112 STAT. 1004 PUBLIC LAW 105-220—AUG. 7, 1998 chief elected officials in the State, shall establish and operate a fiscal and management accountability information system based on guidelines established by the Secretary after consultation with the Governors, local elected officials, and one-stop partners. Such guidelines shall promote efficient collection and use of fiscal and management information for reporting and monitoring the use of funds made available under this subtitle and for preparing the annual report described in subsection (d). (2) WAGE RECORDS. —In measuring the progress of the State on State and local performsince measures, a State shall utilize quarterly wage records, consistent with State law. The Secretary shall make arrangements, consistent with State law, to ensure that the wage records of any State are available to any other State to the extent that such wage records are required by the State in carrying out the State plan of the State or completing the annual report described in subsection (d). (3) CONFIDENTIALITY.—In carrying out the requirements of this Act, the State shall comply with section 444 of the General Education Provisions Act (20 U.S.C. 1232g) (as added by the Family Educational Rights and Privacy Act of 1974). (g) SANCTIONS FOR STATE FAILURE TO MEET STATE PERFORM- ANCE MEASURES. — (1) STATES. — (A) TECHNICAL ASSISTANCE.— If a State fails to meet State adjusted levels of performance relating to indicators described in subparagraph (A) or (B) of subsection (b)(2) for a program for any program year, the Secretary shall, upon request, provide technical assistance in accordance with section 170, including assistance in the development of a performance improvement plan. (B) REDUCTION IN AMOUNT OF GRANT. — If such failure continues for a second consecutive year, or if a State fails to submit a report under subsection (d) for any program year, the Secretary may reduce by not more than 5 percent, the amount of the grant that would (in the absence of this paragraph) be payable to the State under such program for the immediately succeeding program year. Such penalty shall be based on the degree of failure to meet State adjusted levels of performance. (2) FUNDS RESULTING FROM REDUCED ALLOTMENTS. —The Secretary shall use an amount retained, as a result of a reduction in an allotment to a State made under paragraph (I)(B), to provide incentive grants under section 503. (h) SANCTIONS FOR LOCAL AREA FAILURE TO MEET LOCAL PERFORMANCE MEASURES. — (1) TECHNICAL ASSISTANCE.— If a local area fails to meet levels of peiformance relating to indicators described in subparagraph (A) or (B) of subsection (b)(2) for a program for any program year, the Governor, or upon request by the Governor, the Secretary, shall provide technical assistance, which may include assistance in the development of a performance improvement plan, or the development of a modined local plan. (2) CORRECTIVE ACTIONS. —
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