Federal Disability Assistance: Stronger Federal Oversight Could  
Help Assure Multiple Programs' Accountability (26-JAN-07,	 
GAO-07-236).							 
                                                                 
Congress has created 20 federal employment-related programs that 
are aimed at helping people with disabilities obtain jobs. Little
is known about the effectiveness and the management of some of	 
these programs. GAO was asked to review four of these programs;  
the Department of Education (Education) oversees three--Projects 
with Industry (PWI), Supported Employment State Grants, and	 
Randolph-Sheppard. An independent federal agency, the Committee  
for Purchase, oversees the fourth, Javits-Wagner-O'Day (JWOD).	 
Specifically, GAO assessed the extent to which (1) performance	 
goals and measures have been established for these programs and  
(2) the agencies responsible have established adequate oversight 
procedures. We reviewed program planning and performance	 
information, interviewed agency officials, and visited each of	 
the four programs in four states.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-236 					        
    ACCNO:   A65188						        
  TITLE:     Federal Disability Assistance: Stronger Federal Oversight
Could Help Assure Multiple Programs' Accountability		 
     DATE:   01/26/2007 
  SUBJECT:   Aid for the disabled				 
	     Disabilities					 
	     Education program evaluation			 
	     Educational grants 				 
	     Employment assistance programs			 
	     Employment of the disabled 			 
	     Federal aid to states				 
	     Federal procurement				 
	     Federal/state relations				 
	     Licenses						 
	     Performance measures				 
	     Persons with disabilities				 
	     Program management 				 
	     State-administered programs			 
	     Government agency oversight			 
	     Program goals or objectives			 
	     Javits-Wagner-O'Day Program			 
	     Projects with Industry Program			 
	     Randolph-Sheppard Vending Facility 		 
	     Program						 
                                                                 
	     Supported Employment State Grants			 
	     Program						 
                                                                 

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GAO-07-236

   

     * [1]Results in Brief
     * [2]Background

          * [3]Projects with Industry
          * [4]Supported Employment State Grants
          * [5]Randolph-Sheppard
          * [6]Javits-Wagner-O'Day

     * [7]Three of the Four Programs Have Established Goals and Measur

          * [8]Education Has Not Established Federal Goals for Randolph-She
          * [9]Education Has a Supported Employment State Grants Program Go
          * [10]Education Has Established One Federal Performance Goal for t
          * [11]The Committee for Purchase Recently Updated Its Strategic Pl

     * [12]Uneven Federal Oversight Provides Little Assurance of Accoun

          * [13]Education Performs Various PWI Oversight Activities, and On-
          * [14]Education's Oversight of Supported Employment Is Part of Ove
          * [15]Education Provides Little Oversight of the Randolph-Sheppard
          * [16]Committee for Purchase Delegates Most Oversight Responsibili

     * [17]Conclusions
     * [18]Recommendations
     * [19]Agency Comments and Our Evaluation
     * [20]GAO Contact
     * [21]Acknowledgments
     * [22]GAO's Mission
     * [23]Obtaining Copies of GAO Reports and Testimony

          * [24]Order by Mail or Phone

     * [25]To Report Fraud, Waste, and Abuse in Federal Programs
     * [26]Congressional Relations
     * [27]Public Affairs

Report to Congressional Requesters

United States Government Accountability Office

GAO

January 2007

FEDERAL DISABILITY ASSISTANCE

Stronger Federal Oversight Could Help Assure Multiple Programs'
Accountability

GAO-07-236

Contents

Letter 1

Results in Brief 3
Background 5
Three of the Four Programs Have Established Goals and Measures 12
Uneven Federal Oversight Provides Little Assurance of Accountability for
Two Programs 18
Conclusions 27
Recommendations 28
Agency Comments and Our Evaluation 29
Appendix I Objectives, Scope, and Methodology 32
Appendix II Performance Goals and Measures for the Javits-Wagner-O'Day
(JWOD) Program 35
Appendix III Comments from the Department of Education 37
Appendix IV Comments from the Committee for Purchase from People Who Are
Blind or Severely Disabled 39
Appendix V GAO Contact and Staff Acknowledgments 43

Tables

Table 1: Federal and State Funds, Other Funding Sources, Total Funds, and
Funds per Vendor for Four State Randolph-Sheppard Programs in Fiscal Year
2005 13
Table 2: Supported Employment State Grants Program Goal and Actual
Performance, Fiscal Years 2003 through 2005 14
Table 3: PWI Performance Goal and Actual Performance, Fiscal Years 2003
through 2005 15
Table 4: JWOD Performance Goals and Examples of Performance Measures,
Fiscal Years 2007-2009 18
Table 5: JWOD Performance Goals and Measures 35

Figure

Figure 1: Number of Vendors in Program, Fiscal Years 2001-2005 9

Abbreviations

BAC Business Advisory Councils
ETS Committee for Purchase's Essentially The Same
GPRA Government Performance and Results Act of 1993
JWOD Javits-Wagner-O'Day
NCED National Center for the Employment of the Disabled
NIB National Industries for the Blind
NISH National Industries for the Severely Handicapped
PWI Projects with Industry
RSA Rehabilitation Services Administration
SLA State Licensing Agency
VR Vocational Rehabilitation

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separately.

United States Government Accountability Office

Washington, DC 20548

January 26, 2007

The Honorable Edward M. Kennedy
Chairman
Committee on Health, Education, Labor, and Pensions
United States Senate

The Honorable Henry A. Waxman
Chairman Committee on Oversight and Government Reform
House of Representatives

The employment rate for working-age people with disabilities is about half
of the employment rate for working-age people without disabilities.1 In
fiscal year 2003, at least $2.4 billion was spent on 20 federal programs
that are aimed to improve employment opportunities for people who have
disabilities, but little is known about how effectively some of these
programs are achieving their intended outcomes. You asked us to review
four of these programs: Projects with Industry (PWI), Supported Employment
State Grants, Randolph-Sheppard Vending Facility Program (hereafter known
as Randolph-Sheppard), and Javits-Wagner-O'Day (JWOD). PWI and Supported
Employment State Grants are federal grant programs that fund services that
help individuals with disabilities to obtain competitive employment. The
other two programs, Randolph-Sheppard and JWOD, help create jobs for
individuals with disabilities through the federal property management and
procurement systems. Randolph-Sheppard licenses people who are blind to
operate vending facilities on federal or other properties, and JWOD gives
preference to nonprofit agencies who employ people with disabilities to
produce goods and services for the federal government.

The Department of Education (Education) is responsible for administering
the Projects with Industry, Supported Employment State Grants, and
Randolph-Sheppard programs. By law, Randolph-Sheppard is a state-operated
program with limited federal responsibilities. The Committee for Purchase
from People Who Are Blind or Severely Disabled (Committee for Purchase), a
small independent federal agency, is responsible for administering the
JWOD program. The Committee for Purchase utilizes two central nonprofit
agencies--National Industries for the Blind (NIB) and NISH2--to help carry
out its responsibilities.

1Cornell University Institute for Policy Research, Policy Brief,
Dismantling the Poverty Trap: Disability Policy for the 21st Century
(Washington, D.C.: July 2005).

You asked us to determine to what extent (1) performance goals and
measures have been established for these programs and (2) the agencies
responsible for these programs have established adequate procedures for
overseeing program implementation and assuring laws and regulations are
followed.

To determine the extent to which performance goals have been established
for these programs, we conducted a review of program laws, guidance, and
performance documents.3 To obtain additional information about the
performance goals and measures and determine the extent that the agencies
responsible for these programs have established adequate procedures for
overseeing program implementation and assuring that laws and regulations
are followed, we reviewed agency policies and guidance, and interviewed
agency officials at Education and the Committee for Purchase. We also met
with officials of the two central nonprofit agencies (NIB and NISH) that
assist the Committee for Purchase in performing its oversight
responsibilities for JWOD. To supplement the overall program information,
we reviewed each of these programs at the local level in four
states--Arizona, Kansas, New York, and North Carolina--and analyzed
documentation (e.g., program guidance, monitoring protocols, etc.) to
ascertain how these programs were administered and monitored. We selected
these four states based on factors such as whether they had all four
programs operating in the state, geographic diversity, and whether the
states' Vocational Rehabilitation (VR) programs had a separate blind
program (about half of all states have two agencies; one for the general
VR program and one for the blind program).4 We visited a total of 4 PWI
projects, 4 Supported Employment State Grants recipients, 7
Randolph-Sheppard vendors, and 13 JWOD nonprofit agencies. We reviewed
available audit reports on the state-operated Randolph-Sheppard program
for the states we visited and for other states. We also reviewed other
available audit reports for JWOD nonprofit agencies and PWI grantees.
Finally, we interviewed officials of agencies engaged in disability
research and advocacy at the national level including the Council of State
Administrators of Vocational Rehabilitation, National Council on
Disability, and the National Council of State Agencies for the Blind.
(App. I contains a more detailed discussion of our scope and methodology.)
We conducted our work between March 2006 and December 2006 in accordance
with generally accepted government auditing standards.

2NISH was formerly known as the National Industries for the Severely
Handicapped.

3The Government Performance and Results Act of 1993 (GPRA) requires
federal executive branch agencies such as the Department of Education to
set goals, measure their performance, and report on their accomplishments.
Agencies are required to develop annual performance plans that use
performance measurement to reinforce the connection between the long-term
strategic goals outlined in their strategic plans and the day-to-day
activities of their managers and staff.

4State VR programs provide assistance to individuals with disabilities and
are overseen by the Department of Education.

