[Congressional Record Volume 159, Number 175 (Wednesday, December 11, 2013)]
[Senate]
[Pages S8809-S8811]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Ms. COLLINS (for herself, Mrs. McCaskill, and Mr. Manchin):
S. 1825. A bill to improve the management of the Job Corps program,
and for other purposes; to the Committee on Health, Education, Labor,
and Pensions.
Ms. COLLINS. Mr. President, I rise today with Senator McCaskill and
Senator Manchin to introduce the Securing Job Corps Centers Act, a bill
that seeks to address the Job Corps' recent management challenges.
Job Corps is an educational and vocational training program
administered by the Department of Labor, DOL, that helps at-risk young
people ages 16 through 24 by giving them the tools they need to
succeed. Job Corps has been training young adults for meaningful
careers for nearly 50 years and is committed to offering its students a
safe, drug-free environment where they can train and learn.
Job Corps' mission is to attract eligible young people, teach them
the skills they need to become employable and independent, and help
them find meaningful jobs or further their education. This mission has
been threatened, however, by the Department of Labor's mismanagement.
Earlier this year, the DOL ordered a temporary suspension of new
student enrollments as its way to address a significant Job Corps
program shortfall of $61.5 million. This was in addition to the $39
million shortfall in the previous
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program year. The suspension of enrollments decimated the program,
setting it back for years to come, which is especially upsetting
considering Job Corps has compiled an impressive record over five
decades in preparing at-risk youth for the workforce or higher
education.
According to DOL, several factors contributed to Job Corps' financial
problems, but the most significant was unchecked growth in expenditures
due to serious weaknesses in the financial management processes. I
wrote to DOL officials for clarification, and they responded with the
following:
Job Corps lacked appropriate program monitoring tools and
control protocols, including those to sufficiently analyze
contractual spending trends. In turn, this led to inadequate
spending projections for the Operations account.
It is clear that the Department of Labor has mismanaged this program,
and the students suffered the consequences. There are two Job Corps
centers in Maine that do excellent work to help these young adults
become productive members of society. The Penobscot Job Corps Academy
and the Loring Job Corps Center have the capability to serve nearly 800
at-risk youth on a daily basis. These centers put these young men and
women on a path to earning their high school diploma and to gaining the
necessary skills to enter the workforce or the military or go on to
college.
However, the shortfall caused by DOL mismanagement forced these
centers to furlough and lay off staff to reduce costs--jeopardizing the
long-term sustainability of these centers and their important work.
Studies have found Job Corps to be among the most effective of all
federally supported programs that serve youth between the ages of 16
and 24 who are disconnected from both school and work. Even in the face
of unprecedented budget shortfalls and enrollment freezes, Job Corps
has continued to produce impressive results--85 percent of graduates
obtain a job, enroll in higher education, or enlist in the military.
To ensure recent management challenges are addressed as transparently
and effectively as possible, our bill would create an advisory board
responsible for working with the DOL to develop policy and programmatic
recommendations related to Job Corps' administration. The advisory
panel will provide a series of reports directly to the U.S. Secretary
of Labor and Congress on budget and financial management protocols,
cost efficiencies, and maximizing the number of youth served. Our bill
will also require earlier notifications of management decisions at DOL
that could affect student enrollments.
Job Corps' recent management challenges have had ripple effects
throughout the communities served by Job Corps centers and continue to
have an impact on center operations. The fact that every Job Corps
center continues to operate at 21 to 25 percent below full capacity is
the result of a management structure that forced operational decisions
to be made in haste and without proper consideration of alternatives.
An advisory board of experienced Job Corps operations experts can help
the program and its new leadership to emerge from the crises of the
last year and ensure that, in the future, Job Corps policy decisions
are always guided by what is in the best interests of Job Corps
students and communities.
Job Corps' value remains clear. Studies suggest that leaving behind
the youth served by this program could cost our states and our economy
hundreds of thousands of dollars per youth. I urge my colleagues to
support our bill to ensure that Job Corps returns to the operational
efficiency that characterized its first 50 years and remains among the
nation's most successful workforce programs.
Mr. President, I ask unanimous consent that a letter be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Department of Labor,
Employment and Training,
Washington, DC, February 21, 2013.
Hon. Susan M. Collins,
U.S. Senate,
Washington, DC.
Dear Senator Collins: Thank you for your letter to Acting
Secretary of Labor Seth D. Harris regarding the U.S.
Department of Labor's (Department) oversight and
administration of the Job Corps program. Job Corps is part of
the Employment and Training Administration (ETA) and the
Acting Secretary referred your letter to me for response.
