Workforce Investment Act: Better Guidance Needed to Address	 
Concerns Over New Requirements (04-OCT-01, GAO-02-72).		 
								 
A competitive national economy depends on providing individuals  
with labor market skills and employers with access to qualified  
workers. In the past, the nation's job training system was	 
fragmented and did not serve job seekers or employers well.	 
Congress passed the Workforce Investment Act in 1998 to create a 
system linking employment, education, and training services to	 
better match workers and labor market trends. The act's 	 
requirements represented a significant change from earlier	 
workforce development efforts. Many of the act's provisions took 
effect in July 2000., and state and local organizations are at	 
different stages of implementation, with most just recently	 
completing their first full year of WIA implementation. Although 
the act's mandatory partners are making efforts to participate in
the one-stops, programmatic or financial concerns are affecting  
the partners' level of participation, as well as their ability to
fully integrate their services at the one-stop. As implementation
of the act progresses, training options for job seekers may be	 
diminishing rather than improving, as trained providers reduce	 
the number of course offerings they make available to job	 
seekers. Private-sector representatives may be discouraged from  
participating on workforce investment boards as a result of how  
states and localities are operating their boards and associated  
entities.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-72						        
    ACCNO:   A02041						        
  TITLE:     Workforce Investment Act: Better Guidance Needed to      
             Address Concerns Over New Requirements                           
     DATE:   10/04/2001 
  SUBJECT:   Education or training				 
	     Education or training costs			 
	     Federal/state relations				 
	     Labor force					 
	     Labor law						 
	     State/local relations				 
	     Training utilization				 
	     Adult and Dislocated Worker Program		 
	     Adult Education and Literacy Program		 
	     Community Services Block Grant			 
	     Dept. of Commerce Native American			 
	     Program						                                                                 
	     Dept. of Education Carl D. Perkins 		 
	     Vocational Education Program			 								 
	     Dept. of Education Vocational			 
	     Rehabilitation Program				 								 
	     DOL Migrant and Seasonal Farmworkers		 
	     Program						 								 
	     Employment Services Program			 
	     HUD Welfare to Work Initiative			 
	     Unemployment Insurance Program			 

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GAO-02-72
     
Report to Congressional Requesters

United States General Accounting Office

GAO

October 2001 WORKFORCE INVESTMENT ACT

Better Guidance Needed to Address Concerns Over New Requirements

GAO- 02- 72

Page i GAO- 02- 72 WIA Implementation Issues Letter 1

Results in Brief 3 Background 6 Participation in The One- Stop Limited by
Programmatic and

Financial Concerns 13 Training Options May Become Limited as Training
Providers Drop

Out of the System 22 Current Operations of Workforce Investment Boards and
Affiliated

Entities May Discourage Private- Sector Participation 29 Conclusions 36
Recommendations to Executive Agencies 37 Matter for Congressional
Consideration 38 Agency Comments and Our Evaluation 38

Appendix I Presence of Partners at Nine One- Stops and Method of Core
Service Provision 42

Appendix II Comments From the Department of Labor 43

Appendix III Comments From the Department of Education 45

Appendix IV Comments From the Department of Health and Human Services 50

Appendix V Comments From the Department of Housing and Urban Development 52

Appendix VI GAO Contacts and Staff Acknowledgments 56 GAO Contacts 56 Staff
Acknowledgments 56 Contents

Page ii GAO- 02- 72 WIA Implementation Issues Related GAO Products 57

Tables

Table 1: WIA?s Federal Programs: Funding Levels, Services Provided, and
Target Populations (dollars in millions) 7 Table 2: Membership Requirements
for State and Local Boards 12 Table 3: Programmatic Concerns Raised by
Selected Partners and

Related Guidance by Pertinent Federal Agencies 18 Table 4: State and Local
Implementers? Ideas for Addressing

Partners? Programmatic and Financial Concerns 22 Table 5: State and Local
Implementers? Ideas for Addressing

Training Provider Participation Concerns 29 Table 6: State and Local
Implementers? Ideas for Enhancing

Private- Sector Participation 36 Table 7: Partner Programs and Method of
Core Service Provision at

Nine One- Stops 42

Figure

Figure 1: Composition of Committees at the State Level in Vermont,
California, and Pennsylvania 34

Abbreviations

ETPL eligible training provider list FERPA Family Educational Rights and
Privacy Act GED general equivalency diploma HEA Higher Education Act HHS
Department of Health and Human Services HUD Department of Housing and Urban
Development ITA individual training account OMB Office of Management and
Budget SSN social security number UI unemployment insurance WIA Workforce
Investment Act

Page 1 GAO- 02- 72 WIA Implementation Issues

October 4, 2001 The Honorable Edward M. Kennedy Chairman The Honorable James
M. Jeffords Committee on Health, Education,

Labor and Pensions United States Senate

A competitive national economy depends, in part, on a workforce development
system that provides individuals with labor market skills and gives
employers access to qualified workers. In the past, the nation?s job
training system was fragmented, containing overlapping programs that did not
serve job seekers or employers well. 1 To address these problems, the
Congress passed the Workforce Investment Act (WIA) in 1998, seeking to
create a system connecting employment, education, and training services to
better match workers to labor market needs. WIA?s requirements represented a
significant change from prior workforce development efforts, including,
among other things:

 The streamlining of employment and training services through better
integration at the local level. In that respect, WIA requires state and
local entities who carry out at least 17 federal programs 2 to participate
in local one- stop centers (local centers offering job placement assistance
for workers, and opportunities for employers to find workers) by making
employment and training- related services available, 3 and by providing
support for the establishment and operation of these one- stops through
payment of rent or in- kind contributions. 4

1 GAO has reported in the past that the prior workforce development system
was fragmented. See Related GAO Products. 2 The entities carrying out these
programs or their activities at the one- stops are termed

?mandatory partners.? They are funded through four federal agencies: the
Department of Labor (Labor), the Department of Education (Education), the
Department of Health and Human Services (HHS), and the Department of Housing
and Urban Development (HUD). See table 1 for a listing of the programs.

3 These services include ?core? services, such as initial eligibility, as
well as access to the full range of services. 4 WIA did not dictate how one-
stops must be set up, but in guidance, Labor described a range of one- stop
models.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 02- 72 WIA Implementation Issues

 Enhanced training options for job seekers receiving training. WIA requires
any training provider (such as a community college or a technical education
program) wanting to participate in this new system to collect and report
data on student outcomes (such as completion, placement, and wage rates).
Job seekers could use this information to, among other things, decide what
training provider or course offering to patronize.

 A stronger role for the private sector in the workforce system. WIA
requires that the private sector lead and represent the majority of members
on state and local workforce investment boards. WIA created these boards to
establish workforce development policies and oversee one- stop operations.

The Congress passed WIA in August 1998, but many of its components took full
effect on July 1, 2000. 5 As a result, state and local implementers (those
responsible for carrying out WIA at the state and local level) are at
different stages of implementation, with most just recently completing their
first full year of WIA implementation. 6 In an effort to assess what
progress states and localities are making implementing WIA?s requirements
and what issues may be affecting one- stop partners? ability to achieve full
integration, Labor?s ultimate vision of future one- stop systems- you asked
that we identify issues of particular concern to state and local
implementers, as well as possible solutions to address these issues. For the
purposes of this report, we focused on issues related to the three WIA
requirements that represent the foundation of this new system. These issues
are (1) mandatory partners? participation in the one- stops, (2) job
seekers? ability to receive enhanced choices for training, and (3) private-
sector participation on workforce boards.

To more fully assess these issues, we interviewed officials from the
Departments of Labor, Education, Health and Human Services (HHS), and
Housing and Urban Development (HUD). We also interviewed officials from
national associations representing a variety of state and local

5 For example, creation of the one- stops, training provider requirements,
and establishment of boards, which we focus on in this report, and which are
in WIA?s Title I, were not required to take full effect until July 1, 2000.

6 Examples of state and local implementers include, among others, those
agency officials serving individuals eligible for any of the mandatory
partners? services, public and privatesector representatives serving on
state and local workforce investment boards, governors and local elected
officials, training providers, etc. ?Mandatory partners? are a subset of all
state and local implementers.

Page 3 GAO- 02- 72 WIA Implementation Issues

implementers (for example, local governments, state labor agencies,
educational institutions, private- sector representatives). To further
understand the effect these issues were having on local- level
implementation and to determine possible solutions, we met with a wide range
of officials during visits to three states (California, Pennsylvania, and
Vermont), six local areas, and nine one- stop centers in those states. We
selected the states based on a variety of economic, demographic, and other
state- specific factors. 7 To further validate our findings, we sponsored a
symposium that included officials from the key associations representing
state and local implementers. Although our findings are not applicable to
the universe of state and local implementers, they were corroborated by
several sources, including surveys conducted for us by two national
associations 8 and a survey conducted by the Department of Labor (Labor) on
the status of WIA implementation efforts that included information
representing 132 out of approximately 600 local areas. 9 We performed our
work in accordance with generally accepted government auditing standards
between December 2000 and August 2001.

As required by WIA, mandatory partners are making efforts to participate in
the one- stops. However, programmatic or financial concerns are affecting
the partners? level of participation, as well as their ability to fully
integrate their services at the one- stops. First, several mandatory
partners feared that one- stop participation would significantly alter their
traditional service- delivery methods and could adversely affect the quality
of services provided to their eligible populations. For example, staff for
one program that serves the disabled expressed concerns that the special
services their eligible population may need, such as sign language
interpreters, are not available at many one- stops, but are available at
existing program offices.

7 For example, California has the largest WIA funding and the most local
workforce investment areas, while Vermont has significantly less funding and
only one workforce investment area. We selected Pennsylvania because it
implemented WIA earlier than the other two states and we believed it might
have had different implementation experiences. Other factors we considered
included past and expected economic growth in these states. We utilized a
range of criteria, such as population density, to select the local areas
visited in each state.

8 The U. S. Conference of Mayors and the National Association of Counties
conducted these surveys of their entire respective memberships. About 100 of
the approximately 600 local areas responded.

9 Labor?s study is not necessarily representative of all local areas because
only about one quarter of the local areas responded. Results in Brief

Page 4 GAO- 02- 72 WIA Implementation Issues

Second, several mandatory partners were also concerned that full integration
could lead them to serve individuals otherwise ineligible for their
services. For example, local staff of one mandatory program, the Department
of Education?s Vocational Rehabilitation Services program, said that they
must serve those individuals who are most in need of services, and would
violate their own program?s requirements if they were to serve an individual
at the one- stop who did not meet that criteria. In addition, mandatory
partners said that resource constraints limited their ability to fully
integrate their services at the one- stops. For example, when mandatory
partners have a lease on an existing facility that they cannot break, they
can incur additional expenses by operating out of that location, providing
staff to the one- stop, or establishing other links to the one- stops. The
agencies that oversee the programs, such as Labor, have not provided
adequate guidance as to how mandatory partners can resolve these concerns to
achieve full integration at the one- stops. State and local implementers
shared with us their ideas on how to address these problems, such as
offering incentives to mandatory partners for participation.

