Workforce Investment Act: Substantial Funds Are Used for	 
Training, but Little Is Known Nationally about Training Outcomes 
(29-JUN-05, GAO-05-650).					 
                                                                 
The Congress passed the Workforce Investment Act (WIA) in 1998	 
seeking to create a system connecting employment, education, and 
training services to better match job seekers to labor market	 
needs. However, questions have been raised about how WIA funds	 
are being used and, in particular, how much is being spent on	 
training. Contributing to the concern about the use of WIA funds 
is the lack of accurate information about the extent to which WIA
participants are enrolled in training activities. GAO was asked  
to determine (1) the extent to which WIA funds are used for	 
training, (2) how local workforce boards manage the use of	 
Individual Training Accounts (ITA) and what challenges they have 
encountered, and (3) what is known at the national level about	 
outcomes of those being trained. In its comments, the Department 
of Labor (Labor) noted that some of our estimates on training	 
conflicts with their estimates. Labor's estimate of the number of
adults trained comes from their database and includes only those 
who had exited from the program. GAO's estimates represent a more
complete and accurate picture than Labor's because they are based
on information obtained directly from the local workforce areas, 
include all funds spent or obligated for training, and count all 
adults who received training in program year 2003, not just those
who exited the program. 					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-650 					        
    ACCNO:   A28357						        
  TITLE:     Workforce Investment Act: Substantial Funds Are Used for 
Training, but Little Is Known Nationally about Training Outcomes 
     DATE:   06/29/2005 
  SUBJECT:   Education						 
	     Employee training					 
	     Employment assistance programs			 
	     Federal funds					 
	     Financial analysis 				 
	     Funds management					 
	     Locally administered programs			 
	     Program management 				 
	     Training utilization				 
	     Workforce Investment Act Standardized		 
	     Record Data					 
                                                                 

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GAO-05-650

United States Government Accountability Office

GAO

                       Report to Congressional Requesters

June 2005

WORKFORCE INVESTMENT ACT

 Substantial Funds Are Used for Training, but Little Is Known Nationally about
                               Training Outcomes

GAO-05-650

[IMG]

June 2005

WORKFORCE INVESTMENT ACT

Substantial Funds Are Used for Training, but Little Is Known Nationally about
Training Outcomes

  What GAO Found

Local workforce boards used an estimated 40 percent of the WIA funds they
had available in program year 2003 to obtain training services for WIA
participants. Nationally, local boards had approximately $2.4 billion in
WIA funds that were available to serve adults and dislocated workers
during program year 2003 and used about $929 million for training
activities (see fig.). The remaining funds paid for other program costs as
well as administrative costs. We estimate that 416,000 WIA participants
received training during the year. However, because some individuals may
have received more than one type of training, this count may include some
individuals more than once. Most of the participants received occupational
classroom training purchased with ITAs, which are established on behalf of
an eligible participant to finance training services.

Most local workforce boards have developed policies to manage the use of
ITAs, but many boards have encountered challenges in trying to implement
their use. Local boards often require participants to complete specified
tasks prior to entering training, such as gathering additional information
on their desired occupation. In addition, they generally limit the amount
of money participants can spend on training using ITAs and how long the
training can last. Among the challenges encountered by local boards was
the lack of good performance data on training providers making it
difficult to determine which providers were most effective. Local boards
in rural areas faced a different challenge-lack of nearby training
providers.

Little is known on a national level about the outcomes of those being
trained. Certain aspects of Labor's national participant database have
been found to be incomplete and unverified. Additionally, data generally
cannot be compared across states or local areas because of variations in
data definitions. Labor is taking some steps to address these concerns,
but the findings from this study reaffirm the need for a continued focus
on resolving reported data quality issues.

WIA Funds Available and Used for Training in Program Year 2003

                 United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Local Boards Used an Estimated 40 Percent of Available WIA

Funds to Train Program Participants Local Boards Manage ITAs but Have
Faced Challenges in Implementing Them Little Is Known about Outcomes of
Those Being Trained because

of Weaknesses in Data Collected Concluding Observations Agency Comments

                                       1

                                      3 5

11

20

29 32 33

Appendix I Objectives, Scope, and Methodology

Appendix II	Summary of Adult and Dislocated Worker Formula Funds for
Program Year 2003

Appendix III Comments from the Department of Labor

Appendix IV GAO Contact and Staff Acknowledgments

Related GAO Products

  Tables

Table 1: WIA Adult and Dislocated Worker Outcome Performance Measures 11

Table 2: Estimated Total Number of Instances in Which WIA Participants
Were Trained during Program Year 2003, by Category and Funding Source 17

Table 3: Challenges Encountered by Local Boards 26

Table 4: 95 Percent Confidence Intervals for Numeric Estimates with
Margins of Error Exceeding 15 Percent of the Value of Those Estimates 39

                 Table 5: Locations Selected for Site Visits 40

  Figures

Figure 1: WIA Funding Streams for Youth, Adults, and Dislocated
Workers 7
Figure 2: Distribution of Local Workforce Investment Areas in
Program Year 2003 8
Figure 3: Estimated Total WIA Funds Available for Local Areas in
Program Year 2003 13
Figure 4: Estimated Total WIA Funds Used for Training in Program
Year 2003 14
Figure 5: Estimated Percentage of WIA Funds Used for Training, by
Funding Source 15
Figure 6: Estimated WIA-Funded Training in Program Year 2003, by
Category 17

Figure 7: Estimated Percentage of Local Boards Requiring
Completion of Specified Activities for Adults and
Dislocated Workers Seeking Training 21

Figure 8: Estimated Percentage of Local Boards with Various
Dollar Caps on ITAs 23

Figure 9: Estimated Percentage of Local Boards Requiring
Participants to Use ITA Funds for Costs Other than
Tuition 24

Abbreviations

EMILE ETA Management Information and Longitudinal Evaluation
ETA Employment and Training Administration
ETPL eligible training provider list
ITA Individual Training Account
NAWB National Association of Workforce Boards
OIG Office of Inspector General
TAA Trade Adjustment Assistance
TANF Temporary Assistance for Needy Families
WIA Workforce Investment Act
WIASRD Workforce Investment Act Standardized Record Data

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

United States Government Accountability Office Washington, DC 20548

June 29, 2005

The Honorable Michael B. Enzi
Chairman
The Honorable Edward M. Kennedy
Ranking Minority Member
Committee on Health, Education, Labor, and Pensions
United States Senate

The Honorable Patty Murray
Ranking Minority Member
Subcommittee on Employment and Workplace Safety
Committee on Health, Education, Labor, and Pensions
United States Senate

The Congress passed the Workforce Investment Act (WIA) in 1998,
seeking to create a system connecting employment, education, and
training services to better match job seekers to labor market needs.
However, questions have been raised about how WIA funds are being used
and, in particular, how much is being spent on training. Contributing to
the
concern about the use of WIA funds is the lack of accurate information
about the extent to which WIA participants are enrolled in training
activities. In program year 2003,1 the Congress appropriated approximately
$2.3 billion for the Department of Labor (Labor) to provide employment
and training services to adults (those individuals aged 18 and older) and
dislocated workers (in general, those individuals who have been laid off
and are unlikely to return to their previous employment). Because not
everyone needs or wants additional training, WIA authorizes local
workforce boards to oversee a variety of services provided through one
stop career centers to meet the needs of individual job seekers as well as
the needs of the businesses in their area. Such services include providing
information on job openings, comprehensive assessments, individual
counseling, supportive services-such as transportation and child care-
and job training. Job training includes occupational skills training,
which
is typically purchased by WIA participants using Individual Training

1A program year begins on July 1 of a year and ends on June 30 of the
following year. A program year is designated by the year in which it
begins. Thus, program year 2003 began on July 1, 2003, and ended on June
30, 2004.

Accounts (ITA). ITAs are established on behalf of an eligible participant
to finance training services, and payments from these accounts can be made
in a variety of ways, including the electronic transfer of funds or the
use of vouchers.

The primary vehicle for collecting and reporting information about the
extent to which WIA participants are enrolled in training activities,
including training funded through ITAs, is Labor's national participant
database, the Workforce Investment Act Standardized Record Data (WIASRD).
However, both we and Labor's Office of Inspector General have raised
concerns about the completeness and accuracy of data contained in WIASRD.
Because of your interest in how WIA funds are being spent at the local
level, you asked us to determine (1) the extent to which WIA funds are
used for training, (2) how local workforce boards manage the use of ITAs
and what challenges they have encountered, and (3) what is known at the
national level about outcomes of those being trained.

To determine the extent to which program year 2003 WIA funds were used for
training,2 how local workforce boards manage ITAs, and what challenges
they have encountered in implementing ITAs, we conducted a Web-based
survey of the 590 local workforce investment boards that were in existence
in program year 2003 and located in the 50 states, District of Columbia,
and Puerto Rico. We received responses from 428 (73 percent). We used the
428 responses to make estimates about the entire population of local
workforce investment boards. 3 We gathered information for four sources of
WIA funds: adult formula funds, dislocated worker formula funds, national
emergency grant funds, and state set-aside funds for statewide activities
and rapid response activities. We collected information for program year
2003 (July 1, 2003, through June 30, 2004) because it was the most recent
year for which complete data were available. We included questions in the
survey to assess the reliability of the financial and participant data. We
also selected four states to visit- California, Georgia, Iowa, and
Maryland-that varied in funding size and

2For purposes of this report, we are defining "used" to mean funds that
are either spent or obligated.

