Veterans' Employment and Training Service: Greater Accountability
and Other Labor Actions Needed to Better Serve Veterans 	 
(02-FEB-06, GAO-06-357T).					 
                                                                 
The number of service members leaving active duty is likely to	 
increase by 200,000 yearly, according to the Department of Labor.
To improve employment and training services for veterans and to  
encourage employers to hire them, Congress passed the Jobs for	 
Veterans Act in 2002, which reformed Labor's Disabled Veterans'  
Outreach Program (DVOP) and Local Veterans' Employment		 
Representative (LVER) program. This testimony summarizes GAO's	 
recent review of progress implementing the act, including the	 
development of new staff roles and responsibilities, incentive	 
awards, and performance accountability system. GAO examined (1)  
actions taken to improve performance and accountability since the
law's enactment and any associated challenges, (2) whether	 
available data indicate that such action has resulted in improved
employment outcomes for veterans, and (3) factors affecting	 
program oversight an accountability.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-357T					        
    ACCNO:   A45279						        
  TITLE:     Veterans' Employment and Training Service: Greater       
Accountability and Other Labor Actions Needed to Better Serve	 
Veterans							 
     DATE:   02/02/2006 
  SUBJECT:   Accountability					 
	     Employment assistance programs			 
	     Occupational retraining				 
	     Performance measures				 
	     Program evaluation 				 
	     Program management 				 
	     State-administered programs			 
	     Surveys						 
	     Veterans						 
	     Veterans employment programs			 
	     Program implementation				 
	     DOL Disabled Veterans' Outreach Program		 
	     DOL Local Veterans' Employment			 
	     Representative Program				 
                                                                 

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GAO-06-357T

     

     * Background
     * Labor and States Acted to Implement Program Reforms, but Acc
          * Staff Roles and Responsibilities
          * Incentive Awards Program
          * Performance Accountability
     * State Officials Reported that JVA Reforms Improved Veterans'
     * Program Accountability Weakened by Absence of Local Data and
     * Recommendations
     * Contact and Acknowledgments
          * Order by Mail or Phone

TestimonyBefore the Committee on Veterans' Affairs, United States Senate

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10:00 a.m. EST

Thursday, February 2, 2006

VETERANS'EMPLOYMENT AND TRAINING SERVICE

Greater Accountability and Other Labor Actions Needed to Better Serve
Veterans

Statement of Sigurd R. Nilsen, Director

Education, Workforce, and Income Security Issues

GAO-06-357T

Mr. Chairman:

I am pleased to be here today to present the findings of our recent report
on how the Department of Labor (Labor) and states have implemented some
key provisions of the Jobs for Veterans Act (JVA).1 Congress passed JVA in
2002 not only to improve employment and training services for unemployed
veterans, but also to encourage employers to hire them. The ability of
veterans to quickly obtain quality service and employment has always been
important, but will become even more so as the number of service members
leaving active duty is likely to increase by 200,000 yearly, according to
Labor.

The act introduced several reforms to two of Labor's primary veterans'
employment assistance programs-the Disabled Veterans' Outreach Program
(DVOP) and the Local Veterans' Employment Representative (LVER)
program-administered by the Veterans' Employment and Training Service
(VETS). Under the act, DVOP staff are to focus on finding and serving
veterans who need services to become job ready, including case management
services for developing job skills. LVER staff are to focus on developing
relationships with employers to encourage them to hire veterans. In
addition, the act called for DVOP and LVER staff to be integrated with
other staff providing employment and training services within the one-stop
delivery system established in 1998 under the Workforce Investment Act
(WIA), and established an incentive program to reward staff for
outstanding service to veterans. To determine how well these programs were
working to assist veterans across states, the act also required Labor to
establish a performance accountability system as well as a national
minimum standard-or threshold-that states must meet for veterans'
employment.

GAO previously testified on our preliminary observations on the status of
implementation of these key provisions of JVA.2 My testimony today will
present the findings of our completed work related to the JVA reforms of
the DVOP and LVER programs. Specifically, I will address (1) action taken
to improve performance and accountability since the enactment of JVA in
2002 and any associated challenges; (2) whether available data reflect
that such action has resulted in improved employment outcomes for
veterans; and (3) factors affecting program oversight and accountability.

