Major Management Challenges and Program Risks: Department of Labor
(Letter Report, 01/01/99, GAO/OCG-99-11).

As part of its Performance and Accountability Series, GAO provided
information on the major management challenges and program risks facing
the Department of Labor (DOL).

GAO noted that: (1) DOL lacks adequate information to assess whether
many of its programs are operating efficiently and are producing
intended results; (2) because some of DOL's responsibilities are
fragmented or duplicated, either within the Department or by activities
in other federal departments, obtaining overall information on the
impact of the entire federal effort is particularly difficult; (3) DOL
has shown limited capacity to effectively coordinate the activities of
the many units at the federal, state, and local levels that share
responsibility for implementing worker protection laws and various
workforce development programs; (4) recent legislative and program
changes affecting key DOL functions call for increased coordination to
determine whether services are being delivered effectively; (5) DOL also
faces major challenges in the enforcement of its many workplace
mandates--from family and medical leave to occupational safety and
health; (6) to this point, DOL has not effectively leveraged its limited
resources by using alternative enforcement strategies; (7) to its
credit, DOL now provides some regulatory compliance information from
many of its associated agencies through a web site; (8) however, DOL
needs to work more effectively with workers and employers to develop
other regulatory approaches that show promise in enabling agencies to
perform their statutory missions more effectively and at less cost to
taxpayers; (9) the inability of some DOL computer systems to properly
distinguish between the years 2000 and 1900 is potentially a critical
challenge, putting at risk unemployment insurance benefits payments and
the timely issuance of economic statistics; (10) adding to the
complexity of this challenge is the fact that these data rely on many
information systems outside DOL; (11) should states' systems fail to
operate properly because of year-2000-related failures, both benefits
payments and tax collections could be jeopardized; (12) Labor has made
progress in recognizing and correcting the data limitations that inhibit
its ability to adequately assess the impact of its activities and has
improved its performance planning efforts, but it has much additional
ground to cover; and (13) although Labor has made progress in
coordinating its efforts through its strategic planning process, Labor
needs to be more proactive in engaging all agencies with collateral
responsibilities relating to its missions.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  OCG-99-11
     TITLE:  Major Management Challenges and Program Risks: Department 
             of Labor
      DATE:  01/01/99
   SUBJECT:  Performance measures
             Employment or training programs
             Occupational health and safety programs
             Law enforcement
             Information resources management
             Accountability
             Risk management
             Management information systems
             Intergovernmental relations
             Strategic planning
IDENTIFIER:  Unemployment Insurance Program
             DOL Black Lung Program
             Y2K
             Performance and Accountability Series 1999
             
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Cover
================================================================ COVER


Performance and Accountability Series

January 1999

MAJOR MANAGEMENT CHALLENGES AND
PROGRAM RISKS - DEPARTMENT OF
LABOR

GAO/OCG-99-11

Labor Challenges


Abbreviations
=============================================================== ABBREV

  BLS - Bureau of Labor Statistics
  CPI - Consumer Price Index
  HHS - Department of Health and Human Services
  JTPA - Job Training Partnership Act
  OIG - Office of Inspector General
  OSHA - Occupational Safety and Health Administration
  SESA - state employment security agency

Letter
=============================================================== LETTER



January 1999

The President of the Senate
The Speaker of the House of Representatives

This report addresses the major management challenges confronting the
Department of Labor.  It also addresses corrective actions that Labor
has taken or initiated on these challenges--including actions to
foster the adoption of alternative strategies for enforcing workplace
regulations--and further actions that are needed. 