Results in Brief

Three of the four programs we reviewed had federal goals. Currently, no
formal federal performance goals exist for the Randolph-Sheppard program,
but two of the four states we visited had established their own
performance goals, such as increasing the number of participating licensed
vendors and vending facilities. Education officials told us they are
developing federal goals and should complete them by April 2007. Education
has a goal for the Supported Employment State Grants program, which is for
individuals who have significant disabilities to achieve high quality
employment, but it cannot fully assess this program's performance because
these grant funds are mixed with other funding sources to provide
supported employment services; which is common in such situations. The
Projects with Industry program has a performance goal that is consistent
with the mission of the program. The program's goal is to create and
expand job opportunities for individuals with disabilities in the
competitive labor market by engaging business and industry. The program
has had mixed success in meeting its targets for this goal. For example,
the program did not meet one target with regard to the percentage of
individuals served who were placed into competitive employment between
fiscal years 2003 and 2005. However, it consistently exceeded its target
for the average increase in weekly earnings during the same period. For
the JWOD program, the Committee for Purchase first developed performance
goals and measures as part of its fiscal year 2005-2007 strategic plan,
but did not include a key component--performance targets--necessary for
assessing performance. The Committee for Purchase has since revised its
performance management system and established some performance targets,
but cannot yet report progress toward its goals. Measures under the
revised system have some limitations, such as not being clearly defined or
being difficult to measure.

Education and the Committee for Purchase's oversight for the programs they
are responsible for has been uneven. Education has established procedures
for the PWI and the Supported Employment State Grants programs that, if
consistently followed, should provide reasonable assurance that the
programs are in compliance with applicable laws and regulations. For
example, Education told us they conduct quarterly monitoring calls with
all PWI grantees, require grantees to submit annual reports on project
activities and performance, and conduct some on-site reviews. Oversight of
the Supported Employment State Grants program is accomplished as part of
the ongoing monitoring of state Vocational Rehabilitation programs and
includes examining state VR program plans and required data reports. In
the four states visited, we found that each of these states had its own
accountability procedures for ensuring that VR grant funds, including
Supported Employment State Grants funds, were being used in accordance
with federal laws and regulations. Concerning the Randolph-Sheppard
program, however, Education relies heavily on self-reported data for its
monitoring and does not routinely analyze or report the data it collects.
The agency has also provided little guidance to states to ensure
compliance with laws or consistent interpretation of program requirements.
For example, Education has not provided clear guidance or policies
regarding when federal agencies may charge commissions or fees to licensed
vendors as a condition of operating a vending machine on federal property.
We found that licensed vendors are paying commissions or fees in some
locations but not in others and the federal agency had not obtained
approval from Education. With regard to JWOD, the Committee for Purchase
does perform some compliance monitoring for its participating nonprofit
agencies. However, the majority of the compliance visits are performed by
the two central nonprofit agencies that must also represent the interests
of the JWOD nonprofit agencies they oversee. This arrangement, as well as
the fact that they receive a percentage of the total value of contracts
from the JWOD nonprofit agencies, raises questions about their
independence and gives them little incentive to identify instances of
noncompliance that could result in the member JWOD nonprofit losing its
contract.

We are making recommendations to the Secretary of Education and to the
Chairperson of the Committee for Purchase aimed at improving performance
management and oversight of the Randolph-Sheppard and JWOD programs,
respectively. In its comments on a draft of this report, both Education
and the Committee for Purchase generally agreed with our recommendations
and provided information on actions they were taking or planning to take
to enhance performance management and oversight of their respective
programs.

Background

Over the years, Congress has established many employment-related programs
to help people with disabilities obtain jobs. Four of these programs, PWI,
Supported Employment State Grants, Randolph-Sheppard, and JWOD, illustrate
several different approaches taken by Congress to create more employment
opportunities for people with severe disabilities--from providing job
training and support to enabling individuals to run businesses. Congress
created two of the four programs (PWI and Supported Employment State
Grants) in the 1970s and the other two (Randolph-Sheppard and JWOD) in the
1930s.

Projects with Industry

PWI was established in 1978,5 and is a discretionary grant program that
provides financial assistance for up to 5 years to organizations to assist
individuals with disabilities in obtaining competitive employment.6
However, according to Education officials, recent grants have been awarded
for 3-year periods. Grantees of the PWI program include community
rehabilitation program providers, employers, labor unions, nonprofit
agencies or organizations, trade associations, and others. The purposes of
the PWI program are to (1) create and expand job and career opportunities
for individuals with disabilities in the competitive labor market by
engaging private industry as partners in the rehabilitation process, (2)
identify competitive job and career opportunities and the skills needed to
perform these jobs, (3) create practical settings for job readiness and
job training programs, and (4) provide job placements and career
advancements. PWI grantees must establish business advisory councils (BAC)
comprised of representatives of private industry, organized labor, and
individuals with disabilities and their representatives, and others. BACs
are required, among other things, to identify jobs and careers available
in the community, the skills necessary to perform them, and prescribe
appropriate training and job placement programs. Seventy-nine grantees
received about $22 million in fiscal year 2005 and served more than 10,000
individuals with significant disabilities.

5Pub. L. No. 95-602 (1978); 29 U.S.C. S 795.

6Competitive employment is any full- or part-time job that pays at least
the federal minimum hourly wage and provides a work setting typically
found in the community in which individuals with disabilities interact
with non-disabled individuals, other than non-disabled individuals who are
providing services to them, to the same extent that non-disabled
individuals in comparable positions interact with other persons.

The Department of Education is responsible for administering and
overseeing PWI and is required to:

           o Conduct annual on-site compliance reviews--Education's primary
           means of verifying the accuracy of the information grantees
           submit--of at least 15 percent of grant recipients, chosen at
           random.

           o Submit an annual report to Congress that analyzes the extent to
           which the individual grant recipients have complied with the
           evaluation standards. For example, the project must serve
           individuals with disabilities that impair their capacity to obtain
           competitive employment. In selecting persons to receive services,
           priority must be given to individuals with significant
           disabilities.

           o Have a performance reporting system that grantees can use to
           routinely submit program data that evaluates the grantees'
           progress in achieving the stated objectives, the effectiveness of
           the project in meeting the purposes of the program, and the effect
           of the project on its participants.

Supported Employment State Grants

Established in 1978,7 the Supported Employment State Grants program
provides funds to states and is designed to assist states in developing
collaborative programs with appropriate organizations to provide supported
employment services to individuals with the most severe disabilities who
require these services to enter or retain competitive employment.
Supported Employment State Grants funded services include a wide array of
employment-related activities ranging from intensive on-the-job skills
training to discrete post-employment services such as job station redesign
or repair and maintenance of technology to help them perform job
functions, generally for up to 18 months after job placement. In fiscal
year 2005, the grant program was funded at approximately $37 million.8

7Pub. L. No. 95-602 (1978); 29 U.S.C. SS 795g-795n.

8States do not have a matching requirement for federal funds to receive
this grant.

The Supported Employment State Grants program is an integrated component
of state VR programs, which are also overseen by Education.9 Title I of
the Rehabilitation Act of 1973 authorizes a federal-state VR program to
provide services to persons with disabilities so that they may prepare and
engage in meaningful employment.10 Education provided $2.6 billion in
fiscal year 2005 in VR grants to the states and territories based on a
formula that considers the state's population and per capita income.11
Each state and territory designates a single VR agency to administer the
VR program, except where state law authorizes a separate agency to
administer VR services for individuals who are blind. State VR agencies
provide services to individuals in 22 service categories, such as
vocational counseling and guidance, job placement assistance, on-the-job
supports, college or university training, rehabilitation technology, and
interpreter services. State VR agencies that determine they will not be
able to serve all eligible individuals who apply for services must develop
criteria for prioritizing services to individuals with the most
significant disabilities. Education reported that, as of fiscal year 2006,
40 of the 80 state VR agencies had such an order of selection.

Oversight for Supported Employment State Grants is conducted as part of
oversight of state VR programs, and Education is required to:

           o conduct annual reviews of state VR programs that include
           collecting and reporting information on budget and financial
           management data, and an analysis of program performance, including
           relative state performance, based on the standards and indicators;
           and

           o conduct periodic on-site monitoring of state VR programs.

9In this report, the term state VR programs refers to programs or agencies
in the 50 states, the District of Columbia, and the territories of
American Samoa, Guam, Northern Marianas Islands, Puerto Rico, and the
Virgin Islands.

10This program was most recently reauthorized as part of the Workforce
Investment Act of 1998.

11The act generally requires states to match federal funds at a ratio of
78.7 percent federal to 21.3 percent state dollars.

Randolph-Sheppard

The Randolph-Sheppard program12 was created in 1936 to provide blind
persons with gainful employment, enlarge their economic opportunities, and
encourage their self-support.13 While Randolph-Sheppard is under the
authority of Education, the states are primarily responsible for operating
their programs, and every state except Wyoming has established a vendor
program. Each state that has a Randolph-Sheppard program is required to
have a state licensing agency (SLA), under the auspices of the state VR
program and approved by Education, to operate the program, including the
authority to promulgate rules and regulations that govern the program. The
SLAs are responsible for training, licensing, and placing people who are
blind as operators of vending facilities (machines, snack bars, and
cafeterias) located on federal and other properties. In addition, SLAs
must annually submit information about their Randolph-Sheppard programs to
Education, including information on the number of applicants and the
number accepted, the number of vending facilities and vendors, and the
total amount of vendor earnings.

In fiscal year 2005, SLAs spent about $37 million in federal and state VR
grant funds to help operate and support the program. In addition to VR
funds, some states fund the program through optional set-asides from
licensed vendors, which are a percentage of their revenues, and through
the profits from vending machines located on federal properties that are
not operated by licensed vendors. State funds are also used to operate the
program. In total, more than $76 million were used to operate and support
the Randolph-Sheppard program nationwide in fiscal year 2005.

In fiscal year 2005, the Randolph-Sheppard program generated $661.3
million in total gross income and the average annual earnings of vendors
was $43,584. Over a 5-year period (fiscal year 2001 through fiscal year
2005), the number of vending facilities have been in decline nationwide,
decreasing from 3,193 to 3,080. Over the same period, the number of
vendors decreased annually except in fiscal year 2005, as shown in figure
1.

12In the four states we visited, Randolph-Sheppard is called the Business
Enterprise Program.

13Randolph-Sheppard Act, ch. 638, 49 Stat. 1559 (1936) (codified at 20
U.S.C. SS 107, 107a-107f).