As implementation of WIA progresses, training options for job seekers may be
diminishing rather than improving, as training providers reduce the number
of course offerings they make available to WIA job seekers. According to
training providers, the data collection burden resulting from participation
in WIA can be significant and may discourage their willingness to
participate. For example, the requirement that training providers collect
outcome data on all students in a class may mean calling hundreds of
students to obtain placement and wage information, even if there is only one
WIA- funded student in that class. Even if they used other methods that may
be less resource- intensive, training providers said privacy limitations
might limit their ability to collect or report student outcome data.
Training providers also highlighted the burden associated with the lack of
consistency between the data reporting definitions states use for WIA and
other mandatory partners. For example, the definition a state establishes
for ?program completer? for students enrolled in WIA can be different from
the definition a state establishes for students enrolled in Education?s Carl
D. Perkins Vocational Education Program (Perkins). Training providers find
the reporting requirements particularly burdensome given the relatively
small number of individuals who have been sent for training. Guidance from
Labor and Education has failed to address how training providers can provide
this information costeffectively. State and local implementers shared their
views on ways to reduce training providers? burden and enhance job seekers?
training

Page 5 GAO- 02- 72 WIA Implementation Issues

options, such as allowing training providers to collect required data on
only a sample of their students.

Private- sector representatives may be discouraged from participating on
workforce investment boards as a result of how states and localities are
operating their boards and associated entities. Private- sector
representatives and other implementers have said that the large size of the
workforce investment boards at the state and local levels- 54 in one state
we visited- have made it difficult to conduct the board?s business in an
efficient manner. In addition, according to private- sector representatives,
the structures established to accommodate the boards? large size might
inaccurately reflect private- sector views. For example, the boards? day-
today operations are typically carried out by public- sector employees with
few ties or little understanding of the employer community. In addition,
committees that have been set up under the auspices of the boards that are
tasked with researching key issues may not have sufficient membership from
the private sector to ensure that they focus on the issues of concern to the
private sector. Although Labor has offered information to the private sector
related to boards through its contractors, several training sessions, and
publications, it has not issued specific guidance to help states and
localities overcome some of these issues. If these issues are left
unresolved, several private- sector representatives told us they might
reduce their level of participation. State and local implementers shared
with us their ideas of ways to help maintain private- sector leadership,
such as requiring a private- sector chair and private- sector majority on
committees.

We are recommending that the responsible federal agencies- Labor, Education,
HHS, and HUD- work together to provide more effective guidance on how to
address the specific concerns identified by state and local implementers. We
are also presenting a matter for congressional consideration, suggesting
that the Congress provide more time for training providers to adjust to the
data collection and reporting requirements.

Labor, Education, HHS, and HUD provided us with written comments on a draft
of this report. HHS concurred with the recommendation that was applicable to
its activities. Neither Labor, Education, nor HUD commented specifically on
our recommendations, but reiterated the difficulties associated with WIA
implementation. Education raised concerns about our assessment of mandatory
partners? progress towards the full integration model, rather than other
acceptable models. We did not intend to imply that full integration is the
only option for participation. However, because Labor highlighted full
integration as its ultimate vision for

Page 6 GAO- 02- 72 WIA Implementation Issues

participation, our report sought to identify issues that would complicate
partners? efforts to achieve full integration. HUD said that it did not
believe that WIA was directly applicable to its programs. We incorporated
the agencies? comments into the report as appropriate.

Through WIA, the Congress sought to replace the fragmented training and
employment system that existed under the previous workforce system. Among
other things, WIA streamlined program services at one- stop centers, offered
job seekers the ability to make informed choices about training, and
provided for private- sector leadership to manage this new workforce
development system.

To ensure better integration of employment and training services at the
local level, WIA imposed requirements on at least 17 programs administered
by four federal agencies. These requirements included, among others, making
core employment and training services available through the one- stop
centers, providing access to the programs? other services to those eligible,
and supporting the one- stops? establishment and operation. 10 As shown in
table 1, these programs represent a range of funding levels, from $2.4
billion for the Vocational Rehabilitation Program to $55 million for Native
American employment and training programs. The programs also represent
various target populations. For example, while many of the programs serve
either low- income or otherwise disadvantaged or unemployed individuals,
WIA?s Adult and Dislocated Worker programs can serve any individual 18 or
older, as can WagnerPeyser?s Employment Service (Employment Service). In
contrast, Education?s Vocational Rehabilitation Services program can only
serve disabled individuals and even then prioritizes which of those it can
serve. These programs also represent a range of service- delivery methods.
Many of these programs? services are administered by public agency personnel
(such as those from state labor or education departments). Other programs
are administered by, among others, nonprofit or communitybased
organizations, unions, Indian tribal governments, and community development
corporations. Several of these programs consist of block grants that are
provided to states and localities for a variety of efforts, which may
include employment and training services. Although many of

10 Labor introduced the one- stop concept in 1994, when it began awarding
implementation grants to help states bring Labor- funded employment and
training programs into a single infrastructure. Background

Streamlining Services Through One- Stop Centers

Page 7 GAO- 02- 72 WIA Implementation Issues

the programs provide for training, such as WIA?s Adult and Dislocated Worker
programs, others, such as veterans? employment and training programs, must
work with other programs to obtain training for their participants.

Table 1: WIA?s Federal Programs: Funding Levels, Services Provided, and
Target Populations (dollars in millions) Required programs a 2001

appropriation Services provided and target population

Department of Labor Adult Worker Program $950 Assessment, counseling, job
readiness skills, and

occupational skills training to individuals age 18 or older Dislocated
Worker Program 1,590 Assessment, counseling, job readiness skills, and

occupational skills training to individuals age 18 or older, such as those
who are unemployed or seeking reemployment Youth Program 1, 103 Assistance
for youth ages 14- 21 to complete an

educational program or to secure and hold employment. Priority is given to
low- income individuals with particular employment or school- completion
barriers Wagner- Peyser Employment Service

1,016 Assessment, counseling, job readiness and placement to any individual
seeking employment who is legally authorized to work in the United States
Trade Adjustment Assistance Training Program 407 Reemployment assistance to
individuals who have become

unemployed as the result of increased imports Employment and training
services to veterans 159 Counseling and placement services to veterans,
including

those with service- connected disabilities; connections to other programs
that can fund training Unemployment Insurance 2, 349 Compensation to
individuals who have become

unemployed through no fault of their own and are looking for work Job Corps
1, 400 A residential program that provides job training and jobreadiness
skills to disadvantaged at- risk youth, ages 16- 24 Welfare- to- Work
Program 1,500 b Variety of services, including transitional employment, wage

subsidies, job training and placement, and postemployment services, to move
welfare recipients, custodial parents with incomes below the poverty line,
and noncustodial parents of low- income children into employment Senior
Community Service Employment Program 440 Assessment, counseling, placement
assistance, and

occupational skills training for low- income persons age 55 and over Migrant
& Seasonal Farmworker Employment and Training Program 77 Assessment,
counseling, placement assistance,

occupational skills training, and other supportive services for economically
disadvantaged migrant and seasonally employed workers Native American
Employment and Training Programs 55 Assessment, counseling, placement
assistance,

occupational skills training, and other supportive services for Indian,
Alaskan Native, and Native Hawaiian individuals Department of Education
Vocational Rehabilitation Services Program 2,376 Assessment, counseling,
placement assistance,

occupational skills training, and other rehabilitative services

Page 8 GAO- 02- 72 WIA Implementation Issues

Required programs a 2001 appropriation Services provided and target
population

to individuals with disabilities; priority is given to those with the most
significant disabilities Adult Education and Literacy 540 Assessment and
basic skills and literacy training to adults

over the age of 16, not enrolled in school, who lack a high school diploma
or the basic skills to function effectively in the workplace and in their
daily lives

Carl D. Perkins Vocational Education Program 1,100 c Improvement of
vocational and technical education programs through curriculum and
professional development, purchase of equipment, services to members of
special populations, and other activities.

HHS Community Services Block Grant 600 d A wide array of assistance,
including but not limited to

employment or training, to low- income families and their communities HUD
HUD- administered employment and training e A wide range of employment and
training- related services

to residents of public and assisted housing and other lowincome persons

Total $14,162 f

Note: Local areas have the option of including other programs as well, such
as those providing services under the Temporary Assistance to Needy Families
program (a welfare program under HHS), and the Food Stamps Employment and
Training program (an assistance program under the Department of
Agriculture), to name a few. a Title I of WIA replaced those programs that
had been under the Job Training Partnership Act for

economically disadvantaged adults, youths and dislocated workers with three
new programs - Adult, Dislocated Worker, and Youth. It also reauthorized
several programs, such as Native American Employment and Training Programs,
Job Corps, employment and training services to veterans, and Migrant and
Seasonal Farmworker Training Program. Title II of WIA repealed the Adult
Education Act and replaced it with the Adult Education and Family Literacy
Act, Title III amended the WagnerPeyser Act (Employment Service) to require
that the program?s activities be provided as part of the WIA one- stop
system, and Title IV amended the Rehabilitation Act of 1973 (Vocational
Rehabilitation). b This figure represents fiscal year 2000 funding; no
additional funding was provided in fiscal year

2001. The amount of the unused prior years? funds is not available. c Post-
secondary institutions that receive funds are mandatory partners. States
determine the proportion of funds allocated to secondary and postsecondary
education. Nationwide, 38 percent of these funds were allocated to
postsecondary institutions in fiscal year 2001. d Of this amount, only
$590.5 million was available to states, territories, the District of
Columbia, the

Commonwealth of Puerto Rico and federal and state- recognized tribes. $9.5
million was available for training and technical assistance. e According to
HUD, none of its many workforce development initiatives have employment and
training

as a primary purpose nor are they required to use their funding for
employment and training purposes, although they may do so. f Total does not
include fund totals for Welfare- to- Work or HUD?s initiatives.

Source: Labor, Education, HHS, and HUD.

Page 9 GAO- 02- 72 WIA Implementation Issues

While WIA created the establishment of one- stops, it did not prescribe
their structure or specific operations. However, in guidance published in
June 2000, Labor identified a range of models that could be used to comply
with the law?s requirements. These models included simple collocation of
program staff at the one- stops with coordinated delivery of services, or
electronic data sharing between partners? existing offices and the onestops.
According to Labor and others, however, the vision for future participation
by partners in one- stop systems is ?full integration.? Labor has defined
full integration as all partner programs coordinated and administered under
one management structure and accounting system, offering joint delivery of
program services from combined resources. WIA gave local areas discretion to
determine the means by which partners would participate in providing core
services and support for the one- stops? operations. The arrangements were
supposed to be resolved in a memorandum of understanding between the local
workforce investment boards and each partner. As an example of coordinated
delivery systems, partners could develop contractual agreements with other
partners to provide core services, which could include referral
arrangements. WIA also provided a great deal of flexibility as to how
partners could support the one- stops. For example, WIA allows making
financial contributions (for example, paying rent for staff collocated at
the one- stop), or providing equipment or shared services (for example,
teaching a class, or greeting individuals who enter the one- stop).

