    Senior Community Service Employment Program: Labor Has Made
    Progress Implementing Older Americans Act Amendments of 2000, but
    Challenges Remain (06-APR-06, GAO-06-549T).

    The aging of the baby boom generation and increased life
    expectancy pose serious challenges for our nation. Older adults
    often must re-enter the workforce in order to remain
    self-sufficient. The Senior Community Service Employment Program
    (SCSEP) is the only federal program that is specifically designed
    to assist low-income older adults by providing part-time
    community service jobs and training to prepare for employment.
    Since passage of the 2000 Older Americans Act Amendments (OAA),
    SCSEP has also increasingly focused on promoting economic
    self-sufficiency through placement in unsubsidized employment. In
    2005, Congress appropriated about $439 million to serve about
    100,000 older workers. Administered by the Department of Labor
    (Labor), SCSEP is implemented through 69 grantees, including 13
    national organizations and 56 state and territorial agencies. The
    Chairman of the Senate Special Committee on Aging asked GAO to
    (1) determine what effect the OAA Amendments have had on the
    distribution of SCSEP funds to national and state grantees, (2)
    describe the progress Labor has made in implementing the enhanced
    performance accountability system, and (3) identify the
    challenges faced by national and state grantees in managing the
    SCSEP program.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-06-549T
        ACCNO:   A51037
      TITLE:     Senior Community Service Employment Program: Labor Has
    Made Progress Implementing Older Americans Act Amendments of
    2000, but Challenges Remain
         DATE:   04/06/2006
      SUBJECT:   Baby boomers
    	     Elderly persons
    	     Eligibility criteria
    	     Employment assistance programs
    	     Federal/state relations
    	     Older workers
    	     Performance appraisal
    	     Performance management
    	     Performance measures
    	     Program management
    	     State-administered programs
    	     Grant administration
    	     ETA Senior Community Service Employment
    	     Program

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    GAO-06-549T

         * Background
         * OAA Amendments Have Had Minimal Impact on Funding Distributi
              * OAA Amendments Have Had Little Effect on the Distribution of
              * 2002 Competition Reshuffled Funds and Positions among Nation
              * Equal Share of National and State Positions Located in Metro
         * Labor Has Yet to Fully Implement an Enhanced Performance Acc
              * New Performance Measures Were Recently Implemented
              * New Data Collection System Is in Interim Stage
              * Labor Has Initiated an Assessment of SCSEP
         * SCSEP Eligibility and Coordination with WIA Are among the Ma
              * Labor Changed Eligibility Criteria to More Closely Target Pr
              * Other Challenges That Grantees Face
         * Concluding Observations
         * GAO Contact and Acknowledgments
         * GAO's Mission
         * Obtaining Copies of GAO Reports and Testimony
              * Order by Mail or Phone
         * To Report Fraud, Waste, and Abuse in Federal Programs
         * Congressional Relations
         * Public Affairs

    Testimony

    Before the Special Committee on Aging, U.S. Senate

    United States Government Accountability Office

    GAO

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

    Thursday, April 6, 2006

    SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM

    Labor Has Made Progress Implementing Older Americans Act Amendments of
    2000, but Challenges Remain

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

    GAO-06-549T

    Mr. Chairman and Members of the Committee:

    I am pleased to be here today to discuss the Older Americans Act (OAA)
    Amendments of 2000 as they relate to the Senior Community Service
    Employment Program (SCSEP). GAO has conducted several studies related to
    older worker issues,1 and my testimony today is based on work that you
    requested concerning how the OAA Amendments have affected SCSEP.

    The U.S. economy is experiencing a dramatic demographic change with the
    aging of the baby boom generation (people born between 1946 and 1964), the
    oldest of whom are turning age 60 this year. Older Americans are expected
    to represent a growing share of the population and have a longer life
    expectancy than previous generations. Many older adults may choose to
    remain in the workforce or need to continue working for financial reasons.
    Furthermore, the number of older adults living in poverty is expected to
    increase significantly. By 2008, the U.S. Census Bureau estimates that 6.7
    million persons aged 55 and older will be below the poverty level, a 22
    percent increase over the number living in poverty in 2000. This number is
    expected to jump to 9 million by 2015.

    SCSEP is the only federal employment and training program targeted to
    low-income older adults. Originally authorized in 1965 by Title V of OAA,
    SCSEP is administered by the Department of Labor (Labor) to promote
    part-time community service activities for unemployed, low-income
    individuals 55 years and older who have poor employment prospects. Under
    the OAA Amendments, the program has evolved from being primarily focused
    on community service to a program that increasingly emphasizes economic
    self-sufficiency through unsubsidized employment. The amendments also made
    other changes to SCSEP including revising the funding distribution formula
    and establishing a performance accountability system. Furthermore, in
    anticipation of the upcoming reauthorization of Title V of OAA, the
    administration has proposed additional changes to SCSEP. In fiscal year
    2005, Congress appropriated approximately $439 million for SCSEP that
    Labor distributed to 69 grantees: 13 national grantees (consisting of 12
    national nonprofit organizations and 1 federal agency) and 56 state and
    territorial agencies.2 These funds support about 61,000 SCSEP positions,
    through which approximately 100,000 participants are served each year. The
    grantees typically place older workers in part-time community service
    positions, such as nurse's aides, teacher aides, librarians, clerical
    workers, and day care assistants, so that these older workers can gain
    on-the-job experience and prepare for unsubsidized employment.

    1For further information on older worker issues please see the following
    reports and testimonies: GAO, Older Workers: Labor Can Help Employers and
    Employees Plan Better for the Future, GAO-06-80 (Washington, D.C.: Dec. 5,
    2005); Older Workers: Policies of Other Nations to Increase Labor Force
    Participation, GAO-03-307 (Washington, D.C.: Feb.13, 2003); Older Workers:
    Employment Assistance Focuses on Subsidized Jobs and Job Search, but
    Revised Performance Measures Could Improve Access to Other Services,
    GAO-03-350 (Washington, D.C.: Jan. 24, 2003); and Older Workers:
    Demographic Trends Pose Challenges for Employers and Workers, GAO-02-85
    (Washington, D.C.: Nov.16, 2001).

    My testimony today will address (1) changes in the distribution of SCSEP
    funds to national and state grantees as a result of the OAA Amendments,
    (2) the progress that Labor has made in implementing an enhanced
    performance accountability system, and (3) the challenges that national
    and state grantees face in managing SCSEP.

    In summary, our work shows that the OAA Amendments have had little effect
    on the distribution of funds between national and state grantees, with the
    national grantees continuing to receive approximately 78 percent of the
    funding and state grantees about 22 percent. Since the amendments took
    effect in 2000, SCSEP appropriations have experienced only minor
    fluctuations, and correspondingly, the total number of positions
    authorized for participants has remained generally constant. However, the
    distribution of funding and positions among national grantees has changed
    substantially as a result of an open competition that Labor held in 2002.
    Further, although the amendments were passed in 2000, Labor has yet to
    fully establish a performance accountability system. For example, program
    year 2005-which ends on June 30, 2006-is the first year for which grantees
    will be held accountable for their performance, and the final
    Internet-based version of Labor's data collection system is not yet
    online. Labor modified several eligibility criteria to target SCSEP's
    limited funds to individuals it believes are most in need of program
    services. However, most national and state grantees in our survey
    expressed concern that these changes had made it more difficult for them
    to meet their enrollment goals. Finally, we found that despite provisions
    in the OAA Amendments to strengthen connections between SCSEP and the
    Workforce Investment Act (WIA), problems coordinating with WIA providers
    and obtaining intensive and training services for older workers at
    one-stop centers persist.

    2Labor reserved $2 million for private employment projects.

