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CLASSIFICATION
EMPLOYMENT AND TRAINING ADMINISTRATION
ADVISORY SYSTEM
U.S. DEPARTMENT OF LABOR
Washington, D.C. 20210

Federal Bonding Grants
CORRESPONDENCE SYMBOL

OWI/DYS
DATE

December 21, 2020

ADVISORY: TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 10-20
TO:

STATE WORKFORCE AGENCIES
STATE WORKFORCE ADMINISTRATORS
STATE WORKFORCE ADMINISTRATORS WAGNER-PEYSER

FROM:

JOHN PALLASCH /s/
Assistant Secretary

SUBJECT:

Fidelity Bonding Demonstration Grants to State Workforce Agencies to Support
Employment Opportunities for Ex-Offenders, Including Ex-Offenders
Recovering from Opioid and Other Drug Addictions

1. Purpose. To announce the availability of up to $3.3 million for Fidelity Bonding
Demonstration Grants for Program Year 2020. These grants will enable states to expand
their use of fidelity bonds to help persons with criminal records, including ex-offenders
recovering from opioid and other drug addictions, obtain employment.
2. Action Requested. The Employment and Training Administration (ETA), U.S. Department
of Labor (DOL, or the Department) encourages State Workforce Agencies to consider
applying for the grants described in this TEGL. The application deadline is February 02,
2021.
3. Summary and Background.
a. Summary - The Department is committed to helping those involved in the criminal
justice system, including ex-offenders recovering from opioid and other drug
addictions, obtain employment in family-sustaining jobs; better informing employers
about the knowledge, skills, and abilities of this population; and advancing strategies
to address the barriers to reemployment. Through the Federal Bonding Program
(FBP), ETA provides fidelity bonds to employers to help reduce the risks of hiring
individuals whose criminal backgrounds pose barriers to securing employment.
b. Background - FBP is authorized under Section 169 of the Workforce Innovation and
Opportunity Act (WIOA). Over the years, FBP remained a small program, but in
June 2019, the Department awarded $2,234,122 for Fidelity Bonding Demonstration
Grants to 23 states and one outlying area to expand their use of fidelity bonds to help
persons with criminal records get employment. The Department now wishes to
further increase the use of fidelity bonds by offering funds to the states and outlying
areas that did not receive grants last year.
RESCISSIONS

EXPIRATION DATE

None

Continuing

State Workforce Agencies apply for the grant on behalf of their respective states and
states will operate this grant through their current FBP. States that do not currently
operate a FBP must designate a staff person to serve as the state bonding coordinator
for this grant. States will use their own procurement policies and procedures to select
an insurance provider to purchase bonds or may continue to purchase fidelity bonds
through the Department of Labor’s FBP contractor, as long as they comply with state
contracting procedures. State bonding coordinators may certify bonds or delegate the
authority to certify bonds to other staff.
4. Grant Competition Details.
a. Demonstration Goals. The goals of this demonstration include the following:
 Improving employment outcomes, which in turn decreases recidivism, for persons with
criminal records by encouraging states and workforce development partners to provide
fidelity bonds to employers as a hiring tool for persons with criminal records;
 Educating employers and the public on the availability and benefits of fidelity bonds for
persons with criminal records; and
 Providing outreach to employers to encourage them to hire persons with criminal records.
b. Funds Availability. ETA is making up to $3.3 million in funding available under this
TEGL for demonstration grants as authorized by Section 169(b) of WIOA. ETA
anticipates awarding up to 33 grants, with an anticipated funding amount of up to
$100,000 per grant. The maximum amount of funding each state can receive under this
demonstration is $100,000.
c. Eligible Applicants. Eligible applicants for funding under this opportunity are the State
Workforce Agencies for the states and outlying areas that did not receive grants last year.
These include the State Workforce Agencies for Arkansas, Georgia, Hawaii, Idaho,
Indiana, Kansas, Louisiana, Maryland, Minnesota, Montana, Nevada, New Jersey, New
Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode
Island, South Dakota, Tennessee, Utah, Vermont, Virginia, West Virginia, Wyoming,
Puerto Rico, the District of Columbia, the Virgin Islands, American Samoa, the
Commonwealth of the Northern Mariana Islands, and Palau.
d. Eligible Participants. The funds for this demonstration come from an appropriation
designated for serving persons with criminal records. Therefore, only persons with
criminal records, including those involved with the criminal justice system by virtue of
their history of opioid or other drug addictions, are eligible for coverage under the bonds
purchased with these funds. States that wish to provide bonds for at-risk individuals who
are not ex-offenders must purchase bonds with funds other than those provided in this
demonstration project.
e. Allowable Activities.
 The grant’s principal allowable activity is purchasing fidelity bonds to assist persons with
criminal records, including individuals recovering from opioid and other drug addictions,
obtain employment. A minimum of 85 percent of grant funds must be used specifically
for the purchase of bonds.