Figure 1: Number of Vendors in Program, Fiscal Years 2001-2005

While states are responsible for operating their programs, among other
things, Education is required to:

           o approve applications from a state's VR agency to serve as the
           SLA, and approve the rules and regulations the SLA promulgates to
           implement the Randolph-Sheppard Act;

           o conduct periodic evaluations of the program to determine whether
           the program is being used to its maximum potential; and

           o convene arbitration panels and pay for arbitration to resolve
           vendor and SLA disputes.

Javits-Wagner-O'Day

Established in 1938,14 JWOD is a federal procurement set-aside program
designed to increase employment and training opportunities for persons who
are blind or have other severe disabilities.15 Through this program, the
government purchases commodities and services from nonprofit agencies
employing workers who are blind or have severe disabilities. According to
Committee for Purchase officials, in fiscal year 2006, federal procurement
expenditures for goods and services provided by JWOD program suppliers
totaled about $2.3 billion, and provided employment for about 48,000
people who are blind or have severe disabilities at more than 600
participating JWOD nonprofit agencies. The types of employment
opportunities range from working in food service or providing janitorial
services in federal office buildings to producing and/or assembling boxes
and office supplies such as pens, notepads, file folders, and other goods.
For fiscal year 2005, Committee for Purchase officials reported that JWOD
workers earned an average of $9.49 per hour.

14Wagner-O'Day Act, ch. 697, 52 Stat. 1196 (1938) (codified at 41 U.S.C.
SS 46-48).

The Committee for Purchase, which administers the program, received about
$5 million in federal funds in fiscal year 2005 to support the activities
of a 15-member, presidentially appointed board and 29 full-time program
staff, including managing the JWOD procurement list.16 The Committee for
Purchase is required by law to designate one or more central nonprofit
agencies to facilitate the distribution of federal procurement contracts
among qualified nonprofit agencies, and has designated two agencies for
this purpose: NIB, which represents member nonprofit agencies employing
individuals who are blind, and NISH, which represents its member nonprofit
agencies that employ individuals with other severe disabilities.

15A blind person is defined as a person who has been determined to have
(1) not more than 20/200 central visual acuity in the better eye with
correcting lenses or (2) an equally disabling loss of the visual field as
evidenced by a limitation to the field vision in the better eye to such a
degree that its widest diameter subtends an angle of no greater than 20
degrees. A person with a severe disability, other than a blind person, is
any person who has a severe physical or mental impairment (a residual,
limiting condition resulting from an injury, disease, or congenital
defect) that so limits the person's functional capabilities (mobility,
communication, self-care, self-direction, work tolerance or work skills)
that the individual is currently unable to engage in normal competitive
employment. 41 C.F.R. S 51-1.3.

16The Committee for Purchase is responsible for publishing a procurement
list of the commodities produced by any qualified nonprofit agency for the
blind or by any qualified nonprofit agency for the severely disabled and
the services provided by any such agency, which the Committee for Purchase
determines are suitable for procurement by the government under JWOD. The
Committee for Purchase determines the fair market price of commodities and
services that are contained on the procurement list and offered for sale
to the government by any qualified JWOD agency.

In addition to its duties related to establishing and maintaining a
procurement list of goods and services that must be purchased through
qualified JWOD suppliers, the Committee for Purchase is required to:

           o establish rules, regulations, and policies to carry out the
           purposes of the JWOD program, and to provide that nonprofit
           agencies employing individuals who are blind have priority in
           obtaining JWOD contracts;

           o monitor nonprofit agency compliance with Committee for Purchase
           regulations and procedures;

           o inform federal agencies about the JWOD program and encourage
           their participation, and, to the extent possible, monitor federal
           agencies' compliance with JWOD requirements; and

           o study and evaluate its activities on a continual basis to ensure
           the effective and efficient administration of the JWOD Act.

The Committee for Purchase has also established regulations that require
the two central nonprofit agencies (NIB and NISH) to evaluate the
qualifications and capabilities of nonprofit agencies that apply for
contracts and provide pertinent data concerning the JWOD nonprofit
agencies, such as their status as qualified nonprofit agencies, and their
manufacturing or service capabilities. Additionally, NIB and NISH are to
monitor and inspect the activities of participating nonprofit agencies to
ensure compliance with the JWOD Act and appropriate regulations. For
example, to maintain its status as a qualified nonprofit agency organized
for the purposes of the JWOD program, an agency must employ persons who
are blind or have severe disabilities to perform at least 75 percent of
the work-hours of direct labor during the fiscal year to furnish such
commodities or services (whether or not the commodities or services are
procured under the JWOD Act).

The Committee for Purchase's regulations require that each nonprofit
agency maintain employment files for persons with severe disabilities
participating in the JWOD Program. Each file must contain either a
certification by a state or local government entity or a written report
signed by a licensed physician, psychiatrist, or qualified psychologist,
reflecting the nature and extent of a participant's disability or
disabilities that qualify as severe. These reports must also state whether
an individual with severe disabilities is capable of engaging in normal
competitive employment and be signed by persons qualified to evaluate
their work potential, interests, aptitudes, and abilities.17

Three of the Four Programs Have Established Goals and Measures

Federal performance goals and measures have been established for three of
the four programs we reviewed. Education has not established performance
goals and measures for the Randolph-Sheppard program, although two of the
four states that we visited had their own goals and measures. Education
has one goal for the Supported Employment State Grants program, but the
goal only provides an indirect measure of the program's performance
because the data also include individuals with significant disabilities
who receive supported employment services funded under state VR programs.
Education has established a performance goal for PWI, which is consistent
with the purpose of the program. Finally, for the JWOD program, the
Committee for Purchase recently revised its performance goals and
established some targets.

Education Has Not Established Federal Goals for Randolph-Sheppard

Education does not have GPRA performance goals for the Randolph-Sheppard
program, and neither the Randolph-Sheppard Act nor its implementing
regulations require them. According to Education officials, no formal
federal performance goals or measures currently exist for the
Randolph-Sheppard program, but they are under development and expected to
be completed by April 2007. Although not specifically required by law,
Education does collect some information related to program performance
from the states. For example, Education collects information on total
vendor income, number of facilities, and vendors. Education also collects
information on the numbers of individuals who are blind or have
disabilities who are employed by vendors, although there is no requirement
for vendors to employ workers who have disabilities.

States may develop performance goals for their Randolph-Sheppard programs,
and two (Arizona and Kansas) of the four states we visited had established
performance goals. Arizona's goals were to increase the number of licensed
vendors and vending facilities. In fiscal year 2005, the state set a
target of 32 vendors and five new facilities. However, Arizona did not
meet these targets and had 30 licensed vendors and added one new facility.
Kansas' fiscal year 2005 goal was that at least 90 percent of the licensed
vendors maintain or increase their level of income from the prior year,
and the state reported that this goal had been exceeded in each of the
past 3 fiscal years. According to program officials in New York and North
Carolina, no state goals were established for their Randolph-Sheppard
programs. In the four states we visited, nearly $10 million, including
more than $7 million in federal and state funds, were used to support
operations for about 215 licensed vendors, as shown in table 1.

1741 C.F.R. S 51-4.3.

Table 1: Federal and State Funds, Other Funding Sources, Total Funds, and
Funds per Vendor for Four State Randolph-Sheppard Programs in Fiscal Year
2005

                                                            Vendors           
                Federal and state Other funding              (staff Funds per 
State                    funds      sourcesa Total funds  years)    vendor 
Arizona             $1,681,418     $ 790,531  $2,471,949    29.7   $83,231 
Kansas                 517,202       165,732     682,934      15    45,529 
New York             2,705,026       848,736   3,553,762    86.5    41,084 
North                2,478,909       711,558   3,190,467    82.3    38,766 
Carolina                                                                   
Total               $7,382,555   $ 2,516,557  $9,899,112   213.5   $46,366 

Sources: RSA-15 reports submitted by officials of the Arizona, Kansas, New
York, and North Carolina Business Enterprise Programs.

aOther funding sources are vending machine income (federal and
non-federal), and a percentage of net proceeds from licensed vendors.

In these four states, we also interviewed seven licensed vendors who
operated businesses that ranged from full-service cafeterias to small
convenience stores or canteens. We found that all of the licensed vendors
we met with worked full-time and most earned incomes that provided an
income that made them relatively self-sufficient. However, not all
licensed vendors nationwide receive incomes that allow them to support
themselves and their incomes may be subsidized through program revenues
generated by other vendors. Two states we visited were taking steps to
increase vendors' income by consolidating facilities. Regardless of their
financial status, three of the seven licensed vendors we interviewed
continued to receive financial benefits from other federal disability
assistance programs, such as Social Security Disability Insurance. In
addition, at least 6 of the 7 vendors employed fewer than 10 workers, most
of whom were not blind or did not have severe disabilities. However, some
of the vendors we interviewed told us that they are interested in ways to
reach out to and employ more workers who are blind or have severe
disabilities. Further, states we visited told us about other program
challenges, such as a decline in customers as a result of increased
security in federal buildings and consolidation of unprofitable facilities
that reduced the number of opportunities available to vendors.

Education Has a Supported Employment State Grants Program Goal That Indirectly
Measures Performance

Education has a GPRA goal for the Supported Employment State Grants
program that the department uses to indirectly measure the program's
performance. According to program officials, Education has not sought
information that isolates the performance of federally-funded Supported
Employment State Grants because they are used together with state and
other federal funds to provide supported employment services, as is often
the case when funds from different sources are used to achieve an outcome.
Officials told us a separate measure for the Supported Employment State
Grants program would be an artificial distinction. The performance goal is
for individuals who have significant disabilities to achieve high quality
employment. For this goal, Education only includes individuals with
significant disabilities who have a goal of supported employment, that is,
achieving competitive employment with support services such as
rehabilitation technology or on-the-job supports. The measure is the
percentage of individuals who achieve competitive employment, which they
define as making minimum wage or higher, but not less than the wages paid
to workers without disabilities performing similar work, and working
alongside workers without disabilities in an integrated setting.

During fiscal years 2003 and 2004, Education exceeded its performance
target for placing Supported Employment State Grants program participants
in competitive employment. For fiscal year 2005, Education increased the
performance target to 93 percent and achieved 92.6 percent, as shown in
table 2.