    We based our work, in part, on a survey of the 13 national organizations
    and 52 state grantees (including the District of Columbia and Puerto
    Rico). We received responses from all national and state grantees. We also
    interviewed Labor officials and representatives from four national
    organizations that received nearly two-thirds of the SCSEP funds allocated
    to national organizations in program year 2005:3 AARP, Experience Works,
    Mature Services, and Senior Service America. In addition, we visited five
    states-California, Florida, Idaho, Ohio, and Oregon-and interviewed
    officials responsible for administering SCSEP. We used several criteria in
    selecting site visit locations, including geographic dispersion within the
    United States, relative size of the state population, proportion of the
    state population that is both elderly and below the poverty level,
    proportion of the state population that is over the age of 55, and the
    amount of SCSEP funding allocated to each state during program year 2004
    (July 1, 2004, to June 30, 2005). We performed our work between July 2005
    and March 2006 in accordance with generally accepted government auditing
    standards.

                                       Background

    SCSEP, as authorized under the OAA Amendments, promotes part-time
    opportunities in community service for unemployed low-income persons who
    are at least 55 years old and have poor employment prospects. The program
    is also designed to foster economic self-sufficiency by assisting older
    workers in transitioning to unsubsidized employment. Administered by Labor
    for over 30 years, the program operates in every state, the District of
    Columbia, Puerto Rico, Virgin Islands, American Samoa, Guam, and the
    Northern Mariana Islands. The program is administered through grants
    awarded to national organizations as well as state and territorial
    agencies. (See app. I for a listing of national grantees and funds and
    positions awarded in program year 2005.) In program year 2005,
    approximately $439 million was appropriated to support about 61,000 SCSEP
    positions, through which approximately 100,000 participants are served.4
    (See app. II for a listing of funds and positions awarded by state in
    program year 2005).

    3A 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 2005 began on July 1, 2005, and ends on June 30,
    2006.

    SCSEP serves unemployed persons who are 55 years or older whose family
    incomes are no more than 125 percent of the federal poverty level.
    Participants are placed in part-time community service assignments in a
    local nonprofit organization or public-sector agency to gain on-the-job
    experience and prepare for unsubsidized employment. Program participants
    receive training and work experience in a wide variety of occupations,
    including nurse's aides, teacher aides, librarians, clerical workers, and
    day care assistants. Program participants are paid the highest federal,
    state, or local applicable minimum wage, or the prevailing rate of pay for
    persons employed in similar occupations by the same employer. The OAA
    Amendments require that at least 75 percent of SCSEP funds be used to
    subsidize participants' wages and fringe benefits and no more than 13.5
    percent of the funds may be used for administrative expenses. The
    remaining funds may be used for other program costs such as assessments,
    training, job placement assistance, and supportive services.5

    The OAA Amendments were designed to make a number of changes to SCSEP. The
    amendments contained provisions to

               o  establish unsubsidized employment as a program goal, while
               maintaining the community service aspect of the program;
               o  establish a performance accountability system that held
               grantees accountable for meeting specific performance measures,
               including placement and retention of participants in unsubsidized
               employment, community services provided, customer satisfaction,
               and number of persons served--particularly those with the greatest
               economic and social need or those with poor employment history or
               prospects, and those over age 60;
               o  improve coordination between SCSEP and WIA; and
               o  strengthen administrative procedures by defining administrative
               and program costs and applying uniform cost principles.

    4This figure does not include $2 million dollars for reserved for private
    employment projects.

    5Supportive services assist participants to successfully participate in
    SCSEP. Such services include payments for transportation; health care and
    medical services; incidentals such as work shoes, uniforms, and tools;
    child and adult care; and temporary shelter.

    In addition, the amendments revised the distribution formula by specifying
    that the first $35 million in funding above the amount to maintain current
    level of program year 2000 activities be allocated 75 percent to state
    grantees and 25 percent to national grantees. Any additional funds above
    $35 million will be allocated evenly between state and national grantees.

    OAA Amendments Have Had Minimal Impact on Funding Distribution between National
                                   and State Grantees

    The OAA Amendments have had little effect on the distribution of funds
    between national and state grantees, with the national grantees continuing
    to receive approximately 78 percent of the funding and state grantees
    about 22 percent. Since the amendments took effect in 2000, the SCSEP
    appropriation has experienced only minor fluctuations, and
    correspondingly, the total number of positions has remained largely
    constant. However, the distribution of funding and positions among
    national grantees has changed substantially. An open competition for
    national SCSEP positions held in 2002 increased the total number of
    national grantees from 10 to 13 (eliminating 1 incumbent grantee and
    introducing 4 new grantees) and reshuffled funding and positions among
    existing grantees. In program year 2005, national grantees operated in all
    states (including the District of Columbia and Puerto Rico) except Alaska,
    Delaware, and Hawaii. Approximately two-thirds of both national and state
    grantee positions are located in metropolitan areas. However, the
    percentage of positions in metropolitan areas varied widely among national
    grantees. For example, three national grantees administered more than 90
    percent of their SCSEP positions in metropolitan counties, while two have
    about 40 percent of their positions in metropolitan counties.

    OAA Amendments Have Had Little Effect on the Distribution of SCSEP Funds

    The revision of the funding formula outlined in the OAA Amendments has had
    little impact on the distribution of funds between national and state
    grantees. The formula takes effect only when SCSEP funding for national
    and state grantees rises above program year 2000 levels of approximately
    $423 million.6 Because the SCSEP appropriation has remained relatively
    constant over the past 5 years, the distribution of funds between national
    and state grantees has also experienced little change. In each program
    year since 2000, approximately 78 percent of the SCSEP funding for
    grantees was allocated to national grantees and 22 percent was allocated
    to state grantees (see fig. 1).

    6The formula for distributing SCSEP funding to national and state grantees
    applies to the balance after Labor reserves funds for private employment
    projects, the territories, and national grantees serving older Indians and
    Native Americans and Pacific Island and Asian Americans.

    Figure 1: Distribution of SCSEP Funding for Program Years 2000 to 2005

    Note: The allotments are less than the annual appropriations because the
    formula for distributing SCSEP funding to national and state grantees
    excludes funds reserved for private employment projects, territorial
    grantees, and national grantees serving older Indians and Pacific Island
    and Asian Americans. For example, of the $439 million appropriated in
    program year 2005, Labor reserved $2 million for private employment
    projects, about $3.3 million for territorial grantees, and about$12
    million for the two national grantees that serve minority communities.
    Thus, approximately $421 million was allotted by formula to national and
    state grantees.

    For program year 2005, SCSEP appropriations funded 61,047 positions-160
    fewer than were funded in program year 2000.  Slight funding increases
    from program years 2002 to 2004 provided for as much as $4.6 million in
    additional annual funding for national and state grantees. Labor allotted
    approximately 75 percent of this amount to state grantees and 25 percent
    to national grantees in accordance with the revised distribution formula.
    However, these funding increases did not markedly alter the overall
    distribution between national and state grantees.

    2002 Competition Reshuffled Funds and Positions among National Grantees

    Labor's 2002 open competition for the national grants portion of SCSEP
    funding increased the number of national grantees administering SCSEP and
    substantially reshuffled positions and funding among existing grantees.
    Labor decided to conduct the competition in order to ensure that the most
    qualified organizations were awarded grants, to open the grantee community
    to new organizations, and to provide better services to SCSEP
    participants. The competition-the first of its kind in SCSEP's
    history-yielded 68 applications. A three-member Labor review panel
    evaluated each application and scored it according to the applicant's plan
    for program design and services, coordination and oversight, and
    management structure and fiscal integrity. Based on these scores, Labor
    ranked each applicant, deemed that 13 applicants scored in a competitive
    range making them eligible to receive grant awards, and allotted positions
    by county to grantees on a winner-takes-all basis. Specifically, the
    highest ranked applicant received all the positions it requested, and each
    subsequent applicant received all positions not previously claimed by a
    higher-ranked applicant. All 13 competitive applicants were eventually
    awarded positions. The competition produced 4 new national grantees,
    increasing the total number from 10 to 13. One incumbent grantee, the
    National Urban League, was not awarded a grant to continue administering
    SCSEP. The competition also resulted in a significant reshuffling of funds
    and positions among incumbent grantees. Of the nine incumbent national
    grantees that were awarded continuing grants, two gained positions, and
    seven lost positions (see table 1).