3We chose to make these estimates based on an analysis of the differences
between the responding boards and the nonresponding boards. All percentage
estimates have margins of error of plus or minus 5 percentage points or
less. All numerical estimates other than percentages have margins of error
of plus or minus 15 percent or less of the value of those estimates,
unless otherwise noted.

geographic location. Within each state, we visited two local workforce
investment boards, selected to provide a mix of urban and rural areas. At
each location visited, we obtained additional information on training
policies implemented, challenges encountered, and reliability of data
systems. To assess what is known on a national level about outcomes of
those being trained, we obtained program year 2003 WIASRD data and
performed tests to assess its completeness. We also reviewed our prior
reports about the reliability of the WIASRD data and a report by Labor's
Office of the Inspector General on WIA performance outcomes. Appendix I
contains a more detailed discussion of our scope and methodology. We
performed our work between June 2004 and May 2005 in accordance with
generally accepted government auditing standards.

                                Results in Brief

Local boards used an estimated 40 percent of the WIA funds they had
available in program year 2003 to obtain training services for WIA
participants. Nationally, local boards had a combined total of
approximately $2.4 billion in WIA funds that were available to serve
adults and dislocated workers during program year 2003 and used about $929
million for training activities, primarily occupational classroom
training. The remaining funds pay for other program costs, including job
search assistance, case management, and supportive services, as well as
administrative costs. We estimate that 416,000 participants received
training during the year. However, because some individuals may have
received more than one type of training, this count may include some
individuals more than once. Of those trained in program year 2003, about
323,000 participants received occupational classroom training.
Approximately 85 percent of the occupational classroom training provided
during that year was purchased through ITAs. At the eight sites we
visited, participants used ITAs to prepare them for a wide variety of
occupations, including nursing, information technology, and truck driving.
Local boards also used the flexibility provided under WIA to offer a broad
range of training-related activities, such as work experience,
internships, and skills workshops, aimed at increasing employability but
are not included in WIA's definition of training and not paid for with
training dollars. For example, about one-half of local boards used WIA
funds to offer their customers computer lab workshops in software
applications, basic keyboarding, and other computer skills, although this
learning is not defined as training under WIA.

Most local workforce boards have developed policies to manage the use of
ITAs, but many boards have encountered challenges in trying to implement
their use. An estimated 85 percent of the local workforce

boards limited the amount of money participants can spend on training
using ITAs, and about two-thirds limited the length of time participants
can be enrolled in training. For example, the majority of boards limited
the amount participants can spend on training using ITAs to between $3,000
and $7,000 and the length of time they can spend in training to 2 years.
In addition, more than 80 percent of the local boards placed additional
restrictions on adults and dislocated workers seeking to use ITAs by
requiring them to complete specified skill assessments, and about 70
percent of the local boards require adults and dislocated workers to
gather additional information about the occupation for which they desire
training. For example, one board required participants seeking ITAs to
write an essay about why they wanted a particular training. Although the
vast majority of local boards use ITAs, most have faced challenges in
managing their use. For example, nearly two-thirds of the local boards
encountered lack of performance data on providers as a challenge. Local
boards we visited stated that not having performance information on
training providers hindered their ability to determine which providers
served participants most effectively. In addition, local boards located in
rural areas may face other challenges because of the lack of nearby
training providers.

Little is known on a national level about the outcomes of those being
trained because of weaknesses in the WIASRD database. Certain aspects of
WIASRD have been found to be incomplete, unverified, and not comparable
across local areas and states. Labor's Office of the Inspector General has
said there is little assurance that the states' performance data for WIA
programs are either accurate or complete because of inadequate oversight
of data collection and management. Additionally, data generally cannot be
compared across states or local areas because Labor allows local areas
some flexibility to decide how to collect and report certain data on
participant outcomes. For example, outcome data are entered in WIASRD once
a participant has left the WIA program, but we found that local areas use
different definitions to determine when a person has officially exited
from the program. As a result, wage and employment outcomes being reported
could vary greatly, making it difficult to compare outcome data across
local areas. Labor is taking some steps to address these concerns, improve
the data collected at the national level, and assess the impact of the
program. For example, Labor has implemented a new project to validate the
performance information collected and reported under WIA. This initiative
requires states to examine the accuracy of both reports submitted to Labor
and individual data elements. However, because this initiative is
relatively new, it is too soon to tell if it will satisfactorily resolve
all data quality problems. Labor is also in the initial

Background

stages of developing a single, streamlined reporting and record-keeping
system that would replace several databases, including WIASRD, and could
address some data issues. However, it is unclear when this system will be
implemented. Labor plans to conduct impact studies to assess the
effectiveness of the WIA program, but Labor will not begin this process
until after WIA reauthorization, thereby missing WIA's requirement to
conduct at least one study by 2005.

In its comments, Labor noted that some of our information on training
expenditures and training outcomes conflicts with its estimates. Labor
also identified additional steps being taken to address data quality.
Labor's estimate of the number of adults enrolled in training includes
only those adults reported in WIASRD who exited the program. We believe
our estimates of the amount of funds used for training and the number of
adults trained represent a more complete and accurate picture than Labor's
estimates because our estimates come directly from the local workforce
areas, include all funds spent or obligated for training, and count all
adults who received training in program year 2003, not just those who
exited the program.

WIA specifies a different funding source for each of the act's main client
groups-youth, adults, and dislocated workers.4 Our report focuses on
adults and dislocated workers. Once the Congress appropriates WIA funds,
the amount of money that flows to states and local areas depends on a
specific formula that takes into account unemployment for the adult and
dislocated worker funding streams, the number of low-income individuals
for the adult funding stream, and the number of long-term unemployed for
the dislocated worker funding stream.5 Labor allots 100 percent of the
adult funds and 80 percent of the dislocated worker funds

4A dislocated worker is an individual who (1) has been terminated or laid
off, or who has received a notice of termination or layoff, from
employment; is eligible for, or has exhausted entitlement to, unemployment
insurance or is not eligible but has been employed for a sufficient
duration to demonstrate attachment to the workforce; and is unlikely to
return to previous industry or occupation; (2) has been terminated or laid
off, or has received a notice of termination or layoff, from employment as
a result of any permanent plant closure of, or substantial layoff at, a
plant, facility, or enterprise; (3) was self employed but is unemployed as
a result of general economic conditions in the community in which the
individual resides or because of natural disasters; or (4) is a displaced
homemaker.

5See GAO, Workforce Investment Act: Issues Related to Allocation Formulas
for Youth, Adults, and Dislocated Workers, GAO-03-636 (Washington, D.C.:
Apr. 25, 2003).

to states. The Secretary of Labor retains 20 percent of the dislocated
worker funds in a national reserve account to be used for National
Emergency Grants,6 demonstrations, and technical assistance and allots the
remaining funds to each of the 50 states, the District of Columbia, and
Puerto Rico. In program year 2003, Labor allotted approximately $2 billion
to states for adults and dislocated workers (see app. II for a listing of
program year 2003 allotments by state). Upon receiving its allotments,
each state can set aside no more than 15 percent to support statewide
activities. These may include a variety of activities that benefit adults,
youths, and dislocated workers statewide, such as providing assistance in
the establishment and operation of one-stop centers, developing or
operating state or local management information systems, and disseminating
lists of organizations that can provide training. In addition, each state
can set aside no more than 25 percent of its dislocated worker funds to
provide rapid response services to workers affected by layoffs and plant
closings. The funds set aside by the states to provide rapid response
services are intended to help dislocated workers transition quickly to new
employment. After states set aside funds for rapid response and for other
statewide activities, they allocate the remainder of the funds-at least 60
percent-to their local workforce areas7 (see fig. 1).

6For additional information on National Emergency Grants, see GAO,
National Emergency Grants: Labor Is Instituting Changes to Improve Award
Process, but Further Actions Are Required to Expedite Grant Awards and
Improve Data, GAO-04-496 (Washington, D.C.: Apr. 16, 2004).

7Under WIA, the chief elected official in a local area or his or her
designee serves as the local recipient of WIA funds. The local recipient
must disburse the funds at the direction of the local board.

Figure 1: WIA Funding Streams for Youth, Adults, and Dislocated Workers

Source: Employment and Training Administration, and P. L. 105-220.

Approximately 600 local workforce areas exist throughout the nation (see
fig. 2). Each local area has a local workforce board that administers WIA
activities within the local area, including selecting one-stop center
operators, identifying eligible training providers, developing links with
employers, and overseeing the use of funds for employment and training
activities.

Figure 2: Distribution of Local Workforce Investment Areas in Program Year 2003

WIA was intended to meet both the needs of businesses for skilled workers
and the training, education, and employment needs of individuals. The act
allows training and employment programs to be designed and managed at the
local level to meet the unique needs of local businesses and individuals.
Another aspect of the act was to provide customers with easy access to the
information and services they needed and empower those who need training
to obtain the training they find most appropriate. One cornerstone of WIA
was the one-stop concept where information about and access to a wide
array of services would be available at a single location. At the one-stop
center, customers can get information about job openings; receive job
search and placement assistance; receive an assessment of their skill
levels, aptitudes, and abilities; and obtain information on a full array
of employment-related services, including information on local education
and training providers. Through the onestop centers, employers also have a
single point of contact to provide information about current and future
skills needed by their workers and to list job openings.