Table 2: Supported Employment State Grants Program Goal and Actual
Performance, Fiscal Years 2003 through 2005

Goal: Individuals with                  
significant disabilities with a                 Performance
supported employment goal will                 
achieve high-quality employment.  2003  2004       2005
Performance measure              Target Actual Target Actual Target Actual 
Percentage of individuals with a  77.8%  92.7%    78%  92.8%    93%  92.6% 
supported employment goal who                                              
achieve a competitive employment                                           
outcome.                                                                   

Source: Department of Education.

Education Has Established One Federal Performance Goal for the PWI Program

Education has established a GPRA performance goal that includes four
measures for the PWI program. The goal of the PWI program is to create and
expand job opportunities for people with disabilities in the competitive
labor market by engaging business and industry in the rehabilitation
process. The four performance measures are consistent with the program's
goal. For example, one measure is the percentage of individuals served by
the program who were placed into competitive employment. Another measure,
cost per placement, was only recently established for fiscal year 2006 and
performance data are not yet available. In recent years, Education has had
mixed success in meeting the GPRA targets. For example, in fiscal years
2003 to 2005, the PWI program did not meet its target of increasing the
percentage of individuals who were placed into competitive employment.
However, it consistently exceeded its target for increased earnings over
the same period, as shown in table 3.

Table 3: PWI Performance Goal and Actual Performance, Fiscal Years 2003
through 2005

Goal: Create and expand job           
opportunities in the                  
competitive labor market by                    Performance
engaging the participation of                
business and industry in the                 
rehabilitation process.         2003  2004       2005
Performance measures           Target Actual Target  Actual Target  Actual 
Percentage of individuals       62.4%  54.2%  62.7%   61.5%    63%   51.9% 
served by the program who were                                             
placed into competitive                                                    
employmenta                                                                
Percentage of previously          63%    54%    64%   65.5%    65%   62.4% 
unemployed individuals served                                              
who were placed into                                                       
competitive employmenta                                                    
Average increase in weekly       $231   $242   $233    $247   $238    $253 
earnings                                                                   
Cost per placement (federal       NAc    NAc    NAc $3,139d    NAc $3,014d 
grant funds only)b                                                         

Source: Department of Education.

aAn evaluation of the PWI program, published in 2003, raised some doubts
about the reporting on the percentage of individuals placed in competitive
employment.

bCost per placement will become a GPRA indicator in fiscal year 2006.

cNot available.

dData are being used to develop a baseline for fiscal year 2006
performance.

Education has revised its GPRA performance measures for the PWI program
for fiscal year 2006. Specifically, Education will begin to measure the
percentage of PWI projects whose cost per placement is within a specified
range, which has yet to be determined. The agency will also measure the
percentage of all individuals who exit the program and are placed in
competitive employment. According to Education officials, this measure was
added in response to recommendations by the Office of Management and
Budget and will allow more accurate comparisons with other job training
programs throughout the government.

We visited four PWI grantees in the four states and found that these
projects set goals that are consistent with the goals of the PWI program,
such as placing people in competitive employment. For example, one PWI
grantee in Kansas is serving individuals with all types of disabilities
ages 16 and older. One goal of the project is to place 75 percent of the
people they serve each year in competitive employment, which is higher
than the GPRA target set by Education. According to agency officials,
clients are being placed in jobs such as call centers and other customer
service positions, earning average salaries of $9.25 to $10.00 per hour.
In another example, one PWI grantee in New York has a goal to transition
youth from school to work and targets its services to individuals ages 16
to 25 with a mental, physical, or emotional disability. One of the goals
of the project is to place about 67 percent of the people served in jobs
over 3 years. According to the grantee, a successful outcome in the
program is competitive employment in at least a part-time position paying
at least the federal minimum wage, and continued employment for at least 6
months. The PWI projects in Kansas and New York just completed the first
year of operations.

The Committee for Purchase Recently Updated Its Strategic Plan for the JWOD
Program; Progress toward Goals Is Not Yet Known

For the first time, the Committee for Purchase developed performance goals
and measures for the JWOD program in its fiscal year 2005-2007 strategic
plan and updated this plan in October 2006, but it has not yet reported
progress toward meeting these goals. While JWOD's enabling legislation and
regulations do not require goals, the strategic plan includes five
performance goals and a number of measures for each of these goals.18 The
current strategic plan includes some performance measures and targets, but
some of the measures that are more qualitative in nature do not include
targets, and it is unclear how JWOD will measure progress in these areas.
In keeping with the overall mission of the JWOD program, the goals are
aimed at increasing the number of job opportunities for people who are
blind or have severe disabilities. One of the plan's five goals is to
expand employment opportunities. The other four goals include increasing
customer satisfaction (JWOD customers are federal agencies), improving
efficiency of operations, expanding program support and developing new
markets for its products and services. However, these goals do not
specifically address one part of the program's mission, which is to
increase training opportunities.19

18Although the JWOD Act does not require GPRA performance goals and
measures, the Committee for Purchase has determined that the JWOD program
is covered by federal strategic planning requirements.

Furthermore, some of the performance measures are not clearly defined or
may be difficult to measure, thus making it difficult to assess
performance. For example, there are several measures that involve using
"milestone tracking" although the milestones are not provided. One of
these measures will track progress toward annually updating and
implementing a plan to address communication and information sharing with
and among stakeholders. Further, JWOD has over 30 performance measures,
which may make it difficult to identify performance problems. As we
discussed in our June 1996 guide on implementing GPRA,20 performance
measures should be limited to the vital few. Limiting measures to core
program activities enables managers and other stakeholders to assess
accomplishments and make decisions without having an excess of data that
could obscure rather than clarify performance issues.21 The JWOD
performance goals and examples of measures are shown in table 4. All of
the JWOD performance measures are listed in appendix II.

1941 C.F.R. S 51-1.1(a).

20GAO, Executive Guide: Effectively Implementing the Government
Performance and Results Act, [28]GAO/GGD-96-118 (Washington, D.C.: June
1996).

21GAO, Tax Administration: IRS Needs to Further Refine Its Tax Filing
Season Performance Measures, [29]GAO-03-143 (Washington, D.C.: Nov. 22,
2002).

Table 4: JWOD Performance Goals and Examples of Performance Measures,
Fiscal Years 2007-2009

Performance goals                Examples of performance measures          
Continue to expand employment       o Percentage increase in direct labor  
opportunities for people who are    hours performed by people who are      
blind or have other severe          blind or have other severe             
disabilities under the JWOD         disabilities on JWOD products and      
program, including wage             services.                              
progression, benefits, upward       o Percentage increase in the number of 
mobility, and personal job          people who are blind or have other     
satisfaction.                       severe disabilities employed in direct 
                                       labor positions on JWOD                
                                       products/services.                     
Partner with federal customers      o Federal agency scorecard that        
to increase customer                evaluates the level of satisfaction    
satisfaction and loyalty, so        with JWOD products, services, and/or   
that the JWOD program becomes       customer experience among key federal  
their preferred source for          agencies, using a stoplight or similar 
products and services.              summary format.                        
                                       o Increased customer satisfaction with 
                                       quality, timeliness, and price, based  
                                       on customer surveys and/or alternative 
                                       qualitative research (e.g., focus      
                                       groups).                               
Improve efficiency and              o Reduction in the cycle time for the  
effectiveness of the JWOD           addition of a new JWOD product or      
program by streamlining and         service to the procurement list.       
automating processes and            o Milestone tracking of evaluation of  
procedures, and improving           commercial distribution processes,     
communication, while continuing     including staff resources and          
to ensure program integrity.        financial resources.                   
Expand awareness, understanding,    o Milestone tracking of annual update  
and preference for the JWOD         and implementation of a plan that      
program within the public,          addresses communication and            
Congress, federal agencies, the     information sharing with and among     
disability community, and other     both internal and external             
JWOD stakeholders through           stakeholders.                          
effective communication and         o Among members of congressional       
information sharing.                committees or subcommittees with       
                                       oversight or other significance for    
                                       the JWOD program, number who have been 
                                       educated about the JWOD program and/or 
                                       are actively engaged with their local  
                                       JWOD-participating nonprofit           
                                       agency(ies).                           
Strategically develop new           o Milestone tracking of establishment  
markets and expand existing         and implementation of a program market 
markets in which the JWOD           development plan that addresses        
program can provide best value      existing customers, existing           
products and services to federal    products/services, new customers, and  
customers in order to expand        new products/services.                 
employment opportunities that       o Percent increase in the employment   
meet the needs of people who are    of people who are blind or have other  
blind or have other severe          severe disabilities under the JWOD     
disabilities.                       program, measured in (1) actual direct 
                                       labor hours, (2) actual jobs, (3)      
                                       projected direct labor hours on        
                                       procurement list additions, and (4)    
                                       projected jobs on procurement list     
                                       additions by key market segment.       

Source: Final FY 2007-2009 Strategic Plan for the Javits-Wagner-O'Day
(JWOD) Program, Committee for Purchase from People Who Are Blind or
Severely Disabled, October 16, 2006.

Uneven Federal Oversight Provides Little Assurance of Accountability for Two
Programs

Education and the Committee for Purchase engage in a number of oversight
activities for the programs they are responsible for, but their efforts to
ensure compliance with applicable laws and regulations have been uneven,
and overall have provided little assurance of program accountability for
two of the four programs reviewed. Specifically, Education has established
oversight procedures for the PWI and the Supported Employment State Grants
programs that, if consistently followed, should provide reasonable
assurance of compliance with relevant laws and regulations. The agency is
just beginning to conduct on-site monitoring of PWI grantees that may be
sufficient for testing the accuracy of the information used to monitor
compliance. Education's oversight of these two programs has generally been
more active than its oversight of the Randolph-Sheppard program. Education
relies primarily on self-reported data for its monitoring of the
Randolph-Sheppard program and does not routinely analyze or report the
data it collects. Finally, the Committee for Purchase has established
procedures for monitoring and overseeing the JWOD program, but has
prescribed regulations that delegate most of the responsibility for
carrying out these procedures to two central nonprofit agencies that are
also responsible for representing the interests of the JWOD nonprofit
agencies they monitor, raising questions about independence. Furthermore,
there are no procedures in place for the Committee for Purchase to address
instances where the central nonprofit agencies fail to carry out their
oversight responsibilities.