    Table 1: National Grantee Positions Before and After 2002 Competition

    National              Program year 2002          Program year 2003
    Grantee       positions(precompetition) positions(postcompetition)  Change
                        Incumbent grantees that gained positions
    AARP                              7,097                     10,487 + 3,390
    Foundation
    National                          1,831                      2,140   + 309
    Caucus and
    Center on
    Black Aged,
    Inc.
                         Incumbent grantees that lost positions
    Experience                       14,915                     12,051 - 2,864
    Works, Inc.
    National                          5,334                      3,069 - 2,265
    Council on
    the Aging,
    Inc.
    National                          2,163             (not selected) - 2,163
    Urban League
    Senior                            9,015                      7,017 - 1,998
    Service
    America, Inc.
    USDA Forest                       3,998                      2,863 - 1,135
    Service
    Asociacion                        1,864                      1,090   - 774
    Nacional Pro
    Personas
    Mayores
    National                            867                        862     - 5
    Indian
    Council on
    Aging
    National                            857                        856     - 1
    Asian Pacific
    Center on
    Aging
                                      New grantees
    SER -Jobs for             (new grantee)                      3,681 + 3,681
    Progress
    National,
    Inc.
    Easter Seals,             (new grantee)                      2,267 + 2,267
    Inc.
    Mature                    (new grantee)                        774   + 774
    Services,
    Inc.
    National Able             (new grantee)                        764   + 764
    Network
    TOTAL                            47,941                     47,921    - 20

    Source: GAO analysis of data provided by Labor.

    Labor determines the amount of funding to be allocated to grantees based
    on a "cost per authorized position" outlined in the OAA Amendments. As a
    result, following the 2002 competition, each of the 13 successful grantees
    received funding approximately equal to the number of positions it was
    awarded times $7,153-the pre-determined cost per authorized position.
    Among incumbent grantees, two gained additional funding and seven lost
    funding. AARP Foundation gained more than $24 million in additional funds,
    while Experience Works, Inc. lost $20.5 million in funding. Altogether,
    the four new grantees received approximately $54 million in SCSEP funding
    (see table 2).

    Table 2: National Grantee Funding Before and After 2002 Competition

    National           Program year 2002        Program year 2003
    grantee      funding(precompetition) funding(postcompetition)       Change
                         Incumbent grantees that gained funding
    AARP                     $50,764,841              $75,018,059  $24,253,218
    Foundation
    National                 $13,097,143              $15,310,083   $2,212,940
    Caucus and
    Center on
    Black Aged,
    Inc.
                          Incumbent grantees that lost funding
    Experience              $106,686,995               $86,202150 -$20,484,845
    Works, Inc.
    National                 $38,154,102              $21,952,313 -$16,201,789
    Council on
    the Aging,
    Inc.
    National                 $15,471,939           (not selected) -$15,471,939
    Urban League
    Senior                   $64,484,295              $50,190,834 -$14,293,461
    Service
    America,
    Inc.
    USDA Forest              $28,597,694              $20,483,709  -$8,113,985
    Service
    Asociacion               $13,333,192               $7,793,500  -$5,539,692
    Nacional Pro
    Personas
    Mayores
    National                  $6,201,651               $6,165,886     -$35,765
    Indian
    Council on
    Aging
    National                  $6,130,121               $6,120,400      -$9,721
    Asian
    Pacific
    Center on
    Aging
                                      New grantees
    SER - Jobs             (new grantee)              $26,319,150  $26,319,150
    for Progress
    National,
    Inc.
    Easter                 (new grantee)              $16,219,388  $16,219,388
    Seals, Inc.
    Mature                 (new grantee)               $5,536,422   $5,536,422
    Services,
    Inc.
    National               (new grantee)               $5,462,600   $5,462,600
    Able Network
    TOTAL                   $342,921,973             $342,774,494    -$147,479

    Source: GAO analysis of data provided by Labor.

    On March 2, 2006, Labor announced an open competition for program year
    2006 national grantee funding. This announcement is consistent with
    Labor's current proposal for the reauthorization of SCSEP, which
    recommends eliminating performance sanctions in favor of holding a
    competition for grants every 3 years. Using similar criteria to those used
    in the 2002 competition, Labor plans to award no more than 20 grants to
    national grantees, including at least 1 grant to an Indian and Native
    American organization and at least 1 grant to an Asian Pacific Islander
    organization. Labor is specifically seeking organizations that are able to
    foster partnerships with one-stop career centers and community colleges
    and that promote private employment through high-growth job opportunities.
    In order to increase program effectiveness and achieve economies of scale,
    Labor has consolidated the geographic areas over which grantees will
    administer SCSEP for the upcoming program year. When requesting positions,
    potential grantees must apply for at least 10 percent of a state's
    allocation, or $1.6 million, whichever is greater. Furthermore, applicants
    that apply for more than one county in a state must request contiguous
    counties, and except in the cases of very large counties, they must apply
    for all the positions in a county.

    Equal Share of National and State Positions Located in Metropolitan Areas

    For program year 2005, slightly more than two-thirds of both national and
    state grantee positions are located in metropolitan areas. National
    grantees administer SCSEP in every state except Alaska, Delaware, and
    Hawaii, while state grantees operate SCSEP in all 50 states, the District
    of Columbia, and Puerto Rico.7 Individual national grantees operate in as
    many as 39 states (Experience Works, Inc.) and as few as 2 states (Mature
    Services, Inc.). The share of positions in metropolitan areas varies
    widely among national grantees. Three grantees administer more than 90
    percent of their SCSEP positions in metropolitan counties, while two
    grantees have fewer than half of their positions in metropolitan counties
    (see table 3).

    70.75 percent of the total SCSEP appropriation is also used to fund
    positions in American Samoa, Guam, the Northern Marianas, and the U.S.
    Virgin Islands. Each territory operates its own SCSEP program-national
    grantees do not serve these areas.

    Table 3: Summary of SCSEP Positions for Program Year 2005

                                                   Number of Percent of positions
                                   Number of SCSEP    states      in metropolitan
    Grantees                          positions   serveda             counties
    TOTAL                               60,590b        52                   71
    State grantees                       12,982        52                   69
    Nationals grantees                   47,608        49                   72
    AARP Foundation                      10,362        29                   96
    Asociacion Nacional Pro               1,075         6                  100
    Personas Mayores
    Easter Seals, Inc.                    2,248         9                   85
    Experience Works, Inc.               12,029        39                   41
    Mature Services, Inc.                   771         2                   89
    National Able Network                   760         4                   58
    National Asian Pacific                  836         8                  100
    Center on Aging
    National Caucus and Center            2,129        11                   82
    on Black Aged, Inc.
    National Council on the               3,020        12                   80
    Aging, Inc.
    National Indian Council on              842        15                   62
    Aging
    Senior Service America,               7,030        24                   84
    Inc.
    SER - Jobs for Progress               3,658        16                   79
    National, Inc.
    USDA Forest Service                   2,848        38                   39

    Source: GAO analysis of Labor and USDA Economic Research Service data.

    a Includes all 50 states, the District of Columbia, and Puerto Rico.

    b Excludes the 457 positions allotted to the territories.

     Labor Has Yet to Fully Implement an Enhanced Performance Accountability System

    Labor has taken steps to establish an enhanced performance accountability
    system for SCSEP, but has yet to implement some features fully. While
    Labor has introduced the new performance measures that the OAA amendments
    required, program year 2005-which ends on June 30, 2006-is the first year
    for which grantees will be held accountable for their performance. Labor
    has also implemented an early version of a data collection system to
    capture performance information, but the final version is not yet
    available to grantees in its intended online format. In addition, Labor
    has recently undertaken a broad assessment of SCSEP on such issues as
    participant outcomes, program costs, and grantee challenges, but has not
    yet issued a report.

