Workforce Investment Act: New Requirements Create Need for More  
Guidance (04-OCT-01, GAO-02-94T).				 
								 
The Workforce Investment Act (WIA) was a landmark piece of	 
legislation passed in 1998 to unify a fragmented employment and  
training system and better serve workers and employers. WIA	 
sought to significantly change our country's workforce		 
development system by streamlining the delivery of employment and
training services, enabling job seekers to make informed choices 
among training providers and course offerings, and enhancing the 
private-sector role in the workforce system. State and local	 
implementers have faced challenges during the early stages of WIA
implementation because of the significant changes to the	 
workforce system WIA introduced. Mandatory partners have wrestled
with their concerns about how to participate in one-stops without
adversely affecting their respective target populations,	 
violating their own programs' rules, or straining their financial
resources. Training providers have struggled to find ways to	 
effectively meet WIA's data collection and reporting requirements
that they believe are burdensome and, as a result, have reduced  
the course offerings they make available to WIA job seekers.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-94T 					        
    ACCNO:   A02135						        
  TITLE:     Workforce Investment Act: New Requirements Create Need   
for More Guidance						 
     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		 
	     Dept. of Education Vocational			 
	     Rehabilitation Program				 								 
	     DOL Employment Service Program			 
	     HHS Native American Employment and 		 
	     Training Program					 
								 

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GAO-02-94T
     
Before the Committee on Health, Education, Labor, and Pensions, U. S. Senate

United States General Accounting Office

GAO For Release on Delivery Expected at 10: 00 a. m., Thursday, October 4,
2001 WORKFORCE

INVESTMENT ACT New Requirements Create Need for More Guidance

Statement of Sigurd R. Nilsen, Director Education, Workforce, and Income
Security Issues

GAO- 02- 94T

Page 1 GAO- 02- 94T

Mr. Chairman and Members of the Committee: Thank you for inviting me here
today to present the findings of our report on Workforce Investment Act
(WIA) implementation, which is being released today. 1 As you know, WIA was
a landmark piece of legislation passed in 1998 to unify a fragmented
employment and training system and better serve workers and employers. WIA
sought to significantly change our country?s workforce development system by
streamlining the delivery of employment and training services, enabling job
seekers to make informed choices among training providers and course
offerings, and enhancing the private- sector role in the workforce system.
It attempted to accomplish these goals by requiring that

 mandatory partners- state and local entities that carry out selected
federal programs- provide their employment and training services through
local one- stop centers and support the operation of those centers;

 training providers collect data on student outcomes and meet established
performance levels for those outcomes; and

 private- sector representatives lead workforce investment boards set up at
the state and local level.

To help assess the progress being made in implementing WIA during its first
full year ending in June 2001, you asked that we identify issues of
particular concern for state and local implementers mandatory partners,
training providers, and private- sector representatives. You asked also that
we identify possible actions to address these concerns. We focused on issues
related to the three WIA requirements that represent the foundation of the
new system: (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 carry out this work, we contacted 12 national associations representing
state and local implementers, visited nine one- stops located in six local
areas in three states (California, Pennsylvania, and Vermont), and met with
officials and reviewed documents from the four federal agencies that house
the mandatory partner programs (Departments of Education, Health

1 Workforce Investment Act: Better Guidance Needed to Address Concerns Over
New Requirements (GAO- 02- 72, Oct. 4, 2001).

Page 2 GAO- 02- 94T

and Human Services (HHS), Housing and Urban Development (HUD), and Labor).

In summary, state and local implementers have faced challenges during the
early stages of WIA implementation because of the significant changes to the
workforce system WIA introduced. Mandatory partners have wrestled with their
concerns about how to participate in one- stops without adversely affecting
their respective target populations, violating their own programs? rules, or
straining their financial resources. Training providers have struggled to
find ways to effectively meet WIA?s data collection and reporting
requirements that they believe are burdensome and, as a result, have reduced
the course offerings they make available to WIA job seekers. Private- sector
members of workforce investment boards have grappled with their concerns
that their input is diluted by staff and committees set up to facilitate
board operations. The federal agencies that oversee the mandatory partners?
programs, particularly Labor and Education, have not provided adequate
guidance to address these concerns. In our report, we make several
recommendations to the respective Secretaries to work together to provide
more effective guidance to address the concerns raised by state and local
implementers. We also recommend that the Congress consider providing more
time for training providers to adjust to the data collection and reporting
requirements.