Labor has made progress in addressing some of the challenges we have
identified, but further action is needed.  For example, Labor has
recognized and corrected some, but not all, of the data limitations
that inhibit its ability to adequately assess the impact of its
activities.  We recognize that Labor's diverse mission and
decentralized management structure add to the difficulty of its
efforts.  Although Labor has made progress in coordinating efforts
across its multiple offices through its strategic planning process,
Labor needs to be more proactive in engaging all agencies with
collateral responsibilities relating to Labor's missions.  Labor has
made progress in fostering the adoption of alternative enforcement
strategies, such as by providing some regulatory compliance
information from many of its associated agencies through a Web site. 
However, Labor needs to work more effectively with workers and
employers to develop other regulatory approaches.  Finally, Labor and
its component offices have made progress in identifying the Year 2000
issue, making it a departmental priority, and developing contingency
plans to respond to potential failures.  However, as it learns more
about the readiness of its state partners for the year 2000, Labor
may need to update these plans. 

This report is part of a special series entitled the Performance and
Accountability Series:  Major Management Challenges and Program
Risks.  The series contains separate reports on 20 agencies--one on
each of the cabinet departments and on most major independent
agencies as well as the U.S.  Postal Service.  The series also
includes a governmentwide report that draws from the agency-specific
reports to identify the performance and management challenges
requiring attention across the federal government.  As a companion
volume to this series, GAO is issuing an update to those government
operations and programs that its work has identified as "high risk"
because of their greater vulnerabilities to waste, fraud, abuse, and
mismanagement.  High-risk government operations are also identified
and discussed in detail in the appropriate performance and
accountability series agency reports. 

The performance and accountability series was done at the request of
the Majority Leader of the House of Representatives, Dick Armey; the
Chairman of the House Government Reform Committee, Dan Burton; the
Chairman of the House Budget Committee, John Kasich; the Chairman of
the Senate Committee on Governmental Affairs, Fred Thompson; the
Chairman of the Senate Budget Committee, Pete Domenici; and Senator
Larry Craig.  The series was subsequently cosponsored by the Ranking
Minority Member of the House Government Reform Committee, Henry A. 
Waxman; the Ranking Minority Member, Subcommittee on Government
Management, Information, and Technology, House Government Reform
Committee, Dennis J.  Kucinich; Senator Joseph I.  Lieberman; and
Senator Carl Levin. 

Copies of this report series are being sent to the President, the
congressional leadership, all other Members of the Congress, the
Director of the Office of Management and Budget, the Secretary of
Labor, and the heads of other major departments and agencies. 

David M.  Walker
Comptroller General of
the United States


OVERVIEW
=========================================================== Appendix 0

The Department of Labor has primary responsibility for ensuring that
America's businesses have workers with the training needed to be
competitive in today's global economy, providing temporary income
support and job search assistance to workers who have lost their
jobs, ensuring that workplaces are safe and free from hazards, and
ensuring that workers are treated fairly.  Labor's fiscal year 1999
budget of about $37 billion supports a staff of about 17,000 and over
1,000 field offices across the country that carry out Labor's program
activities.  Over the years, our work has called for more efficient
and effective use of Labor's resources to accomplish its mission. 
While Labor has been making changes to more effectively carry out its
responsibilities, it still faces a number of significant performance
and management challenges that need to be overcome. 

THE CHALLENGES


      LABOR LACKS ACCURATE AND
      RELIABLE INFORMATION TO
      ASSESS PROGRAM PERFORMANCE
------------------------------------------------------- Appendix 0:0.1

Labor lacks adequate information to assess whether many of its
programs are operating efficiently and are producing intended
results.  For example, data reported by the $1 billion Job Corps
program on the percentage of participants who complete their
vocational training and obtain jobs related to that training are
misleading and overstate the program's results.  Thus, it is
difficult to have confidence in Labor's assertions of program
effectiveness.  In addition, because some of Labor's responsibilities
are fragmented or duplicated, either within the Department or by
activities in other federal departments, obtaining overall
information on the impact of the entire federal effort is
particularly difficult.  For example, even though the Congress
enacted legislation to consolidate aspects of the nation's employment
training system, separate programs that are focused on the same
population, each with its own outcome and performance data, remain in
Labor and other departments.  Information on the performance of the
collective federal effort is not available. 