The services typically available at one-stop centers fall into the
following categories:

o  	Core services. These include job search and placement assistance, the
provision of labor market information, and preliminary assessment of
skills and needs. Core services are available to all adults who come to a
one-stop center, with no eligibility requirements imposed.

o  	Intensive services. These include comprehensive assessments, case
management, short-term prevocational services,8 work experience, and
internships. Intensive services are available to qualified adults and
dislocated workers who are unable to obtain or retain a job that leads to
self-sufficiency.

o  	Training services. These include occupational skills training,
on-thejob training, customized training,9 and skill upgrading and
retraining. Training services are available to qualified adults and
dislocated

8Short-term prevocational services prepare individuals for employment or
training and include development of learning skills, communication skills,
interviewing skills, punctuality, personal maintenance, and professional
conduct.

9Customized training is designed to meet the special requirements of an
employer and is conducted with a commitment by the employer to hire the
individual upon successful completion of the training, for which the
employer pays no less than 50 percent of the cost.

workers who are unable to obtain or retain employment after receiving at
least one intensive service.10

o  	Supportive services. These include services-such as transportation,
child care, and housing-that are necessary to enable WIA participants to
take part in WIA activities.

WIA requires the use of ITAs, which allow qualified individuals to
purchase the training they determine best for themselves. Adults and
dislocated workers use ITAs to purchase training services from eligible
providers they select in consultation with case managers. Payments from
ITAs may be made in a variety of ways, including the electronic transfer
of funds through financial institutions, vouchers, or other appropriate
methods. Payments may also be made incrementally. WIA requires that ITAs
can only be used to purchase training from programs listed on an eligible
training provider list (ETPL). Local boards, in partnership with the
state, compile this list by identifying training providers and programs
whose performance qualifies them to receive WIA funds to train adults and
dislocated workers. Good information allows participants to make informed
training choices. In this regard, WIA requires that local boards ensure
that participants have access to performance information on training
providers, including the percentage of individuals completing their
training program, the percentage of individuals in the program who
obtained jobs, and the wages earned by these individuals.

Under certain situations, however, local boards have the option of
purchasing training without using ITAs. The three exceptions to using ITAs
are

o  if the activity is on-the-job training or customized training,

o  	if a local board determines an insufficient number of eligible
providers exist in the area (such as in a rural area), or

o  	if a training provider has a demonstrated effectiveness in serving a
special population that face multiple barriers to employment.

10The determination of whether training services may be made available to
adults or dislocated workers under WIA is generally made by WIA adult or
dislocated worker staff.

To assess whether it is accomplishing its goals, WIA established a
performance measurement system for the programs directly funded by WIA-one
that emphasized results in areas of job placement, retention, earnings,
and skill attainment11 (see table 1). WIA requires states to use
Unemployment Insurance wage records to track employment-related outcomes.
States submit this information to Labor in annual reports submitted each
December. States also submit quarterly performance reports, which are due
45 days after the end of each quarter. In addition to the performance
reports, states submit their updates for WIASRD every January. WIA also
requires Labor to conduct at least one multisite study to determine
program results by the end of fiscal year 2005.

Table 1: WIA Adult and Dislocated Worker Outcome Performance Measures

Adult Dislocated worker

1. Entered employment rate 1. Entered employment rate

2. Employment retention rate at 6 months 2. Employment retention rate at 6
months

3. Average earnings change in 6 months 3. Earnings replacement rate in 6
months

4. Entered employment and credential rate 4. Entered employment and
credential rate

Source: U.S. Department of Labor Employment and Training Administration
(ETA), Training and Employment Guidance Letter, No. 799 (Mar. 3, 2001).

  Local Boards Used an Estimated 40 Percent of Available WIA Funds to Train
  Program Participants

Local boards used an estimated 40 percent of the WIA funds they had
available in program year 2003 to obtain training services for WIA
participants. Nationally, local boards had approximately $2.4 billion in
WIA funds that were available to serve adult participants during program
year 2003 and used about $929 million for training activities, primarily
occupational classroom training. The remaining funds pay for other program
costs, including job search assistance, case management, and supportive
services, as well as administrative costs. We estimate that 416,000 WIA
participants received training during the year. However, because some
individuals may have received more than one type of training, this count
may include some individuals more than once. Of those trained in program
year 2003, about 323,000 participants received occupational classroom
training, of which about 85 percent was purchased through ITAs. Local
boards also used the flexibility provided

11Several prior reports have cited disincentives in the performance
measures to serve certain workers using WIA funds. See related GAO
products at the back of this report.

under WIA to offer a broad range of training-related activities aimed at
increasing employability but not included in WIA's definition of training.

    An Estimated 40 Percent of Available WIA Funds Were Used for Training

Local boards nationwide used an estimated 40 percent of their WIA funds
for training in program year 2003. During that year, local boards had
about $2.4 billion in WIA funds available to serve adults and dislocated
workers. Almost all local boards had funds from the WIA adult and
dislocated worker funding streams; in addition, many boards had National
Emergency Grants or funds from two state set-asides, the 15 percent
setaside for statewide activities and the 25 percent set-aside for rapid
response. WIA permits local boards up to 2 years to spend each program's
funding. Accordingly, to get a national picture of available WIA funds at
the local level, we defined available funds as the combined amount of
program year 2003 funds and funds carried over from program year 2002. Of
the approximate $2.4 billion in combined WIA funds that local boards had
available, about $1.8 billion (75 percent) came from the program year 2003
allocation, while the rest consisted of funds carried over from 2002 (see
fig. 3). Allocations from the WIA adult and WIA dislocated worker funding
streams together constituted about 80 percent of the funds local boards
could use.

Figure 3: Estimated Total WIA Funds Available for Local Areas in Program
Year 2003

Dollars in millions 2,500

2,250

2,000

1,750

1,500

1,250

1,000

750

500

250 0

rkerow

WIA adultWIA dislocated

                           y GrantsState set-asides l

at

To

encg

Emer

Carryover funds Program year 2003 funds

                             Source: GAO analysis.

Note: All estimates less than or equal to $87 million in figure 3 have
margins of error exceeding plus or minus 15 percent of the value of those
estimates. See appendix I for the 95 percent confidence intervals
associated with these estimates.

Of the $2.4 billion available, local boards used approximately $929
million in program year 2003 to fund training activities, representing
about 40 percent of the WIA funds that were available to serve adult
participants in the program. The remaining funds pay for other program
costs, including job search assistance, case management, and supportive
services, as well as administrative costs. We found that local boards
spent an estimated $724 million on training and obligated another $205
million.12 Obligations

12WIA regulations require expenditures to be reported on an accrual basis.
This means states should report all cash outlays and all accruals as
expenditures on their reports. Accruals are amounts owed for goods and
services that have been received but for which cash has not yet been
disbursed.

are funds local boards commit to pay for training, but for which services
have not yet been provided and costs not yet incurred (see fig. 4).

Figure 4: Estimated Total WIA Funds Used for Training in Program Year 2003

                              Dollars in millions

1,000

900

800

700

600

500

400

300

200

100 0

orkerw

WIA adultWIA dislocated

                   y GrantsState set-asidestal WIAfunds used

encg

Emer

oT

Obligated funds

Expended funds

Source: GAO analysis.

Note: All estimates less than or equal to $83 million in figure 4 have
margins of error exceeding plus or minus 15 percent of the value of those
estimates. See appendix I for the 95 percent confidence intervals
associated with these estimates.

Local boards used a slightly higher percentage of their WIA adult funds
(43 percent) for training than their dislocated worker and state set-aside
funds, both of which had 37 percent used for training (see fig. 5).

Figure 5: Estimated Percentage of WIA Funds Used for Training, by Funding Source

Percent

43

ekr

wo

WIA adultWIA dislocated

                                       r

g

ency GrantsState set-asidesEmer

                                       l

at

To

                             Source: GAO analysis.

Of the WIA dollars local boards spent on training, an estimated 79 percent
was for occupational classroom training. Boards used the remainder of the
funds to pay for on-the-job training, customized training, and other types
of training, including adult basic education and skill upgrading.

In addition to using WIA funding, many local boards also leveraged other
sources of funding to help pay the costs of training for WIA
participants.13 Some of these funding sources were federal programs,
including Trade

13WIA funding for training is limited to participants who are unable to
obtain grant assistance from other sources to pay the costs of their
training, or who require assistance beyond that available under grant
assistance from other sources.

Adjustment Assistance (TAA),14 the H-1B skill grant program,15 and
Temporary Assistance for Needy Families (TANF). For example, in program
year 2003, one board we visited in Maryland enrolled 49 WIA participants
in training funded by TAA. Other sources of funding came from state and
local governments or private entities. For example, at one site we visited
in Georgia, the local public school system paid for high school
equivalency classes for WIA participants, including teacher salaries,
testing, and books and materials. In addition, the local housing authority
provided training on a variety of soft skills for 600 of its clients at
the onestop center.16

    WIA Participants Were Most Likely to Receive Occupational Classroom Training

Overall, we estimate that 416,000 WIA participants were enrolled in
training during program year 2003 and that about 323,000 participants
received occupational classroom training.17 In our survey, local boards
reported the number of people enrolled in each category of training rather
than the total receiving training. As a result, it is possible that the
416,000 includes some duplication of individuals who received more than
one kind of training during that year (see table 2).

