Veterans' Employment and Training Service: Flexibility and	 
Accountability Needed to Improve Service to Veterans (12-SEP-01, 
GAO-01-928).							 
								 
Recognizing that the country's fragmented employment and training
programs were not serving job seekers or employers well, Congress
enacted the Workforce Investment Act (WIA) in 1988. One of WIA's 
goals was to create a one-stop center system to help unify the	 
services provided by numerous programs and give states the	 
flexibility to design services better suited to local workforce  
needs. Veterans' employment and training programs, administered  
by the Department of Labor's Veterans' Employment and Training	 
Service (VETS), are mandatory program partners in this new	 
one-stop center system. VETS administers two grants--for Disabled
Veterans' Outreach Program (DVOP) specialists and the Local	 
Veterans' Employment Representative (LVER) program--that fund	 
staff offering services for veterans. Although veterans receive  
priority employment services at one-stop centers, VETS does not  
collect appropriate data for determining the effectiveness of	 
these services, including subsequent job retention and wages.	 
VETS requires states to collect information on the number and	 
type of employment services provided to veterans relative to	 
nonveterans. This information showed that veterans received more 
intensive services, and received these services more readily,	 
than did nonveterans seeking services through states' employment 
service offices or one-stop centers--an elevated level of service
principally provided by DVOP and LVER staff. VETS' oversight of  
the DVOP and LVER grants is inadequate. The agency lacks a	 
comprehensive system in place to manage state performance in	 
serving veterans. The two programs do not always operate well	 
within the one-stop center environment because states do not have
the flexibility to design their services for veterans in a way	 
that best meets the needs of employers and veterans. The success 
of the one-stop system depends on providing services that meet	 
the changing employment needs in local communities.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-928 					        
    ACCNO:   A01517						        
    TITLE:   Veterans' Employment and Training Service: Flexibility   
             and Accountability Needed to Improve Service to Veterans         
     DATE:   09/12/2001 
  SUBJECT:   Employment or training programs			 
	     Funds management					 
	     Grant administration				 
	     Grant monitoring					 
	     Veterans benefits					 
	     Veterans employment programs			 
	     VA Disabled Veteran Outreach Program		 
	     VA Local Veterans Employment Reps			 
	     Program						 
								 

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GAO-01-928
     
Report to the Chairman, Subcommittee on Oversight and Investigations,
Committee on Veterans' Affairs, House of Representatives

United States General Accounting Office

GAO

September 2001 VETERANS' EMPLOYMENT AND TRAINING SERVICE

Flexibility and Accountability Needed to Improve Service to Veterans

GAO- 01- 928

Page i GAO- 01- 928 Employment Service to Veterans Letter 1

Results in Brief 2 Background 4 Veterans Receive Priority Service, but
Effectiveness of Service Is

Unknown 8 VETS Does Not Adequately Oversee DVOP and LVER Grants 11 DVOP and
LVER Programs Do Not Always Operate Well in OneStop Centers 16 Conclusions
20 Matters for Congressional Consideration 21 Recommendations for Executive
Action 22 Agency Comments and Our Evaluation 23

Appendix I: Scope and Methodology 25 Appendix II: Comments From the
Department of Labor 27 Appendix III: GAO Contacts and Staff Acknowledgments
33 Related GAO Products 34

Contents

Page ii GAO- 01- 928 Employment Service to Veterans Abbreviations

ADVET Assistant Director for Veterans? Employment and Training DVET Director
for Veterans? Employment and Training DVOP Disabled Veterans? Outreach
Program ETA Employment and Training Administration GPRA Government
Performance and Results Act of 1993 LVER Local Veterans? Employment
Representative RAVET Regional Administrator for Veterans? Employment and

Training VA Department of Veterans Affairs VETS Veterans? Employment and
Training Service VR& E Vocational Rehabilitation and Employment WIA
Workforce Investment Act

Page 1 GAO- 01- 928 Employment Service to Veterans

September 12, 2001 The Honorable Steve Buyer Chairman, Subcommittee on
Oversight

and Investigations Committee on Veterans? Affairs House of Representatives

Dear Mr. Chairman: Recognizing that the nation?s fragmented employment and
training programs were not serving job seekers or employers well, the
Congress enacted the Workforce Investment Act (WIA) in 1998. One of WIA?s
goals was to create a one- stop center system to help unify the services
provided by numerous programs and give states the flexibility to design
services better suited to local workforce needs. Veterans? employment and
training programs, administered by the Department of Labor?s Veterans?
Employment and Training Service (VETS), are mandatory program partners in
this new one- stop center system. 1 VETS administers two grants- for
Disabled Veterans? Outreach Program (DVOP) specialists and the Local
Veterans? Employment Representative (LVER) program- that fund staff offering
services for veterans. These staff work through states? employment service
offices or one- stop centers where public employment and training services
are available. 2 In fiscal year 2001, these grants funded about 1,300 DVOP
staff and about 1,200 LVER staff. However, the law that governs VETS and
these programs, U. S. C. title 38, 3 does not provide the same flexibility
introduced by WIA that allows states to determine the best way to serve
their customers. As a result, questions have arisen about the

1 WIA requires about 17 programs to provide services through the one- stop
center system, including veterans? employment and training programs. These
services are funded through four separate federal agencies: Labor,
Department of Education, Department of Health and Human Services, and
Department of Housing and Urban Development.

2 While all states were making progress in implementing WIA, not all of them
completed the implementation steps by July 1, 2000, when WIA took effect.
Some states offer public employment and training services through one- stop
centers, but there are also locations where these services are available
only at states? employment service offices. For more information see,
Workforce Investment Act: Implementation Status and the Integration of TANF
Services (GAO/ T- HEHS- 00- 145, June 29, 2000).

3 Federal laws pertaining to veterans? issues are in title 38 of the U. S.
Code. The portions relating to the employment and training services are in
chapters 41, 42, and 43.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 01- 928 Employment Service to Veterans

integration of the DVOP and LVER staff into the one- stop center
environment.

Because of the committee?s interest in improving the way employment services
are provided to veterans, you asked us to review the efficiency and
effectiveness of VETS? administration of the DVOP and LVER programs.
Specifically, you asked us to assess (1) how well veterans are provided
employment services through the one- stop center, including the DVOP and
LVER staff; (2) how well VETS oversees the DVOP and LVER grants awarded to
states; and (3) how well the DVOP and LVER programs operate within the new
one- stop center environment. To obtain this information, we visited five
states where we interviewed VETS and state employment agency officials,
including local office managers and DVOP and LVER staff. We conducted
telephone interviews with employment agency officials in 25 additional
states, which included all other states with more than 1 million veterans.
The remaining states were selected through a random sample. We also
interviewed VETS officials in Washington, D. C., and regional offices and
reviewed relevant documents. Finally, we contacted officials from various
veterans? service organizations and the National Association of State
Workforce Agencies. We conducted our work from October 2000 through July
2001 in accordance with generally accepted government auditing standards.
For further information on our scope and methodology, see appendix I.