In addition to requiring the mandatory partners to provide their core
services at the one- stop, WIA changed the way partners served job seekers.
WIA initiated a sequencing of services for adults and dislocated workers to
ensure that they were receiving the requisite amount of services needed to
enter the workforce, and that funds for more intensive services or training
were targeted to those who needed them most. Accordingly, WIA required that
anyone coming into the one- stop would first receive only core services to
aid them with their job search activities. 11 If these efforts were
unsuccessful in helping the job seeker obtain or retain a job that allows
for self- sufficiency, then he or she could

11 Section 134( d)( 2) of WIA lists 11 core services, such as program
eligibility determination, assessment, and provision of employment
statistics. However, only the Adult and Dislocated Worker programs must
offer the entire list of core services; other partners are only required to
provide those that are applicable to their program. For example, a core
service for Education?s Perkins program may be initial assessment of an
individual?s vocational and academic skill levels as part of a program for
members of special populations, while a core service for a partner providing
Education?s Adult Education and Literacy program would be an assessment of
an individual?s aptitudes and abilities.

Page 10 GAO- 02- 72 WIA Implementation Issues

receive intensive services. These services are conducted by one- stop staff
to help the job seeker find, successfully compete for, and retain a job.
Intensive services can include activities such as counseling, and in- depth
skill assessment. Intensive services also include classes such as general
equivalency diploma (GED), literacy, conflict resolution, and punctuality
classes. If these activities still do not help the job seeker obtain and
retain employment, then the individual may be eligible to receive
occupational skills training. 12 WIA allowed local discretion regarding how
individuals would move from one level to the next among those three levels
of services. According to Labor, individuals may receive the three levels of
service concurrently and the determination that an individual needs
intensive and/ or training services can be made without regard to how long
the individual has been receiving core services.

One of the criticisms of past workforce systems was that few data were
available on the impact that training had on a job seeker?s ability to
obtain and maintain employment. Consequently, there is a requirement,
specific to WIA?s Adult and Dislocated Worker programs, for individuals
seeking jobs through WIA. WIA requires the collection of outcome data to be
used to assess training providers? performance and also to allow job seekers
receiving training the ability to make more informed choices about training
providers. Unlike prior systems, WIA allows individuals eligible for
training under the Adult and Dislocated Worker programs to receive vouchers-
called Individual Training Accounts (ITAs)- which can be used for the
training provider and course offering of their choice, within certain
limitations. 13

Training provider participation under WIA?s Adult and Dislocated Worker
programs centers on an eligible training provider list (ETPL). This list
contains all training course offerings that are available to WIA- funded
individuals eligible for training. Course offerings from most community
colleges and other technical education providers are automatically qualified
to be on the ETPL for 1 year, as long as providers submitted paperwork to
each local area where they wanted their course offerings to be available.
When WIA- funded individuals with ITAs enrolled in a course,

12 Candidates for skills training must, among other things, have the skill
prerequisites to successfully complete the training selected. 13 The course
offering should be in a demand occupation, for example, an occupation for
which labor market information suggests a current and continuing need for
workers. Training Provider

Performance and Informed Choice for Job Seekers

Page 11 GAO- 02- 72 WIA Implementation Issues

the training providers would, to stay on the ETPL after the first year of
initial eligibility, need to collect and report data on all the students
enrolled in that course. The providers need to collect data on (1)
completion rates, (2) job- placement rates, and (3) wages at placement. WIA
also required, among other things, collection of retention rates and wage
gains for participants funded under the Adult and Dislocated Worker programs
for 6 months following their first day of employment. 14 This procedure has
to be repeated for any new course offering that training providers may want
to place on the ETPL.

To have course offerings remain on the ETPL after the 1- year initial
eligibility period, training providers must meet or exceed performance
criteria established by the state. For example, a state might determine that
only training providers? courses with an 80- percent- completion rate would
be allowed to remain on the ETPL. If a course failed to meet that level, it
would no longer be open to WIA- funded individuals. Labor?s final
regulations allowed states to extend the initial eligibility period for up
to an additional six months under certain circumstances.

WIA called for the development of workforce investment boards to oversee WIA
implementation at the state and local levels. At the state level, WIA
required, among other things, that the workforce investment board assist the
governor in helping to set up the system, establish procedures and processes
for ensuring accountability, and designate local workforce investment areas.
WIA also required that boards be established within each of the local
workforce investment areas to carry out the formal agreements developed
between the boards and each partner, and to oversee one- stop operations. 15
According to Labor, there are 54 state workforce investment boards and
approximately 600 local boards. 16

14 While this additional data collection requirement is only applicable to
participants who had been funded under the Adult or Dislocated Worker
programs, the Governor is permitted to require providers to submit this type
of data for non- WIA individuals, as well as additional data for all
individuals.

15 WIA allowed states and localities to designate a preexisting structure
from prior workforce efforts to serve as their board, as long as it met
certain criteria. According to Labor, about 27 states and approximately 200
local areas designated such structures as their board, such as their State
Human Resource Investment Councils.

16 Boards have been established in all 50 states and the District of
Columbia, the U. S. Virgin Islands, Puerto Rico, and Guam. Forming Workforce

Investment Boards Led by the Private Sector

Page 12 GAO- 02- 72 WIA Implementation Issues

WIA listed what types of members should participate on the workforce
investment boards, but did not prescribe a minimum or maximum number of
members. Also, it allowed governors to select representatives from various
segments of the workforce investment community, including business,
education, labor, and other organizations with experience in the delivery of
workforce investment activities to be represented on the state boards. The
specifics for local board membership were similar to those for the state. 17
(See table 2.)

Table 2: Membership Requirements for State and Local Boards Level of board
applicable to Membership requirement State Local

Governor X 2 members of each chamber of state legislature X Representatives
of businesses X X Chief elected officials representing cities and counties X
Representatives of labor organizations X X Representatives of entities with
experience in youth activities X Representatives of entities with experience
in the delivery of workforce investment activities (including executive
officers of community colleges and community- based organizations) X Lead
state agency officials with responsibilities for programs carried out by
one- stop partners X Other representatives designated by the Governor or
local elected official (for example, juvenile justice and economic
development officials) X X Representatives of local educational entities
(including school boards, adult education and literacy entities, and
postsecondary educational institutions) X Representatives of community-
based organizations (including organizations representing veterans and
individual with disabilities) X Representatives of economic development
agencies X Representatives of each of the one- stop partners X

Source: The Workforce Investment Act and Labor?s regulations.

Private- sector leadership and involvement on these boards was seen as
crucial to shaping the direction of the workforce investment system. In that
respect, WIA required that private- sector representatives chair the boards
and make up the majority of board members. This would help ensure that the
private sector would be able to provide information on available employment
opportunities and expanding career fields, and help

17 Exceptions are allowed for board membership; for example, an individual
seated on the board can represent more than one entity or institution.

Page 13 GAO- 02- 72 WIA Implementation Issues

develop ways to close the gap between job seekers and labor market needs.

Although state and local boards have some responsibility for implementing
WIA, numerous public agencies and other entities in states and localities
operate the various programs that are mandatory partners under WIA. WIA did
not provide either the state or the local workforce investment boards with
control over the funds for most mandatory partner programs. They only have
limited authority concerning a portion of WIA funds designated for adult and
youth activities and, even then, only under certain circumstances.

WIA required that the mandatory partners provide core services through the
one- stop, as well as support the one- stop?s operations. The mandatory
partners are generally making efforts to participate in accordance with the
requirements of WIA. However, the partners raised a number of concerns that
affect the level and type of participation they are able to provide and may
prevent them from achieving the vision of full integration of services.
Specifically, partners expressed concerns that their one- stop participation
could result in changes to their traditional service- delivery methods.
These changes might adversely affect their ability to serve their target
populations, lead them to serve individuals otherwise ineligible for their
services, or unnecessarily strain their financial resources. Implementers
acknowledged that WIA gave them the flexibility to address many of these
individual concerns at the local level. However, they noted that their
ability to establish and maintain effective one- stop operations is hampered
when each partner has significant limitations affecting how they can
participate and may be unwilling or unable to fully integrate services.
Available guidance from responsible federal agencies has not adequately
addressed many of these specific concerns, resulting in continued confusion
or reluctance to participate in the one- stops.

Many of the mandatory partners have raised concerns that altering their
existing service- delivery methods to participate in the one- stops and
respond to the vision of full integration could adversely affect the quality
of services they provide to their target populations. Since the
implementation of WIA, partners who serve special populations have
repeatedly raised these concerns in comments to Labor and to their parent
agencies. These issues were also raised in a study that found that
Vocational Rehabilitation partners were concerned that one- stop facilities
may not adequately accommodate the special needs of disabled Participation
in The

One- Stop Limited by Programmatic and Financial Concerns

Partners Concerned That Changes to Traditional Delivery Methods Could
Adversely Affect Target Populations

Page 14 GAO- 02- 72 WIA Implementation Issues

participants who may require more specialized services, equipment, or
personnel, such as staff who know sign language. 18 As a result, even though
Vocational Rehabilitation staff were present in some form (either through
collocation or referral) at all of the nine one- stops we visited,
Vocational Rehabilitation continued to maintain their own preexisting
program offices to accommodate their eligible individuals? special needs.
Staff told us that because WIA did not require offices to close, they
believed that it was prudent for them to maintain the existing
servicedelivery structures so as not to limit the quality of services for
their eligible population.

Other partners have said that they did not see how participation in the one-
stop would benefit their eligible populations who were already receiving
services through the existing structures. For example, California Department
of Education officials told us that low- income and disadvantaged
populations in California already have full access to the community college
system at low or no cost, decreasing the incentive for partners providing
services under Perkins and the Adult Education and Literacy Program to
participate in the one- stops in that state. Other partners questioned the
value of participation because of the type of individuals they serve or the
method in which the services are provided. Across the nine one- stops we
visited, there were programs, such as the Native American Program or the
Migrant and Seasonal Farmworker Program, that may have had few eligible
individuals in the area, which decreased the value of one- stop
participation unless there was a critical mass of eligible individuals for
them to serve at the one- stop. For example, for seven of the nine one-
stops we visited, the Native American Program relied on referrals of
potentially eligible individuals from other one- stop partners rather than
providing staff to collocate at the one- stops. Other partners, such as
those funded under the Community Services Block Grant or carrying out HUD?s
employment and training activities, are only required to be involved if they
offer employment or training services. This may explain why partners
representing the Community Services Block Grant and HUD?s various workforce
development initiatives were not present at three of the nine one- stops we
visited. At four one- stops, these partners left information about their
programs at the one- stop for individuals to access independently and/ or
had the one- stop staff direct

18 Daniel O?Shea and Christopher T. King, The Workforce Investment Act of
1998: Restructuring Workforce Development Initiatives in States and
Localities (Albany, N. Y.: The Nelson A. Rockefeller Institute of
Government, 2001).