14To participate in the TAA program, laid-off workers must be certified as
eligible by the Department of Labor. For more information, GAO, Trade
Adjustment Assistance: Reforms Have Accelerated Training Enrollment, but
Implementation Challenges Remain, GAO-04-1012 (Washington, D.C.: Sept. 22,
2004).

15For more information on the H-1B skill grant program, see GAO, High
Skill Training: Grants from H-1B Visa Fees Meet Specific Workforce Needs,
but at Varying Skill Levels, GAO-02-881 (Washington, D.C.: Sept. 20,
2002).

16Soft skills are the nontechnical skills, abilities, and traits that
workers need to function in a job. These include four sets of workplace
competencies: problem-solving and other cognitive skills, oral
communication skills, personal qualities and work ethic, and interpersonal
and teamwork skills.

17These figures include any participant who received training in program
year 2003, regardless of when they were enrolled in, or exited from, the
program.

Table 2: Estimated Total Number of Instances in Which WIA Participants
Were Trained during Program Year 2003, by Category and Funding Source

                                                 National             
                                  WIA dislocated Emergency      State 
                        WIA adult     worker        Grants set-asides   Total 
       Occupational      135,901     123,139        32,558     31,204 322,802 
    classroom training                                                
On-the-job training     14,671          7,863       656      2,217  25,407 
Customized training     13,424          2,193       174     10,883  26,674 
      Other training       20,771     11,526         2,193      6,144  40,634 
          Total          184,767     144,721        35,581     50,448 415,517 

Source: GAO analysis.

Note: All customized training estimates, all other training estimates, and
some on-the-job training estimates in table 2 have margins of error
exceeding plus or minus 15 percent of the value of those estimates. See
appendix I for the 95 confidence intervals associated with those
estimates.

We estimate that more than three-quarters of the training that
participants received (78 percent) was occupational classroom training
(see fig. 6). Onthe-job training and customized training each accounted
for an additional 6 percent of the total training that occurred in program
year 2003, while 10 percent of training included other activities, such as
adult education, literacy classes, entrepreneurial training, and skill
upgrading.

Figure 6: Estimated WIA-Funded Training in Program Year 2003, by Category

Participants in customized training

Participants in on-the-job training

Participants in other training

Participants in occupational classroom training

Source: GAO analysis.

Approximately 85 percent of the occupational classroom training provided during
        program year 2003 was purchased by participants through ITAs. At

some local boards, however, specific kinds of occupational classroom
training were obtained without the use of ITAs. For example, one local
board we visited in Iowa used WIA funds to pay for classes in typing
skills at the local community college, but ITAs were not used to pay for
this training because it was short-term training that did not result in a
credential.

At the eight sites we visited, participants used ITAs to pay for training
in a wide variety of occupations. WIA regulations require that
participants select a training program directly linked to employment
opportunities. Each of these local boards told us that nursing and other
health care professions were in high demand locally, and accordingly,
participants in all eight areas sought training in health care
occupations. Other highdemand occupations at some of the local boards we
visited included information technology, truck driving, manufacturing, and
teaching. As local labor markets have changed, some boards have developed
specially tailored programs designed to mirror shifts in labor demand. For
example, one local area in California faced massive layoffs in the
high-tech industry but had a dearth of qualified teachers in the local
schools. As a result, the local board created a program to train
dislocated high-tech workers to become teachers.

    Local Boards Fund Training-Related Activities and Services

In addition to providing training activities, local boards used the
flexibility provided under WIA to offer a broad range of intensive
services, some of which are aimed at increasing job skills. These
training-related activities, including work experience, internships, and
computer skills training, are not captured in WIA's definition of training
and, therefore, not paid for with training dollars. Accordingly, neither
the amount of funding spent on these activities nor the number of
participants who benefit from them are identified in our statistics on
training. Nevertheless, these activities can play a significant role in
preparing WIA participants for successful employment.

Although many WIA participants do not need extensive training to obtain a
job, some still need help improving a variety of skills that will further
their chances of successfully searching for and retaining a job. Much like
training, these activities are intended to increase employability. Many
are short-term activities, such as computer lab training and other
intensive skills workshops. For example, approximately one-half of local
boards use WIA funds to offer participants computer lab training in
software applications, basic keyboarding, and other computer skills. One
board we visited in Georgia offers another type of short-term, intensive
skills

workshop through its Basic Industrial Maintenance program. During this
4-week training course, participants learn a variety of skills including
the basics of construction, plumbing, and carpentry. Other
training-related activities that are intended to increase skills but are
not included in WIA training are internships and work experience
opportunities. For example, one local board we visited in Iowa spent about
$79,000 in program year 2003 to provide internships and work experience
opportunities to 41 WIA participants.

Moreover, some boards we visited used WIA funds to pay for supportive
services, such as child care and transportation, that enable participants
to attend training. Like funding spent on training-related activities, the
cost of these supportive services is not reflected in the amount of WIA
funding that local boards spend on training. However, these services can
represent a large investment of WIA dollars. Local boards have flexibility
in whether and how they use WIA funds for services that support
training.18 For example, one local board we visited in rural Iowa spent
over $160,000 in program year 2003 on a wide array of supportive services
for people in training, including child care, transportation, eye exams,
and glasses. Because the area contains several correctional facilities,
the board also used a portion of these WIA funds to purchase bicycles for
ex-offenders who were attempting to reenter the workforce but had lost
their driving privileges. Another local area we visited in California
spent $87,000 in supportive services during program year 2003; in addition
to paying for child care and transportation, these WIA funds paid for
items including books, uniforms, and tools, as well as services such as
fingerprinting and tuberculosis testing, which some training programs
require. Not all boards provided WIA-funded supportive services to people
in training, however. One local area we visited in Maryland did not use
WIA funding to provide supportive services to its adult participants,
although it referred those in need to other agencies for assistance.

18Under WIA, supportive services may only be provided to individuals who
are participating in core, intensive, or training services and who are
unable to obtain these services through other programs.

  Local Boards Manage ITAs but Have Faced Challenges in Implementing Them

Most local workforce boards have developed policies to manage the use of
ITAs, but many boards have encountered challenges in trying to implement
their use. Local boards often require participants to complete various
skill assessments prior to entering training and gather additional
information on the occupation for which they desire training. In addition,
they generally limit the amount of money participants can spend on
training using ITAs and how long participants can spend in training.
Although the vast majority of local boards use ITAs, most also said they
have faced challenges in managing their use. The challenge most frequently
identified was lack of good performance data on training providers. Local
boards in rural areas face a different challenge-lack of nearby training
providers. Some boards have identified initiatives to mitigate the
challenges they face.

                             Most Local Boards Have
                            Policies to Manage ITAs

We estimate that most local boards established procedures to ensure that
any training purchased using ITAs is warranted and placed spending limits
on individual ITAs to control costs. WIA regulations require that
participants must receive at least one intensive service, such as
individual counseling and career planning, before enrolling in training.
Many local boards also require participants in the adult and dislocated
worker programs who want training to first complete specified activities
to demonstrate their need for training. For example, local boards may
require participants to complete skill assessments or attend specific
workshops.

In addition, they may require participants to gather information on the
occupation for which they want training or document their inability to
find employment (see fig. 7).

Figure 7: Estimated Percentage of Local Boards Requiring Completion of
Specified Activities for Adults and Dislocated Workers Seeking Training

Percent

86 83

Undergo skillassessments

rkshopso

Completew

dormation Inf

                                    itional

inabilityto find job

Document

                                   Gather ad

Activity

Adult

Dislocated worker

Source: GAO analysis.

More than 80 percent of the local boards require adults and dislocated
workers to complete specified skill assessments or tests before being
allowed to purchase training with ITAs. For example, three local boards in
Georgia, Kansas, and Mississippi commented that participants are required
to complete career assessments or occupational interest inventories prior
to training. A local board in New York mentioned that staff are required
to interview participants and determine whether they are in need of
training and have the skills and qualifications to successfully
participate in the training program. A local board we visited in Georgia
required participants to demonstrate an aptitude and interest in an area
before enrolling in

training. Depending on how proactive the participant is, the process can
take up to 6 months before the participant is enrolled in a training
program.

Approximately 70 percent of the local boards require adults and dislocated
workers to gather additional information about the occupation for which
they want training. For example, a local board in Arizona noted that
participants must interview three people working in their desired field;
another board, in Washington, commented that participants are required to
conduct informational interviews with employers in the occupation they
wish to pursue. Similarly, three of the local boards that we visited
required participants to perform specific tasks prior to entering
training. For example, one local board we visited in Georgia required
participants to gather specific information on training providers and then
compose an essay explaining why they chose a particular course and
provider. Another board we visited, in California, asks participants to
research and disclose information on the training they want to pursue,
including the occupation's starting wage, whether this wage is sufficient
to support them and their family, working conditions, available job
openings, and education and skill requirements. Also, a local board we
visited in Maryland requires participants seeking certain types of
training, such as on the operation of a tractor-trailer, to obtain prehire
letters that guarantee employment once training is completed.