While veterans received priority employment services at one- stop centers,
VETS does not currently collect appropriate data for determining the
effectiveness of these services, including subsequent job retention and
wages. VETS requires states to collect information on the number and type of
employment services provided to veterans relative to nonveterans, such as
the number placed in training or receiving counseling. States extract this
information from data that they collect for other employment and training
programs administered by Labor?s Employment and Training Administration
(ETA). Based on these data and interviews with state officials, we found
that veterans received more intensive services, and received these services
more readily, than nonveterans seeking services through states? employment
service offices or one- stop centers- an elevated level of service
principally provided by DVOP and LVER staff. To determine the effectiveness
of these services, outcome data, such as information on wages and job
retention, is needed. Currently, the only outcome data VETS requires states
to collect are on the percentage of veterans served who enter employment.
Because state officials verify employment rates in different ways, how this
figure is determined varies considerably from state to state. As discussed
in our recent report on Results in Brief

Page 3 GAO- 01- 928 Employment Service to Veterans

VETS? performance measures, 4 VETS has proposed changes to its performance
measures such as requiring states to report job retention, but it has not
yet implemented the changes.

VETS? oversight of the DVOP and LVER grants is inadequate. The agency does
not have a comprehensive system in place to manage state performance in
serving veterans. In order to oversee a program effectively, an agency must
have a performance management system that establishes clear goals for those
administering the program and provides incentives for them to meet these
goals. The agency must also gauge the quality of service offered by the
program and monitor the program?s progress. 5 Despite recently proposed
improvements to its performance measures, VETS? overall performance
management system remains ineffective. VETS does not communicate a
consistent message to states on expected performance, nor does it have
meaningful incentives to encourage states to perform well. As prescribed by
the law, VETS has federal staff in every state that monitors the DVOP and
LVER grants, along with other duties. However, this federal monitoring
effort, which includes on- site evaluations at every local office, is often
unproductive for several reasons. Because states generally also monitor
performance at one- stop centers, including the DVOP and LVER grants, VETS?
monitoring can be redundant. This oversight results in confusion about the
lines of authority between the federal and state monitoring staff and the
DVOP and LVER staff, who are state employees. In addition, VETS? monitoring
is often inconsistent because operational manuals are outdated, training of
monitoring staff is limited, and interpretations of the law differ among
staff.

The DVOP and LVER programs do not always operate well within the onestop
center environment because states do not have the flexibility to design
their services for veterans in a way that best meets the needs of employers
and veterans. The success of the one- stop system is dependent on its
ability to provide services that meet the changing employment needs in local
communities. However, the law does not provide the DVOP and LVER programs
with the flexibility to respond to changing needs. For example, the law
prescribes how DVOP and LVER staff is to be assigned to

4 Veterans? Employment and Training Service: Proposed Performance
Measurement System Improved, But Further Changes Needed (GAO- 01- 580, May
15, 2001). 5 For further information, see Internal Control Standards:
Internal Control Management and Evaluation Tool, (GAO- 01- 131G, Feb. 2001).
This tool, GAO?s Standards for Internal Control in the Federal Government
(GAO/ AIMD- 00- 21. 3. 1, Nov. 1999), and the Office of Management and
Budget Circular A- 123, Management Accountability and Control

(Revised June 21, 1995), should be used concurrently.

Page 4 GAO- 01- 928 Employment Service to Veterans

local offices and does not give states the flexibility to move staff to
locations where state and local officials believe veterans could best be
served. This restriction may result in too many staff in some areas and too
few in other areas. Furthermore, the funding year for DVOP and LVER programs
does not coincide with the funding year for other employment programs
offered in the one- stop centers. Having Labor programs? funding streams on
different schedules is burdensome for states and makes the budgeting process
more complicated. Moreover, VETS has not taken adequate steps to adapt the
DVOP and LVER programs to the one- stop center environment. Instead, VETS
officials said that they wanted to see how states designed their one- stop
centers before making any adjustments to the DVOP and LVER programs.

To improve the way employment services are provided to veterans, we present
matters for congressional consideration and recommendations for executive
action. We suggest that the Congress consider how the DVOP and LVER programs
best fit in the current employment and training system and take steps to
ensure that these programs become more fully integrated into this new
environment. These may include updating the applicable law to provide more
flexibility or taking other actions such as adjusting the funding cycle to
correspond with that of other programs. We also recommend that the Secretary
of Labor implement a more effective performance management system as soon as
possible and take steps to ensure that the DVOP and LVER programs are more
effectively monitored. VETS provided written comments on a draft of this
report and generally agreed with our findings and recommendations. These
comments are reprinted in appendix II.

The Congress established VETS in 1980 to carry out the national policy that
veterans receive priority employment and training opportunities. Faced with
growing long- term challenges of new service delivery systems, an evolving
labor market, and changing technology, VETS? vision is to find innovative
ways to maximize the effectiveness of its efforts. Consequently, VETS
prepared strategic and performance plans in response to the Government
Performance and Results Act of 1993 (GPRA), which was intended to make
agencies accountable for their performance. 6 VETS? strategic plan states
that it will seek new and effective means to help

6 GPRA requires agencies to identify their goals, measure performance, and
report on the degree to which those goals were met. Although not required by
GPRA, the Secretary of Labor directed its component agencies, such as VETS,
to prepare their own strategic and performance plans. Background

Page 5 GAO- 01- 928 Employment Service to Veterans

veterans compete successfully for better paying career jobs- helping them
get on a track that can provide improved income stability and growth
potential.

Although, in recent years, the Congress has not funded the number of
authorized DVOP and LVER staff positions, VETS provides states with grants
for DVOP and LVER staff according to the formula outlined in the law. 7
These DVOP and LVER staff members, whose positions are federally funded, are
part of states? public employment services and provide direct employment
services to eligible veterans. Under WIA, services provided by DVOP and LVER
staff are required to be included in each state?s approved one- stop center
system plan. WIA also requires the establishment of local workforce
investment areas and boards to locally oversee the new onestop center
system. In the solicitation for DVOP and LVER grant applications, VETS notes
that local workforce investment boards are ideally suited to developing
services that best meet the needs of veterans and employers who live and
work in that area.

The DVOP and LVER grant agreements also include assurances by states that
DVOP and LVER staff members serve eligible veterans exclusively. Under
federal law, all employment service staff 8 must give priority to serving
veterans, 9 and the assignment of DVOP and LVER staff to local offices does
not relieve other employment and training program staff of this requirement.
The law prescribes various duties to DVOP and LVER staff members that are
intended to provide veterans with job search plans and referrals and job
training opportunities. DVOP specialists are required to focus on locating
veterans with disabilities and other barriers to employment and assisting
them in finding jobs and job training

7 For fiscal year 2001, VETS? total appropriation was about $187 million,
including $81.6 million for DVOP specialists and $77.3 million for LVER
staff. The appropriation also provided $2 million for the National Veterans?
Training Institute, and the remaining amount, $26 million, was allocated for
VETS? administrative costs.

8 The Wagner- Peyser Act of 1933 created a national system of public
employment service offices to provide employment services to individuals
seeking employment and to employers seeking workers. These employment
service staff are now partners in the new one- stop center system.

9 The grant agreements provide the following order of priority for serving
veterans: (1) special disabled veterans, (2) Vietnam- era veterans, (3)
disabled veterans other than special disabled veterans, (4) all other
veterans and eligible persons. Certain nonveterans, who are dependents of
veterans, are also eligible for priority service; these nonveterans are
called

?eligible persons? and include, for example, the spouse of any person who
died of a serviceconnected disability or the spouse of any person who has a
total disability permanent in nature resulting from a service- connected
disability. For this report, we will use the term

?veterans? to include eligible people.

