[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]

      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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