About one-third of local boards required adults and dislocated workers to
complete workshops prior to enrolling in training. For example, a West
Virginia board noted that participants must demonstrate their soft skills
or complete a soft skills program before entering occupational training.
One of the local boards we visited in California requires that
participants attend an orientation and a soft skills workshop prior to
entering training. They also offer additional voluntary workshops,
including those in which participants explore different vocations,
complete applications, practice interviews, and perform self-assessments.
Similarly, a local board we visited in Georgia requires participants to
take a general orientation and resume writing workshop before being
eligible for ITAs.

Approximately 85 percent of local workforce boards limit the amount of
money participants can spend on training using ITAs. An estimated 31
percent of the local boards limited ITAs to between $3,000 and $5,000 (see
fig. 8). At local boards limiting ITAs, the amount of the caps ranged from
$350 at one local board to $15,000 at three local boards. One of the local
boards we visited in Maryland said that its ITA cap had changed four times
since program year 2000. The cap started at $4,000, was then increased to

$4500 because of inflation, and later rose to $5,500 because of the
increased demand for, and cost of, information technology training.
However, because of reduced WIA funding, the board later lowered the cap
to $3,000.

Figure 8: Estimated Percentage of Local Boards with Various Dollar Caps on ITAs

                       Percentage of boards with ITA cap

                                       31

 Less than$3,000$3,000-$4,999 $5,000-$6,999 $7,000-$8,999 $9,000 or more No ITA
                                      cap

Amount of dollar cap on ITAs

Source: GAO analysis.

Note: Percentages do not add to 100 because of rounding.

Rather than having a single dollar limit on ITAs, two local boards
reported having ITA caps that could vary by training program.
Specifically, a local board in Hawaii limits an ITA for any particular
training program to the cost of the least expensive provider among those
who offer equivalent programs, while a local board we visited in Iowa
limits an ITA for a particular training program to the highest cost of
obtaining that training at a state public institution.

Most of the boards that impose dollar caps on ITAs expect the amount of
the ITA to also cover the costs of books, tools, and uniforms. A number of
local boards also expect the amount of the ITA to cover the costs for

supportive services and other items, such as fees for licenses,
certifications, tests, and physical exams (see fig. 9).

Figure 9: Estimated Percentage of Local Boards Requiring Participants to
Use ITA Funds for Costs Other than Tuition

                                    Percent

86

ools/T

Books/supplies equipment

                                    Uniforms

vices

serSupportive

                                     Other

Type of cost

Source: GAO analysis. Note: Other includes fees for licenses,
certifications, tests, and physical exams.

In addition to limiting the amount of money participants can spend on
training, an estimated two-thirds of the local boards also limit how long
participants can spend in training. The most frequent limit on training
was 2 years. Many of these local boards, however, indicated that time
limits could be waived depending on an individual's circumstances. One of
the local boards we visited in Iowa had no time limit for training using
ITAs, but encouraged shorter-term training lasting one or two semesters,
especially for dislocated workers, because of the limited period for
collecting unemployment insurance.

The use of particular training providers varied among the local boards we
visited. For example, in program year 2003, one local board we visited in
California used 48 private schools as training providers for 305
participants and 3 community colleges for 42 participants. This local
board also used 15 4-year colleges for 202 participants. The majority of
these

participants were former high-tech workers being trained to become
teachers. A local board we visited in Georgia relied heavily on private,
proprietary schools, using them for about 1,000 participants each year.
The board believes these schools are more flexible than other training
providers and offer a wide array of training courses. On the other hand, a
local board we visited in Iowa used community colleges for 90 percent of
the 246 ITAs issued in program year 2003.19 Local boards responding to our
survey reported that 37 percent of the ITAs issued in program year 2003
were used at proprietary schools and 35 percent were used at community
colleges. The remainder were used at various providers, including 4-year
colleges, public vocational and technical schools, and community
basedorganizations.

In December 2004, Mathematica Policy Research issued an interim report
concluding that the way ITAs are administered influences the likelihood of
participants requesting counseling or receiving ITAs.20 The study also
found that different approaches to administering ITAs appeared to have a
limited effect on participants' training choices. Labor funded the 3-year
study to assess how different approaches to administering ITAs affect
training choices, employment and earnings outcomes, returns on investment,
and customer satisfaction. Eight sites were included in the study. These
sites were located in or around Atlanta, Georgia; Bridgeport, Connecticut;
Charlotte, North Carolina; North Cook County, Illinois; Jacksonville,
Florida; and Phoenix, Arizona.21 Mathematica's study results are not
generalizable beyond these eight sites. A later report by Mathematica will
present an analysis of how the ITA approaches affect additional outcomes,
including training completion, customer satisfaction, and employment and
earnings after training, as well as an analysis of the return on the
investment in training.

19For more information about workforce development programs offered by
community colleges and technical schools, see GAO, Public Community
Colleges and Technical Schools: Most Schools Use Both Credit and Noncredit
Programs for Workforce Development, GAO-05-04 (Washington, D.C.: Oct. 18,
2004).

20See Mathematica Policy Research, The Effects of Customer Choice: First
Findings from the Individual Training Account Experiments, Final Interim
Report (Washington, D.C.: December 2004).

21In Atlanta and Phoenix, the study was implemented by a consortium of two
local workforce investment areas.

    Local Boards Face Challenges in Implementing ITAs

Most local boards faced some challenges in their efforts to implement
ITAs, and local boards in rural areas face a unique challenge. The
majority of local boards encountered as challenges the lack of performance
data on training providers, the timing of training being offered, being
able to get new training providers on the eligible training provider list
(ETPL), and the ability to link the ITAs with economic development
strategies (see table 3). A few local boards have found ways to mitigate
some of these challenges.

                Table 3: Challenges Encountered by Local Boards

                                                         Estimated percentage
                                                              of local boards
                                            Challenge encountering challengea

Lack of quality data on provider performance

Timing of training

Getting new providers on ETPL

Linking ITA system with local economic and business strategies

     Lack of providers on ETPL offering training in high demand occupations

Communication with training providers to monitor participant progress

Clients choosing training in low demand or low wage occupations

Management and tracking of obligations and expenditures for training

Lack of qualified providers

Lack of local control over participant's selection of training provider

Federal monitoring and reporting of local and state spending

Getting providers off the ETPL

Formulating ITA policies at the local level

             Not enough guidance from Labor on implementing ITAs 21

Source: GAO analysis.

aWe classified challenges as circumstances that local boards reported
encountering to a moderate, great, or very great extent.

Nearly two-thirds of the local workforce boards encountered the lack of
performance data on training providers as a challenge. For example, a
local board in Wisconsin commented that the lack of consistent data on
training providers reduces the value of the ETPL to local boards. A local

board in Missouri noted that one of the greatest challenges lies in not
having reliable information regarding the quality and relevance of the
training being offered by training providers. The board further stated
that the state's report card containing performance information on
training providers in Missouri was incomplete or unavailable. Local boards
we visited in California and Iowa said that a statewide report card on
training provider performance did not exist. In lieu of a statewide report
card, the California boards tracked training provider performance
themselves, while the Iowa boards relied upon informal feedback about
provider performance.

Approximately 60 percent of the local boards encountered the timing of the
training offered by providers as a challenge. For example, two local
boards we visited in Georgia and Iowa said that some participants are
unable to attend training programs that are offered only during a regular
academic schedule. The Iowa board explained that some participants who
have to wait too long for a training program to begin may have their
unemployment insurance benefits run out before the training can be
completed. On the other hand, some local boards have found solutions to
deal with this issue. For example, a local board in Washington commented
that it purchased classroom group training to offer more flexibility as to
when training will be offered and to satisfy the demand for particular
training. Similarly, a local board in Massachusetts noted it persuaded
local technical high schools to offer programs at night, thereby resulting
in greater availability of training in trade-related fields that are in
high labor demand. A local board we visited in Maryland developed close
relationships with area community colleges that now schedule occupational
training outside the regular academic calendar.

More than half the boards faced getting new providers on the ETPL as a
challenge. This has been a long-standing concern. We reported in 2001 that
according to training providers, the data collection burden resulting from
participation in WIA can be significant and may discourage willingness to
participate under WIA as training providers.22 Labor has heard these
concerns from training providers and has approved waivers for 30 states.
These waivers, in effect, give states additional time to address data
collection challenges. However, getting training providers, particularly
community colleges, to participate in the ETPL remains a concern for

22See GAO, Workforce Investment Act: Better Guidance Needed to Address
Concerns over New Requirements, GAO-02-72 (Washington, D.C.: Oct. 4,
2001).

some local boards. For example, local boards in California, Indiana,
Massachusetts, and Michigan noted that some providers, community colleges
in particular, are reluctant to participate in the ETPL. A local board
that we visited in California elaborated on this point, stating that
community colleges in its area are operating at full capacity and do not
need WIA dollars or participants and, therefore, are not interested in
getting on the ETPL. Some local boards are finding ways to encourage
providers to participate. For example, one local board in Massachusetts
has been working collaboratively with other boards throughout the state to
meet with key figures in the community college system to provide
information, consultation, and feedback. Two local boards we visited in
Iowa and Maryland have developed strong relationships with the 16
community colleges in their areas, each of which is on state lists.
Another local board we visited in California conducts regional ETPL
workshops with training providers and shares ideas with other local boards
in the surrounding areas.