Page 6 GAO- 01- 928 Employment Service to Veterans

opportunities. LVER staff members have the primary responsibility of
ensuring that veterans receive priority service from the employment and
training program staff. Both DVOP and LVER staff are required to assist
veterans in finding jobs. This assistance can range from help with needs,
such as writing a resume, to more comprehensive help, such as assessing
veterans? skills and arranging training opportunities for veterans.

While the state- employed DVOP and LVER staff are the front- line providers
for services to veterans, VETS carries out its responsibilities, as outlined
in the law, through a nationwide network that includes regional and state
representation. The Office of the Assistant Secretary for Veterans?
Employment and Training administers VETS? activities through regional
administrators (RAVET) and directors (DVET) in each state, the District of
Columbia, Puerto Rico, and the Virgin Islands. In larger states, an
assistant director (ADVET) is appointed for every 250,000 veterans in the
state. These federally- paid VETS staff ensure that states carry out their
obligations to provide service to veterans, including the services provided
under the DVOP and LVER grants.

To ensure priority service to veterans, VETS expects states to provide
employment and training services to veterans at a rate exceeding the service
to nonveterans. For example, VETS requires that veterans receive services at
a rate 15 percent higher than nonveterans. Thus, if a state?s placement rate
for nonveterans was 10 percent, the placement rate for veterans should be
11. 5, or 15 percent higher than the nonveteran placement rate. There are
also higher expectations for serving Vietnam- era veterans and disabled
veterans. 10 As required by the law, VETS must report to the Congress on
states? performance in five service categories: (1) veterans placed in or
obtaining employment, (2) Vietnam- era veterans and special disabled
veterans placed in jobs on the Federal Contractor Job Listing, (3) veterans
counseled, (4) veterans placed in training, and (5) veterans who received
some reportable service. VETS has historically used these same performance
categories to measure state performance for serving veterans at a higher
rate than nonveterans. The data for these performance categories is
collected by states for the programs administered by ETA. As required by the
DVOP and LVER grant agreements, the states then extract the relevant data
for their reports to VETS. The law also requires that states establish their
own performance

10 Vietnam- era veterans should be served at a rate 20 percent higher than
nonveterans and disabled veterans at a rate 25 percent higher. Placement
rates for special disabled veterans in jobs listed for federal contractors
should also be 25 percent higher than the rate for nonveterans.

Page 7 GAO- 01- 928 Employment Service to Veterans

expectations, under VETS? guidance, for their DVOP and LVER staff to ensure
that these staff are effectively utilized.

The Congressional Commission on Servicemembers and Veterans Transition
Assistance issued a report in 1999 that raised concerns about the
performance and effectiveness of VETS? programs. 11 The Congress directed
the Commission to review programs that provide benefits and services to
veterans and service members making the transition to civilian life, which
included the DVOP and LVER programs. The Commission recommended that the
Congress restructure employment assistance to veterans in several ways.
These suggested changes included: replacing the current DVOP and LVER
programs with two new programs, establishing effective operational outcome
measures for VETS, and revising the system of priority for services to
ensure priority service for veterans who most need assistance in overcoming
barriers to employment or who are making their transition to civilian life.
The Commission also questioned the effectiveness of the administration and
oversight of VETS? programs, calling for an independent audit of agency
performance.

In our past reviews of VETS? programs, we have recommended changes to VETS?
performance measures and plans. In our most recent report, 12 we noted that
VETS had proposed performance measures more in- line with those established
under WIA and focused more on what VETS? programs achieve and less on the
number of services provided to veterans relative to nonveterans. However, we
reported that VETS still lacked measures to gauge the effectiveness of
services or whether more staff- intense services helped veterans obtain
jobs. While the law still stipulates that VETS is to report to the Congress
on the five service categories, according to its proposed performance
measures, VETS will no longer require that states compare services provided
to veterans with those provided to nonveterans. This change is a positive
step, but VETS officials said that the implementation of these proposed
measures did not occur in July 2001 as planned, and will not be effective
until July 1, 2002.

11 Report of the Congressional Commission on Servicemembers and Veterans
Transition Assistance (Arlington, Va.: Jan. 14, 1999). 12 Veterans?
Employment and Training Service: Proposed Performance Measurement System
Improved, But Further Changes Needed (GAO- O1- 580, May 15, 2001).

Page 8 GAO- 01- 928 Employment Service to Veterans

While veterans receive priority employment services at one- stop centers as
required under the law, the effectiveness of the services, as indicated by
the resulting employment, cannot be determined because VETS does not collect
sufficient data to measure the outcomes veterans achieve from these
services. State- gathered data and interviews with state officials showed
that veterans are receiving priority services at one- stop centers as
demonstrated by the higher rates of service for veterans compared to those
of nonveterans. While one- stop centers can provide priority services to
veterans in different ways, most do so primarily through the DVOP and LVER
staff. Since veterans have these dedicated staff to serve them, they also
received more intensive services, and received these services more readily,
than nonveterans. However, the effectiveness of these services is unknown
because VETS lacks adequate outcome data on job retention and wages. The
only outcome data available- the percentage of veterans served who entered
employment- are often inconsistent from state to state.

On the basis of state data reported to VETS and interviews with state
officials, veterans receive priority employment services at one- stop
centers. 13 To show that states are providing priority service to veterans,
VETS requires states to report data on the number and types of services
provided to veterans and nonveterans as well as the percentage of each group
served that enters employment. Data reported to VETS shows that veterans
generally receive employment services at a higher rate than nonveterans.
Other examples of priority service include not releasing new job openings
received from employers 14 into the job database in order to identify and
contact qualified veterans before the universal population has access to the
information. 15 Some state officials reported that they have

13 Federal regulations require state employment service agencies to give
veterans priority in all employment and training services, including
registration, counseling, referral to other services, and job development.

14 ETA?s labor exchange services include job- listing services, which are
activities performed on behalf of employers. Employers may request
assistance from public labor exchange staff in placing their job openings,
or ?job orders,? on the state?s or one- stop centers? jobs database.

15 Due to increased use of the Internet to post jobs, it is not always
helpful to the employer or applicants to hold job orders. In an effort to be
more ?employer friendly? and avoid posting a job to the one- stop job
database after it has been posted elsewhere, some onestop centers do not
hold job orders. In these states, one- stop center staff searches the
electronic job file daily and forwards announcements to qualified veteran
applicants. Veterans Receive

Priority Service, but Effectiveness of Service Is Unknown

Veterans Receive Priority Service

Page 9 GAO- 01- 928 Employment Service to Veterans

other special services exclusively for veterans, such as designated
computers or special information packets on available resources.

State and local officials reported that veterans also receive more intensive
services than nonveterans. For example, DVOP and LVER staff may provide
veterans individualized services the first day they come in, while
nonveterans are generally referred to self- service first. Veterans
generally gain access to intensive services, similar to those offered under
WIA, such as counseling and case management, more quickly than nonveterans
because DVOP and LVER staff have smaller caseloads than other employment
services staff and thus have the time to spend with individuals. Veterans
have better access to intensive services than nonveterans because DVOP and
LVER staff are funded independently of WIA and are not subject to
restrictions applicable to WIA- funded programs. 16 For example, veterans
served by DVOP and LVER staff do not have to receive basic services before
obtaining intensive services.