1GAO, Veterans' Employment and Training Service: Labor Actions Needed to
Improve Accountability and Help States Implement Reforms to Veterans'
Employment Services, GAO-06-176 (Washington, D.C.: Dec. 30, 2005).

2GAO, Veterans' Employment and Training Service: Preliminary Observations
on Changes to Veterans' Employment Programs, GAO-05-662T (Washington,
D.C.: May 12, 2005).

In summary, our work shows that Labor and most states took action to
implement JVA reforms for improving the DVOP and LVER programs within the
first two years of the new legislation. However, our work also highlights
several areas where Labor agencies should collaborate and take additional
action to enhance outcomes of these reforms, particularly in the area of
improving state oversight and accountability. To this end, our December
2005 report recommended that Labor agencies work together to provide
states and local areas with strategies to address the long-standing
challenge they have faced in integrating veterans' staff into their
service delivery system. For those states with an incentive award system,
the wide variation in methodology for awarding incentives as well as the
mixed opinions on the program's success suggests that states could benefit
from Labor presentation of methodologies that it considers successful and
we recommended that Labor share these best practices. Finally, while
states have appreciated the flexibility JVA provides them in serving
veterans, such flexibility underscores the need for greater accountability
to ensure that programs are on the right track in serving clients.
However, accountability can be hindered and reforms implemented
inconsistently when local level information is not always available,
different Labor agencies do not coordinate their oversight efforts, and
Labor does not use monitoring results to improve program performance. We
therefore recommended that Labor strategically use monitoring results to
target guidance and technical assistance to states and local areas most in
need of improved performance. Labor generally agreed with our
recommendations.

Our review was based on a survey of VETS directors as well as a survey of
state workforce administrators in all 50 states and the District of
Columbia. We also visited five states-California, Florida, Louisiana,
Ohio, and Washington-where we interviewed VETS and state workforce
officials, including local office managers and DVOP and LVER staff. In
addition, we visited the National Veterans' Training Institute in Denver,
Colorado, where we interviewed training officials and veterans' staff from
24 states who were attending training classes. Finally, we held
discussions with Labor agency officials and contacted various veterans'
service organizations and the National Association of State Workforce
Agencies.

                                   Background

JVA amended Title 38 of the U.S. Code, the legislation that governs the
DVOP and LVER programs, and by doing so, introduced an array of reforms to
the way employment, training, and placement services are provided to
veterans under the DVOP and LVER programs. (See table 1.) The act also
required increased veterans' access to electronic services as well as to
different types of Labor employment and training programs by requiring
them to give veterans priority in receiving their services. In addition,
it required federal contractors to advertise job openings at the
appropriate employment service delivery system and report on their veteran
hiring practices.

Table 1: Comparison of Selected Provisions under Title 38 and JVA

Title 38 Before JVA Amendments   JVA                                       
Staff roles and responsibilities 
      o  Prescribes 11 specific        o  Clearly distinguishes DVOP and LVER 
      duties for DVOP staff and 13     staff roles and gives states           
      for LVER staff.                  flexibility in deciding their duties.  
      o  Only LVER staff may be        o  Allows both types of staff to be    
      assigned on a part-time          assigned on a part-time basis.         
      basis.                        
Performance accountability       
      o  Performance measures          o  Comprehensive performance           
      emphasize processes over         accountability system consistent with  
      outcomes.                        WIA performance measures.              
                                       o  National performance standard for   
      o  National standard not         the rate at which veterans enter       
      required.                        employment, a rate that all states are 
                                       expected to meet.                      
      o  Each local employment         o  Annual performance reviews of       
      office evaluated annually.       veterans' services without specifying  
                                       how many local offices will be         
                                       evaluated.                             
Incentive awards                 
      o  No incentive award            o  Incentive award program to          
      program.                         encourage the improvement and          
                                       modernization of veterans' services    
                                       and recognize exemplary staff.         

Source: GAO analysis of Title 38 and JVA legislation.