    New Performance Measures Were Recently Implemented

    Labor has implemented new performance measures, as required by the OAA
    Amendments, and will begin sanctioning grantees that demonstrate poor
    performance for the current program year -2005 -which ends on June 30,
    2006. After Labor issued final regulations for SCSEP in April 2004, it
    instituted practice measures for program year 2004, as grantees
    transitioned to the new data collection and reporting requirements. Labor
    used the resulting performance data to help set baseline goals for
    grantees to meet during program year 2005.

    For program year 2005, according to Labor, four SCSEP measures will
    contribute to a grantee's overall performance assessment:

               o  Placement: the number of participants attaining unsubsidized
               employment, either full-time or part-time, for at least 30 days of
               the first 90 days after exiting the program, divided by the number
               of authorized SCSEP positions.
               o  Employment Retention: the rate of retention in unsubsidized
               employment 6 months after placement.
               o  Service Level: the number of a grantee's participants divided
               by the number of the grantee's authorized positions.
               o  Service to Most-in-Need: the percentage of participants who are
               at least 60 years old and who have at least one of several
               additional barriers to employment, such as language barriers, poor
               employment history, or a physical or mental disability.

    Labor officials told us they plan to assess grantees on their aggregate
    performance across these four SCSEP performance measures. A grantee
    satisfies its overall performance goal if it attains an average score
    across the four measures of at least 80 percent of the target goals. Thus,
    a grantee could meet its performance requirements by attaining less than
    80 percent of some goals but more than 80 percent of the others. For
    example, Labor's data show that one state achieved 47 percent of its
    placement goal but performed well enough on the other measures to receive
    an average score well above the 80 percent threshold for satisfactory
    performance. According to Labor, grantees varied in their ability to meet
    goals for individual measures during the transitional period of program
    year 2004. (See app. III for a listing of the program year 2004 results
    compared to the performance goals for each grantee.) However, Labor
    officials said that most grantees managed to meet the 80 percent threshold
    for their overall performance goal. (See appendix IV for results for each
    of the grantees.) They also stated that, based on Labor's assessment of
    data from the first 2 quarters of the current year, most grantees appear
    to be on track for meeting their performance goals for program year 2005.

    Sanctions for poor performance are similar for state and national grantees
    and will begin after the first year of not meeting the 80 percent
    threshold for overall performance. If performance does not improve,
    sanctions will increase in severity after the second and third consecutive
    years. After the first year of poor performance, a grantee must submit a
    corrective action plan within 160 days of the end of the program year. In
    addition, Labor will provide the grantee with technical assistance to help
    correct the problem. A second consecutive year of failing to meet
    performance goals will generate a competition for 25 percent of the
    grantee's funds for the following program year. If a grantee continues to
    perform poorly for a third year, another competition will result for the
    remaining amount of the grantee's funding. Furthermore, in addition to
    meeting their own goals, national grantees must meet the performance goals
    of each state in which they administer the program. If they fail to meet
    the state's goals, Labor will require a corrective action plan after the
    first year of poor performance and may take other appropriate actions,
    including transferring responsibility for the project to other grantees.
    National or state grantees that fall short of one performance target but
    otherwise meet their aggregate goals will not be subject to sanction;
    Labor will instead provide them with technical assistance related to that
    performance issue.

    In addition, Labor requires grantees to report on the customer
    satisfaction of participants, host agencies, and employers by surveying
    each group. While poor performance on this measure will result in
    technical assistance rather than sanctions, Labor officials told us that
    to date customer satisfaction has been very high. Grantees must also
    report the number of community service hours participants contribute, but
    Labor officials told us that they have struggled to create a measurable
    indicator for community service and do not plan to sanction performance in
    this area.

    SCSEP grantees must also collect data to support several common measures
    as part of a governmentwide initiative to provide comparable performance
    information across federal programs with similar goals and operations.8
    For job training and employment programs serving adults, the three common
    measures include entered employment, retention, and average earnings.
    Thus, between the SCSEP measures and the common measures, grantees must
    collect and report on data for nine different performance measures. The
    SCSEP placement and retention measures overlap somewhat with the common
    measures for entered employment and retention, although the SCSEP
    measures, as defined by the OAA Amendments, are computed differently. (See
    table 4.) Specifically, the SCSEP placement measure is calculated relative
    to each grantee's number of authorized positions, while the common measure
    for entered employment is based on the number of participants who exit the
    program. Likewise, the SCSEP retention measure evaluates employment 6
    months after placement, while the common measure for retention assesses a
    participant's employment in both the second and third quarters after exit.

    Table 4: Comparison of SCSEP Placement and Retention Measures with Common
    Measures for Entered Employment and Retention

    SCSEP performance measure           Common measure
    Placement: the number of            Entered employment: the number of
    participants whose placement into   participants employed in the first
    unsubsidized employment became      quarter after exiting the program,
    final during the quarter, divided   divided by the total number of
    by the total number of authorized   participants who exit the program
    community service positions.        during the quarter.
    Retention: the number of            Retention: of those participants who
    participants placed into            are employed in the first quarter
    unsubsidized employment and who are after exiting the program, the number
    still employed 6 months after the   employed in both the second and third
    date of placement, divided by the   quarters after exit, divided by the
    number of participants placed into  number of participants employed in the
    unsubsidized employment.            first quarter after the quarter of
                                           exit.

    Source: GAO analysis data of provided by Labor.

    Grantees are not subject to sanction for performance on the common
    measures, which the Office of Management and Budget will use to evaluate
    the overall effectiveness of SCSEP. However, the administration's
    legislative proposal for reauthorizing SCSEP supports using the common
    measures. Additional measures, such as community services provided, could
    be tracked as secondary outcomes.

    8The Office of Management and Budget (OMB) introduced common performance
    measures as part of efforts to link program performance to the budget.
    Common measures apply to job training and employment programs administered
    by the U.S. Departments of Labor, Education, Health and Human Services,
    Housing and Urban Development, Interior, and Veterans Affairs.

    New Data Collection System Is in Interim Stage

    Labor has designed a data collection system to capture performance
    information, but has not yet implemented the Internet-based version. The
    agency is in the process of moving to an Internet-based system that
    incorporates the new performance data required under the OAA Amendments.
    In order to capture baseline performance data in program year 2004, Labor
    rolled out an early, non-Internet version of its data collection system in
    time to receive data from the first quarter of that program year. Although
    it collects the required performance data, this interim system is limited
    in its usefulness for helping to manage the program. For example, grantees
    are unable to access their quarterly progress reports directly and must
    wait for Labor to process and send the data to them. Likewise, grantees
    receive reports that notify them of errors in their data submissions, but
    the reports do not identify which records are problematic. Moreover, since
    the initial roll-out, Labor has incorporated several modifications to the
    system and required data reporting elements. Currently, grantees either
    use the early version of Labor's new system or continue to use their own
    databases while they wait for the new Internet-based data collection
    system to undergo testing and be rolled out. If procurement and technical
    processes go as planned, Labor hopes to fully implement the Internet-based
    data collection system by mid-May 2006.

    Labor has provided grantees with guidance and technical assistance on
    implementing the new data collection system. In addition to issuing
    written guidance, Labor and its contractors have conducted demonstrations
    and offer ongoing direct assistance, including an Internet-based forum for
    grantee questions on implementing the new system.

    Labor Has Initiated an Assessment of SCSEP

    Labor recently undertook an assessment of SCSEP, which it has yet to
    complete. In 2004, Labor contracted with DAH Consulting, Inc., and Social
    Policy Research to conduct an assessment of SCSEP. According to Labor, in
    addition to assessing the ability of grantees to find useful community
    service assignments and increase placements in unsubsidized employment,
    the assessment was supposed to gather information on participant training,
    the level of coordination with the one-stop system, program costs,
    outcomes, and other challenges faced by grantees. However, this study was
    not intended to be a true impact evaluation, but rather a more general
    review of SCSEP program operations. As of March 2006, Labor officials had
    received a draft of the study but sent it back to DAH Consulting with
    requested changes. However, because Labor had not provided us with
    preliminary results from the review, as of the date of this testimony we
    are unable to describe what the assessment found, and cannot provide an
    evaluation of the methodology used to generate the report.