Although we are not placing a moratorium on suspension of
enrollments at this time, I hope you will find the following
information to be helpful.
The Employment and Training Administration administers Job
Corps through 147 contracts for the program's 125 centers and
educational and vocational programs. Private contractors
operate 97 centers and the U.S. Department of Agriculture
(USDA) runs the remaining 28 centers. This letter discusses
the financial problems experienced by Job Corps in Program
Year (PY) 2011 and PY 2012, their causes, what we should have
done better, corrective actions we have taken, and the steps
we will take to ensure that the Job Corps program can
continue to provide high-quality programming to some of our
nation's most disadvantaged youth. We would welcome the
opportunity to provide you and your colleagues with a more
in-depth briefing at your earliest convenience. We are
continuing to analyze the matters discussed in this letter.
The description we have set forth below reflects our current
understanding.
Several factors contributed to the financial problems with
Job Corps in PY 2011, including growth in expenditures (such
as student-related expenditures and those associated with the
opening of three new Job Corps centers in PY 2010 and PY
2011) and serious weaknesses in ETA's and Job Corps'
financial management processes that led to a failure to
identify and adjust for rising costs in a timely manner. In
PY 2012, Job Corps again experienced financial problems
because the cost-savings measures taken by ETA and Job Corps
management were not aggressive enough to allow the program to
stay within budget.
For example, Job Corps opened three new centers in PY 2010
and PY 2011 on a delayed schedule. Funding that had been
provided to Job Corps to cover the costs of operating these
centers in prior years was no longer dedicated to these sites
as a result of the delays, and we did not appropriately plan
for the increased costs resulting from the opening of these
centers.
While these and other costs escalated during the course of
PY 2011, the extent of the financial problems went
unrecognized. This is largely because Job Corps lacked
appropriate program monitoring tools and control protocols,
including those to sufficiently analyze contractual spending
trends. In turn, this led to inadequate spending projections
for the Operations account.
As you know, Congress provided ETA with authority in PY
2011 to transfer up to $26.2 million in funds from the Job
Corps Construction, Rehabilitation and Acquisition (CRA)
account to the Operations account. In April 2012, I concluded
that Job Corps would need to transfer this full amount. At
the end of May 2012, I notified the Secretary of the need to
transfer the funds. It also became apparent that this
transfer would not be sufficient to meet PY 2011 operating
needs.
Thus, ETA obtained approval from the Office of Management
and Budget (OMB) in June 2012 to transfer up to an additional
$5.37 million from the Training and Employment Services (TES)
and State Unemployment Insurance and Employment Service
Operations (SUIESO) accounts to the Job Corps Operations
account. The Department notified the Appropriations
Committees of its intent to transfer these funds. In the end,
only $2.2 million of this initial request was transferred to
Job Corps' Operations account.
In addition to the fund transfers for PY 2011, ETA
implemented a variety of programmatic changes to control
costs. These changes focused on non-mission critical
administrative expenses to ensure that student academic,
career technical training, and post-graduation placement
activities were not affected. These included negotiating
across-the-board cost-savings targets with each Job Corps
center to deobligate PY 2011 funds and suspending enrollment
for new students in the month of June, except for homeless
youth. ETA also conducted additional oversight on travel by
requiring center operators to report all bus and airfare
travel directly to the national office prior to arranging
travel with ticketing agencies, thus allowing for real-time
accounting of June's travel costs. We also required Job Corps
center operators to submit their financial reports every
three days during the month of June.
Concurrently, ETA implemented several initiatives to
strengthen and coordinate existing controls and created new
controls where appropriate to track contractor expenditures,
and certify adequate funding throughout the rest of PY 2011.
On May 22, 2012, the Department established a Job Corps
working group within DOL to provide weekly oversight of the
remediation efforts during the end of PY 2011. In addition,
in June 2012, Secretary Solis requested that the Inspector
General (IG) perform a comprehensive review of the Job Corps
financial control system.
We understood at the outset of PY 2012 that we needed to
take measures to ensure that program obligations remained
within Job Corps' appropriated levels. Even before the
program year started, we began to develop a comprehensive
plan for cost-cutting measures, which was updated throughout
the Program Year. In addition, the improvements made to Job
Corps' financial management allowed us to make projections
earlier in the program year about the overall budget
situation.
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Given our strong interest in not reducing student services
and minimizing disruption to the Job Corps Program, we
proceeded cautiously in evaluating and implementing cost
saving measures in PY 2012. In retrospect, it is clear that
we did not act as quickly or decisively as circumstances
required. As the Assistant Secretary, I take full
responsibility for our failure to manage these issues more
aggressively.