Within Labor, VETS has primary responsibility for helping the nation's
veterans find employment. Among the programs that VETS administers are the
DVOP and LVER programs, which were funded at about $162 million in fiscal
year 2005. VETS administers the agency's activities through
representatives in each of Labor's six regional offices and within each
state. The state directors are the link between VETS and each state's
employment service system that is overseen by the ETA. The DVOP and LVER
staff, whose positions are funded by VETS, are part of the state's public
employment service system.

Employment services fall under the purview of ETA, which administers the
Wagner-Peyser-funded Employment Services program within each state,
providing a national system of public employment services to any
individual seeking employment who is authorized to work in the United
States. Like VETS, ETA carries out its employment service program through
staff in Labor's six regions and workforce agencies in each state. In
fiscal year 2005, ETA requested about $700 million for the Wagner-Peyser
program.

The DVOP and LVER programs, along with the Employment Services program,
are all mandatory partners in the one-stop center system created in 1998
by WIA and overseen by Labor, in which services provided by numerous
employment and training programs are made available through a single
network.

    Labor and States Acted to Implement Program Reforms, but Accountability
                               Challenges Remain

Labor and states have taken action to implement most JVA provisions to
reform veterans' services since the law was enacted in November 2002, but
challenges remain particularly in implementing reforms to improve
accountability for the DVOP and LVER programs. Labor issued guidance
clarifying the new roles and responsibilities for veterans' staff and
allocated funding to states for an incentive program. Labor has also
established performance measures aligned with state workforce systems
under WIA as required by JVA. However, Labor reports that states will not
be held accountable to a common national standard for veterans' employment
until 2007. (See table 2.) States also report good progress in
implementing provisions, but challenges remain in some local areas in
terms of integrating veterans' staff with other employment services staff
in local workforce centers. Many states also have not implemented an
incentive program as provided in JVA for recognizing quality services to
veterans.

Table 2: Summary of Labor's Completed and Planned Actions to Implement
Selected JVA Provisions, as of December 2005

Provision              Labor's completed actions   Labor's planned actions 
Prior to JVA                                       
Veterans' staff roles     o  VETS issued first of     o  Updates will      
and responsibilities      several guidance letters    occur as necessary.  
                             in September 2002.       
                             National Veterans'       
                             Training Institute       
                             subsequently began       
                             conducting training on   
                             JVA provisions for       
                             veterans' staff in 2003. 
JVA enacted November                               
7, 2002                                            
First full program                                 
year following JVAa                                
Performance               o  VETS issued a            o  Labor anticipates 
accountability            guidance letter             that it will be 2007 
                             establishing new            before it can        
                             performance measures in     establish a national 
                             June 2003, followed by      standard that states 
                             guidance in May 2004 on     must meet for        
                             negotiating performance     veterans entering    
                             measures with states.       employment.          
First full fiscal year                             
following JVAb                                     
Incentive awards          o  VETS allocated           o  None.             
                             incentive award funds to 
                             states beginning in      
                             fiscal year 2004.        

Source: GAO analysis of JVA provisions and Labor information.

aProgram year 2003 was the first full program year under JVA and ran from
July 1, 2003, to June 30, 2004.

bFiscal year 2004 was the first full fiscal year under JVA and ran from
October 1, 2003, to September 30, 2004.

Staff Roles and Responsibilities

VETS took several steps to prepare veterans' staff for their new roles and
responsibilities under the law, and while the majority of state workforce
administrators reported that these staff had transitioned to a greater
focus on intensive services for veterans and employer outreach as required
by JVA, challenges remained in the areas of training and integrating staff
in some one-stop offices. VETS began issuing guidance to transition staff
to their new roles in 2002, and a training program soon followed in 2003.
Both Labor's formal written guidance and technical assistance was
well-received, with almost three-quarters of the 50 state workforce
officials reporting on our survey that the quality was good or excellent
in facilitating implementation of new staff duties.