    SCSEP Eligibility and Coordination with WIA Are among the Major Challenges
                                     Grantees Face

    Changes to SCSEP eligibility criteria and coordination difficulties with
    WIA and the one-stop system pose major challenges to SCSEP grantees in
    managing the program. Although the OAA Amendments did not contain
    provisions changing the eligibility criteria for SCSEP, Labor modified
    some eligibility criteria to target SCSEP's limited funds to individuals
    it believes are most in need of SCSEP's intensive services. For example,
    Labor modified the types of income it uses to determine an individual's
    eligibility for the program to include Social Security Disability
    Insurance (SSDI) and unemployment compensation, so that only those with
    the lowest incomes are targeted. In addition, Labor changed its previous
    policy of allowing low-income older adults who work part-time to enroll in
    SCSEP, and revised the time period for which income is calculated. Most
    national and state grantees told us that these changes decreased the pool
    of eligible individuals, and were concerned that enrollments would decline
    as a result. Furthermore, the majority of the 13 national and 52 state
    grantees surveyed also identified coordinating with WIA providers,
    obtaining intensive and training services at one-stop centers,
    implementing Labor's new data collection system, and meeting new
    performance measures as being major challenges to managing the SCSEP
    program.

    Labor Changed Eligibility Criteria to More Closely Target Program

    Labor estimated that SCSEP's funding is only sufficient to serve less than
    one percent of the eligible population and, as a result, changed the
    eligibility criteria for SCSEP participation to target the program to
    those older adults it believes are most in need of program services. Labor
    issued guidance in April 2004 and again in January 2005 to reflect and
    clarify policy changes to SCSEP eligibility criteria that were previously
    established in guidance issued in December 1995. Major eligibility policy
    changes include what is to be counted as income, employment status at time
    of application, and the time period to be used for the purposes of
    calculating income. (See table 5.)

    Table 5: Changes to Eligibility Criteria

                                                            Training and
                                                            Employment Guidance
    Changes to eligibility     Older Worker Bulletin     Letter 13-04, issued
    criteria                   95-5, issued June 1995    January 2005
    Social security income     25 percent of social      No exclusion, all
                                  security income excluded  social security
                                  from income calculations  income counted in
                                                            income calculations
    Social security disability Excluded from income      Included in income
    insurance (SSDI)           calculations              calculations (other
                                                            disability benefits
                                                            excluded)
    Unemployment compensation  Excluded from income      Included in income
                                  calculations              calculations
    Veterans' payments         Excluded from income      Included in income
                                  calculations              calculations
    Interest/dividends         $3,000 excluded from      Included in income
                                  income calculations       calculations
    Exclusion for enrollee     $500 of includable income No such exclusion
    recertification            was not counted for
                                  enrollee recertification
    Time period for income     Option of using either    No option,
    calculations               previous 12 months or 6   calculations based on
                                  months annualized         6 months annualized
    Employment status          Not mentioned. Labor      Applicants must be
                                  allowed applicants to be  unemployed
                                  either under-employed or
                                  unemployed

    Source: GAO analysis of Labor guidance.

    While, the OAA Amendments do not define what constitutes income, Labor
    decided to use the U.S. Census Bureau's Current Population Survey (CPS) as
    the standard for determining income eligibility for SCSEP. In the preamble
    to its April 2004 regulations, Labor set forth its intent to use the
    income categories collected in the CPS as the SCSEP definition of income
    for determining program eligibility. After receiving feedback from
    grantees, Labor decided to exclude certain forms of income. For example,
    Labor excluded disability benefits-except SSDI- as well as supplementary
    security income, workers' compensation, public assistance, child support,
    and several other sources of income. Most national and state grantees we
    surveyed expressed concern with the revised income criteria. For example,
    one national grantee told us that including SSDI is especially onerous
    because individuals receiving SSDI are among the hardest to serve. A state
    grantee stated that SSDI should not be included in determining program
    eligibility because other disability benefits were not included in
    calculating income eligibility. Another state grantee noted that social
    security is the only source of income for many older adults and including
    it provides a misleading picture of an individual's actual income.

    The administration's proposal for the upcoming reauthorization of Title V
    of OAA contains provisions for standardizing the income threshold. Labor
    believes that reauthorization provides an opportunity for Congress to
    align SCSEP income eligibility criteria with those used by Labor and other
    federal programs that are means-tested. Labor noted that more uniformity
    with respect to the types of income used to determine program eligibility,
    such as Social Security benefits versus earned income, would increase
    public confidence that these programs were being administered in a
    consistent and equitable manner.

    Most national and state grantees surveyed were also concerned with Labor's
    policy change requiring applicants to be unemployed at time of
    application. Labor officials stated that the Office of the Solicitor took
    a strict interpretation of the OAA Amendments and determined that
    applicants must be unemployed at the time of application to be eligible
    for SCSEP. Labor officials noted that this interpretation was consistent
    with the department's philosophy that SCSEP should be targeted to those
    most in need of the program's intensive services. Prior to the OAA
    Amendments, Labor permitted applicants who held part-time jobs and met
    other eligibility criteria to be eligible for SCSEP services. The OAA
    amendments retained the language contained in the statement of purpose
    from the authorizing legislation that the program was to provide services
    to unemployed low income adults 55 years and older. The amendments further
    defined eligible individuals as those individuals who are 55 years and
    older and have income not more than 125 percent of the poverty guidelines,
    but did not refer to employment status. Grantees told us that the
    requirement that applicants be unemployed prevented some low-income older
    workers from receiving SCSEP services. For example, a state grantee noted
    that older workers who may work only 4 hours per week have very low
    incomes but are not eligible for program services because they are not
    unemployed. Another state grantee noted that many older workers who are
    not eligible for social security benefits often work part-time, and thus
    would not be eligible under the employment test, but would otherwise still
    meet the income eligibility criteria.

    Many grantees were also concerned that Labor revised the period on which
    income is calculated. Prior to Labor's regulations issued in 2004,
    grantees had the option of calculating income using either the includable
    income for the 12 months preceding application or annualizing the
    includable income for the 6 months preceding application, that is doubling
    the 6-month income to calculate an annual income. Labor now requires
    grantees to annualize an applicant's income using the 6 months prior to
    application. Labor officials told us that changing the period on which
    income is calculated was intended to simplify the process and to reflect
    the most current income information. However, a national grantee and two
    state grantees noted in their survey responses that annualizing 6 months
    of income could distort income for those who only had earnings during that
    6-month period. For example, a state grantee noted that many older
    individuals in their state work during the planting and harvesting seasons
    but are unemployed for the remainder of the year. They noted that doubling
    the individual's 6-month income made many of these seasonal workers
    ineligible for SCSEP. Conversely, doubling 6-month earnings to calculate
    annual income can have the unintended consequence of including some
    individuals who would not otherwise be eligible for the program if a
    12-month period was applied.

    Other Challenges That Grantees Face

    National and state grantees surveyed also identified other issues that
    presented major challenges to managing the SCSEP program. The majority of
    both national and state grantees identified several issues in the survey
    as being great or very great challenges, in particular coordinating SCSEP
    activities with WIA services, obtaining intensive services and training at
    one-stop centers, implementing Labor's new data collection system, and
    meeting performance measures (see fig. 2).

    Figure 2: Issues Cited by Majority of National and State Grantees as Great
    or Very Great Challenges

    Although the OAA amendments sought to strengthen coordination between
    SCSEP and WIA, national and state grantees surveyed identified the
    coordination of SCSEP activities with WIA services and obtaining intensive
    services and training at one-stops as major challenges. For example,
    several national and state grantees responded that many WIA providers are
    hesitant to provide intensive services or training to SCSEP participants
    because WIA providers are concerned that enrolling older adults would
    negatively affect their performance measures. Older adults who receive
    intensive services or training from WIA providers are included in the
    computation of WIA performance measures. Another state grantee stated that
    while coordination with one-stops for core services is very good, access
    to training is very difficult. We heard a similar theme among states we
    visited. For example, one state grantee we visited said that WIA is so
    performance-driven that few SCSEP participants are able to access
    intensive and training services under WIA.