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

To streamline services, WIA requires at least 17 programs administered by
four federal agencies to make their core services available through the one-
stops and support the operation of those one- stops. As shown in table 1,
these programs represent a range of funding levels, from $2.4 billion for
the Department of Education?s Vocational Rehabilitation Program to $55
million for Labor?s Native American Employment and Training Program. The
programs also serve various target populations. For example, while many of
the programs serve either low- income or otherwise disadvantaged or
unemployed individuals, WIA?s Adult Program can serve any individual aged 18
or older, as can Labor?s Wagner- Peyser Employment Service (Employment
Service). In contrast, Education?s Vocational Rehabilitation Program can
only serve disabled individuals, and even then, prioritizes which of those
it can serve. Background

Page 3 GAO- 02- 94T

These programs also represent a range of service delivery methods. Public
agency personnel (such as state labor or education departments) administer
many of these programs? services. Several programs are administered by,
among others, nonprofit or community- based organizations, unions, Indian
tribal governments, and community development corporations. Several of these
programs are block grants that federal agencies provide to states and
localities for a variety of efforts, which may or may not include employment
and training services. Although many of the programs provide for training,
such as WIA?s Adult and Dislocated Worker Programs, some, such as employment
and training programs for veterans, must work with other programs to obtain
training for their participants.

Table 1: WIA?s Federal Programs: Funding Levels, Services Provided, and
Target Populations Required programs a

2001 Appropriation

(dollars in millions) Services provided and target populations 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 schoolcompletion 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 job- readiness

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 lowincome 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

Page 4 GAO- 02- 94T

Required programs a 2001

Appropriation (dollars in

millions) Services provided and target populations

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 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 (Perkins) $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

Health and Human Services (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

Housing and Urban Development (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 low- income 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. 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
Postsecondary 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.

Page 5 GAO- 02- 94T

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.

WIA did not prescribe how the one- stops should operate, but in guidance
produced in June 2000, Labor identified a range of options for one- stops,
including simple collocation of program staff at the one- stops or
electronic linkages between existing program offices and the one- stops. In
this guidance, however, Labor laid out a vision for one- stop operations
that it called ?full integration.? The realization of a fully integrated
system would entail all partner programs operating under one management
structure and accounting system and offering joint delivery of program
services from combined resources. WIA also allowed partners a wide range of
methods to support the one- stop?s operation. For example, partners could
pay rent for the space occupied by program staff or could provide equipment
or shared services, such as providing initial intake services of greeting
onestop visitors and collecting general information from them to assess
program eligibility or teaching classes to individuals at the one- stop.

WIA also required that any training provider wishing to provide training
services to any individual receiving training through WIA?s Adult and
Dislocated Worker Programs provide key data- such as (1) completion rates,
(2) job placement rates, and (3) wages at placement for students. WIA
required the collection of these outcome data so that job seekers receiving
training could use them to make more informed choices about training
providers. Unlike prior systems, WIA allowed individuals eligible for
training under the Adult and Dislocated Worker Programs to receive vouchers-
called Individual Training Accounts- which they could use for the training
provider and course offering of their choice, within certain limitations.

WIA also required these data so that states and localities could assess
training providers? performance. For example, a state might determine that
only training providers? courses with an 80- percent completion rate would
be allowed to remain on the training provider list. If a course failed to
meet that level, it would no longer be available to receive WIA- funded
individuals. WIA provided a 1- year initial eligibility period before these
requirements went into effect. Labor?s final regulations allowed states to
extend the initial eligibility period for up to an additional six months
under certain circumstances.

Page 6 GAO- 02- 94T

Finally, 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 oversee one- stop
operations. 2 According to Labor, there are 54 state workforce investment
boards and approximately 600 local boards. 3

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. 4

WIA required that private- sector representatives chair the boards and make
up the majority of board members. This was to help ensure that the private-
sector would be able to provide information on the available employment
opportunities and expanding career fields and help develop ways to close the
gap between job seekers and labor market needs.

2 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.

3 Boards have been established in all 50 states and the District of
Columbia, the U. S. Virgin Islands, Puerto Rico, and Guam. 4 Exceptions are
allowed for board membership- for example, an individual seated on the board
can represent more than one entity or institution.