VETS officials cited challenges, however, in meeting all training needs
for veterans' staff informing them of their new roles and responsibilities
under the act. While Labor's training institute continues to conduct and
fund training, it estimated that the current funding would cover training
for only about 16 percent of all veterans' staff each year, while annual
staff turnover was averaging about 18 percent. In terms of staff
integration, Labor officials said that integrating staff into the one-stop
offices has been a persistent challenge and the DVOP and LVER staff we
interviewed cited a wide variation of integration in local areas. Reasons
these staff cited for poor integration included a lack of support by the
local office manager, the lack of education and training for other
one-stop staff members on serving veterans, and only fair to poor quality
of Labor's guidance and technical assistance to states in how to integrate
veterans' staff into the local one-stop offices.

Incentive Awards Program

VETS issued guidance in time to establish an incentive program in the
first fiscal year after JVA, and 32 of the 50 state workforce
administrators we surveyed reported implementing the program. State
workforce officials in 17 states that did not implement the program cited
various reasons. California, for example, cited that state law prohibited
monetary or other gifts to employees for performing their duties. Idaho
cited potential morale problems among one-stop staff that have limited
opportunities to serve veterans. Four other states cited that the awards
were incompatible with the states' collective bargaining agreements. VETS
officials said that some states had been more successful than others in
designing their awards system and state opinions were mixed on the extent
that the incentive programs resulted in improved services. Administrators
in 16 states with award programs in place reported that their program had
a positive effect on improving or modernizing veterans' services. On the
other hand, administrators in 15 other states either said that their
incentive program had no effect (7 states) or that it was too early to say
(8 states).

Performance Accountability

Labor has taken action to establish a new accountability system as
required by JVA, but reports that more time is needed under the new system
before it can hold all states accountable to the same standard for
veterans' employment. As required by the act, Labor established some new
performance measures for the DVOP and LVER grant programs in 2003
consistent with state performance measures under WIA. VETS officials told
us they made additional modifications to the performance accountability
system when they adopted the Office of Management and Budget's new common
performance measures in July 2005. As these new systems were put in place,
VETS officials said they also changed the method they use to calculate the
entered employment measure and collect source data. However, VETS
anticipates it will need at least 3 years under these measures-until
2007-to collect comparable trend data needed to establish the national
performance standard holding all states accountable to the same minimum
goal for the rate veterans enter employment.

State Officials Reported that JVA Reforms Improved Veterans' Services and
                              Employment Outcomes

While data are not available to link the JVA reforms to changes in
veterans' services and employment outcomes, most state workforce
administrators we surveyed believed that the reforms have improved the
quality of services to veterans, and have improved their employment
outcomes. Overall, 33 of the 50 state workforce administrators reported
that veterans' employment services have improved in their respective
states since the law's enactment. Among six different services we asked
about, administrators most often reported that DVOP staff were spending
more time on case management since JVA, although somewhat fewer states
reported that services to disabled veterans had similarly improved. (See
fig. 1.)

Figure 1: Improvements in Services to Veterans since JVA Was Enacted

Workforce administrators in 33 states also reported improvement in
veterans' employment results. These respondents attributed the improvement
both to the law's reforms and to other factors. The reform cited most
often as helping veterans obtain employment was the increased availability
of case management or other intensive services through the DVOP program.
Other than the reforms themselves, administrators said veterans'
employment was influenced by employer willingness or desire to hire
veterans and by the strength of the local job market. (See fig. 2.)

Figure 2: Factors That Assisted Veterans in Obtaining Employment

In terms of barriers to employment, state administrators reported that
federal contractor failure to list job openings at the local one-stop
centers was a factor under most likely to delay or prevent some
employment. Other factors also presented obstacles to employment, the most
frequent one being a poor local job market. This factor was cited nearly
twice more often as other factors, such as non-transferability of skills
or employer reluctance to hire veterans with National Guard or Reserve
commitments. (See fig. 3.)

Figure 3: Factors That Delayed or Prevented Veterans from Obtaining
Employment

Program Accountability Weakened by Absence of Local Data and Lack of Coordinated
                                   Oversight

Labor oversight and accountability for the DVOP and LVER programs has been
affected by the lack of data available from local workforce offices in
some states, as well as the lack of coordination among Labor agencies in
monitoring and sharing information gathered on program performance. While
state VETS directors responding to our survey most often reported that
their monitoring role under JVA has had a positive effect on local
accountability, 19 directors reported their monitoring role either had no
effect or a negative effect. Our survey showed two main reasons for the
lack of a stronger effect.