While priority service can be provided in different ways depending on the
one- stop center, most state officials and one- stop center managers we
spoke with said that they primarily used DVOP and LVER staff to provide
priority services to veterans since these staff are dedicated to assisting
veterans exclusively. DVOP and LVER staff we spoke with said that they tried
to talk to every veteran at least once because they were better able than
other staff to identify barriers to employment and were able to provide
veterans with information about other benefits available to them. However,
in some of the one- stop centers we visited, only veterans determined to
have employment barriers were referred to the DVOP and LVER staff, while
others were referred to self- service or other one- stop center staff. In
offices with no DVOP and LVER staff, veterans generally received one- on-
one service from any available employment service staff, and appointments
could be made with DVOP or LVER staff in other offices.

According to many state officials as well as DVOP and LVER staff, the DVOP
and LVER staff members relate better to veterans because they are

16 Moreover, where funding is limited, recipients of public assistance and
other low- income individuals must receive priority access to WIA- funded
intensive services and training. Because DVOP and LVER staff members are not
WIA- funded, they may provide intensive services for any eligible veteran
without regard to this provision.

Page 10 GAO- 01- 928 Employment Service to Veterans

veterans themselves. 17 For example, because they are familiar with the
processes at the Department of Veterans Affairs (VA), they can help veterans
file disability claims with the VA or help them to receive the appropriate
disability benefits. The DVOP and LVER staff also has broader knowledge of
veterans? issues than other one- stop center staff, partly because of their
training at the National Veterans? Training Institute, instruction that
included training in case management. DVOP and LVER staff are required to
network with veterans? groups and other service providers and, therefore,
are better able to refer veterans to services and resources available to
them outside the one- stop center. DVOP staff members also work on the
development of employment opportunities for their disabled clients and
perform outreach to identify veterans; something that other employment
services staff members do not have time to do.

While veterans receive more services and receive these services more quickly
than nonveterans, the effectiveness of these services cannot be determined.
VETS currently lacks sufficient employment outcome data, such as the wages
and job retention of veterans served who obtain jobs, which would indicate
whether services provided to veterans were effective. VETS has proposed
collecting data on employment outcomes, similar to those collected by ETA
and WIA programs, and the agency has also recommended that states use
unemployment insurance wage records to collect outcome data. However, these
improvements have not yet been implemented, partly because the data that
states report to VETS is extracted from data collected for other federal
employment and training programs. To avoid requiring states to collect
separate data, VETS is dependent on ETA to change the type of data it
collects.

The only outcome data that states currently report to VETS- the percentage
of veterans entering employment after registering for employment services-
is collected inconsistently. While some states compare their employment
service registration records with unemployment insurance wage records,
others may simply call employers for employment verification or send
postcards or letters to customers asking whether they have obtained
employment. States may also use a combination of these approaches. In some
states where follow- up was by telephone or mail, state officials reported
that the DVOP and LVER staff

17 The law prescribes eligibility requirements for states in hiring DVOP and
LVER staff based on their veteran status. For example, first preference for
hiring DVOP specialists is given to qualified disabled veterans, and first
preference for hiring LVER staff is given to qualified veterans with
service- related disabilities. Effectiveness of Service

Cannot Currently Be Determined

Page 11 GAO- 01- 928 Employment Service to Veterans

had more time to follow- up with their customers than other employment and
training staff, resulting in more complete employment data for veterans.
Furthermore, in past reviews, we have pointed out that the use of relative
standards comparing the percentage of veterans entering employment with that
of nonveterans, results in states with poor levels of service to nonveterans
being held to lower standards for service to veterans than states with
better overall performance. 18

In addition, states and local workforce investment areas choose to register
customers at different stages of the job search process, thus the percentage
of ?registered? veterans entering employment may differ based on when they
were required to register. In some areas, customers register to use any
service, including self- service; in other areas they are only required to
register when using staff- assisted services. Those who find employment
before being registered are not counted as having entered employment after
using self- service resources available through the onestop center.
Consequently, the reported percentage of veterans served who entered
employment is not comparable from state to state.

Poor performance management hinders VETS? oversight of the DVOP and LVER
grants. The agency does not have a comprehensive system in place to manage
state performance in serving veterans. VETS does not effectively communicate
its expectations to states about performance, nor does it have meaningful
incentives to encourage states to perform well. In addition, VETS? efforts
to target services to specific categories of veterans are unfocused.
Furthermore, VETS is required by law to have federal staff in every state
and to conduct annual on- site evaluations at every local office, but this
monitoring is often unproductive.

In order to oversee a program effectively, an agency must have a management
system that establishes clear goals for those administering the program.
Furthermore, an agency must develop performance measures that allow for the
determination of whether the goals are being met. VETS does not have such a
management system. The agency does not have clear goals that it communicates
to states or that it tracks with outcome data.

18 While VETS has proposed eliminating this relative comparison, the agency
is still required by law to report on this comparison to the Congress in its
annual report. VETS Does Not

Adequately Oversee DVOP and LVER Grants

VETS Does Not Effectively Communicate Its Goals or Provide Incentives for
Meeting Performance Goals

Page 12 GAO- 01- 928 Employment Service to Veterans

VETS? goals are not reflected by the performance measures that the agency
uses to monitor state performance. For example, one agency goal is to
provide high- quality case management to veterans, but the agency has no
state performance measures for assessing the quality of case management for
veterans. 19 Instead, the performance measure is the percentage of veterans
served who enter employment. Because VETS? performance measures do not
reflect the agency?s goals, the agency cannot track how well its goals are
being met. Furthermore, current performance measures do not affect how
services are delivered to veterans. Several one- stop managers and DVOP and
LVER staff said that they provide services that veterans need without
concentrating on the required performance measures, hoping that the services
meet or exceed the measures. Although VETS is working to improve its
performance measures, it still lacks a comprehensive system to manage
performance.

VETS? efforts to ensure that intensive services are focused on those
veterans most in need by ?targeting? specific groups of veterans are
unfocused. In its strategic plan, the agency, for case management and
intensive services, targets disabled veterans, minority veterans, female
veterans, recently separated veterans, veterans with significant barriers to
employment, special disabled veterans, homeless veterans, veterans provided
vocational rehabilitation under the VA, 20 and veterans who served on active
duty in the armed forces under certain circumstances. This includes nearly
all veterans, and not necessarily those most in need of service. The
numerous categories of targeted veterans could result in the vast majority
of veterans being targeted for case management. A VETS official said that
the focus for service should be on veterans with the greatest needs as
determined by individual assessments because groups targeted on a national
level do not necessarily correlate to the needs of veterans in particular
states or local areas.

19 Case management involves preparing comprehensive employment plans,
ensuring access to necessary training and supportive services, and providing
support during program participation and after job placement.

20 Vocational rehabilitation service to veterans is a joint program between
VETS and the VA. The Vocational Rehabilitation and Employment (VR& E) is a
program within the VA that assists veterans with service- related injuries
to achieve suitable employment or enhance their ability to function
independently at home and in the community. VR& E provides vocational and
educational guidance and counseling to assist service- members, veterans,
and certain veterans? dependents in selecting an appropriate career goal and
training institution.