    The reported lack of coordination between SCSEP and WIA is especially
    relevant in light of the administration's proposal to increase the age of
    SCSEP eligibility from 55 to 65, with limited exceptions for those between
    the ages of 55 and 64. Labor believes that WIA, not SCSEP, should be the
    primary program for older adults age 55 to 64. However, we have previously
    reported that WIA has built in disincentives that discourage the providing
    of in-depth services, such as training, to older adults. 9 We noted that
    the Bureau of Labor Statistics and the Census Bureau data suggest that
    older workers are 50 percent more likely to work part-time and less likely
    to become re-employed after being laid off than younger workers. These
    characteristics may negatively affect outcomes on certain WIA performance
    measures, and, as a result, create a barrier to enrolling older workers
    into WIA intensive services and training.

    While most of the 13 national and 52 state grantees surveyed also reported
    challenges with Labor's new data collection system, they noted that the
    agency provided helpful assistance with system implementation. Several
    national and state grantees stated that implementation of the data system
    was both time and labor-intensive. In particular, one state grantee told
    us that Labor rolled out the data collection system prematurely, resulting
    in a loss of productivity at the grantee and subgrantee level. Despite
    these concerns, most grantees indicated that they received training or
    technical assistance for the system from Labor or its contractors.
    Moreover, while several national and state grantees provided positive
    comments about Labor's assistance, with respect to staff responsiveness,
    others were less than satisfied and indicated the need for more
    assistance.

    All of the national grantees and most of the state grantees that cited
    meeting performance measures as a great or very great challenge in the
    survey indicated that the program eligibility changes had the greatest
    effect on the ability to meet the performance measure dealing with SCSEP
    service level.10 A number of state grantees mentioned that the greater
    difficulty in recruiting SCSEP participants translated into difficulty
    meeting the service level performance measure. Another of the state
    grantees that we visited said that the service level measure would present
    the greatest challenge because the income guidelines were too restrictive.
    According to Labor data, 7 of the 13 national grantees and 21 of the 52
    state grantees did not meet their service level goals for program year
    2004. Labor officials noted that some of the grantees who were concerned
    with low enrollments may not perform sufficient outreach or marketing.

    9GAO, Older Workers: Employment Assistance Focuses on Subsidized Jobs and
    Job Search, but Revised Performance Measures Could Improve Access to Other
    Services, GAO-03-350 (Washington, D.C.: Jan. 24, 2003).

                                Concluding Observations

    The aging of the baby boom generation presents serious challenges for the
    nation's workforce investment system. The expected increase in the number
    of low-income older adults means that, more and more, older Americans will
    have to continue working in order to have sufficient income. Older adults
    often have difficulty re-entering the labor force and may rely on federal
    employment and training programs to help them find employment, with SCSEP
    being the only federal employment and training program targeted
    exclusively to low-income older adults. While Labor has made progress
    implementing the OAA Amendments-particularly in terms of increasing the
    program's focus on unsubsidized employment-challenges remain. More
    specifically, while Labor has taken steps to establish an enhanced
    performance accountability system, as of March 2006 the system has still
    not been fully implemented. The delay in implementing this system means
    that program year 2005 is the first year that grantees will be held
    accountable for poor performance. In this respect, given the upcoming
    reauthorization of the OAA, only limited data will be available to assess
    SCSEP performance. In addition, while Labor's changes to the eligibility
    criteria seem to have resulted in SCSEP funds being more targeted to those
    it believes are most in need of program services, one aspect of how this
    targeting was operationalized may have produced mixed outcomes. In
    particular, the requirement for grantees to double an applicant's income
    from the most recent 6-month period could have the unintended result of
    excluding some individuals with very low incomes from the program while
    including others with much higher incomes, depending on when the work was
    performed. Those who are excluded from participation in SCSEP may turn to
    other employment and training programs such as WIA. However, given the
    problems older adults often experience in obtaining in-depth services such
    as training, it is unclear whether the existing workforce system is able
    to provide the type and level of services this population may need. Thus,
    while the OAA amendments were designed to enhance employment and training
    opportunities for older adults, we believe that Labor has not done enough
    to address unresolved issues concerning coordination between SCSEP and
    WIA, and helping older adults obtain intensive and training services at
    one-stop centers.

    10This measure is defined as the total number of participants served to a
    grantee's authorized number of positions adjusted for the difference in
    wages required paid in a state or area.

    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.

                            GAO Contact and Acknowledgments

    For further information regarding this testimony, please contact me at
    (202) 512-7215. Jeremy Cox, Wayne Sylvia, Rebecca Woiwode, Drew Lindsey,
    and Stuart Kaufman were key contributors to this testimony.

    Appendix I

    Table 6: National Grantee Funds and Positions for Program Year 2005

    National grantee                               Funds ($)   Positions
    TOTAL                                          340,542,384 47,608
    AARP Foundation                                74,119,938  10,362
    Asociacion Nacional Pro Personas Mayores       7,697,076   1,075
    Easter Seals, Inc.                             16,077,169  2,248
    Experience Works, Inc.                         86,033,517  12,029
    Mature Services, Inc.                          5,514,963   771
    National Able Network                          5,435,364   760
    National Asian Pacific Center on Aging         5,978,047   836
    National Caucus and Center on Black Aged, Inc. 15,228,375  2,129
    National Council on the Aging, Inc.            21,602,605  3,020
    National Indian Council on Aging               6,027,252   842
    Senior Service America, Inc.                   50,290,679  7,030
    SER - Jobs for Progress National, Inc.         26,168,160  3,658
    USDA Forest Service                            20,369,239  2,848

    Source: GAO analysis of data provided by Labor.

    Appendix II

    Table 7: Total Funds and Positions by State for Program Year 2005

                          National               State                 Total
      State grantee   Funds ($) Positions  Funds ($) Positions   Funds ($) Positions
      TOTAL         340,542,384    47,608 92,860,928    12,982 433,403,312    60,590
      Alabama         6,320,471       884  1,615,788       226   7,936,259     1,110
      Alaska                  0         0  1,864,917       261   1,864,917       261
      Arizona         4,508,899       630  1,160,235       162   5,669,134       792
      Arkansas        6,213,586       869  1,587,316       222   7,800,902     1,091
      California     29,193,091     4,079  7,481,025     1,045  36,674,116     5,124
      Colorado        3,448,825       482    882,633       123   4,331,458       605
      Connecticut     3,748,103       524    953,812       133   4,701,915       657
      Delaware                0         0  1,864,917       261   1,864,917       261
      District of     1,959,560       274    505,378        71   2,464,938       345
      Columbia
      Florida        20,122,897     2,813  5,146,318       718  25,269,215     3,531
      Georgia         7,560,338     1,057  1,936,098       271   9,496,436     1,328
      Hawaii                  0         0  1,864,917       261   1,864,917       261
      Idaho           1,936,240       271    464,305        65   2,400,545       336
      Illinois       13,248,612     1,852  3,395,289       475  16,643,901     2,327
      Indiana         8,928,466     1,248  2,284,880       319  11,213,346     1,567
      Iowa            4,368,036       611  1,117,527       156   5,485,563       767
      Kansas          3,510,095       491    889,751       124   4,399,846       615
      Kentucky        6,462,984       904  1,658,495       232   8,121,479     1,136
      Louisiana       5,691,272       795  1,473,427       206   7,164,699     1,001
      Maine           2,102,073       294    540,969        76   2,643,042       370
      Maryland        4,688,692       655  1,202,943       168   5,891,635       823
      Massachusetts   7,416,501     1,037  1,900,508       266   9,317,009     1,303
      Michigan       11,355,634     1,587  2,911,264       407  14,266,898     1,994
      Minnesota       8,126,440     1,136  2,071,340       290  10,197,780     1,426
      Mississippi     4,204,146       588  1,081,937       151   5,826,083       739
      Missouri        8,201,648     1,147  2,156,756       302  10,358,404     1,449
      Montana         2,263,238       317    548,087        77   2,811,325       394
      Nebraska        2,606,361       365    669,093        94   3,275,454       459
      Nevada          1,723,459       241    464,305        65   2,187,764       306
      New Hampshire   1,642,685       230    464,305        65   2,106,990       295
      New Jersey      9,641,033     1,348  2,462,830       344  12,103,863     1,692
      New Mexico      1,992,155       279    491,143        69   2,483,298       348
      New York       22,540,759     3,151  5,765,585       805  28,306,344     3,956
      North           8,921,341     1,247  2,284,880       319  11,206,221     1,566
      Carolina
      North Dakota    2,045,068       286    526,732        74   2,571,800       360
      Ohio           14,871,277     2,079  3,808,133       532  18,679,410     2,611
      Oklahoma        5,467,186       765  1,402,248       196   6,869,434       961
      Oregon          5,016,473       701  1,281,241       179   6,297,714       880
      Pennsylvania   18,297,675     2,558  4,669,412       653  22,967,087     3,211
      Puerto Rico     4,688,692       655  1,195,825       167   5,884,517       822
      Rhode Island    1,809,921       253    469,788        66   2,279,709       319
      South           4,645,938       650  1,188,707       166   5,834,645       816
      Carolina
      South Dakota    2,360,955       330    605,030        85   2,965,985       415
      Tennessee       6,968,906       974  1,779,502       249   8,748,408     1,223
      Texas          18,928,589     2,646  4,840,245       677  23,768,834     3,323
      Utah            2,273,090       318    583,676        82   2,856,766       400
      Vermont         1,866,926       261    484,024        68   2,350,950       329
      Virginia        7,392,768     1,033  1,893,389       265   9,286,157     1,298
      Washington      5,047,100       706  1,288,359       180   6,335,459       886
      West Virginia   3,833,611       536    982,285       137   4,815,896       673
      Wisconsin       8,737,884     1,221  2,235,285       312  10,972,938     1,533
      Wyoming         1,642,685       230    464,305        65   2,106,990       295