More than half of the local boards found linking ITAs with local economic
and business development strategies to be a challenge. Several local
boards provided different examples of why they found it difficult to
provide participants with training in high-demand occupations in their
area. The area around one local board we visited in California faced a
nursing shortage, but nearby training for nurses was difficult to obtain.
Some area community colleges were opting not to provide nursing training
because they could not recoup the costs of operating them. A local board
we visited in Georgia also said that keeping up with businesses' needs is
a challenge and noted that some information technology sector-based
training courses are not always available. Other local boards identified
some initiatives they are pursuing to strengthen links with economic
development. For example:

o  	A local board in Michigan partners with a local technical training
center to develop intensive, short-term certificate programs in highskill,
high-wage, and high-demand fields. The technical center is operated by a
local community college but offers non-credit certificate programs
responsive to business and community needs.

o  	A local board in Ohio works closely with the local Chambers of
Commerce and economic development partners to formulate training programs
that are based on employer demands. Specifically, if the board hears that
a group of employers have a skill need, then the board will develop the
appropriate training program with a service provider.

o  	A local board in Texas uses an industry cluster analysis report to
focus attention on specific industries and then targets funds for training
in these sectors. Training institutions must prepare industry-approved
training curriculums in order to have programs approved by the local board
and to have ITAs issued to participants for training.

o  	A local board in Washington partnered with representatives from local
education, economic development, and government to develop a shared
blueprint for economic development and training around eight high-demand
industry clusters.

A number of local boards representing rural locations mentioned that the
requirement to use ITAs to purchase training from providers on the ETPL
presented a different problem for them from their counterparts in urban
areas. Local boards in Arizona, Colorado, Kansas, Montana, North Carolina,
and Utah all mentioned that participants in rural areas have few nearby
training providers from which to choose. Additionally, local boards in
Kansas and Montana noted that being located in a rural area with limited
providers makes dealing with ITAs burdensome. A local board that we
visited in rural California applied for and received a waiver from using
ITAs. The board directly contracts with a community college for a 2-year
program to train participants to become registered nurses and an 18month
program to train participants to become licensed vocational nurses.
Through April 2004, 73 participants have completed the nursing programs,
and according to the board, all were employed in their respective fields.

Little is known on a national level about the outcomes of those being
trained. Certain aspects of WIASRD have been found to be incomplete and
unverified. Additionally, data generally cannot be compared across states
or local areas because of differences in data definitions. Labor is taking
some steps that may address these concerns and plans to complete an
evaluation that will measure the overall impact of the WIA program.

  Little Is Known about Outcomes of Those Being Trained because of Weaknesses in
  Data Collected

Concerns Remain That Our analysis of program year 2003 WIASRD has shown
that the database Data Collected Are does not contain information for a
large number of data elements. It is Unreliable unclear if these values
are missing because Unemployment Insurance

wage records are not available or because they simply were not entered
into the database by officials. This finding reaffirms issues that have
been raised previously about the quality of data that Labor uses to assess

program performance. Our 2004 report found that performance data submitted
by states in quarterly and annual reports were not sufficiently reliable
to determine outcomes for the WIA programs. 23 Labor's Office of Inspector
General (OIG) raised the same concerns in 2002 by noting that because of
inadequate oversight of data collection and management, little assurance
exists that the states' performance data for all WIA programs are either
accurate or complete.24 OIG's report found that of the 12 local areas
examined, none had adequately documented procedures for validating
participant performance data. Similarly, none of the four states examined
had sufficient procedures to ensure the accuracy of their reported
performance data. At the time, OIG recommended that states use a
statistical sampling method for validating reported data.

Because of questions about the comparability of data elements, states'
performance data are of limited value for national comparisons, or even
comparisons within a single state. Labor allows local areas to exercise
some flexibility in determining how to collect and report certain
performance data on participants. For example, while local areas collect
data on a participant who leaves the program, they use different methods
to determine when a person has officially exited from the program. WIASRD
guidelines define participants as having exited the program on the last
date they received WIA services. Labor allows two ways to define exit: (1)
at the point of case closure or (2) when the participant has not received
any services or training for more than 90 days and is not scheduled for
future services. We found that local area definitions differ from this and
from each other. For example, one local board we visited defines exit as
occurring when participants are finished with their WIA services; another
board defines exit when participants have found a new job and the wages
for their new job are considered acceptable (regardless of the number of
days that have passed since their last service). Wage and employment
outcomes under these different circumstances would vary greatly, making it
difficult to compare outcome data across local areas. In a prior report,
we also noted the data are not comparable on what constitutes a
credential-whether it is the attainment of a certified skill or

23GAO, Workforce Investment Act: Labor Actions Can Help States Improve
Quality of Performance Outcome Data and Delivery of Youth Services,
GAO-04-308 (Washington, D.C.: Feb. 23, 2004).

24U.S. Department of Labor, Office of Inspector General, Workforce
Investment Act Performance Outcomes Reporting Oversight , 06-02-006-03-390
(Washington, D.C.: Sept. 30, 2002).

of a degree. 25 Labor allows states and local areas to determine what
constitutes a credential.

    Labor Is Taking Actions to Improve Data and Assess Impact of Program

Labor is taking some steps to address data quality concerns and improve
the data used at the national level. This includes implementing a new
project to validate the performance information collected and reported
under WIA. The data validation initiative covers both the accuracy of
reports submitted to Labor on program activity and performance outcomes
and the accuracy of individual data elements. The report validation checks
the accuracy of states' software used to calculate the performance reports
submitted to Labor. For example, if a state reports, for a particular time
frame, that 100 adults found employment after they received services, the
validation software searches through the state's electronic records to
ensure that 100 records are found that match these criteria. Data element
validation, on the other hand, evaluates the accuracy of the participant
data used to generate reports submitted to Labor. The process compares
selected information from a sample of participant exit records with the
original paperwork that contained this information. Data element
validation results in an estimate of the error rate for each data element
that has been selected for validation.

While Labor provides guidelines for the data validation, states are
responsible for executing the initiative. Program year 2003 is the first
year states have completed the process, and Labor plans to review state
results and start setting acceptable standards for error rates.
Eventually, Labor plans to hold states accountable for meeting accuracy
standards. Once these accuracy standards are in place, states failing to
meet the standards may lose eligibility for incentive awards or, in cases
with significant deviations from the standards, may be sanctioned. Because
this initiative is relatively new, it is too soon to tell if it will
satisfactorily resolve all data quality problems associated with WIASRD
outcome measures-but it is a step toward addressing these concerns.

Labor is also in the initial stages of developing a single, streamlined
reporting and record-keeping system that will replace a series of
databases, including WIASRD, and may address some concerns about data

25GAO, Workforce Investment Act: Improvements Needed in Performance
Measures to Provide a More Accurate Picture of WIA's Effectiveness,
GAO-02-275 (Washington, D.C.: Feb. 1, 2002).

quality. The system, formally called the ETA Management Information and
Longitudinal Evaluation (EMILE), would replace the current data collection
and reporting requirements for 12 employment and training programs. The
goal of the new system is to allow for consistent, comparable analysis
across Labor's employment and training programs, using the same
definitions for specific measures. These definitions, known as common
measures, are to be implemented July 1, 2005, well before EMILE is
implemented. 26 A feasibility analysis on the EMILE proposal, which will
provide information on next steps, is in the planning stages and should be
completed by December 2005, but it is unclear how soon EMILE will be
implemented.

Labor has plans to meet the requirement that it conduct at least one
multisite study to determine the general effectiveness of the WIA program
and the specific impacts of WIA services on the community and participants
involved. WIA requires Labor to conduct at least one multisite evaluation
using a control group by the end of fiscal year 2005. However, as noted in
a prior report, Labor will not meet this deadline. 27 Labor is waiting for
WIA reauthorization to begin the evaluation, and will likely wait until
the second year after reauthorization to commission the study. Labor
anticipates it will take at least 5 years to complete the first
evaluation.

WIA represented a fundamental shift for workforce development because it
attempted to significantly change how employment and training services
were provided and because it provided considerable latitude to those
implementing WIA at the state and local levels, yet little is known about
the impacts of these changes. In program year 2003, local workforce boards
used a substantial amount of WIA funds to train a large number of
individuals. During these times of increasingly tight federal budgets, it
is important to know what types of training are the most successful and
how the outcomes from training compare with outcomes from other services.
We previously recommended that Labor take actions to improve data

                                   Concluding

                                  Observations

26For additional information on EMILE and common measures, see GAO,
Workforce Investment Act: Labor Should Consider Alternative Approaches to
Implement New Performance and Reporting Requirements, GAO-05-539
(Washington, D.C.: May 27, 2005).

27GAO, Workforce Investment Act: States and Local Areas Have Developed
Strategies to Assess Performance, but Labor Could Do More to Help,
GAO-04-657 (Washington, D.C.: June 1, 2004).

  Agency Comments

quality and to conduct an impact evaluation of WIA services.28 While Labor
is taking steps to address the accuracy of data contained in WIASRD,
reliable information is not yet available on a national level as to the
outcomes of those being trained. In addition, Labor will likely wait until
2007 to conduct the multisite impact evaluation required by WIA. Our
findings reaffirm the need for a continued focus on resolving reported
data quality issues and determining what services are the most successful.