Page 13 GAO- 01- 928 Employment Service to Veterans

Unnecessary performance measures often add to DVOP and LVER work, without
measuring quality of service to veterans. Some state and VETS officials we
spoke with expressed concern about having performance measures that
specifically focus on service to Vietnam- era veterans. The law requires
VETS to report to the Congress on states? service to Vietnamera veterans;
consequently, VETS includes this service as a performance goal. Since these
veterans make up such a small percentage of the workforce, due in part to
the fact that many are at or near retirement age and may not be seeking
employment, DVOP and LVER staff may spend much of their time trying to
identify and serve this group of veterans in order to meet VETS? performance
goals. In fact, one state VETS official, who is also a disabled Vietnam- era
veteran, said that the time- consuming service to Vietnam- era veterans
might be a distraction to DVOP and LVER staff.

Some state officials also identified one of VETS? performance measures that
should be eliminated. VETS requires that Vietnam- era veterans, special
disabled veterans, and veterans who served on active duty under certain
circumstances are placed in jobs on the Federal Contractor Job Listing. To
do this, in addition to identifying qualified job candidates from this pool
of particular group of veterans, DVOP and LVER staff must monitor local
federal contractors to make sure that they are listing their job
opportunities with the one- stop centers and hiring these veterans. Because
the presence of federal contractors in a given state or local area is
unpredictable and is determined by the federal agencies awarding contracts,
state employment service officials said the federal contractor measure
should be eliminated. It is the responsibility of contractors to list their
job openings, and the Office of Federal Contract Compliance Programs is
responsible for ensuring that all companies conducting business with the
federal government list their jobs with state employment service offices and
take affirmative action to hire qualified veterans. Eliminating this
performance measure would allow DVOP and LVER staff members more time to
focus on the employment needs of individual veterans rather than compliance
issues under the purview of another federal agency.

Furthermore, although VETS has proposed improved performance measures, its
performance management system still lacks incentives to encourage states to
meet performance goals. Presently, states are neither rewarded for meeting
or exceeding their performance measures, nor penalized for failing to meet
these measures. If a state fails to meet its performance measures, VETS
simply requires the state to develop a corrective action plan to address the
deficiencies in that state. There are no financial repercussions for states
not meeting their performance

Page 14 GAO- 01- 928 Employment Service to Veterans

measures, and states will not lose funding for failing to adequately serve
veterans. One VETS official said that he would never take funds away from a
state for not meeting performance measures because ultimately this would
deny services to veterans. In addition, there is little in the way of
incentives to encourage fiscal compliance with the grants. If a state
overspends DVOP or LVER funds, state officials can submit a grant
modification requesting additional funds. 21 A VETS official noted that if
the DVOP and LVER grants could be awarded through a competitive bid process
within states rather than awarded directly to states? employment service
agencies as required by law, the grantees might have more incentive to
provide better services to veterans.

VETS? monitoring of the DVOP and LVER grants is often unproductive. It is
excessive and has little effect on service. As mandated by law, VETS has an
extensive field structure- with federal staff in every state- to monitor the
DVOP and LVER programs. This federal oversight often duplicates state
oversight and confuses the lines of authority for DVOP and LVER staff.
Furthermore, VETS? oversight may be inconsistent due in part to outdated
manuals, limited training, and the lack of clear guidance from the national
office.

The law mandates VETS? field structure, prescribing that each state have
federal VETS staff- positions ranging from the director to office support
staff. This includes about 185 field staff members in state DVET offices and
about 37 field staff members in regional RAVET offices. In addition to their
other duties not related to the grants, these federal VETS staff members
estimated that they collectively spend about half of their time
administering the DVOP and LVER grants. 22 The federal VETS staff annually
reviews every employment service office or one- stop center where DVOP and
LVER staff are located. This annual review, called the Local Employment
Service Office evaluation, includes an evaluation of office performance
based on the review of specific documents and a site visit.

21 If a state has excess funds in the DVOP or LVER grants, VETS reallocates
the money to other states requesting additional funds. Last year, about $3
million was received from states that did not use all of their DVOP and LVER
funds for staff. VETS then reallocated these funds to states that had
requested additional funding. States had actually requested more than this
amount- about $5 million.

22 VETS staff members are also responsible for enforcing veterans?
preference and reemployment rights for veterans, Reservists, and National
Guard members. VETS? Monitoring Is Often

Unproductive

Page 15 GAO- 01- 928 Employment Service to Veterans

While some state employment agency officials believe that the DVET presence
as a VETS monitor serves as a reminder of veterans? priority and provides
immediate technical assistance, other state officials we interviewed believe
that this presence is unnecessary and excessive. Many state officials
believe that the DVOP and LVER grants are ?micromanaged.?

For example, one state official said that she receives weekly letters, daily
visits, and constant phone calls from the DVET but receives very little to
no communication from other employment and training programs. She did not
believe that all of this contact and monitoring improved services to
veterans. An official in another state pointed out that there is one monitor
for every million dollars of grant money the state receives and that VETS
staff are highly involved at the operational level, thus making the program
feel ?policed.?

VETS? annual on- site evaluations of employment services offices that we
observed or whose reports we reviewed produced few substantive findings.
Furthermore, according to some state officials, these evaluations have
little or no effect on how DVOP and LVER staff members perform their duties.
Some federal monitoring staff agree that the evaluations are not as
effective as they could be because VETS has little authority to influence
the way DVOP and LVER staff work at the state and local level. This
monitoring may also be unnecessary for those offices that exceed their
performance expectations.

States generally perform their own monitoring and oversight of one- stop
centers, including the services provided to veterans by DVOP and LVER staff.
Most state officials we interviewed had some state oversight to monitor
employment services, which included the DVOP and LVER grants. In addition,
as permitted under the LVER grants, states generally had a state veterans?
coordinator, paid by the LVER grant funds, to oversee the programs. For
example, one state?s veterans? coordinator reviews several one- stop centers
every quarter, as well as meets initially with all new DVOP and LVER staff.
In another state, the employment services department has field supervisors
who perform local office reviews and who review the quarterly reports from
each one- stop regarding services to veterans. However, VETS officials
questioned the adequacy of the state monitoring and stressed the necessity
for the federal oversight by VETS staff to make sure that veterans are
provided priority employment services.

Because there are two monitoring entities- federal and state- the lines of
authority for the DVOP and LVER staff may be unclear and confusing. In some
cases, the DVOP and LVER staff, who are state employees, go directly to the
federal officials, the DVET and his or her staff, with

Page 16 GAO- 01- 928 Employment Service to Veterans

problems and questions rather than discussing these issues with their state
supervisors. When DVOP and LVER staff directly contact the federal VETS
monitors, they are bypassing their state supervisors and circumventing state
procedures. According to state employment officials, federal officials, in
their efforts to monitor one- stop centers, may sometimes provide
information that contradicts state policies.

Further confusion exists when the DVET bypasses state officials to
communicate directly with DVOP and LVER staff. State employment officials
believe that the DVET should contact the grantee- the state- directly and
not bypass the state officials. When presented with questions from the DVET,
DVOP and LVER staff may be in an awkward situation. If they give VETS
officials the information they requested, they could be reprimanded by state
employment officials for not following state procedures. If they tell the
VETS officials to obtain the information from the state employment
officials, DVOP and LVER staff might offend the VETS staff who monitors
their work.