Page 7 GAO- 02- 94T

WIA?s mandatory partners are making efforts to participate in the onestops
as required by the law. However, they are wrestling with questions about how
to accomplish the required participation, as well as move closer to the
vision of full integration, given their clients? needs, their programs?
rules, and their financial constraints. Responsible federal agencies have
published guidance in these areas, and Labor has recently established an
interagency workgroup to address these issues. However, state and local
implementers said they continue to lack a clear sense of how one- stop
participation, as well as rules for client eligibility and cost accounting,
is compatible with their clients? needs.

First, many of the mandatory partners have expressed concerns that
significantly altering existing service delivery methods to participate in
the one- stops might adversely affect the quality of services they provide
to their target populations. For example, staff from Education?s Vocational
Rehabilitation Program, which serves the disabled, were concerned that one-
stops might not adequately provide the special services, equipment, or
personnel (such as staff who know sign language) that their clients need. As
a result, even though Vocational Rehabilitation staff were present in some
form at the nine one- stops we visited, they continued to maintain existing
program offices to ensure that the special needs of their eligible clients
were accommodated. Other partners said that they did not see how
participation in the one- stop would benefit their eligible populations, who
in some cases were already receiving services through other sources. For
example, California education department officials told us that lowincome
and disadvantaged populations in California already have full access to the
community college system at low or no cost. According to these officials,
this access decreased partners? incentive to provide Perkins or Adult
Education and Literacy Program services through the one- stops.

Second, a number of partners have expressed concerns that altering
traditional service delivery methods to participate in the one- stops may
lead to conflicts with their own program?s requirements regarding which
individuals are eligible for the services they offer. For example, at
several of the one- stops we visited, veterans? staff believed they could
not provide shared services, such as greeting one- stop visitors and
collecting general information from them. They were concerned that doing so
might mean serving individuals who are not veterans, which is not allowed
under their authorizing legislation. We found that at some locations,
veterans? staff were unwilling to teach orientation or job preparation
classes if anyone in the class was a not a veteran. Yet at other locations,
veterans? staff were willing to teach classes attended by nonveterans. Labor
has published no guidance to address this confusion. However, Labor
officials with whom we spoke agreed that having veterans? staff serve
nonveterans was a Participation in the

One- Stop Limited by Concerns Over Programmatic and Financial Constraints

Page 8 GAO- 02- 94T

violation of the program?s mandate, but believed it was permissible for
veterans? staff to teach such classes as long as the majority of students
were veterans. Nonetheless, Labor also said that any expenditures associated
with delivery of services to nonveterans would be disallowed. The concerns
that veterans? staff have about violating program mandates may explain why
veterans staff were collocated at the nine one- stops we visited, but served
only veterans and paid rent as their required support of the one- stop
rather than providing a shared service.

Third, many of WIA?s mandatory partners said participation in the onestops
was problematic given financial constraints. For example, Labor and others
have found that, at least in some locations, the Employment Service operates
at the one- stop and also at existing offices outside the one- stops. We
found this to be the case for at least two of the nine one- stops we
visited, largely because the Employment Service could not afford to break
leases on existing facilities. According to Employment Service officials we
spoke to, limited funding also makes it difficult to assign additional
personnel to staff the one- stop or to devote resources to developing
electronic linkages with the one- stop. In the states we visited, partners
told us that limited funding was also a primary reason why, when partners
did provide individuals to help staff the one- stop, they did so on only a
part- time basis. Some of the programs also have caps on 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 on their costs for the one- stops? operation
and staff who support the local workforce investment board. According to a
survey conducted for us by a national association, 61 of the 69 counties
that responded stated that this cap limits the ability to serve both
functions, especially given the funding limitations of other programs.

