provision of SE services, including extended services, to youth with the most significant disabilities must be matched by September 30 of the fiscal year of appropriation for the State to fully expend the reserved funds, or permit the carry over of any unobligated portion of the reserved funds into the succeeding FFY for obligation and expenditure. Any amount of the reserved funds carried over into the next FFY must be spent on supported employment services, including extended services, for youth with the most significant disabilities in that carryover year.

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Q: How must a VR agency account for the Federal SE funds it reserves for the provision of SE services, including extended services, to youth with the most significant disabilities?

Because section 603(d) of the Rehabilitation Act is clear that the State must reserve and use 50 percent of its total SE allotment for a specific purpose (SE services, including extended services) that benefit a specific population (youth with the most significant disabilities), it will be critical that the designated State unit implement internal controls that ensure proper data collection and financial accountability of these reserved funds. The State's accounting procedures must be such that the designated State unit will be able to accurately complete all required forms, including financial reports, that show the reservation and use of these funds for this purpose and for this population, as required by Uniform Guidance at 2 CFR 200.302.

In order to track and account for the proper expenditure of funds for the provision of SE services, including extended services, to youth with the most significant disabilities, agencies should consider those services as a cost objective in order to effectively track the use of reserve funds within the SE program. The Uniform Guidance at 2 CFR 200.28 defines a cost objective as:

"a program, function, activity, award, organizational subdivision, contract, or work unit for which cost data are desired and for which provision is made to accumulate and measure the cost of processes, products, jobs, capital projects, etc. A cost objective may be a major function of the non-Federal entity, a particular service or project, a Federal award, or an indirect (Facilities & Administrative (F&A)) cost activity…."

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Q: Can a State expend more than 50 percent of its SE Federal funds for the provision of SE services, including extended services, to youth with the most significant disabilities?

Yes. Section 603(d) of the Rehabilitation Act requires a State to reserve "half" of its SE allotment for the provision of SE services, including extended services, to youth with the most significant disabilities. However, this does not preclude the State from providing SE services, including extended services, to youth with the most significant disabilities in an amount that is in excess of 50 percent of the State's SE allotment with its SE funds or VR funds.

In the event that a State does expend more than 50 percent of its SE allotment to provide SE services, including extended services, to youth with the most significant disabilities, there is no requirement that the State provide non-Federal expenditures to match the Federal funds in excess of the 50 percent reserved amount expended for this purpose.

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Q: What are the potential consequences of a State not reserving and using the requisite amount of funds for the provision of SE services, including extended services, to youth with the most significant disabilities?

Section 603(d) of the Rehabilitation Act requires a State to reserve half (50 percent) of its allotment for the provision of SE services, including extended services, to youth with the most significant disabilities. Therefore, the statute makes clear that the reservation and use of SE funds for this purpose is mandatory, not discretionary, for States. Section 107(a)(1) requires the Commissioner of RSA to conduct annual reviews and periodic on-site monitoring of the VR program, and ensure that the State is complying with the provisions of the State plan, which includes a supplement for the provision of SE services authorized under the Rehabilitation Act, including those provided to youth with the most significant disabilities. Section 107(a)(4)(B) requires the Commissioner to examine, among other things, the provision of services, including SE services and extended services to youth with the most significant disabilities, when conducting reviews or monitoring. Section 107(b) and (c) specify the remedies available to the Commissioner if a State fails to satisfy Federal requirements governing the VR program and services authorized under the State plan, which includes requirements related to SE services, including extended services, to youth with the most significant disabilities. These remedies may include a corrective action plan and recovery and/or withholding of funds. In this manner, compliance with requirements governing SE services, including extended services, to youth with the most significant disabilities is the same as it is for any VR or SE program requirement. States that fail to meet the 50 percent reserve requirement may also face potential consequences resulting from audit findings stemming from Department of Education Inspector General, State, or Single Audits.

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Q: How is the SE reservation requirement affected when there are two VR agencies (General and Blind)?

The reservation of funds for the provision of SE services, including extended services, to youth with the most significant disabilities is a State matter that must be resolved at the State level when there are two agencies. For this reason, RSA encourages agencies to coordinate to ensure State compliance. While RSA recommends that each designated State unit, particularly when a State has two designated State units, reserve 50 percent of its SE allotment to facilitate tracking of State compliance of the reservation requirement, there is no statutory requirement that this be done. If one agency (when a State has two VR agencies) uses more of its funds than the other, the State would be in compliance so long as the State's total of funds reserved and expended for the provision of SE services, including extended services, to youth with the most significant disabilities, is at least 50 percent of the State's total allotment, including any adjustments that affect the amount of the Federal award to one or both agencies.

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Q: When may a State expend SE award funds for the provision of SE services to individuals with the most significant disabilities?

Because supported employment funds are meant to be used to support and maintain an individual with a most significant disability in employment, the provision of SE services may not be provided prior to an individual being placed into an employment position requiring supported employment services. Section 7(39) of the Rehabilitation Act indicates that SE services are "ongoing support services, including customized employment, needed to support and maintain an individual with a most significant disability in supported employment…" Section 7(38) of the Rehabilitation Act defines supported employment:

(38) Supported employment.— The term ‘supported employment' means competitive integrated employment, including customized employment, or employment in an integrated work setting in which individuals are working on a short-term basis toward competitive integrated employment, that is individualized and customized consistent with the strengths, abilities, interests, and informed choice of the individuals involved,…

Because the use of SE funds can begin only when an individual with a most significant disability is placed in an employment position requiring supported employment services, this means that all Federal expenditures for that individual that occur prior to the individual being placed into supported employment, must be provided with VR funds. If the individual is a youth with a most significant disability, the expenditures, since they are made with VR, rather than SE funds, do not count toward the 50 percent reserve requirement. Additionally, any non-Federal funds expended on VR services provided to an individual who is a youth with a most significant disability prior to his or her placement into a supported employment position do not qualify as SE services, and may not be counted as non-Federal share for the 50 percent SE reserve requirement for the provision of SE services, including extended services, to youth with the most significant disabilities.

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Q: How do States pay for costs of administering the SE award in excess of the 2.5 percent administrative cap?

WIOA amended section 603(c) of the Rehabilitation Act to reduce the amount of the SE allotment that States can spend on administrative costs from 5 to 2.5 percent. In accordance with section 608(a), however, nothing prohibits States from using VR funds to pay for SE services, including administrative costs in excess of the 2.5 percent allowed from the SE allotment itself.

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