Page 15 GAO- 02- 72 WIA Implementation Issues

individuals to the grantees? programs located elsewhere. 19 Additionally,
according to HUD officials, in many cases, clients receiving HUD services,
such as housing assistance, are located in centralized areas, such as
subsidized housing projects. This means there are likely few potential HUD
clients that would enter a one- stop not located at a housing project, and
HUD clients located at housing projects would have little reason to go to
the one- stop for services.

Although state and local implementers reported that programs lack sufficient
guidance addressing how one- stop participation will meet the needs of their
eligible population, some have still found ways to encourage programs to
participate. State and local implementers said that Labor?s and Education?s
published guidance concerning how the programs can provide their core
services has not sufficiently identified ways to address partners? concerns
about potential adverse effects on service to target populations. However, a
private- sector consultant providing assistance to local areas said that in
one local area, partners providing Vocational Rehabilitation services are
willing to participate in the one- stop because staff became convinced that
serving their eligible population there would improve the quality of service
for disabled individuals. Rather than addressing partners? concerns about
the potential adverse effect their onestop participation may have on their
eligible populations, some state and local implementers have tried to
encourage participation in one- stops by offering incentives. For example,
one local area allows partners to use one- stop facilities to teach classes,
while another allows partners to use the facilities to assess eligible
individuals? literacy levels.

A number of partners with narrowly defined program requirements or special
target populations have expressed concerns to their parent agencies and to
us that altering traditional service- delivery methods to participate in the
one- stops or respond to the vision of full integration could lead to a
conflict with their own program?s requirements or commitments regarding
which individuals are eligible for the services they offer. (See table 3.)
As a result, even when programs met WIA?s requirements to provide core
services at the one- stop, they focused on their own eligible populations.
For the nine one- stops we visited, even though a majority of the partners
were participating, only a few of them,

19 Detailed information on the nature of partners? participation at each of
the one- stops visited is found in appendix I. Partners Concerned That

Changes May Lead to Serving Ineligible Individuals

Page 16 GAO- 02- 72 WIA Implementation Issues

such as Employment Service, and WIA?s Adult and Dislocated Worker programs,
are authorized to serve a broad range of individuals who came into the one-
stop for services. The others served the more limited number of individuals
specifically eligible for their services. The latter partners also tended to
provide support services such as rent, rather than provide a shared service,
because they believed doing so would conflict with their programs? mandates.

Vocational Rehabilitation staff have raised concerns to both Education and
to us about how they can participate in the one- stop without violating
their program?s mandates. Vocational Rehabilitation staff serve disabled
individuals, yet many who come into the one- stop are either not disabled or
do not meet their order- of- selection requirements in which individuals
with the most significant disabilities are afforded priority for services.
As a result, they do not believe they can provide core services to everyone
coming into the one- stop. They also believe their order- of- selection
requirements make it difficult to provide shared services, such as providing
initial intake or serving as a greeter, because an individual- even a
disabled one- may not meet previously set order of selection requirements.
Other partners told us that they believe that all disabled individuals
should first be served by the Vocational Rehabilitation program. They said
that in some one- stops, an individual with disabilities might be sent to
the Vocational Rehabilitation staff only to be sent back to WIA staff for
core services. In response to concerns raised by Vocational Rehabilitation
staff, Education issued regulations reaffirming that Vocational
Rehabilitation staff must participate in the one- stop and provide one- stop
operational support services. However, the regulations also noted that such
participation must be consistent with existing Vocational Rehabilitation
programmatic requirements. The lack of explicit direction leads to continued
confusion and a general hesitancy to conduct activities not normally
provided in their existing offices. This may explain, why at the one- stops
we visited where Vocational Rehabilitation staff were collocated, they
focused on their eligible population only and did not provide even
permissible shared services, instead generally providing rent as their
support of the one- stop?s operations.

Veterans? staff have also voiced their concerns regarding the relationship
between their program mandate and WIA. Partners providing veterans? services
were collocated at the nine one- stops we visited; however, the veterans?
staff at those one- stops said they could not provide shared services, such
as initial intake, because that would mean serving the entire range of one-
stop users, whereas veterans? staff are only allowed to serve veterans. We
were also told by local implementers that veterans? staff may

Page 17 GAO- 02- 72 WIA Implementation Issues

be unwilling to teach orientation or job preparation classes at the one-
stop to any nonveterans, even if there were veterans participating in the
classes. Labor officials with whom we spoke believed that it was permissible
for veterans? staff to teach such classes as long as the majority of
students were veterans. However, the same officials said that having
veterans? staff serve nonveterans was a violation of the program?s mandate.
In its comments to this report, Labor said that Veterans? Employment and
Training Service funding is provided to states to be used exclusively for
services to veterans and that if services were to be provided to
nonveterans, the funding connected with such service would be disallowed.
Labor has not published adequate guidance to help staff resolve these
specific issues. This may explain why there are varying degrees of
participation in local one- stops by veterans? staff. For example, we were
told that there were one- stops where veterans? staff provided services to
support the one- stop?s operations, such as teaching classes attended by
nonveterans.

Adult Education and Literacy providers, who participated in all nine
onestops we visited, have also raised concerns about meeting both their own
program commitments and WIA?s requirements for one- stop participation. WIA
provides that, in competitively awarding funds to Adult Education and
Literacy providers, a preference must be given to those providers that have
a commitment to serve individuals in the community who are most in need of
literacy services, including low- income individuals and individuals with
minimal literacy skills. This means, in some cases, an individual at the
one- stop needing literacy training may not meet the standards that Adult
Education and Literacy providers apply to determine who will be given
priority for services. As a result, the individual may be sent to Adult
Education and Literacy for services, only to be sent back to WIA?s Adult
program for services. Although both Labor and Education have emphasized that
state and local partners must collaborate to identify and address literacy
and other service needs in a community, neither agency has issued guidance
to address those instances when such conflicts arise due to such lack of
planning between Adult Education and Literacy and WIA.

Page 18 GAO- 02- 72 WIA Implementation Issues

Table 3: Programmatic Concerns Raised by Selected Partners and Related
Guidance by Pertinent Federal Agencies Program Potential conflict Agency
guidance

Vocational Rehabilitation Services

Local Vocational Rehabilitation staff believe that if they serve any
disabled entering the one- stop or if they provide shared services to
support the one- stop?s operation (such as initial intake or being a
greeter), they may be serving nondisabled individuals or those that do not
meet their order- of- selection requirements.

Education has said that it believes the Vocational Rehabilitation program
can comply with both WIA and Vocational Rehabilitation requirements.
Features such as common intake and referral are permitted when determining
individuals? initial eligibility.

Local veterans? staff believe that if they provide shared services such as
greeting individuals at the one- stops, they may serve nonveterans.

None Veterans? staff Local veterans? staff believe that if they teach a
class, they may be serving nonveterans.

None Adult Education and Literacy Local Adult Education and Literacy staff

believe that if they accept individuals referred by the one- stop regardless
of need level, they may go against Adult Education and Literacy program
commitments.

None

In some areas, partners tried to work around these limitations, such as by
using WIA funds to obtain an outside tutor or other appropriate service for
the individual. In other cases, Adult Education and Literacy charged a fee
for services they provided to WIA clients, when those services were not
consistent with service priorities. 20 Education officials also advocated
various partners? jointly financing a separate staff person to perform
greeter and initial intake services.

Many of WIA?s mandatory partners also identified resource constraints that
they believe affected their ability to participate in as well as fully
integrate their services into the one- stops. The first issue was the
overall funding levels. Several of the partners we interviewed said they
were not provided additional funding, which would have enabled them to
provide services at the one- stops in addition to covering the expenses
associated with their existing offices. This funding would have also allowed
the partners to devote significant resources to establishing sophisticated

20 Education officials said that this was permissible because they had
recently removed the regulation that prohibited charging a fee for Adult
Education and Literacy services. Partners Identified

Resource Constraints They Believe Affect Their Ability to Participate

Page 19 GAO- 02- 72 WIA Implementation Issues

electronic links between existing offices and the one- stops. 21 The
participants in the GAO- sponsored symposium also identified insufficient
funding levels as one of the top three implementation problems. Labor also
found that in many states, the agencies that administer the Employment
Service program had not yet been able to collocate with the one- stops,
although Labor?s regulations indicate that this is the preferred method for
providing core services. We were told by Employment Service officials and
one- stop administrators we spoke to that this was often because they still
had leases on existing facilities and could not afford to incur the costs of
breaking those leases. Limited funding made it even more difficult to assign
additional personnel to the one- stop or to devote resources to developing
electronic linkages with the one- stop. In the states we visited, mandatory
partners told us that limited funding was also a primary reason why even
when they collocated staff at the one- stop, they did so on a limited or
part- time basis.

Resource limitations may help explain why, at the nine one- stops we
visited, mandatory partners employed a wide range of methods to provide the
required support for the operation of the one- stops. Across all the sites
we visited, WIA?s Adult and Dislocated Worker programs and, across most
sites, Employment Service, were the only partners consistently making
monetary contributions to pay for the one- stops? operational costs. Other
mandatory partners tended to make in- kind contributions- for example,
Perkins and Adult Education and Literacy partners provided computer or GED
training. Pennsylvania, however, was able to encourage all of its partners
to provide some type of financial support; while in California and Vermont,
many partners were not required to provide any financial support.

Mandatory partners also identified how restrictions on the use of their
funds can serve as another constraint affecting both their participation in
the one- stops and the opportunity for full integration. For example, some
programs have caps on administrative spending that affect their ability to
contribute to the support of the one- stop?s operations. For example, WIA?s
Adult and Dislocated Worker programs have a 10- percent administrative cap
that supports both the one- stops? operation and board staff at the local
level. According to a survey conducted for us by a national association, 61

21 Labor provided states with some initial funding assistance in the form of
one- stop implementation grants, but most states have nearly exhausted these
funds. These funds were spent primarily on the establishment of one- stop
centers, not on altering delivery systems of partners.

Page 20 GAO- 02- 72 WIA Implementation Issues

of the 69 respondents stated that this cap limits their ability to serve
both functions, especially given the funding limitations of other programs.
In addition, Education reported that its regulations generally prohibit
states from using Education funds for acquisition of real property or for
construction. This means partners, such as those carrying out Perkins,
cannot provide funds to buy or refurbish a one- stop. Moreover, Adult
Education and Literacy and Perkins officials noted that they can only use
federal funds for the purpose of supporting the one- stop under WIA. Because
only a small portion of the funds they have available at the local level
come from federal sources, their ability to contribute is further limited.