Finally, many of the partners were not sure how to define or account for
allowable activities in the one- stop environment, given existing guidance
from the Office of Management and Budget (OMB) and Labor. For example, OMB
requires that all shared services be properly accounted for by programs.
This means that if a partner dedicated a copy machine to the one- stop, the
copy machine cannot be used for any purpose other than its program. Any
other partner who uses the machine would have to pay or somehow reimburse
that partner. According to a number of partners, tracking this kind of
activity is very difficult to do. Also, partners said the guidance was not
meant to address situations where costs must be allocated across programs
with different or competing missions. For example, if partners are only
willing to staff the one- stop 1 day a month, they only pay for that
percentage of the one- stop costs, leaving other partners to make up the
shortfall. According to partners we interviewed,

Page 9 GAO- 02- 94T

this has led to partners with a broad client base, or those with greater
connection to the one- stops- such as WIA?s Adult and Dislocated Worker
Programs- paying a greater share of the one- stop operations. Partners also
questioned how to account for personnel who, in the process of providing
support services, may provide services to potentially ineligible
populations.

Although both Education and Labor have provided information to states and
local implementers about how to interpret WIA?s requirements, according to
state and local implementers we interviewed, the guidance does little to
specifically address the concerns about how to integrate services while not
adversely affecting target populations or violating program requirements.
Labor has recently established a one- stop workgroup that seeks to
specifically address financial concerns, but as of yet, has released no
findings.

Although training providers are making efforts to participate in the WIA
system, they believe that the new data collection and reporting requirements
it imposed are too burdensome to warrant their participation in the system,
especially given the few individuals sent to training. As a result, they are
reducing the number of course offerings they make available under WIA- in
effect, reducing the training options from which WIA job seekers have to
choose. Labor has established a workgroup in an effort to address many of
the issues that training providers described as burdensome, but this
workgroup may not include all the key players and, to date, has not provided
any guidance.

Training providers and other state and local implementers we interviewed
identified the number of students for whom they potentially must collect
data as one factor that makes WIA?s data collection and reporting
burdensome. WIA requires that training providers report program completion,
placement, and wage data, among other data elements, for all students in a
class, regardless of whether they were WIA- funded. This means that even if
only one student in a class of 100 was WIA- funded, the training provider
would be required to provide data on all 100 students.

The methods available to collect the required data are a second factor that
makes data collection burdensome, according to training providers we
interviewed. WIA did not specify how training providers would collect or
report the required information, and in many locations, the methods being
used strain training providers? resources or raise privacy concerns. For
example, in two of the states we visited, training providers planned to
track students after they graduated and call them to obtain the necessary
Training Options May

Become Limited as Training Providers Drop Out of the System

Page 10 GAO- 02- 94T

data, but said they did not have the staff necessary to call hundreds of
students. In other states, training providers were considering meeting data
collection requirements by providing students? social security numbers
(SSNs) to state agencies (such as departments of labor) responsible for WIA
implementation. These agencies would then match the SSNs against
unemployment insurance wage records (which are reported by SSNs). Although
this method was more efficient, training providers worried that it might
violate the privacy rights of students. They said that the Family
Educational Rights and Privacy Act (FERPA) generally prohibits an
educational institution from disclosing personally identifiable student
information (such as an SSN) without the student?s consent. There are a
number of exceptions where providing such data is allowed- for example, to
the Department of Education. Although Labor and Education issued a January
2001 memo noting that certain exceptions could allow educational
institutions to disclose this information without a student?s prior consent,
many of the training providers we interviewed did not see the memo as
sufficient assurance that such a practice could be carried out without
violating FERPA.

Training providers identified differences between WIA?s data collection and
reporting requirements and those of other programs as a third factor that
makes data collection burdensome. Training providers noted that these
differences mean that data have to be collected twice for similar outcomes.
For example, in Texas, the state defined completion for most WIA- eligible
training programs as receipt of a 9- hour credit certificate. For
Education?s Perkins program, however, the state defined program completion
as receipt of a 15- hour credit certificate. While the outcomes being
measured are similar, the differences require two separate measures.

According to training providers, the fourth factor that makes the training
requirements burdensome is their focus on process rather than the outcomes
training providers achieve. Training providers believed that at least some
of the required data focused on process rather than outcomes, and as a
result, did not accurately reflect their performance. For example, WIA
requires training providers to track the number of students who complete a
program, but several community colleges told us that this measure fails to
reflect how a community college serves individuals. According to training
providers, often students acquire the skills they need and/ or find jobs
before a program is over, and so they leave the program without completing
it. In such cases, a state or locality could penalize a training provider
for not achieving a particular level of program completion, even though the
training provider achieved one of WIA?s goals helping people find
employment.