Education Performs Various PWI Oversight Activities, and On-site Monitoring Is
Improving

Education regularly performs a number of oversight activities to ensure
that PWI grantees are making progress toward project goals and complying
with applicable laws and regulations. Specifically, program specialists
told us they conduct quarterly monitoring calls with all PWI grantees in
which they ask a series of 30 questions that help them to identify and
proactively resolve problems with individual projects. The questions
address several areas, including progress toward meeting goals, activities
of the BACs, interaction with the state VR agency, and fiscal management.
Further, Education requires that PWI grantees submit annual reports that
include detailed information about project activities and performance, and
informs grantees of this requirement as part of the application process.
Education uses the project information it receives from grantees to
identify those grantees that may be at risk of being out of compliance
with program requirements and to target these grantees for additional
assistance or for on-site reviews. Education also relies on the data it
receives from grantees to provide information about grantees' performance
in its annual reports to Congress.22

Although grantees are responsible for monitoring their own projects,
Education is required to conduct random on-site reviews of 15 percent of
PWI grantees annually.23 On-site reviews are the primary means by which
Education can assess the accuracy of the performance data submitted by
grantees. Education conducted 11 of the 12 required on-site reviews in
fiscal year 2006 and had scheduled the remaining review for November 2006.
However, it conducted only 3 of the 12 required for 2005, and 0 in 2004,
and therefore did not have enough information to provide reasonable
assurance of the accuracy of the data submitted by grantees in those
years. Although each of the PWI grantees that we visited had procedures in
place to review the data they submitted to Education, a research
organization conducted an evaluation of the program that raised doubts
about the accuracy of PWI data submitted by grantees in general.24
Specifically, reviewers found that about one-fifth of PWI grantees
surveyed (19 out of 92) provided information on the number of persons
placed in fiscal year 2001 that was inconsistent with the information they
had submitted to Education.

22By law, Education is required to develop standards for the annual review
and evaluation of a grant recipient's project, which include a number of
compliance indicators. These include, for example, the number of
applicants and individuals eligible for a program, and the number of
significantly disabled people who ended their participation in the
program, became employed, and were still employed after 6 and 12 months.

Education is also required to submit an annual report to Congress
analyzing the extent to which the individual grant recipients have
complied with program evaluation standards.25 In fiscal years 2003, 2004,
and 2005, Education has met this requirement by providing summaries of the
extent to which grantees have met program performance targets in its
Performance and Accountability Report to Congress.

Education's Oversight of Supported Employment Is Part of Overall VR Program
Monitoring Efforts

Education's oversight of the Supported Employment State Grants program is
integrated into its ongoing efforts to review and monitor state VR
programs.26 During fiscal year 2006, Education revised its annual state
plan review protocols and prepared a draft on-site monitoring plan for the
VR program.27 Annual reviews include examining each state's VR program
plans and other documentation, such as required annual data reports on VR
customers, services, and outcomes; caseloads; and financial accountability
and data reporting procedures. Education's October 2006 draft on-site
monitoring protocols call for on-site reviews once every 3 years and are
designed to verify and supplement the information it receives from the
states regarding program performance and compliance, and include reviewing
case files and holding public hearings or other discussions with VR
program consumers and advocates, as needed. Education has not yet
conducted any on-site reviews using the revised protocols, but plans to
conduct its first reviews beginning in fiscal year 2007. Once fully
implemented, the annual reviews and on-site monitoring, along with
state-level activities, should offer reasonable assurance that the
Supported Employment State Grants program is in compliance with applicable
laws and regulations and the data that states submit to Education annually
are accurate.

2329 U.S.C. S 795(f)(3)(A).

24RTI International, Evaluation of the Projects with Industry Program,
Final Report (Research Triangle Park, N.C.: 2003).

2529 U.S.C. S 795(f)(5).

26For more information on Education's oversight of state VR programs, see
GAO, Vocational Rehabilitation: Better Measures and Monitoring Could
Improve the Performance of the VR Program, GAO-05-865 (Washington, D.C.:
September 2005).

27The procedures were developed with input from national experts, state VR
agency officials, State Rehabilitation Council members, VR consumer and
advocacy groups, community partners and provider organizations and other
key stakeholders.

In addition, we found that all four states we visited had their own
accountability procedures for ensuring that VR grant funds, including
Supported Employment State Grants funds, were being used in accordance
with federal laws and regulations. For example, the New York state VR
agency has configured its automated information management system in a way
that only authorizes payment for supported employment services to
providers that have a contract to provide these services, at the
contracted rates. In addition, three of the four states had adopted
performance-based contracting systems, whereby vendors providing supported
employment services, such as job coaching or training, are required to
demonstrate progress toward required milestones in order to receive
payment from the state agencies, and VR counselors monitor their progress
on a weekly, biweekly, or monthly basis.

Education Provides Little Oversight of the Randolph-Sheppard Program

Education provides little oversight of the Randolph-Sheppard program.
Despite being required to conduct periodic evaluations of the program and
being responsible for approving states' rules and regulations for
implementing the Randolph-Sheppard Act,28 Education has no formal
procedures for evaluating state programs. In addition to lacking
procedures, Education has performed few on-site monitoring reviews of SLAs
in recent years. According to agency officials, Education has performed
five on-site monitoring reviews since the beginning of fiscal year 2005
and had performed no recent site visits in the four states that we
visited. Education's oversight activities primarily consist of collecting
data from states through annual reports from the SLAs that administer the
program and providing requested technical assistance. Although the states
report considerable information including earnings data; the number of
vendors, facilities, individuals employed by vendors; types of facilities;
costs; and sources of funding, Education does not test the accuracy of
data that it requires states to report, nor does the agency routinely
analyze the data to assess program performance and management. As a
result, Education cannot assess trends in performance, identify possible
best practices, or help states that may need assistance. Upon request,
Education also provides technical assistance to SLAs. According to
Education officials, technical assistance and guidance is regularly
provided to SLAs through telephone calls and written correspondence,
including e-mails, with staff on specific questions.

2820 U.S.C. S 107a and 34 C.F.R. SS 395.4 - .5.

In its oversight role, Education has not provided clear guidance to states
on emerging issues that could have nationwide implications. Instead,
Education responds to individual state concerns and convenes panels to
arbitrate disputes that SLAs are unable to resolve. As a result, states
have different policies regarding the permissibility of teaming
agreements, which partner licensed vendors with commercial food operators
in order to help manage larger food service operations at dining
facilities at military bases. SLAs may have such agreements for various
reasons, such as state program officials' lack of expertise or licensed
vendors' inexperience running such facilities. In these cases, the
licensed vendor generally does not operate the food service facilities,
but rather manages some aspects of food service operations. For example,
one of the states we visited (Kansas) had a teaming agreement. One of the
states we visited (New York) does not currently allow teaming agreements,
while another (Arizona) has no policy regarding teaming agreements. The
fourth state, North Carolina, permits teaming agreements but does not
currently have any as of June 2006.

Although Education has noted the increasing use of teaming agreements, it
has not issued guidance to the SLAs directly addressing whether these are
in keeping with the spirit of the Randolph-Sheppard Act, or whether they
should be subject to limitations, despite concerns expressed by states and
others. For example, the California State Auditor found that by allowing
teaming agreements, the SLA had inadequately protected the interests of
the state and licensed vendors. The SLA had not (1) ensured that written
contracts existed before beginning operations, (2) analyzed the investment
and return on investment of the teaming agreement to the program and
licensed vendors, (3) adequately reviewed the teaming agreements, or (4)
ensured that the commercial food service operators were paying their fair
share of program costs. In addition, the Georgia State Auditor identified
some concerns about teaming agreements, including the failure to define
the duties for participating licensed vendors, resulting in these vendors
having little, if any, responsibility for the overall operation and
success of subcontracted food services. Further, the auditor noted that
the program is not ensuring that the commercial food service operators are
making progress toward the program's goal that licensed vendors eventually
assume responsibility for operating the facility.

Additionally, Education has not provided clear guidance or policies
regarding when federal agencies may charge fees or commissions to licensed
vendors as a condition of operating a vending facility on federal
property. The Randolph-Sheppard Act has been interpreted to prohibit
commissions unless federal agencies obtain written approval from the
Secretary of Education.29 We found that licensed vendors have paid
commissions or fees in some locations but not in others and the federal
agencies had not obtained approval from Education. For example, in one
state we visited (Kansas), at least one licensed vendor was required to
pay 1.5 percent of total revenues to the U.S. Postal Service in exchange
for permission to operate vending facilities on the agency's properties.
However, Education has not prohibited such practices or required the
Postal Service or other federal agencies charging commissions to obtain
written approval. Furthermore, officials in Kansas have chosen not to
dispute it. According to agency officials, Education has never approved
such a limitation and cannot routinely monitor state-level or
vendor-specific business negotiations, but would intervene to bring the
parties together in an attempt to resolve disputes or make clear the
requirements of the Randolph-Sheppard Act.

Although Education has exercised little oversight for this program, the
four SLAs that we visited had certain procedures in place that should, if
consistently operated along with other certain complementary processes and
procedures such as management's monitoring of performance over time, help
safeguard program assets. SLA officials obtained cash register receipts,
daily reports on business activities, or monthly reports submitted by the
vendors to review the financial operations for these programs. However,
audits of programs in other states have reported certain issues relating
to the accountability of state-operated programs under the
Randolph-Sheppard Act. For example, the Michigan Auditor General reported
that SLA staff did not comply with established equipment inventory control
procedures for program equipment and could not account for equipment
inventory, placing inventory at risk of misappropriation.30 Further, the
California State Auditor reported that, among other things, the SLA has
not followed up on missing financial reports from licensed vendors and has
not been able to monitor licensed vendors' financial problems properly. In
addition, the auditor found that the SLA was not adequately pursuing
past-due commissions owed to the program by private businesses operating
vending machines on federal properties.31

29Under 20 U.S.C. S 107(b), any limitation on the placement or operation
of a vending facility shall be fully justified in writing to the
Secretary, who shall determine whether such limitation is justified. In
2005, an arbitration panel ruled that a 10-percent commission charged by
the U.S. Postal Service to licensed vendors without authorization of the
Secretary of Education was a limitation not allowed under the law. The
panel was convened by Education after it received a complaint and, as
required by law, Education published a synopsis of the decision in the
Federal Register. 70 Fed. Reg. 60803-04.