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

In selecting an insurance provider for the bonds, states must follow the Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards, including 2 CFR 200.317, which states: “When procuring property and services
under a Federal award, a state must follow the same policies and procedures it uses for
procurements from non-Federal funds.” States may choose any insurance company,
broker, or agency, including the FBP provider contracted by the Department, consistent
with the state’s procurement policies and procedures.



At a minimum, the specifications of bonds purchased with these grant funds must include
the following:
o Bonds must reimburse employers for losses due to the illegal acts of their
employees, such as theft, forgery, and embezzlement;
o Bonds must provide at least $5,000 of coverage;
o Bonds must be allowed to be used in multiples to cover an individual employee,
totaling up to $25,000 of coverage per employee; and
o Bonds must provide coverage for at least six months.
States may require additional specifications, such as increasing the dollar amount of
coverage or lengthening the duration of coverage.



States that do not currently operate a FBP must designate a staff person to serve as the
state bonding coordinator for this grant. The state bonding coordinator implementing this
demonstration in the state may have other responsibilities beyond operating this
demonstration; this does not need to be a full-time position. A primary function of this
position will be to certify bonds with the insurance provider. State bonding coordinators
may also delegate the authority to certify bonds to local staff.



Grant funds may be spent on educating employers and the public about the benefits of
fidelity bonds for persons with criminal records, including individuals recovering from
opioid and other drug addictions. Employer and public education may include, but is not
limited to, the development and distribution of written materials, virtual and in-person
information sharing, and meetings.



Grant funds may be spent on administrative costs associated with operating this
demonstration.

f. Use of Funds.
The following cost limitations apply:
 At least 85 percent of grant funds must be used specifically for the purchase of bonds;
 The remaining grant funds may be used for education, outreach, and administrative costs;
and
 These demonstration grants are subject to the Uniform Guidance: Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal
Awards at 2 CFR Part 200 and OMB’s approved exceptions for the Department at 2 CFR
Part 2900.
ETA expects to execute grant awards on or before April 01, 2021, and grant funds will be