In addition to duplicating state monitoring efforts, the evaluations that
federal staff conducts may be inconsistent both within and between states
because the manuals that guide their efforts are outdated and the training
they receive is not adequate. The evaluation manual, published by the
national VETS office, has not been updated since 1989 even though WIA has
introduced changes to the employment service delivery system. While some
federal monitors use this manual, directors in some regions and individual
states have developed new guidelines. Consequently, evaluations are
conducted using different criteria depending on the region and state. Some
training exists for the federal monitoring staff, but the training is not
adequate because, according to a VETS official, it is too focused on finding
fault rather than sharing information on innovative ways to serve veterans.
The training emphasizes grant management and compliance audits rather than
focusing on how to assist and work with states to improve employment
services to veterans.

The DVOP and LVER grant programs do not always operate well in onestop
centers, according to the state and local officials we interviewed. With the
passage of WIA, states are now allowed the flexibility to meet the
employment and training needs of their populations through multiple programs
offered through one- stop centers nationwide. However, DVOP and LVER
programs operate under a law established prior to WIA. This law, which
outlines two staffing grants with separate rules and funding, is DVOP and
LVER

Programs Do Not Always Operate Well in One- Stop Centers

Page 17 GAO- 01- 928 Employment Service to Veterans

very prescriptive in terms of which veterans are eligible for services and
excludes, for example, persons who have served in the Reserves 23 or
National Guard. The funding year for DVOP and LVER programs does not
coincide with the funding year for other employment programs offered in the
one- stop centers and having Labor programs? funding streams on different
schedules is burdensome. In addition, VETS has not taken adequate steps to
adjust the DVOP and LVER programs to the one- stop center environment.
Instead, VETS officials said that they were waiting to see how states design
their one- stop centers before making any adjustments.

DVOP and LVER grant programs lack the flexibility states need to effectively
meet the needs of veterans through one- stop centers. For instance, the
assignment of DVOP and LVER staff to local offices is largely prescribed by
the law and allows little variation for state or local office needs and
circumstances. LVER staff is assigned to local offices based on the number
of veterans registered for assistance at each local office. 24 For the DVOP
program, the law stipulates that at least 25 percent of the staff should be
located at facilities outside of the employment service system such as
veterans? hospitals or community colleges. The Secretary of Labor can waive
this requirement only if at least 20 percent of DVOP staff is located at
facilities outside of the employment service system nationwide. These
requirements may no longer be appropriate as the employment and training
environment changes. Since the passage of WIA, many of the locations that
were once considered facilities outside the employment service system are
now considered part of that system. One state official noted that many
community colleges with DVOP staff are now considered to be one- stop
employment and training centers. While the state met the assignment
requirement before WIA, it may have to move this staff to new locations
outside the system simply to comply with the requirement of the DVOP grant.

Smaller employment services offices or one- stop centers may have a more
difficult time meeting the employment needs of their veterans because of

23 Except for Reservists who served on active duty during a period of war or
under certain other circumstances. 24 As nearly as practical, one full- time
LVER is assigned to each local employment service office at which at least
1,100 eligible veterans and eligible persons are registered for assistance,
one additional full- time LVER is assigned to each office for each 1, 500
eligible persons above 1,100, and one half- time LVER is assigned to each
office at which at least 350 but less than 1,100 eligible veterans and
eligible persons are registered for assistance. DVOP and LVER Programs

Lack Flexibility

Page 18 GAO- 01- 928 Employment Service to Veterans

the restrictions in the law. Although the LVER grant allows smaller
locations to have a half- time LVER position, VETS does not allow this same
flexibility for the DVOP program. Smaller offices in rural or sparsely
populated areas that cannot justify a full- time DVOP position would not
benefit from the services provided by a DVOP staff member. For instance, a
state official noted that if half- time DVOP staff were permitted, this
would broaden service to veterans.

The law also specifies the separate duties for DVOP and LVER staff.
According to the law, DVOP staff are to carry out 10 duties that include the
following: promoting the development of jobs for veterans through contacts
with employers, performing outreach activities to locate veterans in need of
assistance, and carrying out other duties to promote the development of
entry- level and career job opportunities for such veterans. LVER staff are
to carry out 12 duties that include: functionally supervising services to
veterans provided by the local employment service staff, providing
employment assistance to veterans, and encouraging employers to hire
eligible veterans. LVER staff must also provide quarterly reports to the
local office manager and the state DVET regarding compliance with federal
law and regulations concerning special services and priorities for veterans.
Although there are some differences between the duties of DVOP and LVER
staff, the staff members we visited generally perform similar duties. While
the law makes distinctions between DVOP and LVER staff, a VETS official said
that, in reality, they perform many of the same duties.

The separate funding streams for the DVOP and LVER grants provide states
with little discretion in staffing. If a state does not spend all of its
grant money, states return the extra funding and VETS redistributes it to
states that request additional funding; however, states are not allowed to
transfer money from one grant to another. For example, a state that
overspends in its DVOP program but spends less than its allocation in the
LVER program would have to use other funds to cover the amount overspent in
the DVOP program, and VETS would take back the additional LVER grant money.
The state may request more money from VETS for its DVOP program, but there
is no guarantee that it will get the additional funding.

Furthermore, DVOP and LVER staff members are not allowed to serve certain
individuals who may qualify for veteran services under other employment and
training programs. The law governing the DVOP and LVER programs defines
veterans eligible for employment assistance more narrowly than WIA or VETS
for its other veterans? activities. WIA defines a veteran more broadly as an
individual who served in the active military, naval, or air service. VETS,
as an agency, also assists a broadly defined

Page 19 GAO- 01- 928 Employment Service to Veterans

group, which includes veterans, Reservists, and National Guard members.
However, for the DVOP and LVER program, the law restricts the population of
eligible veterans to those who served on active duty for more than 180 days.
Because of this more restricted definition of an eligible veteran in the
applicable law, DVOP and LVER staff are not allowed to serve veterans who
were on active duty for 180 days or less, and they are not permitted to
serve Reservists 25 or National Guard members. One state official explained
that there is a large and growing number of Reservists and National Guard
members in his state, but fewer veterans because there are no military bases
where service members are discharged. Because of the more restrictive
definition for veterans, DVOP and LVER staff are not allowed to serve these
Reservists or members of the National Guard in that state. This narrow
definition does not permit states the flexibility to use DVOP and LVER staff
to serve persons that are considered veterans under WIA or persons who VETS
would help in securing employment, such as Reservists and National Guard
members.

VETS appears to be taking a reactive rather than a proactive approach to
adapting to the one- stop center environment. For example, instead of
coordinating with other programs to determine how best to fit the DVOP and
LVER programs into the one- stop system, VETS? headquarters officials
reported that they are waiting to see how states implement their programs
and will decide afterwards how to integrate the staff or adjust their
programs. While VETS implemented, in 1997, a pilot project in several states
to test new ways of measuring state performance in providing employment
assistance to veterans, the agency has not yet implemented changes based on
these initiatives.