Committee for Purchase Delegates Most Oversight Responsibilities for JWOD to Two
Organizations That Represent the Interests of the Agencies They Oversee

The Committee for Purchase has established procedures for monitoring and
overseeing the JWOD program, but has delegated most of the responsibility
for monitoring participating JWOD nonprofit agencies to two central
nonprofit agencies. As of April 2006, NIB officials reported that they
worked with 81 participating JWOD nonprofit agencies that employed
individuals who are blind, and NISH officials reported that they worked
with 552 JWOD nonprofit agencies that employed individuals with other
severe disabilities.32 In particular, although the Committee for Purchase
must approve the nonprofit agencies' participation in the program, it
relies on the central nonprofit agencies to certify that:

           o 75 percent or more of the direct labor hours under JWOD
           contracts are performed by individuals who are blind or have
           severe disabilities, and if not, that there is a suitable plan in
           place to bring this percentage up to the required level;
           o agencies maintain required documentation for each of these
           individuals;

           o agencies function as nonprofit entities serving individuals who
           are blind or have severe disabilities;

           o agencies have a required job placement program; and

           o agencies comply with applicable occupational safety and health
           standards.

30Michigan Office of the Auditor General, Performance Audit, Michigan
Commission for the Blind, Department of Labor and Economic Growth and
Family Independence Agency, Report Number: 43-231-03 (October 2004).

31California State Auditor, Department of Rehabilitation: Its Delay in
Correcting Known Weaknesses Has Limited the Success of the Business
Enterprise Program for the Blind, Report No. 2002-031 (September 2002).

32NISH was formerly called National Industries for the Severely
Handicapped.

The Committee for Purchase requires that the JWOD nonprofit agencies
certify annually that they are in compliance with program requirements but
does not routinely verify this information, relying instead on the central
nonprofit agencies to do so. According to agency officials, the Committee
for Purchase performs about 20 field visits annually, visiting up to 3
agencies per visit, or about 60 of the more than 600 participating
nonprofit agencies. At this rate, the Committee for Purchase is unable to
satisfy its own requirements to perform on-site compliance reviews at each
fully compliant participating nonprofit agency every 5 years.

The Committee for Purchase's regulations create at least two problems for
NIB and NISH: the potential for a conflict of interest resulting from a
lack of organizational independence as well as disincentives to perform
their monitoring duties effectively. Specifically, these regulations
require that NIB and NISH, on behalf of the Committee for Purchase,
monitor the compliance of JWOD nonprofit agencies, but, at the same time,
represent them in their dealings with the Committee for Purchase.
Moreover, the regulations also permit NIB and NISH to charge a fee based
on JWOD nonprofit agencies' sales to the government that does not exceed
the limit set by the Committee for Purchase, and require the nonprofit
agencies to pay that fee in order to remain in good standing in the
program. This system of compensation may create a disincentive for NIB and
NISH to identify instances of noncompliance that could result in the JWOD
nonprofit agency losing its contract, especially for those JWOD nonprofit
agencies that are generating large volumes of JWOD sales. Finally,
although the regulations and procedures provide for a number of duties
that the central nonprofit agencies must perform, they do not specify
actions the Committee for Purchase can take if the central nonprofit
agencies fail to execute these duties.

NIB and NISH officials reported that they monitor JWOD nonprofit agencies'
compliance with relevant laws and regulations by conducting on-site
reviews of nonprofit agencies every 3 years,33 and require quarterly
statistical reports from the agencies they oversee. The Committee for
Purchase has established procedures for these reviews that require each
central nonprofit agency to use a standardized review sheet to assess
whether the JWOD nonprofit agency is compliant in 11 different program
areas, including the percentage of direct labor hours performed by
individuals who are blind or have severe disabilities, documentation of an
employee's disability, and an evaluation of whether or not the individual
is capable of competitive employment.34 The on-site reviews are the
primary means for NIB and NISH to test the accuracy of the data that the
JWOD nonprofit agencies submit, but the scope of the reviews may not be
sufficient to provide reasonable assurance of the accuracy of all of the
data. For example, NIB and NISH officials reported that they test the
accuracy of the data for percentage of direct labor hours by reviewing a
sample of case files, but they do not verify other data, such as job
placement and upward mobility statistics. Further, they do not always
report instances of noncompliance they find to the Committee for Purchase.

In the states we visited, reports from NIB's and NISH's on-site reviews
generally showed that the JWOD nonprofit agencies were in compliance with
program requirements, and most files contained the required documentation.
Eleven of 13 agencies that we visited provided documentation of the
results of their most recent on-site reviews showing they were in
compliance. However, in our limited reviews of 137 case files at these 13
agencies, we found that 5 of 8 NISH agencies had at least 1 file that
lacked the required medical documentation of a worker's disability, and
that 3 of these 8 NISH agencies had at least 1 file that lacked the
required documentation on competitive employment. We also found that one
of the five NIB agencies we visited had one case file that lacked the
required medical documentation. In sum, 11 percent of the files we
reviewed at the NIB and NISH agencies we visited lacked the required
medical or competitive employment documentation.

33In 2005, NIB performed about 27 on-site reviews in 2005 and NISH
performed about 180, according to agency officials.

34For individuals employed at NISH associated agencies, any individual who
is capable of competitive employment is not considered severely disabled,
according to program regulations. See the Committee for Purchase's
Compliance Memorandum No. 7, "On-Site Compliance Reviews," dated May 6,
1998.

A serious instance of noncompliance escaped detection by the responsible
central nonprofit agency (NISH) and the Committee for Purchase. In this
case, the National Center for the Employment of the Disabled (NCED) in El
Paso, Texas, failed to use workers with severe disabilities to perform the
required percentage of direct labor hours on its JWOD contracts, which
were valued at over $200 million. Instead, NCED inflated its reported
percentage by improperly including economically disadvantaged workers. The
problems at NCED were detected not through routine monitoring, but rather
through an anonymous tip to the Committee for Purchase, and resulted in as
many as 1,144 JWOD jobs being lost to individuals who did not have severe
disabilities during fiscal years 2004 and 2005. The JWOD nonprofit agency
took actions prescribed by the Committee for Purchase to come into
compliance, including dividing the agency's operations into two different
units--one for JWOD work and one for commercial activities--and the
Committee for Purchase is satisfied with the actions taken.

The definition of a severe disability in the law allows for differing
interpretations, which may complicate efforts to ensure compliance for
agencies that serve individuals who have severe disabilities. The
statutory definition of blindness is fairly straightforward: a lack of
visual acuity of not more than 20/200 in the better eye with correcting
lenses or a limited field of vision of not more than 20 degrees. In
contrast, the definition of a severe disability requires a diagnosis of a
residual, physical or mental impairment that limits functioning in one of
five areas (mobility, communication, self-care, self-direction, and work
tolerance or work skills), and a determination that the impairment has
rendered the individual unable to engage in normal competitive employment
over an extended period of time. Despite the fact that the definition is
subject to interpretation, the Committee for Purchase has offered little
additional guidance that would clarify when disabilities that may not
normally be considered severe could be, such as the conditions under which
a recovering alcoholic or a person with diabetes could be considered to
have a severe disability. During our review of case files at 13 JWOD
nonprofit agencies, we noted instances where it was unclear in the medical
documentation that the disability was severe, such as a case in which the
individual was diabetic, with no indicated symptoms, and another in which
the individual was diagnosed as having an aggressive personality.

Conclusions

All four of these programs generally provide training and employment
opportunities that might not otherwise be available for individuals who
are blind or have severe disabilities. However, two are hampered by
weaknesses in performance management and program oversight that signal a
need for stronger federal leadership. Absent federal goals for the
Randolph-Sheppard program and routine analyses and reports from Education
on states' program operations and performance, little is known about how
this program is improving the lives of participants. Having such
information about outcomes is an important component of any program, and
essential during times of fiscal austerity. Further, by not exercising
more oversight and issuing clear guidance to all states on emerging issues
that could affect program participants, Education may be missing an
important opportunity to help states improve program operations or
proactively respond to these issues. While recognizing that there may be
increased costs for improved oversight, these costs could be minimized by,
for example, monitoring Randolph-Sheppard activities as part of
Education's oversight for the VR program. Although the Committee for
Purchase has made significant progress in developing goals for the JWOD
program, some of the goals lack key elements--clear measures and
performance targets. Also, the current approach for overseeing nonprofit
agencies operating under the JWOD program poses difficult challenges for
the two central nonprofit agencies in managing the conflicts of interest
that may exist because of their lack of organizational independence, and
therefore demands strong and effective oversight from the Committee for
Purchase. Ensuring program integrity is particularly important for JWOD
since nonprofit agencies are given a competitive advantage over private
business and industry in the federal procurement system to ensure that
opportunities are provided to individuals with severe disabilities.

Recommendations

           1. To improve program performance management and oversight, we
           recommend that the Secretary of Education provide more effective
           leadership of the Randolph-Sheppard program by:

                        o establishing performance goals to identify desired
                        programwide outcomes that assess states' licensed
                        vendor programs' performance as a whole in achieving
                        established goals;

                        o being more proactive in disseminating clear,
                        consistent and routine guidance about program
                        requirements and prohibited practices to federal
                        agencies and states; and

                        o strengthening their monitoring of SLA and
                        Randolph-Sheppard program performance in a
                        cost-effective manner.