We provided a draft of this report to Labor for review and comment. In its
comments, Labor acknowledged that the WIA reporting system currently has
limited information on training expenditures and training outcomes, but
noted that some of our information conflicts with their estimates of these
activities. In particular, Labor states the Administration's estimate of
the amount of WIA funds spent on training is lower than the 40 percent
that we estimate was used for training in program year 2003. In addition,
Labor estimates adult training enrollments to be roughly 200,000. We agree
with Labor that the WIA reporting system has limited reliable information.
As a result, we went directly to the local workforce boards to obtain as
complete a picture as possible on the extent to which WIA funds were used
for training and how many adults were trained in program year 2003. Our
information differs from Labor's estimates in two ways. First, our report
indicates that 40 percent of WIA funds were used for training in program
year 2003. We define funds used for training to include funds spent as
well as funds obligated. As shown in the report, of the approximately $929
million used for training in program year 2003, about $724 million was
actually spent and another $205 million was obligated. Second, Labor's
estimate of 200,000 adults enrolled in training includes only those adults
reported in WIASRD who exited from the program. Our estimate of 416,000
comes directly from the local workforce areas that provided the training
and includes the total number of adults who received training in program
year 2003, including those who had not exited from the program. We believe
our estimates of the amount of WIA funds used for training and the number
of adults trained represent a more complete and accurate picture than
Labor's estimates because we included all funds used for training in
program year 2003, whether they were spent or obligated, and counted all
adults who received training in program year 2003, not just those who
exited the program.

28See GAO-05-539, p. 36-37; GAO-04-496, p. 29; GAO-04-657, p. 41; and
GAO-04-308, p. 31.

Regarding our discussion on data quality, Labor stated that it appreciates
that we recognize the steps taken to improve data quality through data
validation and noted that it has provided states with the software,
handbooks, user guides, and technical assistance necessary to develop
reports and document validation. Labor commented that it plans to continue
supporting data validation during the transition to common measures and is
currently revising the software and related materials to match the new
reporting requirements. In addition, Labor stated that in the coming
months it will be publishing proposed revisions to the WIASRD in the
Federal Register. Labor also has issued guidance standardizing the
definition of "exit" for purposes of assessing program performance across
all programs implementing common measures. Labor said that states will
begin implementing the change on July 1, 2005, and believes that this will
improve the comparability of WIA outcome data. We commend Labor's efforts
to improve data quality and acknowledge that these actions are a step in
the right direction to having a reporting system that contains complete
and accurate information.

Labor also provided technical comments that we incorporated where
appropriate. Labor's entire comments are reproduced in appendix III.

We will send copies of this report to the Secretary of Labor, relevant
congressional committees, and other interested parties and will make
copies available to others upon request. In addition, the report will be
available at no charge on GAO's Web site at http://www.gao.gov.

A list of related GAO products is included at the end of this report. If
you or your staffs have any questions about this report, please contact me
at (202) 512-7215 or at [email protected]. Contact points for our Offices of

Congressional Relations and Public Affairs may be found on the last page
of this report. Other contacts and staff acknowledgments are listed in
appendix IV.

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

Appendix I: Objectives, Scope, and Methodology

We were asked to determine (1) to what extent Workforce Investment Act
(WIA) funds have been used for training, (2) how local workforce
investment boards have managed the use of Individual Training Accounts
(ITA) and what challenges they have encountered, and (3) what is known at
the national level about the outcomes of those receiving training. To
address these issues, we conducted a Web-based survey of all local
workforce investment boards in the 50 states, the District of Columbia,
and Puerto Rico, and visited eight local boards located in 4 states. We
conducted our work from June 2004 to May 2005 in accordance with generally
accepted government auditing standards.

                                Web-Based Survey

To determine the extent to which program year 2003 WIA funds were used for
training, how local workforce boards manage ITAs, and what challenges they
have encountered, we conducted a Web-based survey of the local workforce
investment boards for the 590 local workforce investment areas in
existence in program year 2003. Program year 2003 was the most recent year
for which complete data were available. The basis for our list of local
workforce investment boards was the directory from the National
Association of Workforce Boards (NAWB). To view the survey, go to
www.gao.gov/cgi-bin/getrpt?GAO-05-807SP.

Prior to administering the survey, we pretested the content and format of
the questionnaire with a number of local workforce investment boards to
determine whether (1) the survey questions were clear, (2) the terms used
were precise, (3) respondents were able to provide the financial and
client data we were seeking, and (4) the questions were unbiased. We made
changes to the content and format of the final questionnaire based on
pretest results.

The surveys were conducted using self-administered electronic
questionnaires posted on the Web. We received completed surveys from 428
boards (a 73 percent response rate).

We attempted to assess the reliability of the responses to survey
questions that asked for quantitative data relating to WIA funds used for
training and numbers of clients served. We included questions in the
survey that asked whether or not the local board carried out certain
practices or procedures to ensure that databases or data systems used to
produce the financial and client information we asked for were in fact
reliable. These questions asked (1) if there were written procedures that
defined data elements or specified how data were collected; (2) if routine
internal reviews of data were conducted to check for errors in
completeness, accuracy, or

Appendix I: Objectives, Scope, and Methodology

reasonableness; (3) if periodic monitoring or audits of the data were
conducted to check for errors in completeness, accuracy, or
reasonableness; and (4) whether or not routine quality control procedures
were in place such as data verification to source documents or computer
edit checks. We asked these four questions separately for both the
financial data and the client data obtained in the survey. If the local
area responded that it had used at least two of the four practices or
procedures to monitor the quality of the financial and participant data
provided in their survey, we either accepted the responses or called for
clarification, depending on which procedures were used.1 If the local
board responded that three or four of these practices or procedures were
not used for either financial or client data, we did not use those data.
In cases where the local board responded that it was not sure whether
these practices or procedures had been carried out or did not answer three
or more of the four questions, we telephoned the board to try to determine
whether or not it had actually carried out these practices or procedures.
In cases where we determined that the data actually did meet our data
reliability criteria, based on these telephone calls, we accepted the
responses. On the basis of the criteria, we accepted the financial data
for all 428 of the completed surveys and we accepted the participant data
for 425 of the completed surveys. In the three cases where we did not
accept the participant data, we did retain and use responses from other
sections of the survey. In addition to including the questions on data
reliability in the survey, we also checked the consistency of responses on
a number of survey questions that asked for numeric data. On the basis of
these consistency checks, some responses were dropped from our analysis.

We generated estimates to the population of 590 boards by treating the 428
responding boards as a simple random sample. We chose to treat the 428
responding boards as a simple random sample from the population of 590
based on an analysis of the differences between the responding boards and
the nonresponding boards.

To determine if there were any significant differences between the
responding boards and the nonresponding boards, we contacted officials in
the 50 states, the District of Columbia, and Puerto Rico to obtain the
number of unemployed individuals for each local area. We obtained this

1Because we believe that having written procedures was less important to
define quality than the other three measures, we only accepted responses
without clarification if the board reported using two of the three
remaining procedures.

Appendix I: Objectives, Scope, and Methodology

number for all 590 boards in the population. We used this information to
determine whether sample-based estimates of this characteristic generated
from the responding boards compared favorably with the known population
values. The known population value of the number of unemployed individuals
fell within the 95 percent confidence interval surrounding the
sample-based estimate. On the basis of these results, and our assessment
that the number of unemployed individuals is correlated with key items we
were estimating, we concluded that treating the 428 responding boards as a
simple random sample is not likely to introduce significant bias into
estimates. Some of the 428 responding boards did not provide responses to
all of the items in the survey. To improve our estimates, we employed a
nearest neighbor hot deck imputation methodology to account for
nonresponse of numerical items.

Because we decided to treat the respondents as a simple random sample of
boards, our results are estimates of the population of 590 boards and thus
are subject to sampling errors that are associated with samples of this
size and type. Our confidence in the precision of the results from this
sample is expressed in 95 percent confidence intervals, which are expected
to include the actual results in 95 percent of samples of this type. We
calculated confidence intervals based on methods that are appropriate for
a simple random sample. All percentage estimates have margins of error of
plus or minus 5 percentage points or less. All numerical estimates other
than percentages have relative margins of error of plus or minus 15
percent or less, except for those shown in table 4. For example, an
estimate of $1,000,000 with a relative margin of error of plus or minus 15
percent would have a 95 percent confidence interval of $850,000 to
$1,150,000.

                 Appendix I: Objectives, Scope, and Methodology

Table 4: 95 Percent Confidence Intervals for Numeric Estimates with
Margins of Error Exceeding 15 Percent of the Value of Those Estimates

                 Question                   Estimate Lower bound  Upper bound 
      National Emergency Grant (NEG)     $80,000,000 $58,000,000 $103,000,000 
          Carryover program funds                                
     State set-asides carryover funds     87,000,000 66,000,000   108,000,000 
Dislocated Worker funds obligated for  83,000,000 70,000,000    96,000,000 
                 training                                        
     NEG funds obligated for training     14,000,000 10,000,000    18,000,000 
      NEG funds expended on training      63,000,000 51,000,000    74,000,000 
State set-asides funds obligated for   17,000,000 14,000,000    21,000,000 
                 training                                        
      NEG participants in on-the-job             656         441 
                 training                                        
     State set-asides participants in          2,217       1,744        2,690 
            on-the-job training                                  
     Adult participants in customized         13,424       9,584       17,264 
                 training                                        
     Dislocated Worker participants in         2,193         976        3,410 
            customized training                                  
      NEG participants in customized             174          71 
                 training                                        
     State set-asides participants in         10,883       8,329       13,437 
            customized training                                  
     Total participants in customized         26,674      21,432       31,916 
                 training                                        
Adult participants in other training       20,771      10,371       31,172 
     Dislocated Worker participants in        11,526       4,973       18,078 
              other training                                     
    NEG participants in other training         2,193         895        3,492 

State set-asides participants in other training 6,144 3,956 8,332

Total participants in other training $40,634 $23,542 $57,726

Source: GAO analysis.