Page 11 GAO- 02- 94T

Training providers we spoke with said that the few WIA clients that have
been sent to training since WIA was passed made the data collection and
reporting requirements even more onerous. For example, each of the nine one-
stops we visited had sent training providers, on average, only six
individuals for training since July 2000. According to training providers we
interviewed, this is significantly fewer than they had received under the
workforce system predating WIA. A variety of reasons may explain the low
number of job seekers sent to training. First, many state and local
implementers we interviewed, as well as federal agency officials, believe
that WIA calls for a work- first approach, which encourages job seekers to
obtain employment without training. Second, the strong economy over the past
several years has encouraged employers to be more interested in getting
workers on board quickly than waiting for them to complete training. Third,
states may be discouraging one- stops from placing hard- toemploy
individuals into training, fearing that this may affect their achievement of
WIA performance measures that focus on employment. Finally, because the
Adult and Dislocated Worker Programs have had to consistently bear a greater
share of the costs associated with establishing and maintaining the one-
stops, they have had little money left for training, according to local
implementers.

WIA data collection coupled with the few job seekers sent to training has,
to date, resulted in training providers reducing the number of programs they
offer. We found that the number of providers and course offerings on
available course listings 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.

Labor has established an adult and dislocated worker workgroup in an effort
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 although it invited training provider
representatives to a meeting, the formal membership does not include these
representatives. This may limit the value of any solutions developed and the
willingness of training providers to adopt those solutions.

Page 12 GAO- 02- 94T

Private- sector representatives who are supposed to be leading workforce
investment boards have expressed frustrations that the manner in which
boards are operated may be diluting their input and, ultimately,
discouraging their participation. Private- sector representatives we spoke
with believed that state and local boards are too large to efficiently
address key workforce issues and that staff and committees intended to help
deal with the size of the boards may not reflect private- sector views.
Labor has issued little guidance on this matter, but has recently formed a
workgroup to examine these concerns.

Private- sector representatives and others believed that the large number of
board members- exceeding 40 in most places, according to a national board
association- makes it difficult to set up meetings and run them efficiently.
For example, officials in one local workforce investment area noted that as
the number of board members increased, so did their dispersion throughout
the state. These officials said that the dispersion of members throughout
the state made it difficult to find locations for the board meetings that
were convenient to all members. If members were unable to attend the
meetings, boards might not be able to achieve a quorum (usually a simple
majority) and, therefore might be unable to vote on courses of action.
Ensuring that the numerous board members all have the same information
before a meeting and keeping members apprised of the board?s activities also
becomes more difficult as the size of a board increases. Addressing issues,
reconciling disagreements, and reaching agreements would also become more
challenging because having a large number of members results in more
opinions. These difficulties have been especially prevalent this past year
as boards have had to perform many administrative tasks to set up the WIA
system, such as developing strategic plans or certifying one- stops.

Private- sector representatives also believed that the staff put in place to
serve the boards may not share employer?s perspectives regarding the system.
Every state and local board has assigned staff that are responsible for
setting up meetings, developing the agenda, and ensuring that boards stay
current with compliance issues. 5 However, according to private- sector
representatives and other implementers, the public- sector agency
responsible for carrying out many of WIA?s mandatory programs, usually a
labor or human services agency, employs these staff. Private- sector and
other representatives expressed concerns regarding how staff are to carry

5 In some cases, the size of the staff can be large itself; for example,
there are 25 staff supporting California?s state board. Current Operations
of

Workforce Investment Boards and Affiliated Entities May Discourage
PrivateSector Participation

Page 13 GAO- 02- 94T

out their primary focus of serving the board when they report to supervisors
in their respective agencies.

In addition, private- sector representatives believed that committees
serving under the auspices of the boards may dilute employer?s input into
the system. These committees research particular issues that the board may
ultimately address. WIA is silent on the establishment of the committees and
the form that they should take, but we were told that private- sector
representatives are often underrepresented or not represented at all on the
committees, even though the committees play an important role in influencing
board activities. In the states we visited, committees generally had less
than 50- percent private- sector membership, and only one committee at the
state level had more than 50- percent private- sector membership.

Labor has recently established a workforce investment board workgroup to
consider these issues, 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, private- sector representatives and other state and local
implementers said they lack information on how to balance the requirements
of the board operations with the needs of the private sector.

Despite the struggles of state and local implementers in these areas, many
of them have found ways to overcome these difficulties. Some examples
follow.