Although they ultimately were insufficient, we did take
several significant steps throughout PY 2012 to gain better
control of Job Corps' expenses. For example, in August a
newly-created Office of Financial Administration (OFA) within
ETA, headed by a Senior Executive Service-level Comptroller,
began operating. OFA oversees the now-centralized budget and
financial operations of Job Corps. After OFA began operating,
we developed initial targets for both savings and what we
believed would be a sufficient reserve for the Job Corps
program. We also eliminated a contract for accounting
services within the Job Corps Operations account, reduced
USDA costs, and negotiated with contractors to identify
additional cost-savings measures.
In September 2012, the Secretary approved several
additional measures for PY 2012: a reduction in new student
biweekly stipend and transition pay to graduates, suspension
of enrollments in late November and December, centralizing
student transportation costs, and reducing the national
academic support contract and career technical support
contract. In October 2012, we issued guidance informing the
Job Corps community that we would be suspending enrollment
from November 26 through December 31, 2012. We also announced
that, effective November 1, 2012, Job Corps would reduce the
stipends and transition pay for new enrollees.
Despite these cost-cutting measures, our analysis of data
in November showed that Job Corps would need to implement
additional savings because costs were again exceeding
budgeted amounts. Therefore, in December, we took additional
steps, including eliminating the student stipend for days
when a Job Corps student is not present for duty, which took
effect immediately, and reducing the student clothing
stipend, effective January 1, 2013. We reduced Job Corps'
national media buy by $4 million for PY 2012. In mid-
December, we increased the student to teacher ratio from 15:1
to 18:1 in order to save costs, while properly accounting for
the special academic needs of at-risk youth.
In January 2013, we also issued guidance to reduce health
care-related costs, including by modifying the current health
staffing requirements, adjusting the hours for center
physicians, dentists and Training Employee Assistance Program
specialists based on center usage, and requiring applicants
to provide a current record of immunizations in order to
eliminate duplicative care. We also continued our work to cut
administrative costs. Among other things, we have issued a
solicitation that we anticipate will help Job Corps right-
size its career technical training and academic programs and
we are exploring the best way to centralize utility and other
procurements.
Notwithstanding these efforts to reduce costs for PY 2012,
as of the beginning of January 2013 we continued to project
insufficient cost savings to remain within budgeted levels
for the program year. On January 18, 2013, Job Corps
instructed all centers to temporarily suspend outreach and
admission activities, effective January 28, except for
runaway, homeless and foster care candidates. The length of
the suspension will be determined by the time it takes to
achieve the necessary savings, but we do not expect it to
last past June 30, 2013.
The decision to temporarily freeze Job Corps enrollment
nationwide was extremely difficult. It came after we
implemented many alternative cost-savings measures, albeit
insufficient ones. We also considered other alternatives
before deciding to implement the temporary enrollment freeze.
Some of the options we considered include an abbreviated
program year, slot reductions at a specified number of
centers, cutting student stipends and transition pay to
current students, and adopting a student leave policy in lieu
of scheduled holiday and other school breaks. Ultimately, we
rejected these and other options because of their more
harmful effect on the Job Corps program and the students that
it serves as well as the insufficient savings we would have
obtained. Our conclusion was that the most certain and least
detrimental savings Job Corps could achieve for the remainder
of PY 2012 was from the temporary suspension. This will
result in reduced center operating expenses, lower Outreach/
Admissions contract costs, as well as savings in student
stipend and transportation costs.
Notwithstanding the temporary enrollment suspension, on
January 28, 2013, Job Corps continued to serve 44,268
students as of that date. With the suspension of new
enrollments, Job Corps will be able to keep its commitment to
students who are already in the program.
In closing, the Department deeply regrets the current
situation facing the Job Corps program. I personally take
responsibility for not acting more quickly to ensure that the
program was operating within its appropriated levels. The
decision to temporarily suspend enrollment at all centers is
the most balanced, efficient way to achieve the savings now
in order to avoid a shortfall in PY 2012. However, we clearly
recognize that a comprehensive review and assessment of the
Job Corps program, contracting, budget, and management is
needed to ensure that we do not face this situation again. We
will keep your office updated. Please contact Michelle Rose
in the Department's Office of Congressional and
Intergovernmental Affairs with any questions. She may be
reached at (202) 693-4600.
Sincerely,
Jane Oates,
Assistant Secretary.
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