Several of the partners reported to us, and to Labor and Education, that
they are not sure how to define or account for allowable activities in the
WIA environment. For example, partners said existing guidance from the
Office of Management and Budget (OMB) and Labor might not address situations
in which costs must be allocated across programs with different or competing
missions. In that respect, several implementers said that if some programs
are unwilling or unable to contribute, costs will tend to be shifted to the
Adult and Dislocated Worker partners- the programs having the broadest
mission of any partners at the one- stop and the greatest responsibility for
ensuring their effective operation. OMB requires that all shared services be
properly accounted for by programs, which means that if a partner dedicated
a copy machine to the one- stop, and that copy machine was used by all
partners, the partner providing the copy machine must be reimbursed by all
of the partners using it to remain in compliance with OMB regulations.
According to a number of partners, tracking that kind of information is very
difficult in this shared environment. This may explain why, in most of the
nine one- stops we visited, partners tended to bring and use their own
administrative supplies and materials, and shared very few items. Partners
have also stated that guidance from Labor does not provide adequate detail
about how to account for personnel who, in the process of providing support
services, may be providing services to potentially ineligible populations.
For example, if Vocational Rehabilitation staff were willing to provide
initial intake services at the one- stop, it is not clear how the time spent
would be reported if no disabled individuals entered the one- stop. This may
also help explain why, in most of the nine one- stops that we visited, only
those partners with broad target populations provided shared services, such
as intake. Labor has convened a one- stop workgroup that, according to Labor
officials,

Page 21 GAO- 02- 72 WIA Implementation Issues

plans to continue examining these issues further, and work with OMB to
establish guidelines on what partners can and cannot do. 22 In comments to
us, Labor also reported that it has drafted a financial management technical
assistance guide that provides information on financial and administrative
requirements applicable to some of the Labor programs. It plans to finalize
this guide and begin training in October 2001.

Despite these problems, we found several local areas that were making
efforts to compensate for funding limitations. For example, a number of one-
stops in Pennsylvania have brought in additional paying partners, such as
businesses and nonprofit entities, to provide funds to help support onestop
operations. In California and Vermont, officials are using various state
sources of training funds to leverage WIA?s funds. In one of the states we
visited, local areas made a decision to classify expenses associated with
running the one- stop as programmatic rather than administrative so that the
recorded administrative costs can be kept to a minimum.

As a result of their experiences, state and local implementers have
developed a number of ideas for actions that they believe could reduce what
they see as programmatic and financial concerns affecting the level and type
of partner participation at the one- stop (as shown in table 4). Although
there was broad consensus among those we contacted that these concerns
needed to be addressed, there was not consensus on how best to address these
concerns, nor on how to maintain the flexibility that was key to WIA?s
implementation. Some of the ideas include providing more specific guidance
at the federal level to overcome these concerns, while others call for
legislative and/ or regulatory action. These actions include amending
partners? enabling legislation to mandate changes in their service- delivery
methods, requiring additional partners to participate, or expanding the
scope of partners? allowable activities at the one- stop.

22 Labor has convened four workgroups, comprised of local, state, and
federal subject- area experts as a direct result of its recent survey of
local areas. These workgroups have been tasked with providing feedback and
suggestions on subjects related to WIA implementation. They are also tasked
with developing technical assistance and training strategies to assist the
workforce investment system address the issues identified as barriers to the
successful implementation of WIA. State and Local

Implementers? Ideas for Addressing Programmatic and Financial Concerns

Page 22 GAO- 02- 72 WIA Implementation Issues

Table 4: State and Local Implementers? Ideas for Addressing Partners?
Programmatic and Financial Concerns Concern Ideas for addressing concern

The Congress should amend partners? authorizing legislation to mandate that
the old delivery systems are changed or altogether eliminated. The Congress
and agencies should change requirements or regulations applying to service-
delivery to harmonize them with the reality of the one- stop. The Congress,
agencies, and local one- stops should give partners incentives for
participation and relocation to the one- stop (for example, good building,
state- of- the- art facilities, business centers to attract employers, the
use of one- stop facility for partner functions or for community events).
Changes to traditional delivery methods

could adversely affect target populations The Congress and agencies should
redefine administrative limitations to encourage one- stop participation.
The Congress and agencies should broaden allowable responsibilities of
partners? employees (for example, if there are no veterans at a given time,
veterans? staff should be allowed to carry out other duties at the one-
stop). Agencies should provide additional guidance on the federal level that
encourages partner participation. Changes may lead to serving ineligibles

Agencies and states should encourage and reward creative local agreements
between partners and cross- training of staff. The Congress and agencies
should redefine program costs to include the costs associated with running
of the one- stops. The Congress and agencies should make administrative caps
across partners consistent. The Congress should mandate specific financial
contributions for partners (for example, a percentage of program funds).
States should get nonmandatory partners involved (for example, TANF, Food
Stamps, etc.). Agencies should disseminate best- practice information about
cost- sharing. The Congress should create a separate funding stream for one-
stop costs. The Congress should provide program funds through block grants,
at least for Labor programs. Resource constraints affect participation

Agencies, along with states and local areas, should create a common intake
form that all partners would use for their participants? assessments, thus
limiting expense associated with each partner performing this task
independently.

WIA job seekers may have fewer training options to choose from because
training providers are reducing the number of course offerings they make
available under WIA. According to training providers, WIA?s data collection
and reporting requirements are burdensome and they question whether it is
worthwhile to assume this burden because so few individuals have been
referred to them under WIA. Among the workgroups Labor has established is
one to address training provider concerns, but the workgroup has not yet
provided detailed guidance to states and localities. If these data
collection and reporting requirements succeed in discouraging training
providers from participating, WIA?s goal that job seekers receive enhanced
choice in training options might be jeopardized. Training Options May

Become Limited as Training Providers Drop Out of the System

Page 23 GAO- 02- 72 WIA Implementation Issues

According to training providers and other state and local implementers we
interviewed, WIA?s data collection and reporting requirements are burdensome
for three reasons. First, providers have to collect data on a potentially
large number of students. Second, there are problems with the methods
available for collecting these data. Third, WIA data collection and
reporting requirements are different from those of other programs for which
training providers must also collect data. Moreover, training providers did
not necessarily see the data they are required to collect as accurate and
useful for assessing their performance.

Training providers have voiced a number of concerns to us, and to Education,
about the fact that the number of students for whom they must potentially
collect data presents a significant burden for them. First, WIA requires
that training providers report program completion, placement, and wage data
for all students in a class, regardless of whether they were WIA- funded. In
other words, if one student in a class of 100 was WIAfunded, the training
provider would be required to provide data on all 100 students. WIA also
requires training providers to report additional information on WIA- funded
students within 6 months of completion of the class. Part of the burden
perceived by training providers may stem from their belief that WIA required
them to perform this 6- month followup on all of the students in a
particular course. Although WIA did not require this type of followup, it
did provide the Governor, or the local board, with the option of requiring a
provider to submit this additional information. WIA further provided that if
such a request imposed extraordinary costs on providers, the Governor or the
local board should provide access to costeffective methods for the
collection of this information, or supply additional resources to the
provider to aid in the collection. 23

Second, training providers have reported that the burden associated with
collecting these data raises concerns. WIA did not specify how training
providers would collect or report this information. In a number of states,
training providers were providing student information, such as social
security numbers (SSNs), to state agencies responsible for WIA
implementation, such as state departments of labor. These agencies then
attempted to match SSNs with unemployment insurance (UI) wage records (which
are based on SSNs) to acquire the necessary data for WIA

23 The training providers who believed they needed to perform the 6- month
followup on all of the students in a course were unsure whether their
Governor had requested this additional information. Training Providers See

Required Data Collection and Reporting as Burdensome

Page 24 GAO- 02- 72 WIA Implementation Issues

as well as non- WIA participants. Training providers said that providing SSN
information to states might be efficient because states are required to use
UI data in assessing their own performance under WIA and would be able to
incorporate the training provider outcome data in their ongoing data
analysis efforts. Moreover, because states are required by WIA to verify the
data provided by training providers, having access to SSNs would facilitate
that process. However, training providers highlighted limitations in the UI
data that needed to be addressed through additional data collection. For
example, the UI data do not include federal employees, military personnel,
farm workers, the incarcerated, the selfemployed, and those employed out-
of- state. Moreover, there is a significant time lag in the availability of
the data.

Training providers also highlighted privacy concerns regarding the provision
of SSNs to state agencies. They said the Family Educational Rights and
Privacy Act (FERPA) generally prohibits an educational institution from
disclosing personally identifiable information (such as an SSN) from
individual student records without prior written consent from the student
unless the disclosure meets one of a number of exceptions envisioned by the
law and implementing regulations (such as provision of the information to
Education). In January 2001, Labor and Education issued joint guidance
stating that certain exceptions that could allow educational institutions to
disclose this information without a student?s prior consent were applicable
to the WIA data collection reporting requirements. However, confusion and
inconsistency continues within both federal and state Education departments
as to the use of this exception. There is also confusion about the
consequences of utilizing this exception, with some state- level education
officials believing that a student could take them to court, alleging that
disclosure, without the student?s consent, violates FERPA or similar state-
level privacy laws. While several courts have held that there is no private
right of action under FERPA, there have been cases where individuals have
alleged that violations of FERPA are violations of their civil rights.
According to one Education official, a court recently awarded a student
$450,000 for the unauthorized disclosure of information from the student?s
records by an educational institution.

When training providers were unwilling, or believed that they were unable,
to provide SSNs to the state, they used other methods to gather the
information, which they said were even more resource- intensive. For
example, in two of the states we visited, training providers told us that
they planned to obtain the required information by calling all students who
attended the course. This plan required them not only to track where the

Page 25 GAO- 02- 72 WIA Implementation Issues

students were located, but expend significant resources to call a sufficient
number of them to acquire a representative sample. They said they did not
have the staff available to collect data in this manner.

Third, training providers reported that WIA?s data collection and reporting
requirements are similar, but not exactly the same, as those of other
programs, posing an additional data collection burden on providers. This is
especially true for Education?s Perkins program, which generally allows
state discretion as to what and how outcome data will be collected. For
example, in Texas, Perkins and WIA have different definitions for a program
completer. The state defined completion for most WIA- eligible training
programs as receiving a 9- hour credit certificate, for example, enough
training to get a job. For Perkins, however, the state set its lowest
completion point as receiving a 15- hour credit certificate from an array of
state- approved courses, for example, courses that would lead to student
attainment of a state- established skill proficiency. Moreover, WIA?s data
collection requirements often differ in scope from other programs. For
example, Adult Education and Literacy providers must develop outcome
information for all students enrolled in adult education and literacy
programs. WIA requires outcome information for students in different
groupings, for example, only in particular courses.