           2. To improve program performance management, we recommend that
           the Chairperson for the Committee for Purchase assess goals and
           measures for JWOD to ensure that they are clear, measurable and
           continue to capture key aspects of program performance as the
           Committee for Purchase continues to develop its performance
           management system.
           3. To help ensure that JWOD nonprofit agencies comply with program
           laws and regulations, we recommend that the Chairperson of the
           Committee for Purchase improve procedures for overseeing these
           agencies. This could include requiring the central nonprofit
           agencies to enter into written contracts with the Committee for
           Purchase that clearly lay out their oversight responsibilities and
           the consequences for failing to fulfill them, providing a means of
           compensating the central nonprofit agencies for their services
           that provides an incentive for effective enforcement, or having
           the Committee for Purchase assume greater responsibility for
           oversight of JWOD nonprofit agencies, by performing more on-site
           compliance reviews.

Agency Comments and Our Evaluation

We received written comments on a draft of this report from the Department
of Education and the Committee for Purchase. Education and the Committee
for Purchase generally agreed with our recommendations and provided
information on activities they had underway or planned.

Education agreed that it should provide more effective leadership of the
Randolph Sheppard program and commented that the actions we recommended
were consistent with the steps the program is taking to improve program
administration. Some of the steps Education cited included developing
appropriate performance goals, enhancing its efforts to provide clear and
consistent guidance, and improving program monitoring. We believe these
efforts will help to improve program performance management and oversight.

The Committee for Purchase agreed that its performance goals and measures
for the JWOD program should be assessed to ensure that they are clear and
quantifiable. However, the Committee for Purchase commented that its
regulations did not intend for "training" to be taken literally as a
mission output and, therefore, the agency did not establish a separate
goal for training activities. Rather, the Committee for Purchase stated
that it viewed training as an important, but incremental activity that
equips persons who are blind or have severe disabilities with the
knowledge and skills necessary for employment, which it considers the
paramount goal of the program. Also, the Committee for Purchase believes
the reporting requirements for establishing a separate goal for training
would burden the nonprofit agencies. To avoid confusion over the Committee
for Purchase's goals in the future, the agency plans to clarify its
regulations. While we believe that training is key to preparing persons
who are blind or have severe disabilities for employment, we can
understand the Committee for Purchase's view that the paramount program
goal is employment. Clarifying the regulations regarding the Committee for
Purchase's intent with respect to the role of training may make it clear
that a separate goal for training is not essential.

With respect to ensuring effective monitoring and oversight, the Committee
for Purchase agreed that more guidance was needed to help ensure that JWOD
nonprofit agencies comply with program laws and regulations. Additionally,
the Committee for Purchase commented that it has recently begun taking
steps to address possible conflicts of interest between the two roles
played by the central nonprofit agencies. The Committee for Purchase also
commented that it is considering establishing other oversight and
compliance mechanisms and in its proposed fiscal year 2007 budget included
three new positions and additional funding for oversight, compliance
monitoring, and program review. We believe the Committee for Purchase's
proposed actions are positive steps toward helping to ensure that JWOD
nonprofit agencies comply with program laws and regulations.

Education and The Committee's comments appear in appendixes III and IV,
respectively. Both agencies also provided technical comments, which we
have incorporated into the report as appropriate.

We are sending copies of this report to the Secretary of Education,
Chairperson of the Committee for Purchase, relevant congressional
committees, and others who are interested. Copies will also be made
available at no charge on GAO's Web site at http://www.gao.gov.

Please contact me on (202) 512-7215 if you or your staff have any
questions about this report. Contact points for our Offices of
Congressional Relations and Public Affairs can be found on the last page
of this report. Other major contributors to this report are listed in
appendix V.

Robert E. Robertson Director Education, Workforce, and Income Security

Appendix I: Objectives, Scope, and Methodology

The objectives of our study were to assess to what extent (1) performance
goals and measures have been established for these programs and (2) the
agencies responsible for these programs have established adequate
procedures for overseeing program implementation and assuring laws and
regulations are followed.

To determine what performance goals and measures have been established for
these programs, we reviewed program laws, guidance, and
performance-related documents. To obtain additional information about the
performance goals and measures, and determine the extent that the agencies
responsible for these programs have established adequate procedures for
overseeing program implementation and assuring that laws and regulations
are followed, we (1) reviewed federal laws, regulations, and guidance to
determine the programs' requirements; and (2) interviewed agency officials
at the Rehabilitation Services Administration (RSA) within the Department
of Education, and the Committee for Purchase from People Who Are Blind or
Severely Disabled (Committee for Purchase). In addition, we interviewed
officials of the two central nonprofit agencies--the National Industries
for the Blind (NIB) and NISH--that have been delegated certain oversight
responsibilities for Javits-Wagner-O'Day (JWOD) member nonprofit agencies
by the Committee for Purchase.

To obtain additional information about program goals and measures and
oversight for the four programs, we conducted site visits to four states
(Arizona, Kansas, New York, and North Carolina). During these visits, we
met with state VR agency officials to discuss the Supported Employment,
Projects with Industry (PWI), JWOD, and Randolph-Sheppard programs. In
addition, we visited 4 PWI grantees, 13 JWOD nonprofit agencies, and 7
Randolph-Sheppard vendors. Several criteria were used in selecting the
states to visit. States that were considered had all four of the
employment-related disability programs currently present and operating in
them. States varied in the administration of their VR programs with about
half of all states having two separate programs--one for the general VR
and a separate one for the blind--and the remaining states having only one
VR program. We selected two states (New York and North Carolina) that had
both general and blind VR programs, and two states (Arizona and Kansas)
that had one VR program that served all people with disabilities seeking
employment-related assistance. In addition, we selected states based on a
review of information about the characteristics of NIB and NISH member
nonprofit agencies to include both large and small, urban and rural, and
different kinds of work performed (products and services). States were
also selected to include geographic diversity.

During the state visits, we met with officials representing each of the
four programs. For Education's programs, we interviewed local officials of
nonprofit agencies with PWI grants, state program administrators for the
state-operated Randolph-Sheppard programs as well as licensed vendors, and
state VR officials responsible for administering the Supported Employment
State Grants program. For JWOD, we interviewed chief executive officers or
their representatives of the JWOD nonprofit agencies with current federal
contracts to provide goods and/or services. In addition, during these
meetings, we collected documentation to ascertain how the federal and two
central nonprofit agencies were monitoring their respective programs. We
also reviewed the records of 137 workers who were blind or had severe
disabilities, selecting some records at each of the 13 JWOD nonprofit
agencies we visited. The records were randomly selected from lists of
current JWOD workers. A random number generator was used to assign a
number to each name on the active roster and records were selected on the
basis of the number--starting with the lowest number. During the record
review, we assessed whether the agencies' files of workers who were blind
or had severe disabilities contained required medical documentation and
assessment of ability to work in competitive employment.

We determined that the fiscal and program data we used in this report was
reliable for our purposes. To make this determination, we assessed the
reliability of fiscal and programmatic data by interviewing officials
knowledgeable about the data and the steps they take to ensure accuracy.
For Supported Employment, prior GAO work had systematically tested
relevant variables, including all 22 variables of the services provided.
In addition, for this engagement we obtained documentation from two states
(Kansas and New York) that described the states' procedures for checking
the reliability of their data. Programmatic data collected by the
Committee for Purchase for the JWOD program, and Education for the PWI and
Randolph-Sheppard programs were self-reported by local program officials.
For example, reviews of the information reported by officials for the PWI
program were generally performed by project managers. For fiscal
reporting, however, we found that JWOD nonprofit agencies, PWI grantees,
and licensed vendors generally had systems and procedures for stronger
accounting of financial data. For example, state licensing agency (SLA)
officials used cash register receipts and routine reports on business
activities submitted by the licensed vendors to the SLAs to review the
financial information for these programs. In addition, licensed vendors
were also required to complete merchandise inventories at least once each
year.

We also reviewed other available reports on the Randolph-Sheppard program
of the states visited, and reviewed the findings and recommendations of
state audit reports from four other states--California, Georgia, Michigan,
and South Carolina--that had evaluated all or certain aspects of their
state-operated Randolph-Sheppard programs in recent years. In addition, we
interviewed officials of agencies engaged in disability research and
advocacy at the national level to learn more about each of the objectives.
These organizations were the Council of State Administrators of Vocational
Rehabilitation, Disability Policy Collaboration, Easter Seals, Goodwill
Industries International, National Council on Disability, and the National
Council of State Agencies for the Blind. We also met with officials of the
General Services Administration, a federal procurement agency and partner
of the JWOD program.

We conducted our work between March 2006 and December 2006 in accordance
with generally accepted government auditing standards.

Appendix II: Performance Goals and Measures for the Javits-Wagner-O'Day
(JWOD) Program 