Lack of Local Level Data. In our survey, state VETS directors reported
that performance data from local offices are not available in many states,
limiting federal oversight and weakening local level accountability. State
VETS directors reported in our survey that among four different tools used
to monitor local office performance, the most beneficial were analysis and
use of data captured in states' performance reports, along with on-site
reviews of local offices. Under JVA, states took on greater responsibility
for assessing their own performance, and VETS modified its monitoring
practices in response by extending the time between site visits to local
offices from 1 year to 5 years. VETS directors in 21 states, however,
noted that data were not available to monitor performance of local
offices, and in these states, federal oversight may be limited to the
on-site monitoring visits by VETS directors required once every 5 years.

Lack of Coordinated Oversight. While Labor agencies are jointly
responsible for monitoring employment and training services, little or no
effort has been made to coordinate oversight or use the monitoring results
to target assistance to states and localities that are most in need. For
example, while VETS is responsible for monitoring performance of the DVOP
and LVER programs, ETA oversees other workforce programs that serve
veterans as well as nonveterans, such as WIA and Wagner-Peyser Employment
Services. However, the two agencies do not generally coordinate their
monitoring activities or share the results. Only five state VETS directors
reported that they met with ETA officials to share monitoring results and
take joint action to address problems.

Labor also lacks a strategy for using the monitoring information it
gathers to improve performance across states and local areas. While Labor
has authority under JVA to provide technical assistance to states that are
deficient in performance or need help, VETS has yet to begin addressing
the significant variation in performance levels among states, as reflected
by their widely divergent performance goals. For example, in program years
2004 and 2005, states' negotiated goals for the rate at which veterans
entered employment ranged from 38 to 65 percent, while Labor's national
employment goal for veterans was 58 percent.3 Although more than half of
the state goals fell short of Labor's national target, VETS has not been
proactive in determining why certain states are falling behind and in
targeting them for assistance.

3Labor's national goal applies to all programs that serve veterans and is
distinct from the JVA requirement to set a national minimum standard for
the DVOP and LVER programs.

                                Recommendations

Our report recommended that the Secretary of Labor provide clear guidance
to integrate veterans' staff into the one-stops and foster state use of
incentives. We also recommended that Labor's program offices coordinate
their oversight of JVA provisions, and that Labor use monitoring results
to develop program improvements. Labor agreed with our recommendations.

Mr. Chairman, this completes my prepared statement. I would be happy to
respond to any questions you or other Members of the Committee may have at
this time.

                          Contact and Acknowledgments

For further information regarding this testimony, please contact me at
(202) 512-7215. Lacinda Ayers, Meeta Engle, and Stan Stenersen were key
contributors to this testimony.

Related GAO Products

Veterans' Employment and Training Service: Labor Actions Needed to Improve
Accountability and Help States Implement Reforms to Veterans' Employment
Services. GAO-06-176 . Washington, D.C.: December 30, 2005.

Unemployment Insurance: Better Data Needed to Assess Reemployment Services
to Claimants. GAO-05-413 . Washington, D.C.: June 24, 2005.

Veterans' Employment and Training Service: Preliminary Observations on
Changes to Veterans' Employment Programs. GAO-05-662T . Washington, D.C.:
May 12, 2005.

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.

Veterans' Employment and Training Service: Flexibility and Accountability
Needed to Improve Service to Veterans. GAO-01-928 . Washington, D.C.:
September 12, 2001.

Veterans' Employment and Training Service: Proposed Performance
Measurement System Improved, but Further Changes Needed. GAO-01-580 .
Washington, D.C.: May 15, 2001.

Veterans' Employment and Training Service: Strategic and Performance Plans
Lack Vision and Clarity. GAO/T-HEHS-99-177 . Washington, D.C.: July 29,
1999.

Veterans' Employment and Training Service: Assessment of the Fiscal Year
1999 Performance Plan. GAO/HEHS-98-240R . Washington, D.C.: September 30,
1998.

Veterans' Employment and Training: Services Provided by Labor Department
Programs. GAO/HEHS-98-7 . Washington, D.C.: October 17, 1997.

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