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						 
                                                                 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
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.

Related GAO Products

Older Workers: Labor Can Help Employers and Employees Plan Better for the
Future. GAO-06-80 . Washington, D.C.: December 5, 2005.

Workforce Investment Act: Labor and States Have Taken Actions to Improve
Data Quality, but Additional Steps Are Needed. GAO-06-82 . Washington,
D.C.: November 14, 2005.

Redefining Retirement: Options for Older Americans. GAO-05-620T .
Washington, D.C.: April 27, 2005.

Older Workers: Policies of Other Nations to Increase Labor Force
Participation. GAO-03-307 . Washington, D.C.: February 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.: January 24, 2003.

Older Workers: Demographic Trends Pose Challenges for Employers and
Workers. GAO-02-85 . Washington, D.C.: November 16, 2001.

130505

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

GAO's Mission

The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of GAO Reports and Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO's Web site ( www.gao.gov ). Each weekday, GAO posts newly
released reports, testimony, and correspondence on its Web site. To have
GAO e-mail you a list of newly posted products every afternoon, go to
www.gao.gov and select "Subscribe to Updates."

Order by Mail or Phone

The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to:

U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548

To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061

To Report Fraud, Waste, and Abuse in Federal Programs

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: [email protected]
Automated answering system: (800) 424-5454 or (202) 512-7470

Congressional Relations

Gloria Jarmon, Managing Director, [email protected] (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125 Washington,
D.C. 20548

Public Affairs

Paul Anderson, Managing Director, [email protected] (202) 512-4800 U.S.
Government Accountability Office, 441 G Street NW, Room 7149 Washington,
D.C. 20548

www.gao.gov/cgi-bin/getrpt? GAO-06-549T .

To view the full product, including the scope

and methodology, click on the link above.

For more information, contact Sigurd R. Nilsen, (202) 512-7215 or
[email protected].

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. ***