VETS has required states to sign an agreement to ensure that veterans will
continue to receive priority services and that the DVOP and LVER staff will
continue to assume duties very similar to those they had in the employment
services system. However, these individual agreements with states were all
very similar and did not contain any information about specific ways that
DVOP and LVER staff might serve veterans within this new environment.
Furthermore, VETS has not developed policies and procedures for operating
within the one- stop system or adequately shared innovative ways to help
veterans find and retain jobs. Because of these outdated policies and
procedures, DVOP and LVER staff in many states may continue to operate
separately as if they were in the old employment

25 Except for Reservists who served on active duty during a period of war or
under certain other circumstances. VETS Has Not Adequately

Adapted to the One- Stop Center Environment

Page 20 GAO- 01- 928 Employment Service to Veterans

services system and fail to adapt to the new one- stop center environment
where employment and training programs are expected to be integrated.
According to one- stop managers we interviewed, this lack of integration may
diminish services to veterans. For example, the DVOP and LVER staff may be
unaware of all the programs and services offered through the onestop.

VETS has not addressed the fact that, unlike the DVOP and LVER staff, the
one- stop center is designed to serve all customers. In order to create
onestop centers that serve all customers through seamless delivery of
services, some federal, state, and local officials have developed creative
ways of integrating services. For example, one DVET allows the DVOP and LVER
staff in his state to serve nonveterans 2 percent of their time. This
flexibility allows DVOP and LVER staff to have contact with the universal
population in certain circumstances. If a DVOP staff member is the only
bilingual staff member in the office, he or she may assist a customer who
does not speak English without being reprimanded for serving a nonveteran.
However, this flexibility is not universally permitted by the DVET staff,
nor has VETS endorsed this concept.

The funding year for DVOP and LVER programs does not coincide with the
funding year for other employment programs offered in the one- stop centers,
another sign that the DVOP and LVER grants have not been fully integrated
into the one- stop environment. The appropriation to fund the DVOP and LVER
grants is made available on a federal fiscal year basis (October 1 through
September 30), while other employment programs and states operate on a
program year basis (July 1 through June 30). Having Labor programs? funding
streams on different schedules is burdensome for states and makes the
budgeting process more complicated. One state official explained that
information on the other major federal grants, such as Wagner- Peyser
funding to support employment service staff, is made available on a program
year basis, which allows states enough time to plan for their start date.
However, the DVOP and LVER grants are made on the federal fiscal year basis,
so the funds are not appropriated until October or later, causing problems
or delays in state planning.

While the Congress has clearly defined employment service to veterans as a
national responsibility, the law has not been updated to reflect the recent
changes in the employment and training service delivery system introduced by
WIA. The prescriptive nature of the law also creates a onesize- fits- all
approach for service delivery, mandating many of the DVOP and LVER program
activities and requirements. This approach is ineffective because it does
not account for the fact that each state and Conclusions

Page 21 GAO- 01- 928 Employment Service to Veterans

one- stop center may have a different approach to satisfying the needs of
local employers as well as different types of veterans who may need
employment assistance. Although the law stipulates separate roles and
responsibilities for DVOP and LVER staff, they perform similar duties and
may not need to be separately funded. The law that governs VETS also
stipulates how grant funds and staff must be allocated as well as how the
grants should be monitored. These requirements hamper VETS? ability to
consider alternative ways of administering or overseeing the grants.
Furthermore, the law requires that VETS report annually on states?
performance for serving veterans relative to serving nonveterans, which may
not be a good indicator if a state serves its nonveteran population poorly.
The law also requires VETS to report on requirements pertaining to the
Federal Contractor Job Listing and this detracts DVOP and LVER staff members
from serving veterans.

While VETS planned to find innovative ways to assist veterans with
employment, it has not been proactive in helping DVOP and LVER staff become
an integral part of the one- stop center environment. The new onestop center
system, while giving veterans priority for employment services, gives states
flexibility in planning and implementing employment and training systems and
holds them accountable for performance. However, VETS has not taken steps to
adjust to this new environment. The agency has not updated its oversight
guidelines or staff training procedures to ensure consistent and effective
monitoring of the DVOP and LVER programs within the one- stop centers. VETS
has not established clear performance goals for states, nor has it given
states the flexibility to decide how best to serve their veteran population.
While VETS has proposed ways of improving performance measures, these
measures have not yet been implemented. VETS has not proposed any incentives
to hold states accountable for meeting performance goals.

We suggest that the Congress consider how the DVOP and LVER programs best
fit in the current employment and training system and take steps to ensure
that these programs are able to be more fully integrated into this new
environment. While veterans? employment service is clearly a national
responsibility, the Congress should consider updating the law to provide
more flexibility and improved accountability and taking other actions, such
as adjusting the DVOP and LVER grant funding cycle to correspond with that
of other programs. The Congress should consider revising title 38 to Matters
for

Congressional Consideration

Page 22 GAO- 01- 928 Employment Service to Veterans

 provide states and local offices more discretion to decide where to locate
DVOP and LVER staff and provide states the discretion to have half- time
DVOP positions;

 allow VETS and/ or states the flexibility to better define the roles and
responsibilities of staff serving veterans instead of including these duties
in the law;

 combine the DVOP and LVER grant programs into one staffing grant to better
meet states? needs for serving veterans;

 provide VETS with the flexibility to consider alternative ways to improve
administration and oversight of the staffing grants, for example,
eliminating the prescriptive requirements for monitoring DVOP and LVER
grants;

 eliminate the requirement that VETS report to the Congress a comparison of
the job placement rate of veterans with that of nonveterans; and

 eliminate the requirement that VETS report on Federal Contractor Job
Listings.

The Congress should also consider making the DVOP and LVER grant funding
cycle consistent with that of other employment and training programs.

We recommend that the Secretary of Labor establish more effective management
and monitoring of the DVOP and LVER programs. Specifically, the Secretary of
Labor should direct VETS to

 specify performance goals and expectations for serving veterans and allow
states the flexibility to present a plan for how they intend to meet these
goals and expectations;

 implement, as soon as possible, a performance measurement system that
holds states accountable, reflects the agency?s goals and expectations, and
defines how the performance data should be collected to ensure accuracy and
reliability;

 implement a performance management system for the state grantees that
provides incentives for meeting goals and penalties, beyond corrective
action plans, for not meeting goals; and

 update oversight guidelines and improve staff training to ensure
consistent monitoring of DVOP and LVER programs in one- stop centers.
Recommendations for

Executive Action

Page 23 GAO- 01- 928 Employment Service to Veterans

We provided VETS with the opportunity to comment on a draft of this report.
VETS generally agreed with our findings and recommendations and had two
concerns about our matters for congressional consideration. Although VETS
recognizes that title 38 is prescriptive and limits the agency?s flexibility
to provide different approaches for more innovative services to veterans, it
had concerns about having half- time DVOP staff positions and combining the
two DVOP and LVER grants into a single staffing grant. VETS said that if
these matters receive further consideration, it would discuss its concerns
with the appropriate congressional committee. VETS? comments appear in
appendix II.

VETS said that measuring the effectiveness of services provided to veterans
in one- stop centers is difficult and that the agency is working with others
in the Department of Labor to develop data collection strategies supporting
its proposed performance measures. VETS said that this new performance
measurement system would not be effective until July 1, 2002. Furthermore,
VETS intends to work with states to develop appropriate performance measures
for the DVOP and LVER grants and will issue prototype performance standards
that states may use for DVOP and LVER staff.

In terms of its oversight of the DVOP and LVER grants, VETS agreed that
improved management and monitoring of the grants is needed. VETS said that
it would redouble its efforts to ensure that effective communication between
its staff and DVOP and LVER staff is accomplished without compromising
states? supervisory structure. VETS plans to develop a new grant review
guide and a grants management course. VETS said that its management control
system parallels its performance plan. According to VETS, this system tracks
program activities, performance outcomes, and corrective actions initiated.
However, we found that VETS does not use this information to hold states
accountable. VETS also said that incentives to encourage states to meet
performance goals would be useful but said there are no discretionary funds
available. In this case, we would urge the agency to consider the use of
nonmonetary incentives.