 One- stop partners jointly financed a separate staff person to perform
shared support services, such as initial intake, to allow partners to
provide shared services without violating their program requirements.

 A state board decided to classify expenses associated with running the
one- stop as programmatic rather than administrative as a way to lessen the
impact of a cap on certain spending.

 A state board gave the education community approval to use existing
Perkins? outcome data for the purposes of WIA data collection and reporting
until the state is able to fully implement other outcome data measures. This
was intended to lessen the burden posed by similar, yet different, data
collection and reporting requirements.

 A community college enrolled WIA- funded training participants in a

?separate? college. This college exists in name only and stands in for the
Local Efforts to

Address Concerns and Ideas for Action

Page 14 GAO- 02- 94T

community college where WIA- funded training participants actually take
classes. This was done to avoid collecting data on non- WIA- funded
students.

 Several local areas required that all committees have private- sector
leadership and a private- sector majority and that quorums have a
privatesector majority.

State and local implementers we contacted also identified a number of
actions they believed could enhance their ability to implement WIA in these
areas and move closer to the vision of full integration. However, there was
no consensus on which of these ideas had the greatest potential to address
these concerns while preserving the local flexibility key to WIA. Some of
the ideas included providing more specific guidance at the federal level,
while others could require legislative and/ or regulatory action. For
example,

 amending the enabling legislation to more explicitly detail the level or
type of one- stop participation partners should achieve;

 leaving partners? authorizing legislation as is but providing incentives
for participation (for example, not requiring partners to financially
support the one- stops or expanding the scope of activities allowable at the
onestop);

 giving training providers additional funds to offset the cost of data
collection; and

 appointing board staff either from private- sector- oriented entities (for
example, economic development agencies) or nonprofit entities that reflect
employers? outlook. 6

The workforce development system envisioned under WIA represents a sea
change from prior systems, not only because of WIA?s new requirements and
the additional partners involved, but also because of the flexibility
allowed to state and local implementers to determine how to implement these
new requirements. Given this, it is understandable that skepticism and
resistance to change continue to affect the speed and caliber of
implementation efforts.

6 For a more complete listing of ideas provided by state and local
implementers, see GAO- 02- 72, Oct. 4, 2001. Conclusions and

Recommendations for Executive Action

Page 15 GAO- 02- 94T

State and local implementers agreed that the issues we highlighted need to
be addressed to enhance WIA implementation, but there was no consensus on
which efforts would best achieve WIA?s goals while maintaining state and
local flexibility. As a result, more specific guidance to address these
concerns, in addition to time, may be what is required. Better guidance can
help ensure that the flexibility provided to states and local areas under
WIA fosters innovation rather than confusion, unnecessary burden, diminished
customer choice, and a decline in private- sector participation. Specific
guidance may also help states and localities make progress toward a seamless
system of service delivery.

In line with this thinking, in our report, we make several recommendations
to the respective Secretaries to work together to provide more effective
guidance to address the concerns raised by state and local implementers. In
all of these areas we believe guidance can be detailed without being
prescriptive, since the goal would be to focus on the benefits and
incentives of participation rather than the requirements.

Specifically, the report being issued today recommends that the Secretaries
of Labor, Education, HHS, and HUD, jointly explore the programmatic and
financial concerns raised by state and local implementers that affect their
ability to participate and fully integrate services. We also recommend that
Education and Labor disseminate bestpractice information on the cost-
effective methods the states and localities are using to comply with WIA?s
data collection and reporting requirements, as well as address confusion
concerning dual reporting requirements and FERPA privacy concerns. In
addition, because training providers will also need time to resolve data
collection issues before they are judged on their performance, we recommend
that Congress consider giving training providers additional time to receive
WIA- funded students before they have to meet all the new WIA requirements.
Finally, we recommend that Labor disseminate information on successful
practices by states and localities to help ensure that boards gain the most
from privatesector participation.

Mr. Chairman, this concludes my prepared statement. I will be happy to
answer any questions that you or other members of the Committee may have.

Page 16 GAO- 02- 94T

For future questions regarding this testimony, I can be contacted at (202)
512- 7215. Key contributors to this testimony were Lori Rectanus, Monika
Gomez, and Natalya Bolshun. GAO Contact and

Staff Acknowledgments

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