Training providers did not necessarily see the data they are required to
collect by WIA as accurate and useful for assessing their performance. This
perception made them less willing to take on this data collection burden.
For example, several community colleges told us that WIA?s measure of
program completer fails to reflect how a community college serves
individuals. For example, a student may leave a course midway through the
class because the student had acquired the necessary skills, or had obtained
employment. Thus, the community college may have met the needs of the
individual, even though the individual did not necessarily complete the
course.

As a result of these concerns, training providers are withdrawing their
participation from the WIA system, especially because they have access to
the same populations of students through other programs, such as Welfare-
to- Work, whose data collection requirements may be less burdensome. In
fact, we found that the number of providers and course offerings on the ETPL
has decreased in many locations. For example, between July 2000 and July
2001, Vermont?s list decreased from offering 600 programs by 80 providers to
offering 158 programs by 46 providers.

Page 26 GAO- 02- 72 WIA Implementation Issues

In some locations, state agencies and training providers are trying to work
together to overcome some of these concerns. For example, in California,
community colleges in one county have chosen to classify WIA- funded
training participants as being enrolled in a separate college. Only the name
of this college, and not the name of the community college where the classes
were actually held, has been placed on the ETPL, easing the burden on
providers who previously had to collect data on non- WIA students as well.
In addition, WIA allows local boards to accept certain other program-
specific performance information for the purposes of fulfilling WIA?s
eligibility requirements, if the information is ?substantially

similar? to what WIA requires. In this regard, California?s education
community received approval from the state workforce investment board to use
Perkins? outcome data as substantially similar measures until the state is
able to fully implement other outcome data measures. In addition, at least
one state was able to address concerns about privacy protections under FERPA
because the agency receiving and analyzing the data was located within the
state Department of Education.

Labor has established a workgroup- its adult and dislocated worker
workgroup- to address many of the issues that training providers described
as burdensome. Labor?s goal is to craft solutions that do not penalize
states already collecting the data successfully. However, the workgroup has
no deadline for completion and does not include all the key players. For
example, the workgroup does not include training provider representatives,
although Labor officials said they invited an association representing
community colleges to meetings. However, the lack of formal membership of
these key players may limit the value of any solutions developed or the
willingness of training providers to adopt those solutions. Moreover, the
workgroup has not yet provided guidance, such as products and materials on
subsequent eligibility and consumer report requirements. Some state and
local implementers we spoke to felt that the continued confusion surrounding
the provision of SSNs to noneducational entities needed to be resolved at
the state or federal level through a mechanism stronger than guidance, such
as through an amendment to FERPA itself.

Training providers have said that the data collection requirements are even
more burdensome given that they have received few job seekers for training
since WIA was implemented in their states. According to regional Labor
officials and several of the national associations we interviewed, training
providers are receiving relatively few training referrals under WIA. For the
nine one- stops we visited, training providers had been sent, on Data
Collection Burden

Exacerbated Because Few Individuals Sent to Training

Page 27 GAO- 02- 72 WIA Implementation Issues

average, only six individuals with ITAs since July 2000. Moreover, officials
from a local area encompassing nine counties told us that their two onestops
had provided no ITAs to individuals until March 2001, and had sent a total
of 11 individuals to training offered by four of its eligible providers
between March and July 2001. In addition, in some of the local areas we
visited, there were financial limitations on the amounts of the ITAs, which
did not necessarily cover the cost of some of the course offerings on the
ETPL. Therefore, not all classes on the ETPL were available to some
WIAfunded individuals. In addition, training providers are not always able
to recoup the costs they are expending to collect and report the required
data unless they build this extra cost into the cost of training.

There are a variety of reasons why the number of job seekers who have been
sent to training is low. These reasons were identified by the state and
local implementers as well as several national associations we interviewed,
and by the respondents to the surveys conducted for us. First, local areas
have generally adopted a ?work- first? approach to implementing WIA,
encouraging job seekers to try to obtain employment without training. In
that respect, local areas have set a level for what constitutes a
?sustainable wage? (the minimum wage level at which a job is considered to
provide for self- sufficiency and qualify as an acceptable placement for a
job seeker) that allows them greater flexibility in placing an individual in
a job without training. We also found that many local areas required job
seekers to perform a number of activities before they were able to qualify
for training. For example, job seekers were often required to spend a
certain amount of time looking for a job, or go on a certain number of
interviews before they could be approved to receive training with WIA funds.
This may have also reduced the number of individuals who received training.

Second, some state and local implementers said that, given the strong
economy, employers were more interested in hiring workers than waiting for
them to complete training classes. 24 Third, according to local
implementers, the Adult and Dislocated Worker programs have had little money
left over for training because they, along with the Employment Service, have
had to consistently bear a greater share of the costs associated with
establishing and maintaining the one- stop, as well as

24 It is possible that, in these situations, the job seeker may receive
customized training or on- the- job training, both of which are not subject
to the ITA requirements. We did not find anyone tracking how much training
is occurring through these methods.

Page 28 GAO- 02- 72 WIA Implementation Issues

providing core and intensive services to job seekers. Moreover, WIA required
using alternative funding sources, such as Pell grants (a form of federal
financial aid available to students), to leverage their training dollars,
but state and local implementers were uncertain whether they could do this.
25 Finally, according to the state and local implementers we interviewed and
the national associations representing them, the establishment of
performance measures for adult and dislocated workers may be discouraging
one- stops from placing individuals into training. Due to the fact that
incentives and financial sanctions, such as a loss of program funds, are now
linked to performance on a series of measures (for example, employment
entry, earnings gain, or job retention), onestops may be hesitant to send
individuals to training who, in the minds of one- stop administrators, are
not likely to complete training and receive a job that meets performance
measures. This particularly affects certain types of individuals, such as
incumbent workers whose wage gain may not meet performance levels, or hard-
to- serve individuals who may be diverted to other partners? programs for
training or placement.

As a result of their experiences, state and local implementers have
developed a number of ideas for actions that they believe could address the
concerns raised by training providers and other state and local implementers
(as shown in table 5). Although there was broad consensus among those we
contacted that these concerns needed to be addressed, there was not
consensus on which ideas had greater potential to address these concerns,
nor which ones would best maintain the flexibility that was key to WIA?s
implementation. Some of the ideas included actions that could be taken on
the local level, such as the suggestion that one- stops increase their use
of customized and on- the- job training in partnership with training
providers. Others would require regulatory or legislative action, such as
giving training providers additional funds to offset the cost of data
collection or amending FERPA to allow for the use of SSNs to satisfy WIA?s
data collection requirements.

25 This confusion centers on how sources of funding should be prioritized.
For example, WIA specifically states that training services should be
limited to individuals who are unable to obtain other grant assistance for
such services or who require assistance beyond that made available under
other grant assistance programs. The Higher Education Act (HEA) prohibits
consideration of HEA student aid (for example, Pell grants, among others) in
determining the need or eligibility of any person for benefits or
assistance, or the amount of such benefits or assistance, under any federal,
state, or local program financed in whole or in part with federal funds.
State and Local

Implementers? Ideas for Addressing Training Provider Concerns

Page 29 GAO- 02- 72 WIA Implementation Issues

Table 5: State and Local Implementers? Ideas for Addressing Training
Provider Participation Concerns Concern Ideas for addressing concern

The Congress and agencies should allow training providers to collect data on
a sample of WIA or non- WIA participants. Agencies should focus on one
aspect of performance measures and allow locals flexibility in developing
remaining measures. The Congress should eliminate Governor?s authority to
require additional performance data. The Congress should extend the initial
eligibility period before training provider performance requirements go into
effect. The Congress or the agencies should mandate or develop single data-
collection method using UI or other data. States should allow schools to
access wage records. Agencies should develop a common set of data collection
requirements for training providers. Training providers see required data
collection and reporting as

burdensome The Congress should amend FERPA to allow for the use of SSNs to
satisfy WIA?s data collection requirements. Data collection burden
exacerbated because few individuals sent to training The Congress and/ or
agencies should allow for additional funds to

go to providers to cover costs associated with collecting performance data.

Private- sector representatives we spoke with are frustrated with the
operations of the workforce investment boards under WIA, believing that the
boards are too large to effectively address their concerns, and that board-
related entities created to help deal with the size of the boards may not
reflect employer views. Labor?s guidance in this area has not specifically
addressed these issues. Although some private- sector representatives still
appear to be making efforts to meet WIA?s requirement of private- sector
leadership, they told us that, if their concerns are not addressed, they may
decide to decrease their involvement or stop participating. This could limit
the ability of the boards to develop and establish the strong links with the
business community needed to develop workforce development strategies that
effectively address the needs of all individuals.

Based on the results of surveys and reports of national associations
representing workforce investment boards, and according to the majority of
private- sector employers and other state and local implementers we
interviewed, the large number of members on boards has made it very
difficult to conduct operations efficiently. For example, according to a
national board association, the average number of members on workforce
boards exceeds 40 in most of the places where new boards have been
established since the passage of WIA. In our work, we found that Vermont had
over 40 seats on its state board, California had 64, and Pennsylvania
Current Operations of

Workforce Investment Boards and Affiliated Entities May Discourage
PrivateSector Participation

Private- Sector Representatives Believe Large Boards Preclude Efficient
Operations

Page 30 GAO- 02- 72 WIA Implementation Issues

had 33. Local boards can be just as large. For example, we found one in
Pennsylvania with 43 members and two in California with 45 members. The size
of these boards is especially large in comparison to various private- sector
corporate boards. For example, General Motors? board of directors has 13
members, while Intel?s board has 11.

We were told that the size of the boards makes it difficult to recruit the
necessary private- sector board members for several reasons. First, because
private- sector representatives must make up the majority of board
membership, the larger the board, the greater the requirement for private-
sector members, which increases the difficulty of recruiting the requisite
number of private- sector members. We found several boards that had been
unable to achieve the private- sector majority required by WIA. For example,
Vermont?s state board had about 42 percent private- sector membership,
although the state is working to fill additional private- sector vacancies.
Pennsylvania and California used private nonprofit institutions to achieve
their private- sector majorities. Labor?s survey of 132 local areas found
that local areas were more successful recruiting private- sector
representatives who had retired than those who were still working, which may
limit the current knowledge of workforce issues brought by the private-
sector to the board.

Second, the large number of board members makes it difficult to set up
meetings. For example, officials in one local workforce investment area said
they attempted to meet quarterly to accommodate the schedules of the various
members. However, because members often are dispersed throughout the state,
it may be difficult to handle the logistics for so many participants, or to
find locations for the board meetings that are convenient to all members and
do not pose transportation obstacles. If members are unable to attend the
meetings, boards may not be able to achieve a quorum (usually a simple
majority), and therefore may be unable to make decisions.