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available for expenditure during a four-year period of performance.
g. Instructions for Submitting Applications.
Application Narrative. Applicants must submit an Application Narrative not longer than four
double-spaced pages. The Narrative must be divided into three components, and the
requirements for each are outlined below under the following headings: (1) Impact/Need
Statement; (2) Project Implementation; and (3) Fiscal Integrity.
1. Impact/Need Statement: Describe the need in your state for the grant. Identify the
number of ex-offenders your state expects to serve in its Employment Services (ES) and
WIOA adult formula program over the next four years. That number may be higher or
lower than the number shown for your state in the table in Attachment 1, which provides
the estimated number of ex-offenders served by each state’s ES and WIOA adult
formula programs over four years based on Program Year 2018 data. This information
will be used to verify that there are enough individuals in your service area to meet the
participation level you are requesting in your application. The use of this data does not
mean that all workers bonded under this demonstration project must be enrolled in
WIOA or ES services. Identify the total amount of the request.
2. Project Implementation: Describe how your state currently administers FBP and what
adjustments, if any, will be made to your state’s current FBP to operate this grant. If
your state does not currently participate in FBP, describe how your state will administer
the fidelity bonding demonstration. Identify the costs to educate employers and the
public about fidelity bonding for ex-offenders, including individuals recovering from
opioid and other drug addictions, and administrative costs that will be charged to the
grant. Describe your plan to expend the funds requested within four years.
3. Fiscal Integrity: Describe the procedures you will implement to ensure the fiscal
integrity of the project, track funding, and ensure a clear and concise audit trail.
Applicants are not expected to identify an insurance provider in their application.
Application Procedures, Requirements, and Timeline. In an effort to achieve greater
efficiency and as part of ETA’s on-going effort to streamline the grant award process,
grantees are required to submit the following items through Grants.gov at
https://www.grants.gov/.
o An electronically signed copy of an SF-424 - Application for Federal Assistance
(OMB Control No. 4040-0004);
o An SF-424A - Budget Information - Non-Construction Programs (OMB Control
No. 4040-0006);
o A Budget Narrative to explain the projected costs reflected in each line item of the
SF-424A, demonstrating how grant funds will be used. See Attachment 2 for
instructions on completing the Budget Narrative;
o An Application Narrative comprised of three sections: (1) Impact/Need Statement;
(2) Project Implementation; and (3) Fiscal Integrity. Each section must address the
questions and requirements laid out in Section 10 above. The Application Narrative
statement must not exceed four double-spaced pages, not including attachments;
and

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o

A proposed project timeline, which includes a brief summary of planned activities
and project milestones.

An SF-424 electronically submitted through Grants.gov constitutes the official signed
document and must reflect the total amount requested of no more than $100,000 in item 18,
Estimated Funding.
To find this TEGL on Grants.gov and submit the required documents, select “Search
Grants.” On the left side of the page, scroll down to Agency, expand the selection “All
Department of Labor,” and select “Employment and Training Administration.”
If applicants encounter a problem with Grants.gov and do not find an answer in any of the
other resources call 1-800-518-4726 or 606-545-5035 to speak to a Customer Support
Representative or email [email protected].
The final date for accepting applications is 11:59PM ET on Feb 02, 2021.
h. Award Procedures. Awards will be made to eligible applicants meeting the grant
requirements as outlined in this TEGL. ETA may choose to provide technical assistance,
as needed, to assist applicants that fail to meet all the requirements necessary for ETA to
provide funding; however, this technical assistance is not an indication or guarantee that
ETA will award the applicant a grant. An applicant will not receive a grant if it fails to
demonstrate all required components prior to ETA exhausting all of the grant funds.
ETA may elect to award a grant with or without discussions with the applicant. Should a
grant be awarded without discussions, the award will be based on the applicant’s signature
on the SF-424, including electronic signature, which constitutes a binding agreement by
the applicant.
NOTE: The Department will determine if the applicant had any restriction on spending
for any ETA grant due to adverse monitoring findings within the past three years.
Depending on the severity of the findings, the Grant Officer may elect to not provide
the applicant a grant award or to impose conditions on the award.
All applications chosen for funding by the Grant Officer will go through a risk-review
process before making an award; ETA will review information available through any
OMB-designated repository of government-wide eligibility qualification or Federal
integrity information, such as the Federal Awardee Performance and Integrity
Information System (FAPIIS), Dun and Bradstreet, and “Do Not Pay.” Additionally,
ETA will comply with the requirements of 2 CFR Part 180 (Government-wide
Debarment and Suspension [Non-Procurement]). If ETA determines that an entity is
responsible and an award will be made, special conditions that correspond to the degree
of risk assessed may be applied to the award.

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Risk-related criteria that will be evaluated include the following:
i.
ii.