    Source: GAO analysis of data provided by Labor.

    Appendix III: Summary of SCSEP Grantee Performance Data for Benchmark
    Year, Program Year 2004

    The following baseline performance data for SCSEP grantees are from
    benchmark program year 2004 (July 1, 2004, to June 30, 2005). According to
    the Department of Labor, four SCSEP measures will contribute to a
    grantee's overall performance in program year 2005, the first year for
    which grantees will be held accountable for their performance.

    The following measures are used:

               o  Placement: the number of participants attaining unsubsidized
               employment, either full- or part-time, for at least 30 days of the
               first 90 days after exiting the program, divided by the number of
               authorized SCSEP positions.
               o  Employment Retention: the rate of retention in unsubsidized
               employment 6 months after placement.
               o  Service Level: the number of a grantee's participants divided
               by the number of the grantee's authorized positions.
               o  Service to Most-in-Need: the percentage of participants who are
               at least 60 years old and who have at least one of several
               additional barriers to employment, such as language barriers, poor
               employment history, or a physical or mental disability.

    These figures were provided by the Department of Labor and are included in
    this testimony for contextual purposes only. GAO has not verified the
    accuracy or reliability of these data.

    Table 8: SCSEP National Grantee Performance, Program Year 2004

                                           Retention                  Service to
                         Placement rate      rate     Service level  most-in-need
    Grantee name     Goal Actual Goal Actual  Goal Actual    Goal       Actual
    AARP Foundation        35.0% 47.7% 50.0% 53.2%  150.0% 214.6%  50.0% 54.3%
    Asociacion              22.0  22.5  50.0  42.0   140.0  133.2   70.0  62.7
    Nacional pro
    Personas Mayores
    Easter Seals            27.0  17.0  50.0  69.8   147.0  145.3   80.0  72.4
    Experience Works        29.0  21.6  50.0  64.4   142.0  153.3   65.0  66.5
    Mature Services         30.0  24.2  50.0  74.5   150.0  145.9   80.0  70.3
    National ABLE           30.0  20.2  50.0  44.8   140.0  162.0   80.0  57.5
    Network
    National Asian          26.0  20.5  50.0  58.7   145.0  170.0   70.0  69.7
    Pacific Center
    on Aging
    National Caucus         24.0  17.8  50.0  59.8   145.0  142.7   70.0  72.7
    and Center on
    Black Aged
    National Council        26.0  30.7  55.0  68.5   140.0  154.7   78.0  65.5
    on the Aging,
    Inc.
    National Indian         20.0   8.6  80.0  79.5   155.0  137.0   75.0  60.7
    Council on Aging
    Senior Service          28.0  31.3  20.0  80.0   145.0  171.6   60.0  59.0
    America, Inc.
    SER - Jobs for          20.0  17.1  40.0  69.7   140.0  132.9   70.0  70.0
    Progress
    National
    USDA Forest             33.0  17.0  50.0  64.9   150.0  129.1   70.0  62.6
    Service

    Source: Labor.

    Table 9: SCSEP State Grantee Performance, Program Year 2004

                                         Retention                   Service to
                       Placement rate       rate     Service level  most-in-need
    Grantee name   Goal Actual  Goal Actual  Goal Actual   Goal         Actual
              Alabama       22.0% 23.8%  50.0% 64.0% 140.0% 156.8%    70.0% 67.4%
               Alaska        25.0  36.0   50.0  82.5  140.0  205.3     40.0  49.7
              Arizona        25.0  14.9   75.0  92.3  140.0  154.6     69.0  70.3
             Arkansas        23.0  19.3   50.0  89.7  148.0  157.0     70.0  64.0
           California        25.0  21.0   70.0  74.6  140.0  177.0     68.0  69.0
             Colorado        23.0  27.4   50.0  66.7  155.0  175.0     80.0  64.1
          Connecticut        34.0  36.7   50.0  66.7  150.0  189.8     75.0  61.3
             Delaware        28.0  28.3   50.0  82.6  140.0  160.3     75.0  57.0
          District of        23.0  29.6   50.0 100.0  147.0  147.9     75.0  79.0
             Columbia
              Florida        30.0  31.5   50.0  86.5  140.0  194.1     60.0  71.4
              Georgia        26.0  35.7   50.0  82.5  175.0  183.8     70.0  67.2
               Hawaii        22.0  26.0   40.0  85.0  140.0  174.0     70.0  65.8
                Idaho        30.0  30.8   50.0  83.3  140.0  144.6     50.0  58.5
             Illinois        22.0  17.7   70.0  87.9  140.0  154.2     60.0  59.5
              Indiana        25.0  19.3   50.0  68.3  140.0  142.7     50.0  61.6
                 Iowa        25.0  24.2   50.0  83.3  140.0  144.6     65.0  53.3
               Kansas        21.0  11.2   22.0  90.9  150.0  137.6     70.0  72.1
             Kentucky        25.0  15.0   50.0  88.9  140.0  127.5     70.0  66.0
            Louisiana        25.0  13.0   50.0 100.0  155.0  143.5     80.0  66.0
                Maine        20.0  21.0   50.0  44.4  120.0  135.5     70.0  64.3
             Maryland        25.0  11.8   50.0  86.7  150.0  134.9     70.0  63.6
        Massachusetts        22.0  18.7   50.0  81.3  140.0  137.9     75.0  69.3
             Michigan        23.0  18.8   50.0  80.6  148.0  133.9     70.0  59.9
            Minnesota        23.0  14.8   50.0  57.9  120.0  132.6     65.0  65.0
          Mississippi        20.0   7.9   50.0  50.0  140.0  136.2     65.0  71.0
             Missouri        20.0   5.9   49.0  45.5  140.0  130.0     55.0  69.8
              Montana        23.0  28.6   40.0  84.6  145.0  151.9     70.0  63.2
             Nebraska        22.0  17.0   55.0  66.7  145.0  134.0     60.0  67.5
               Nevada        23.0  70.8   20.0  90.3  140.0  236.9     75.0  79.2
        New Hampshire        20.0  12.3   50.0  57.1  150.0   93.8     70.0  47.5
           New Jersey        32.0   7.5   50.0  86.7  160.0  137.6     75.0  81.1
           New Mexico        25.0   8.7   50.0  50.0  155.0  100.0     70.0  63.8
             New York        26.0  23.5   50.0  73.8  150.0  151.4     70.0  63.9
    North Carolina        22.0  15.0   50.0  69.7  160.0  134.0     65.0  60.7
         North Dakota        23.0   1.4   45.0   0.0  142.0  104.1     75.0  75.3
                 Ohio        27.0  22.4   50.0  55.4  140.0  157.1     75.0  63.1
             Oklahoma        25.0  21.3   50.0  81.8  145.0  149.7     80.0  72.9
               Oregon        29.0  27.3   25.0  72.7  140.0  182.8     50.0  53.0
         Pennsylvania        27.0  16.4   50.0  60.0  170.0  137.4     75.0  66.9
          Puerto Rico        20.0   9.5   50.0 100.0  145.0  125.6     75.0  52.1
         Rhode Island        35.0  30.0   50.0  50.0  155.0  162.0     75.0  75.3
    South Carolina        25.0   7.2   40.0  25.0  140.0  118.0     70.0  67.5
         South Dakota        25.0  24.7   50.0  60.0  145.0  148.2     80.0  64.3
            Tennessee        23.0  18.0   50.0  78.9  142.0  143.6     70.0  70.5
                Texas        35.0  31.4   40.0  58.3  165.0  155.2     80.0  56.6
                 Utah        35.0  45.1   40.0  92.3  145.0  159.8     80.0  55.0
              Vermont        30.0  30.0   50.0  83.3  140.0  170.0     70.0  37.6
             Virginia        33.0  22.6   50.0  75.0  150.0  146.2     70.0  69.7
           Washington        20.0  46.5   50.0  82.1  125.0  200.8     80.0  56.9
        West Virginia        25.0  13.8   50.0  37.5  140.0  113.8     75.0  66.9
            Wisconsin        30.0  20.6   50.0  85.0  160.0  157.9     65.0  55.4
              Wyoming        45.0  33.8   50.0  76.9  175.0  183.1     70.0  58.0