Third, the large number of board members makes it difficult to run meetings
efficiently. It may be difficult to ensure that the numerous board members
all have the same information prior to the meeting, and to keep members
apprised of the board?s activities. In addition, it is difficult to reach
agreement on important issues because having more members results in having
more opinions that need to be addressed and reconciled. These difficulties
have been especially prevalent this past year when boards have had to
perform many administrative tasks, such as developing strategic plans or
certifying one- stops, in order to set up the WIA system. Private- sector
representatives and other implementers in the three states

Page 31 GAO- 02- 72 WIA Implementation Issues

we visited said that the boards did not operate in an efficient manner. This
inefficiency led to meetings that focused on administration and process
rather than on outcomes and broad strategic goals, both of which the
private- sector representatives see as an appropriate role for a board of
directors.

Some board members and association representatives indicated that it would
be easier to deal with the large size of the board if they could meet in
smaller groups outside of the formal board meetings to discuss important
issues. At the same time, WIA?s requirement that boards make available to
the public, information regarding their activities through open meetings may
preclude such action. State and local implementers in one state told us that
they believe WIA?s sunshine provision prohibits decisions from being made in
private, and has prevented board members from meeting in smaller groups to
discuss issues. In one state we visited, employers told us that a required
72- hour public comment period for any agenda item precludes board members
from putting on the agenda any important items that might have come up at
the last moment.

Despite these difficulties, we found several local areas making efforts to
address the problems associated with large boards. For example, some local
areas have divided their boards into smaller committees focusing on specific
issues, thus increasing member participation and creating a more manageable
governance structure. As the next section shows, however, the downside of
this approach is the potential dilution of private- sector influence if
private- sector board members are not included as members of the committees.
To make a state board smaller, more manageable, and more efficient, one
state board chair said he hopes to remove, but not replace, board members
who fail to take their participation seriously. Labor has contracted with
organizations, offered training sessions, and developed publications that
provide information on how boards should operate. For example, it has
contracted with a coalition of 20 privatesector organizations to produce
publications and guides on WIA. However, it has not provided guidance
specifically on ways to ensure that boards maintain private sector
leadership. It has also recently formed a workforce investment board
workgroup, one of six workgroups formed since its implementation status
survey, to consider these issues.

Page 32 GAO- 02- 72 WIA Implementation Issues

According to our interviews with private- sector representatives and
private- sector information from national associations, additional
structures that have been developed to accomplish many of the day- to- day
board activities may not reflect or may dilute employer?s input into the
system.

Virtually every state and local board has assigned staff that is responsible
for carrying out much of the detail associated with the board operations,
such as setting up meetings, developing the agenda, and ensuring that boards
stay current with compliance issues. 26 Private- sector representatives were
concerned, however, that the staff may lack knowledge of or interest in the
needs of the private sector.

According to private- sector representatives and other implementers, staff
are often employed by the public- sector agency responsible for carrying out
WIA?s Adult, Dislocated Worker and other mandatory partners? programs in
each state, which in most cases is a labor or human services agency. As a
result, private- sector and other representatives expressed concerns
regarding how staff can carry out their primary focus of serving the board
when they report to supervisors in their respective agencies. In that
respect, we were told that staff sometimes dismissed issues that private-
sector representatives tried to raise because the issues were not deemed
important by the state agency. In two states, private- sector and other
representatives also complained that staff failed to provide them with key
information for the board meetings early enough to allow them to prepare,
leaving them unable to participate at the board meetings to the same extent
as public officials. Private- sector representatives also questioned whether
the existing public- sector staff have sufficient understanding of the
environment in which business representatives operate. Finally, although
staff generally offer extensive expertise of working with job training
programs, staff experienced in prior workforce systems may be hesitant to
embrace WIA?s vision of a more private- sectordriven and strategic system.

Labor has provided little guidance or information in this area, but there
are some locations that appear to have hired staff that adequately
represents the private sector. For example, in a local area in California,
the WIA funds have been provided to the Office of Economic Development, from
which

26 In some cases, the size of the staff can be large itself; for example,
there are 25 staff supporting California?s state board. Private- Sector

Representatives Believe Board Staff and Committee Structures May Not Reflect
Employer Interests

Board Staff May Not Reflect Employer Views

Page 33 GAO- 02- 72 WIA Implementation Issues

the staff originate, to ensure that the board staff have a private- sector
focus. In a local area in Pennsylvania, staff is employed by an incorporated
board, which gives the staff greater independence from the state public
agencies.

To address many of the difficulties stemming from the large size of the
boards, many states and localities have established committees under the
auspices of the board. Committees are generally established to address
particular topics, such as youth activities or performance measures, with
the goal that the committees will research the issues and decide upon a
particular course of action for the board to take.

However, according to our interviews with private- sector representatives
and survey results, the establishment of committees to address particular
topics of interest for the board could serve to dilute private- sector input
into key decisions. There is no requirement that the private- sector members
chair these committees or even be included on them. WIA is silent on the
establishment of the committees and the form that they should take, but some
private- sector representatives told us that, given the important role these
committees play in influencing board activities, they felt alienated when
they were underrepresented or not represented on the committees. In all of
the states we visited, we found that committees at both the state and local
level had little private- sector membership. Figure 1 shows that only one of
the state board committees, each labeled with their specific committee name,
had more than 50 percent private- sector membership. Committee Structure May

Dilute Employer Input

Page 34 GAO- 02- 72 WIA Implementation Issues

Figure 1: Composition of Committees at the State Level in Vermont,
California, and Pennsylvania

In the states we visited, we also found that there were public- sector
committee members who were not board members. According to privatesector
representatives in one state, this membership problem further decreases
private- sector input in the system. At the same time, however, ensuring
private- sector involvement on these committees is problematic, since
private- sector employers serve on the boards as volunteers in addition to
their regular responsibilities, with time constraints often precluding them
from attending both board and committee meetings.

Labor has provided technical assistance to state and local boards, and has
arranged peer assistance and provided information on promising practices to
help local boards deal with some of these challenges. However, information
is still lacking on how to balance the requirements of the board operations
with the needs of the private sector. Despite this, some locations appear to
be making progress in ensuring private- sector input to committees. For
example, some local areas in California are requiring committees to have a
business majority and define a quorum in terms of the business majority.

Page 35 GAO- 02- 72 WIA Implementation Issues

As a result of their experiences, state and local implementers have
developed a number of ideas for actions that they believe could enhance the
role of the private- sector on workforce investment boards (as shown in
table 6). Although there was broad consensus among those we contacted that
these concerns needed to be addressed, there was not consensus on which
ideas had greater potential to address these concerns, nor which ones would
best maintain the flexibility that was key to WIA?s implementation. Some of
the ideas focused on those actions that could be taken at the local level,
such as clearly delineating the responsibilities of staff members to ensure
a private- sector focus. Others may involve legislative or regulatory
action, such as giving responsibility for WIA programs to public- sector
entities (for example, economic development agencies) or nonprofit entities
that reflect employer outlook, or limiting authority of public- sector
staff. In addition, some state and local implementers suggested mandating a
maximum number of staff members and providing financial incentives to
business members to take over the tasks currently performed by the staff.
State and Local

Implementers? Ideas for Enhancing Private- Sector Participation

Page 36 GAO- 02- 72 WIA Implementation Issues

Table 6: State and Local Implementers? Ideas for Enhancing Private- Sector
Participation Concern Ideas for addressing concerns

The Congress should leave membership decisions to states and locals. The
Congress and agencies should alter interpretation of WIA?s sunshine
provision or clarify the requirements to allow board members to convene
outside of regularly scheduled public meetings. Private- sector
representatives believe large boards preclude

efficient operations The Congress should allow states and locals to give
more weight to private- sector votes on boards that may not have a business
majority. The Congress, agencies, or states should clearly delineate
responsibilities of staff to the Board to limit staff authority and require
greater control by the private sector. The Congress should mandate that
nonpublic agency representatives be included as staff to the Board. The
Congress and agencies should limit size of staff. The Congress and agencies
should require Governors to give responsibility for WIA to Chambers of
Commerce, State Departments of Commerce, or other entities with a business
outlook, as well as hire staff from those entities Agencies should limit the
number of staff who have worked under the prior workforce development system
The Congress and agencies should mandate private- sector leadership and
majority on committees The Congress should mandate a business majority for
quorum. Private- sector representatives believe board staff and committee

structures may not reflect employer interests Agencies should allow for
separate private- sector advisory committees even if the participants are
not on the larger board.

The workforce development system WIA sought to create represents a sea
change for workforce development, not only because it attempted to
significantly change how employment and training services are provided, but
also because it provided significant latitude to those implementing WIA at
the state and local level. Given the early stage of this process, and the
new and additional partners involved in the process, it is not surprising
that implementation has been affected by concerns over the new requirements.
Unless these concerns are addressed in some fashion, there is a risk that
the flexibility provided to states and local areas under WIA, instead of
fostering innovation, will continue to lead to confusion, unnecessary
burden, and resistance to change. Moreover, although states and localities
will continue to participate as required by WIA, the vision for one- stops-
full integration- may not be achieved. In effect, complying with WIA could
result in additional requirements rather than the replacement of traditional
service- delivery structures. The opportunity for the federal government to
foster fundamental change in the workforce development system of the future
could be lost. Conclusions

Page 37 GAO- 02- 72 WIA Implementation Issues

While state and local implementers agreed that these concerns needed to be
addressed, there was no consensus on a single course of agency or
congressional action that would be most effective in addressing these
concerns. Moreover, some of the concerns may stem from confusion about what
states and localities can already do to embrace WIA?s requirements. As a
result, states and localities need more time to fully understand and embrace
these new ways of operating in conjunction with appropriate guidance and
technical assistance. Guidance from all responsible agencies can go a long
way towards addressing concerns; it will also help identify issues that may
require action beyond guidance. First, the vision of a seamless system of
employment and training services depends upon states and localities having
better information about the benefits of integrating their services at one-
stops. Second, states and localities need better information on cost-
effective methods for training provider data collection and reporting. They
need tools to address the burden associated with conflicting program
requirements and clarification about the confusion surrounding the allowed
use of SSNs under FERPA and related policy guidance to meet data collection
requirements. Also, training providers need another year of initial
eligibility exempt from the data collection requirements while they work
with state and local implementers to explore ways to resolve data collection
difficulties. Until these issues are resolved, dropping training providers
from consideration or having them withdraw their services when the initial
eligibility period ends would be at odds with WIA?s goal of providing job
seekers with better training options.

Third, unless action is taken to ensure that the states and localities
understand and can implement ways to achieve effective workforce investment
board operations consistent with private- sector needs, WIA?s requirement of
private- sector leadership for this new workforce system may be at risk.
Moreover, the private sector has the necessary labor market knowledge to
create a strategic workforce investment system, without which the new system
may be adversely affected.