In addition, VETS said that agreements with each state about how DVOP and
LVER staff would be integrated into the one- stop delivery system agency
were developed prior to implementing WIA. We determined that these
individual state agreements ensured that veterans would continue to receive
priority services and that the DVOP and LVER staff would continue to assume
duties akin to those they had prior to WIA. However, these agreements did
not contain any information about specific ways that DVOP and LVER staff
might serve veterans within the new environment. Agency Comments

and Our Evaluation

Page 24 GAO- 01- 928 Employment Service to Veterans

We found that DVOP and LVER programs do not always operate well in one- stop
centers.

As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days after
its issue date. At that time, we will then send copies to the Secretary of
Labor and the Secretary of the Department of Veterans Affairs. We will also
make copies available to others upon request.

If you or your staff have any questions about this report, please contact me
at (202) 512- 7215 or Joan T. Mahagan at (617) 565- 7532. Key contributors
to this report are listed in appendix III.

Sincerely yours, Sigurd R. Nilsen Director, Education, Workforce,

and Income Security Issues

Appendix I: Scope and Methodology Page 25 GAO- 01- 928 Employment Service to
Veterans

In designing our study, we obtained legislation, regulations, and Veterans
Employment and Training Service (VETS) directives regarding the Disabled
Veterans? Outreach Program (DVOP) specialists and the Local Veterans?
Employment Representative (LVER) staffing grants to states. We interviewed
VETS officials in Washington, D. C., responsible for administering the
grants and VETS staff at the Regional Lead Center in Chicago, Illinois, who
provided us with documentation regarding VETS? strategic plan and general
guidance for the DVOP and LVER staffing grants. To obtain additional
information about the oversight of the staffing grants, we also conducted
telephone interviews with all of VETS? regional administrators and
interviewed the state directors and other federal VETS staff in five states
that we visited.

To obtain information on how DVOP and LVER staff are integrated into the
one- stop center environment, we interviewed state employment agency
officials in 30 states. For five states- Connecticut, Florida, Ohio, Oregon,
and Texas- we conducted site visits. For the remaining 25 states, we
conducted telephone interviews with state employment officials. To identify
the states for our telephone interviews, we developed a stratified random
sample. We first identified all states with a veteran population over 1
million. These states included California, Florida, New York, Ohio,
Pennsylvania, and Texas. Since Florida, Ohio, and Texas were states where we
conducted site visits, we conducted in- person interviews with the state
officials rather than telephone interviews. Thus, the states with veteran
populations over 1 million that we included for telephone interviews were
California, New York, and Pennsylvania. For the remaining states, we
randomly selected Alabama, Arizona, Delaware, the District of Columbia,
Idaho, Iowa, Kansas, Kentucky, Maine, Minnesota, Montana, New Hampshire, New
Jersey, New Mexico, North Dakota, Oklahoma, South Carolina, Tennessee, Utah,
Virginia, Wisconsin, and Wyoming for telephone interviews.

To understand how DVOP and LVER grants are integrated in the one- stop
system at the state level, we visited five states to provide a more in-
depth analysis. We selected Connecticut, Florida, Ohio, Oregon, and Texas to
provide a mix of different geographic locations, size of veteran
populations, and entered employment rates for veterans as well as a both
public and privatized service providers. The five states were located in
five different VETS regions; the veterans populations varied from about
313,000 in Connecticut to about 1,652,000 in Florida; and the entered
employment rates for veterans served in public employment offices ranged
from 45.8 percent in Texas to 18.5 percent in Ohio. In the five states, we
interviewed state VETS directors as well as state employment agency
officials, local office managers, and DVOP and LVER staff. We visited a
Appendix I: Scope and Methodology

Appendix I: Scope and Methodology Page 26 GAO- 01- 928 Employment Service to
Veterans

total of 17 local offices in the five states and interviewed a total of 39
DVOP and LVER staff at these locations, which were representative of both
urban and more rural areas. At the local offices, we also observed
operations. In addition, where appropriate, we interviewed local workforce
board members.

We conducted telephone interviews with five Veterans? Service Organizations-
AMVETS, the American Legion, Disabled American Veterans, Veterans of Foreign
Wars, and Vietnam Veterans of America- to obtain their views on the DVOP and
LVER staffing grants. We also contacted officials from the National
Association of State Workforce Agencies (formerly known as the Interstate
Conference on Employment Security Agencies, Inc.) and met with its Veterans?
Affairs Committee.

We conducted our work from October 2000 through July 2001 in accordance with
generally accepted government auditing standards.

Appendix II: Comments From the Department of Labor Page 27 GAO- 01- 928
Employment Service to Veterans

Appendix II: Comments From the Department of Labor

Appendix II: Comments From the Department of Labor Page 28 GAO- 01- 928
Employment Service to Veterans

Appendix II: Comments From the Department of Labor Page 29 GAO- 01- 928
Employment Service to Veterans

Appendix II: Comments From the Department of Labor Page 30 GAO- 01- 928
Employment Service to Veterans

Appendix II: Comments From the Department of Labor Page 31 GAO- 01- 928
Employment Service to Veterans

Appendix II: Comments From the Department of Labor Page 32 GAO- 01- 928
Employment Service to Veterans

Appendix III: GAO Contacts and Staff Acknowledgments

Page 33 GAO- 01- 928 Employment Service to Veterans

Sigurd R. Nilsen, Director, (202) 512- 7215 Joan T. Mahagan, Assistant
Director, (617) 565- 7532.

In addition to those named above, Jonathan H. Barker, Richard P. Burkard,
Lara L. Carreon, Betty S. Clark, Corinna A. Nicolaou, Paul R. Schearf,
Salvatore F. Sorbello, Jr., and James P. Wright made key contributions to
this report. Appendix III: GAO Contacts and Staff

Acknowledgments GAO Contacts Staff Acknowledgments

Related GAO Products Page 34 GAO- 01- 928 Employment Service to Veterans

Veterans? Employment and Training Service: Further Changes Needed to
Strengthen Its Performance Measurement System (GAO- 01- 757T, June 7, 2001).

Veterans? Employment and Training Service: Proposed Performance Measurement
System Improved, But Further Changes Needed (GAO- 01580, May 15, 2001).

Veterans? Employment and Training Service: Better Planning Needed to Address
Future Needs (GAO/ T- HEHS- 00- 206, Sept. 27, 2000).

Veterans? Employment and Training Service: Strategic and Performance Plans
Lack Vision and Clarity (GAO/ T- HEHS- 99- 177, July 29, 1999).

Veterans? Employment and Training Service: Assessment of the Fiscal Year
1999 Performance Plan (GAO/ HEHS- 98- 240R, Sept. 30, 1998).

Veterans? Employment and Training: Services Provided by Labor Department
Programs (GAO/ HEHS- 98- 7, Oct. 17, 1997).

Veterans? Employment and Training Service: Focusing on Program Results to
Improve Agency Performance (GAO/ T- HEHS- 97- 129, May 7, 1997). Related GAO
Products

(205519)

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