    Source: Labor.

    Appendix IV: Aggregate SCSEP Grantee Performance for Benchmark Year,
    Program Year 2004

    These figures were provided by the Department of Labor and are included in
    this testimony for contextual purposes only. GAO has not verified the
    accuracy or reliability of these data.

    Table 10: Aggregate National Grantee Performance for Program Year 2004

    National grantee                         Percent of aggregategoal achieved
    Met or exceeded 80% threshold for satisfactory performance
    Senior Service America, Inc.                                        182.1%
    AARP Foundation                                                      123.6
    SER - Jobs for Progress National                                     113.8
    National Council on the Aging, Inc.                                  109.2
    Mature Services                                                      103.7
    Experience Works                                                     103.4
    National Asian Pacific Center on Aging                               103.3
    National Caucus and Center on Black Aged                              99.0
    Easter Seals                                                          98.0
    Asociacion Nacional pro Personas Mayores                              92.7
    USDA Forest Service                                                   89.2
    National ABLE Network                                                 86.1
    Did not meet 80% threshold for satisfactory performance
    National Indian Council on Aging                                      77.9

    Source: Labor.

    Table 11: Aggregate State Grantee Performance for Program Year 2004

    State grantee           Percent of aggregate goal achieved
    Met or exceeded 80% threshold for satisfactory performance
    Nevada                                               258.5
    Kansas                                               165.3
    Washington                                           157.1
    Oregon                                               155.4
    Alaska                                               145.0
    Hawaii                                               137.3
    Utah                                                 134.6
    Florida                                              133.9
    District of Columbia                                 133.6
    Montana                                              132.7
    Georgia                                              125.8
    Idaho                                                122.4
    Arkansas                                             115.2
    Delaware                                             114.2
    Connecticut                                          112.4
    Iowa                                                 112.2
    Colorado                                             111.4
    Alabama                                              111.1
    Oklahoma                                             110.8
    Vermont                                              110.5
    Indiana                                              109.7
    Massachusetts                                        109.6
    Tennessee                                            109.5
    New York                                             107.6
    Louisiana                                            106.8
    Kentucky                                             105.8
    Wisconsin                                            105.6
    Michigan                                             104.8
    California                                           104.7
    Wyoming                                              104.1
    Illinois                                             103.9
    Virginia                                             103.8
    Puerto Rico                                          100.9
    Nebraska                                             100.9
    Maryland                                             100.4
    South Dakota                                         100.4
    Texas                                                100.1
    Maine                                                 99.6
    Arizona                                               98.8
    New Jersey                                            97.7
    Rhode Island                                          97.7
    Minnesota                                             97.7
    Ohio                                                  97.5
    North Carolina                                        96.1
    Pennsylvania                                          87.7
    Mississippi                                           86.5
    Missouri                                              85.6
    Did not meet 80% threshold for satisfactory performance
    New Hampshire                                         76.6
    West Virginia                                         75.1
    New Mexico                                            72.6
    South Carolina                                        68.0
    North Dakota                                          44.9

    Source: Labor.

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    130505

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    Highlights of GAO-06-549T , testimony before the Special Committee on
    Aging, U.S. Senate

    April 6, 2006

    SENIOR COMMUNITY SERVICE EMPLOYMENT PROGRAM

    Labor Has Made Progress Implementing Older Americans Act Amendments of
    2000, but Challenges Remain

    The aging of the baby boom generation and increased life expectancy pose
    serious challenges for our nation. Older adults often must re-enter the
    workforce in order to remain self-sufficient. The Senior Community Service
    Employment Program (SCSEP) is the only federal program that is
    specifically designed to assist low-income older adults by providing
    part-time community service jobs and training to prepare for employment.
    Since passage of the 2000 Older Americans Act Amendments (OAA), SCSEP has
    also increasingly focused on promoting economic self-sufficiency through
    placement in unsubsidized employment. In 2005, Congress appropriated about
    $439 million to serve about 100,000 older workers. Administered by the
    Department of Labor (Labor), SCSEP is implemented through 69 grantees,
    including 13 national organizations and 56 state and territorial agencies.

    The Chairman of the Senate Special Committee on Aging asked GAO to (1)
    determine what effect the OAA Amendments have had on the distribution of
    SCSEP funds to national and state grantees, (2) describe the progress
    Labor has made in implementing the enhanced performance accountability
    system, and (3) identify the challenges faced by national and state
    grantees in managing the SCSEP program.

    The 2000 OAA Amendments have had little impact on the distribution of
    funds between national and state grantees, with national grantees
    continuing to receive approximately 78 percent of the funding and states
    about 22 percent. However, the distribution of funding among national
    grantees has changed substantially as a result of Labor's 2002 open
    competition for the national grants portion of SCSEP funding.

    Labor has taken steps to establish an enhanced performance accountability
    system for SCSEP, but has yet to implement some features. For example,
    Labor introduced the new performance measures required by the OAA
    Amendments, but program year 2005-which ends on June 30, 2006-is the first
    year that grantees will be held accountable for meeting their goals. Labor
    has implemented an early version of a data collection system to track
    grantee performance, but the final Internet-based version is not yet
    available.

    Changes to the SCSEP eligibility criteria and difficulties coordinating
    with the Workforce Investment Act (WIA) one-stop system have posed
    challenges to SCSEP grantees. Labor modified some eligibility criteria to
    target limited program funds to individuals it believes are most in need
    of SCSEP services.

    However, grantees expressed concern that these changes had made it more
    difficult for them to meet their enrollment goals. Finally, GAO found that
    despite provisions in the OAA Amendments to strengthen connections between
    SCSEP and WIA, problems persist in coordinating with WIA providers and
    obtaining intensive and training services for older workers at one-stop
    centers.

    Challenges to Managing SCSEP Cited by Grantees
    *** End of document. ***