To facilitate the implementation of WIA, as well as to help state and local
implementers move closer to the vision of a fully integrated system, we
recommend that the Secretary of Labor, along with the Secretaries of
Education, HHS, and HUD, jointly explore the specific programmatic and
financial concerns identified by state and local implementers that affect
their ability to fully integrate their services at the one- stops, and
identify specific ways in which these concerns can be overcome.
Recommendations to

Executive Agencies

Page 38 GAO- 02- 72 WIA Implementation Issues

To help ensure that there is a sufficient quality and quantity of training
programs and providers available for individuals, we recommend that the
Secretary of Labor, along with the Secretary of Education

 Disseminate best- practice information on cost- effective methods being
used by states and localities to collect and report the required training
provider data;

 Address confusion arising from dual reporting for WIA requirements and
those for other education programs; and

 Establish a unified federal position on whether SSNs can be provided by
training providers to state agencies (such as departments of labor) for the
purposes of meeting WIA?s data collection requirements, if it is determined
that the most cost- effective data collection methods require the use of
SSNs.

To help maintain private- sector leadership in the system, the Secretary of
Labor should disseminate information on successful practices by states and
local areas to ensure effective board operations and the effective
operations of their affiliated entities consistent with strong private-
sector leadership.

To ensure that training providers are not unnecessarily withdrawing their
course offerings, the Congress may wish to allow training providers to
remain on the list of eligible providers for another year without meeting
all the data collection requirements while they work with state and local
implementers to explore ways to resolve data collection difficulties.

We provided a draft of this report to Labor, Education, HHS and HUD for
review and comment. The comments from the agencies are reproduced in
appendixes II through V, respectively. Labor appreciated our work in
identifying issues and problems associated with WIA implementation, and
Education said that the report and recommendations provided insight on ways
it can help state and local implementers. HHS, which is responsible for one
of the mandatory partner programs, concurred with the recommendation that
the respective Secretaries jointly explore the specific programmatic
barriers affecting programs? ability to achieve the vision of full
integration. Neither Labor, Education, nor HUD responded directly to any of
our recommendations.

The majority of the comments made by Labor, Education, and HUD reiterated
the difficulties associated with WIA implementation. Labor said Matter for

Congressional Consideration

Agency Comments and Our Evaluation

Page 39 GAO- 02- 72 WIA Implementation Issues

that the specific issues we identified in the report must be considered in
the broader context of the massive reform of the workforce development
system anticipated by this landmark legislation. We believe that our report
highlights the difficulties that states and localities are having
implementing many of these new, complicated requirements and discusses those
issues that need to be addressed to ensure successful implementation.
According to Labor, integrating the many partners into one system is a
challenging task, and it has no authority to direct or mandate participation
of others, nor can it deliver guidance that must come from other partners.
For WIA to succeed, partnership among agencies at the federal level is key,
which is why we recommended that the respective Secretaries work together
jointly to address limitations to participation.

Education said it was concerned that our report would set a benchmark for
measuring the success of WIA against the vision of full integration, rather
than the coordination that was required by the law. We did not intend to
imply that full integration is the only option for participation. However,
because Labor highlighted full integration as its ultimate vision, our
report sought to identify those issues that would serve as impediments to
achieving full integration. If policymakers want full integration to be a
viable option, the issues we highlighted in our report- and reiterated by
Education in its comments- need to be considered and addressed. Education
also highlighted the concerns we raised in our report concerning privacy
protections under FERPA, saying that the protection under FERPA cannot be
ignored or sacrificed when faced with the separate, independent challenge of
meeting the accountability requirements of WIA. This comment supports our
recommendation that Education and Labor work together to establish a unified
federal position on what is allowed under FERPA for purposes of WIA.

HUD?s comments focused on its viability as a partner in the one- stops.
Although HUD noted that it is participating in interagency workgroups and
has provided guidance, it said that WIA did not directly apply to the
majority of HUD?s programs, pointing out that HUD?s programs differ
significantly from those of Labor and Education. It also suggested that none
of its workforce development initiatives have a primary mission of
employment and training. HUD?s response reiterates the need for it to work
to resolve the programmatic limitations that affect the ability of its
programs from participating in the one- stop system.

Labor said our report did not fully reflect the unprecedented level of
guidance and technical assistance that it and its federal and state partners
have provided to state and local implementers since the passage of WIA.

Page 40 GAO- 02- 72 WIA Implementation Issues

Throughout the report, we clarified this point and provided more examples of
such guidance. However, much of the guidance that Labor has issued to date
has focused on helping state and local implementers set up the system. State
and local implementers now need guidance that addresses concerns specific to
a system that is in the critical early stages of operation, such as how to
effectively collect performance data and operate boards.

Both Education and Labor highlighted the importance of state and local
flexibility for WIA implementation. Labor said that our report needs to more
explicitly acknowledge this flexibility, and that the differences we
observed among various one- stop systems reflect decisions based on state
and local circumstances to achieve state and locally established goals. We
believe our report fully acknowledges that WIA did not prescribe how states
and locals would implement WIA. We did note, however, that flexibility
without guidance or implementation assistance can sometimes lead to
confusion. Education and Labor both believed that detailed guidance was not
compatible with the flexibility WIA affords states and localities. However,
we believe that guidance can be detailed without being prescriptive, and
that federal partners play a vital role in helping state and local
implementers optimize the flexibility provided by WIA.

In addition to these comments, each of the agencies provided technical
comments that we incorporated, where appropriate.

As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 10 days after
the date of this report. At that time, we will send copies to the Secretary
of Labor, the Secretary of Education, the Secretary of Housing and Urban
Development, the Secretary of Health and Human Services, appropriate
congressional committees, and other interested parties. We will also make
copies available to others upon request.

Page 41 GAO- 02- 72 WIA Implementation Issues

Please contact me on (202) 512- 7215 if you or your staff have any questions
about this report. Other contacts and staff acknowledgements are listed in
appendix VI.

Sigurd R. Nilsen Director, Education, Workforce

and Income Security Issues

Appendix I: Presence of Partners at Nine OneStops and Method of Core Service
Provision

Page 42 GAO- 02- 72 WIA Implementation Issues

Table 7 shows the range of methods used by partners to meet the requirement
of core service provision through the one- stops at each of the nine
locations we visited.

Table 7: Partner Programs and Method of Core Service Provision at Nine One-
Stops One- stops where the program was providing core services through? a

Program One- stops

where program

present Collocation Referral Electronic linkages Contract

Mandatory programs WIA Adult 9 9 - - WIA Dislocated 9 9 - - WIA Youth 9 9 -
- Employment Service 9 9 - - Trade Adjustment Assistance 9 9 - - Employment
and training services to veterans 9 9 Unemployment Insurance 9 3 - 6
Welfare- to- Work 9 7 2 - Vocational Rehabilitation 9 7 3 1 Adult Education
and Literacy 9 5 4 1 Senior Community Service Employment Program 9 6- 21
Carl D. Perkins Vocational Education 8 44- Migrant and Seasonal Farmworker
Program 7 53- Native American Program 8 2 7 1 Job Corps 7 2 4 - 1 HUD-
administered employment and training 6 142Community Services Block Grant 6 2
4 1 Nonmandatory programs b School- to- Work 4 2 1 2 Temporary Assistance
for Needy Families 9 54- 2 Food stamps 7 2 3 - 2 Transportation 2 - 2 -
Employers 1 1 - - a

These columns may add up to more than nine because partners may be using
more than one method of core service provision at a one- stop. b These were
some of the nonmandatory partners we observed; this is not an exhaustive
list of the

various nonmandatory partners participating in one- stops.

Appendix I: Presence of Partners at Nine One- Stops and Method of Core
Service Provision

Appendix II: Comments From the Department of Labor

Page 43 GAO- 02- 72 WIA Implementation Issues

Appendix II: Comments From the Department of Labor

Appendix II: Comments From the Department of Labor

Page 44 GAO- 02- 72 WIA Implementation Issues

Appendix III: Comments From the Department of Education

Page 45 GAO- 02- 72 WIA Implementation Issues

Appendix III: Comments From the Department of Education

Appendix III: Comments From the Department of Education

Page 46 GAO- 02- 72 WIA Implementation Issues

Appendix III: Comments From the Department of Education

Page 47 GAO- 02- 72 WIA Implementation Issues

Appendix III: Comments From the Department of Education

Page 48 GAO- 02- 72 WIA Implementation Issues

Appendix III: Comments From the Department of Education

Page 49 GAO- 02- 72 WIA Implementation Issues

Appendix IV: Comments From the Department of Health and Human Services

Page 50 GAO- 02- 72 WIA Implementation Issues

Appendix IV: Comments From the Department of Health and Human Services

Appendix IV: Comments From the Department of Health and Human Services

Page 51 GAO- 02- 72 WIA Implementation Issues

Appendix V: Comments From the Department of Housing and Urban Development
Page 52 GAO- 02- 72 WIA Implementation Issues

Appendix V: Comments From the Department of Housing and Urban Development

Appendix V: Comments From the Department of Housing and Urban Development
Page 53 GAO- 02- 72 WIA Implementation Issues

Appendix V: Comments From the Department of Housing and Urban Development
Page 54 GAO- 02- 72 WIA Implementation Issues

Appendix V: Comments From the Department of Housing and Urban Development
Page 55 GAO- 02- 72 WIA Implementation Issues

Appendix VI: GAO Contacts and Staff Acknowledgments

Page 56 GAO- 02- 72 WIA Implementation Issues

Lori Rectanus, (202) 512- 9847 Monika Gomez, (202) 512- 9062

Natalya Bolshun also made significant contributions to this report, in all
aspects of the work throughout the review. In addition, Dianne Murphy Blank,
Andrea Sykes, and Andrew Von Ah, aided in the gathering and analyses of
information collected on our site visits, Jessica Botsford and Richard
Burkard, provided legal support, and Patrick DiBattista assisted in report
and message development. Appendix VI: GAO Contacts and Staff

Acknowledgments GAO Contacts Staff Acknowledgments

Related GAO Products Page 57 GAO- 02- 72 WIA Implementation Issues

Department of Labor: Status of Achieving Key Outcomes and Addressing Major
Management Challenges (GAO- 01- 779, June 15, 2001).

Major Management Challenges and Program Risks, Department of Labor

(GAO- 01- 251, Jan. 2001).

Multiple Employment Training Programs: Overlapping Programs Indicate Need
for Closer Examination of Structure (GAO- 01- 71, Oct. 13, 2000).

Workforce Investment Act: Implementation Status and the Integration of TANF
Services (GAO/ T- HEHS- 00- 145, June 29, 2000).

Multiple Employment Training Programs: Major Overhaul Needed to Create a
More Efficient, Customer- Driven System (GAO/ T- HEHS- 95- 70, Feb. 6,
1995).

Multiple Employment Training Programs: Major Overhaul Needed to Reduce
Costs, Streamline the Bureaucracy, and Improve Results (GAO/ THEHS- 95- 53,
Jan. 10, 1995).

Multiple Employment Training Programs: Overlap Among Programs Raises
Questions About Efficiency (GAO/ HEHS- 94- 193, July 11, 1994).

Multiple Employment Training Programs: Overlapping Programs Can Add
Unnecessary Administrative Costs (GAO/ HEHS- 94- 80, Jan. 28, 1994). Related
GAO Products

(130007)

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