Note: All dollar amounts are rounded to millions.

The practical difficulties of conducting any survey may introduce other
kinds of errors, commonly referred to as nonsampling errors. For example,
difficulties in how a particular question is interpreted, in the sources
of information that are available to respondents, or in how the data are
entered into a database or were analyzed can introduce unwanted
variability into the survey results. We took steps in the development of
the questionnaire, the data collection, and the data analysis to minimize
these nonsampling errors. For example, social science survey specialists
designed the questionnaire in collaboration with GAO staff with subject
matter expertise. Then, the draft questionnaire was pretested with a
number of local boards to ensure that the questions were relevant, clearly
stated, and easy to comprehend. As mentioned above, we included additional
questions to determine whether certain practices or procedures had been
carried out on the financial and client data. When the data were analyzed,
a second, independent analyst checked all computer programs.

Appendix I: Objectives, Scope, and Methodology

Since this was a Web-based survey, respondents entered their answers
directly into the electronic questionnaire. This eliminated the need to
have the data keyed into a database, thus removing an additional source of
error.

Site Visits 	We used two criteria in selecting site visit locations.
First, we stratified the 48 continental states and the District of
Columbia into four categories according to amount of program year 2003
adult and dislocated worker formula funds to reflect states with varying
funding sizes. The four categories were less than $10 million, $10 million
to $25 million, over $25 million to $50 million, and over $50 million. We
selected one from each category. Second, we chose geographically dispersed
states to help illuminate regional differences in implementing ITAs. From
within each state, we judgmentally selected two local boards to provide a
mix of urban and rural areas (see table 5).

                  Table 5: Locations Selected for Site Visits

                             Local workforce area Type        City      State 
                                    Merced County Rural     Merced California 
             North Valley Job Training Consortium Urban Sunnyvale  California 
                                           (NOVA)                  
                 Atlanta Regional Workforce Board Mixed    Atlanta Georgia    
                                           (ARWB)                  
            City of Atlanta Workforce Development Urban    Atlanta Georgia    
                                           Agency                  
                                        Region 16 Rural Burlington       Iowa 
                                         Region 9 Urban Davenport        Iowa 
                                 Baltimore County Urban   Towson     Maryland 
                                 Western Maryland Rural Hagerstown   Maryland 

Source: GAO analysis.

At each location visited, we obtained general information about the local
workforce area and additional information on WIA funding, local training
policies implemented, challenges encountered, innovative practices, and
reliability of data systems. To increase our confidence in the reliability
of the data we gathered from our survey, we interviewed each local board
we visited about data monitoring and quality control procedures and
policies with respect to their financial and participant databases. We
also asked the local boards we visited to show us samples of records in
their databases and to trace them to source documents. We generally found
their data quality processes and procedures to be sufficiently reliable
for the purposes of our report.

                 Appendix I: Objectives, Scope, and Methodology

                              Assessment of WIASRD

To determine whether the Workforce Investment Act Standardized Record Data
(WIASRD) might be a viable source of data for outcomes of training
participants, we reviewed our prior reports about the reliability of the
WIASRD data and a report by Labor's Office of the Inspector General on WIA
performance outcomes. We also performed electronic tests of the program
year 2003 WIASRD data to check for missing values. The variables analyzed
included employment after first, third, and fifth quarters after exit
quarter, and type of credential attained. Missing data due to unemployment
insurance wage data lags were taken under consideration. On the basis of
our analysis, we determined that the WIASRD data elements pertinent to
this report were not sufficiently reliable for our purposes. We have
discussed the data reliability issues throughout the body of the report.

Appendix II: Summary of Adult and Dislocated Worker Formula Funds for Program
Year 2003

                                                Dislocated worker 
                          State Adult allotment         allotment       Total 
                        Alabama     $15,735,991       $19,648,431 $35,384,422 
                         Alaska       3,074,377         3,532,589   6,606,966 
                        Arizona      16,031,216        19,236,076  35,267,292 
                       Arkansas       8,471,046         8,381,623  16,852,669 
                     California     127,752,492       181,115,296 308,867,788 
                       Colorado       6,355,326        12,644,518  18,999,844 
                    Connecticut       5,139,126         6,545,965  11,685,091 
                       Delaware       2,230,852         1,619,829   3,850,681 
           District of Columbia       3,029,095         3,412,007   6,441,102 
                        Florida      42,307,802        56,526,693  98,834,495 
                        Georgia      16,339,645        19,872,747  36,212,392 
                         Hawaii       4,153,045         3,507,793   7,660,838 
                          Idaho       3,478,699         4,600,066   8,078,765 
                       Illinois      43,313,151        63,671,542 106,984,693 
                        Indiana      11,927,202        18,667,803  30,595,005 
                           Iowa       3,463,590         4,733,474   8,197,064 
                         Kansas       5,201,245         5,859,682  11,060,927 
                       Kentucky      14,994,952        15,324,618  30,319,570 
                      Louisiana      20,489,917        22,106,456  42,596,373 
                          Maine       2,518,154         2,406,018   4,924,172 
                       Maryland      11,088,755        13,818,649  24,907,404 
                  Massachusetts       9,103,791        16,275,735  25,379,526 
                       Michigan      37,251,688        49,051,997  86,303,685 
                      Minnesota       8,412,429        10,814,167  19,226,596 
                    Mississippi      12,275,609        14,986,889  27,262,498 
                       Missouri      15,184,213        17,356,406  32,540,619 
                        Montana       3,180,736         2,068,283   5,249,019 
                       Nebraska       2,230,852         2,876,482   5,107,334 
                         Nevada       5,454,619         9,336,077  14,790,696 
                  New Hampshire       2,230,852         2,491,345   4,722,197 
                     New Jersey      20,367,136        29,967,785  50,334,921 
                     New Mexico       7,517,971         7,051,503  14,569,474 
                       New York      64,530,126        85,269,181 149,799,307 
                 North Carolina      25,708,051        43,355,653  69,063,704 
                   North Dakota       2,230,852           946,647   3,177,499 

Appendix II: Summary of Adult and Dislocated Worker Formula Funds for
Program Year 2003

                                              Dislocated worker  
                     State   Adult allotment           allotment        Total 
                      Ohio        37,225,801          39,094,488   76,320,289 
                  Oklahoma         7,232,422           6,326,289   13,558,711 
                    Oregon        14,830,033          25,631,266   40,461,299 
              Pennsylvania        31,676,565          44,790,835   76,467,400 
               Puerto Rico        41,665,749          36,808,705   78,474,454 
              Rhode Island         2,230,852           2,571,482    4,802,334 
            South Carolina        13,557,999          17,614,232   31,172,231 
              South Dakota         2,230,852           1,272,804    3,503,656 
                 Tennessee        17,271,017          17,675,156   34,946,173 
                     Texas        74,133,194          91,170,377  165,303,571 
                      Utah         3,515,501           6,438,510    9,954,011 
                   Vermont         2,230,852           1,293,147    3,523,999 
                  Virginia        13,242,958          13,971,928   27,214,886 
                Washington        25,736,856          39,224,868   64,961,724 
             West Virginia         8,053,562           6,914,091   14,967,653 
                 Wisconsin        12,501,089          19,319,871   31,820,960 
                   Wyoming         2,230,852             951,173    3,182,025 

Total $892,340,757 $1,150,149,247 $2,042,490,004

Source: Department of Labor, Employment and Training Administration.

Note: Amounts identified reflect the adult and dislocated worker program
year 2003 funds after the 0.59 percent rescission. Totals exclude the
seven outlying areas (American Samoa, Guam, Marshall Islands, Micronesia,
Northern Mariana, Palau, and Virgin Islands).

Appendix III: Comments from the Department of Labor

Appendix III: Comments from the Department of Labor

Appendix III: Comments from the Department of Labor

Appendix IV: GAO Contact and Staff Acknowledgments

GAO Contact

  Staff Acknowledgments

Sigurd R Nilsen (202) 512-7215

Joan Mahagan, Assistant Director, and Wayne Sylvia, Analyst-in-Charge,
managed all aspects of the assignment. Rebecca Woiwode made significant
contributions to this report in all aspects of the work. In addition,
Amanda Mackison and Matthew Saradjian assisted in the survey design, data
collection, and report writing; Stuart Kaufman and Shana Wallace assisted
in the design of the national survey and the assessment of the survey's
data reliability; James Ashley and Sidney Schwartz assisted in data
projections of the national survey; Grant Mallie and Stefanie Bdzusek
assisted in analyzing the national survey responses; Joan Vogel assisted
in assessing the data reliability of the WIASRD data; Jessica Botsford and
Richard Burkard provided legal support; and Corinna Nicolaou provided
writing assistance.

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GAO-05-539.Washington, D.C.: May 27, 2005.

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