Table 5: JWOD Performance Goals and Measures

Performance goals               Performance measures                       
Continue to expand employment      o Percentage increase in direct labor   
opportunities for people who       hours performed by people who are blind 
are blind or have other severe     or have other severe disabilities on    
disabilities under the JWOD        JWOD products and services.             
program, including wage            o Percentage increase in the number of  
progression, benefits, upward      people who are blind or have other      
mobility, and personal job         severe disabilities employed in direct  
satisfaction.                      labor positions on JWOD                 
                                      products/services.                      
                                      o Percentage increase in the number of  
                                      people receiving benefits versus not    
                                      receiving benefits.                     
                                      o Percentage decrease in the number of  
                                      people receiving less than the          
                                      federally-mandated minimum wage or      
                                      Service Contract Act wage rate,         
                                      segmented by disability.                
                                      o The number of employees who are blind 
                                      or have other severe disabilities who   
                                      are promoted into a direct labor job,   
                                      other than supervisory or management    
                                      positions, which includes increased     
                                      wages and/or fringe benefits, not       
                                      attributed to cost of living or         
                                      productivity increases of less than 20  
                                      percent. Promotions can be movement     
                                      between JWOD and non-JWOD jobs.         
                                      o The number of employees who are blind 
                                      or have other severe disabilities who   
                                      are promoted into an indirect labor job 
                                      requiring supervisory, management, or   
                                      technical skills, that included         
                                      increased wages and/or fringe benefits, 
                                      not attributed to cost of living        
                                      raises.                                 
                                      o The number of employees who are blind 
                                      or have other severe disabilities who   
                                      leave the nonprofit agency through      
                                      competitive or supported employment     
                                      placements.                             
Partner with federal customers     o Federal agency scorecard that         
to increase customer               evaluates the level of satisfaction     
satisfaction and loyalty, so       with JWOD products, services and/or     
that the JWOD program becomes      customer experience among key federal   
their preferred source for         agencies, using a stoplight or similar  
products and services.             summary format.                         
                                      o Time to resolve customer questions or 
                                      complaints received via the central     
                                      customer feedback mechanism(s) or other 
                                      means of communication.                 
                                      o Increased customer satisfaction with  
                                      quality, timeliness, and price, based   
                                      on customer surveys and/or alternative  
                                      qualitative research (e.g., focus       
                                      groups).                                
Improve efficiency and             o Overhead cost as a percentage of JWOD 
effectiveness of the JWOD          program direct labor hours, calculated  
program by streamlining and        as total Committee for Purchase budget  
automating processes and           plus central nonprofit agencies'        
procedures, and improving          operating and supporting costs          
communication, while continuing    (excluding capital expenditures),       
to ensure program integrity.       divided by total number of direct labor 
                                      hours, segmented by overall program     
                                      (Committee for Purchase plus central    
                                      nonprofit agencies' overhead), National 
                                      Industries for the Blind (NIB) and      
                                      NISH.                                   
                                      o Reduction in the cycle time for the   
                                      addition of a new JWOD product or       
                                      service to the procurement list.        
                                      o Percentage increase in sales of       
                                      products through commercial             
                                      distribution channels, segmented by     
                                      product category.                       
                                      o Ranking of commercial distributors,   
                                      evaluated against consistent program    
                                      performance expectations, including     
                                      compliance with the Committee for       
                                      Purchase's Essentially The Same (ETS)   
                                      requirements, segmented by product      
                                      category.                               
                                      o Milestone tracking of evaluation of   
                                      commercial distribution processes,      
                                      including staff resources and financial 
                                      resources.                              
                                      o Percent of information technology     
                                      projects on which the Committee for     
                                      Purchase, central nonprofit agencies,   
                                      and nonprofit agencies collaborated to  
                                      increase efficiency and exchange of     
                                      information.                            
                                      o Decrease in the percentage of JWOD    
                                      nonprofit agencies found out of         
                                      compliance, segmented by reason.        
                                      o Consider a future measure linked to   
                                      the results of governance and executive 
                                      compensation actions.                   
Expand awareness,                  o Effectiveness of communication and    
understanding, and preference      information sharing measured by         
for the JWOD program within the    increased percentages in awareness,     
public, Congress, federal          familiarity (understanding) and         
agencies, the disability           preference, segmented by key            
community, and other JWOD          stakeholders.                           
stakeholders through effective     o Milestone tracking of annual update   
communication and information      and implementation of a plan that       
sharing.                           addresses communication and information 
                                      sharing with and among both internal    
                                      and external stakeholders.              
                                      o Analysis of program-level             
                                      communications execution to ensure that 
                                      program resources are used in support   
                                      of the strategic communications plan.   
                                      o Analysis of program-level             
                                      publications, events, and other         
                                      communications tools to evaluate        
                                      message alignment.                      
                                      o Facilitate nonprofit agency adoption  
                                      of program messaging and branding.      
                                      o Awareness, understanding, preference  
                                      among federal customers, segmented by   
                                      Department of Defense and civilian      
                                      agencies.                               
                                      o Awareness, understanding, preference  
                                      for "the disability community,"         
                                      comprised of government policy makers,  
                                      academia, and private membership or     
                                      advocacy organizations for people who   
                                      are blind or have other severe          
                                      disabilities.                           
                                      o Among members of congressional        
                                      committees or subcommittees with        
                                      oversight or other significance for the 
                                      JWOD program, number who have been      
                                      educated about the JWOD program and/or  
                                      actively engaged with their local       
                                      JWOD-participating nonprofit            
                                      agency(ies).                            
Strategically develop new          o Milestone tracking of establishment   
markets and expand existing        and implementation of a program market  
markets in which the JWOD          development plan that addresses         
program can provide best value     existing customers, existing            
products and services to           products/services, new customers, and   
federal customers in order to      new products/services.                  
expand employment opportunities    o Percent increase in the employment of 
that meet the needs of people      people who are blind or have other      
who are blind or have other        severe disabilities under the JWOD      
severe disabilities.               program, measured in (1) actual direct  
                                      labor hours, (2) actual jobs, (3)       
                                      projected direct labor hours on         
                                      procurement list additions, and (4)     
                                      projected jobs on procurement list      
                                      additions by key market segment.        
                                      o JWOD goal achievement, by agency and  
                                      overall federal government.             
                                      o Milestone tracking of establishment   
                                      and implementation of a strategy for    
                                      greater cooperation between JWOD and    
                                      the small business community, which may 
                                      explore counting appropriate JWOD       
                                      awards toward the annual Small Business 
                                      procurement goals and/or the federal    
                                      government's inclusion of               
                                      disability-owned businesses within the  
                                      small business measure categories       
                                      (relates to leveraging the JWOD program 
                                      to create additional jobs in the        
                                      commercial sector).                     
                                      o Milestone tracking of implementation  
                                      of a strategy for greater cooperation   
                                      between JWOD and Randolph-Sheppard      
                                      programs.                               
                                      o Milestone tracking of establishment   
                                      and implementation of a strategy for    
                                      greater cooperation with                
                                      service-disabled veterans' businesses.  

Source: Final FY 2007-2009 Strategic Plan for the Javits-Wagner-O'Day
(JWOD) Program, Committee for Purchase From People Who Are Blind or
Severely Disabled, October 16, 2006.

Appendix III: Comments from the Department of Education

Appendix IV: Comments from the Committee for Purchase from People Who Are
Blind or Severely Disabled

Appendix V: GAO Contact and Staff Acknowledgments

GAO Contact

Robert E. Robertson (202) 512-7215

Acknowledgments

The following individuals made important contributions to this report:
Shelia D. Drake, Timothy Hall, Regina Santucci, Don Allison, Rachael
Valliere, Daniel Schwimer, Walter Vance, and Robert Owens.

(130560)

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www.gao.gov/cgi-bin/getrpt?[36]GAO-07-236 .

To view the full product, including the scope
and methodology, click on the link above.

For more information, contact Robert E. Robertson at (202) 512-7215 or
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Highlights of [37]GAO-07-236 , a report to congressional requesters

January2007

FEDERAL DISABILITYASSISTANCE

Stronger Federal Oversight Could Help Assure Multiple Programs'
Accountability

Congress has created 20 federal employment-related programs that are aimed
at helping people with disabilities obtain jobs. Little is known about the
effectiveness and the management of some of these programs. GAO was asked
to review four of these programs; the Department of Education (Education)
oversees three--Projects with Industry (PWI), Supported Employment State
Grants, and Randolph-Sheppard. An independent federal agency, the
Committee for Purchase, oversees the fourth, Javits-Wagner-O'Day (JWOD).
Specifically, GAO assessed the extent to which (1) performance goals and
measures have been established for these programs and (2) the agencies
responsible have established adequate oversight procedures. We reviewed
program planning and performance information, interviewed agency
officials, and visited each of the four programs in four states.

[38]What GAO Recommends

GAO recommends that Education establish goals for the Randolph-Sheppard
program and strengthen program monitoring and guidance. GAO also
recommends that the Committee for Purchase ensure JWOD goals and measures
are clear and measurable and strengthen its procedures for overseeing the
JWOD nonprofit agencies. In their comments, Education and the Committee
for Purchase generally agreed with GAO's recommendations.

Three of the four programs have federal performance goals. No federal
performance goals or measures currently exist for the Randolph-Sheppard
program, which provides opportunities for individuals who are blind to
operate vending facilities on federal properties. Without goals, it is
difficult to assess the program's performance, but Education officials
told GAO they are developing them. Education has a goal and a measure for
the Supported Employment State Grants program--a federal grant program
that provides job coaching and other support to help individuals with
severe disabilities secure jobs. The goal indirectly measures the
program's performance because grant funds are mixed with other funding
sources to provide supported employment services. Education has also
developed one goal for the PWI program--a federal grant program that helps
individuals with disabilities obtain competitive employment--that is
consistent with the mission of the program. The goal is to create and
expand job opportunities for individuals with disabilities in the
competitive labor market by engaging business and industry, and one of the
measures tracks the percentage of individuals placed in employment in work
settings making at least minimum wage. The Committee for Purchase, which
oversees the JWOD program--a program that helps to create jobs through the
federal property management and procurement systems--first developed
federal goals and measures for its fiscal year 2005-2007 strategic plan
and has since revised them. The revised measures still have limitations,
such as not being clearly defined or being difficult to measure.

Education's and the Committee for Purchase's oversight of the four
programs has been uneven. Education has established procedures, such as
on-site reviews, for the PWI and Supported Employment State Grants
programs that, if consistently followed, would provide reasonable
assurance that the programs are in compliance with applicable laws and
regulations. However, Education conducts limited oversight of the
Randolph-Sheppard program. For example, Education does not routinely
analyze or report the data it collects from states and has provided little
guidance to ensure states comply with laws or consistently interpret
program requirements. One area in which Education has not provided
sufficient guidance is the circumstances under which federal agencies may
charge fees to licensed vendors operating vending facilities on their
properties. As a result, vendors in some locations were paying commissions
or fees but those in other locationswere not. Finally, the Committee for
Purchase delegates most of its oversight responsibilities to two central
nonprofit agencies that also represent the interests of the JWOD nonprofit
agencies they oversee. This arrangement, as well as the fact that they
receive a percentage of the total value of the contracts from the JWOD
nonprofit agencies, raises questions about their independence and gives
them little incentive to identify instances of noncompliance that could
result in the JWOD nonprofit agency losing its federal contract.

References

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  37. file:///home/webmaster/infomgt/d07236.htm#http://www.gao.gov/cgi-bin/getrpt?GAO-07-236
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