Financial stability;
Quality of management systems and ability to meet the management
standards prescribed in the Uniform Grant Guidance;
iii. History of performance: The Applicant’s record in managing awards, cooperative
agreements, or procurement awards, if it is a prior recipient of such Federal
awards, including timeliness of compliance with applicable reporting
requirements, and if available, the extent to which any previously awarded
amounts will be expended prior to future awards;
iv. Reports and findings from audits performed under Subpart F-Audit
Requirements of the Uniform Grant Guidance (2 CFR Sections 200.500 200.520) or the reports and findings of any other available audits and monitoring
reports containing findings, issues of non-compliance, or questioned costs; and
v. The applicant’s ability to effectively implement statutory, regulatory, or
other requirements imposed on recipients.
Selection of a recipient does not constitute approval of the grant application as submitted.
Before grant award, the Department may enter into negotiations about items such as
program components, staffing and funding levels, and administrative systems in place to
support grant implementation. If the negotiations do not result in a mutually acceptable
submission, the Grant Officer may terminate the negotiations and decline to fund the
application.
i. Required Reporting.
 Quarterly Fiscal Reports – Grantees must submit the quarterly Basic ETA-9130 financial
report until funds are expended or the grant period has expired. Quarterly financial
reports are due 45 days after the end of each calendar year quarter. Grant recipients must
submit the ETA-9130 using the Department’s Online Electronic Reporting System.
 Quarterly Progress Report – Grantees must submit a one-page narrative report
summarizing the progress of their grant within 45 days of the end of each quarter to their
assigned Federal Project Officer.
 Fidelity Bonding Issuance Form OMB Control No 1205-0541– State bonding
coordinators or designated staff will report on the fidelity bonding issuance form the
occupational title, industry, hourly wage, and hours of work per week of the position;
gender, race, and ethnicity of the ex-offender who is being insured; number of employees
of the employer; and whether the employer is for-profit, not-for-profit, or a government
agency. To comply with state policies regarding reporting gender and other concerns
raised by states, the gender, race, and ethnicity items will be optional and not required to
issue a bond.
 Recidivism – Persons enrolled in the Wagner-Peyser Employment Service who are
covered by Fidelity Bonds will have their recidivism tracked through ETA’s performance
reporting requirements. ETA will provide states with a Special Project ID code to use for
Wagner-Peyser Employment Service performance reporting on these individuals on the
ETA-9172, the DOL-only Participant Individual Record Layout (PIRL). The code will
identify persons enrolled in the Employment Service who are covered by Fidelity Bonds.

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j. OMB Information Collection. OMB Information Collection No 1225-0086, Expires
July 31, 2022.
According to the Paperwork Reduction Act of 1995, no persons are required to respond to a
collection of information unless such collection displays a valid OMB control number.
Public reporting burden for this collection of information is estimated to average 20 hours
per response, including time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing the collection of
information.
Send comments about the burden estimated or any other aspect of this collection of
information, including suggestions for reducing this burden, to the U.S. Department of
Labor, to the attention of the Departmental Clearance Officer, 200 Constitution Avenue
NW, Room N1301, Washington, DC 20210. Comments may also be emailed to
[email protected].
PLEASE DO NOT RETURN YOUR GRANT APPLICATION TO THIS ADDRESS.
SEND ONLY COMMENTS ABOUT THE BURDEN CAUSED BY THE
COLLECTION OF INFORMATION TO THIS ADDRESS. SEND YOUR GRANT
APPLICATION TO THE SPONSORING AGENCY AS SPECIFIED IN THIS
ANNOUNCEMENT.
This information is being collected for the purpose of awarding a demonstration grant.
5.

Inquiries. Questions regarding this guidance should be directed to Melissa Abdullah at
[email protected] in the ETA Office of Grants Management.

6.

References.
 Section 169(b) of the Workforce Innovation and Opportunity Act (WIOA), Pub. L. 113128;
 Department of Labor Appropriations Act, 2020 (Public Law 116-94);
 ETA Form 9130 (Office of Management and Budget (OMB) Control No. 1205-0461);
and
 Federal Bonding Program website, www.bonds4jobs.com.

7.

Attachments.
 Attachment 1: Estimated Number of Offenders Served by Each State’s Employment
Service and WIOA Adult Formula Program Over Four Years Based on Program Year
2018 Data
 Attachment II: Instructions for Completing Budget Narrative

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