      DECENTRALIZATION INTENSIFIES
      LABOR'S COORDINATION
      CHALLENGE
------------------------------------------------------- Appendix 0:0.2

Labor has shown limited capacity to effectively coordinate the
activities of the many units at the federal, state, and local levels
that share responsibility for implementing worker protection laws and
various workforce development programs.  This coordination task is
imposing; management responsibility is dispersed across 22 Labor
Department offices, at least 14 entities in other federal agencies,
and numerous state organizations.  Recent legislative and program
changes affecting key Labor functions call for increased coordination
to determine whether services are being delivered effectively.  As
our work has demonstrated, such coordination has not always occurred. 
For example, we reported in 1998 that the lack of effective
coordination can result in farmworker children working in violation
of the law. 


      ALTERNATIVE ENFORCEMENT
      STRATEGIES COULD LEVERAGE
      LABOR'S LIMITED RESOURCES
------------------------------------------------------- Appendix 0:0.3

Labor also faces major challenges in the enforcement of its many
workplace mandates--from family and medical leave to occupational
safety and health.  To this point, Labor has not effectively
leveraged its limited resources by using alternative enforcement
strategies.  For example, in previous work we found that billions of
dollars in federal contracts had been awarded to employers found to
be violating workplace safety and health standards.  To address this
situation, we have recommended that the Occupational Safety and
Health Administration (OSHA) do a better job of sharing information
on the health and safety records of contract employers with federal
contracting officers throughout the government.  We have also
stressed that labor law enforcement could be better served through
greater service orientation, such as by improving communication
between agency compliance officers and the regulated community and
increasing employers' and workers' accessibility to compliance
information.  To its credit, Labor now provides some regulatory
compliance information from many of its associated agencies through a
Web site.  However, Labor needs to work more effectively with workers
and employers to develop other regulatory approaches that show
promise in enabling agencies to perform their statutory missions more
effectively and at less cost to taxpayers, such as placing greater
responsibility on workers and individual employers to maintain safe
and healthful workplaces. 


      YEAR 2000 PROBLEM COULD
      JEOPARDIZE BENEFITS PAYMENTS
      AND ECONOMIC STATISTICS
------------------------------------------------------- Appendix 0:0.4

The inability of some Labor computer systems to properly distinguish
between the years 2000 and 1900 is potentially a critical challenge,
putting at risk unemployment insurance benefits payments and the
timely issuance of economic statistics.  Labor makes extensive use of
complex information technology to support its mission; without
effective, up-to-date information technology, Labor cannot ensure the
income security of millions of workers or generate crucial national
economic data.  Adding to the complexity of this challenge is the
fact that these data rely on many information systems outside Labor. 
The Unemployment Insurance program, for example, is jointly
administered by Labor and the states.  Each state uses its own
information systems to pay benefits to laid-off workers--an estimated
$24 billion in benefits to roughly 8 million unemployed workers in
fiscal year 1999--and to collect state unemployment taxes from
employers.  Should states' systems fail to operate properly because
of Year-2000-related failures, both benefits payments and tax
collections could be jeopardized. 

PROGRESS AND NEXT STEPS

Labor has made progress in addressing some of the challenges we have
identified, but further action is needed.  Labor has made progress in
recognizing and correcting the data limitations that inhibit its
ability to adequately assess the impact of its activities and has
improved its performance planning efforts, but it has much additional
ground to cover.  We recognize that Labor's diverse mission and
decentralized management structure add to the difficulty of its
efforts.  However, through its focus on defining intended outcomes,
devising strategies to achieve those outcomes, and establishing
measurement systems to assess progress, the Government Performance
and Results Act of 1993, commonly known as the Results Act, offers
Labor a mechanism to address some of these basic management
challenges. 

Labor needs to continue to broaden its approach to strategic
management.  Although Labor has made progress in coordinating its
efforts through its strategic planning process, Labor needs to be
more proactive in engaging all agencies with collateral
responsibilities relating to Labor's missions.  This includes Labor
component offices; other federal agencies; as well as state, local,
and private sector organizations.  Labor has made progress in
fostering the adoption of alternative enforcement strategies, such as
by providing some regulatory compliance information from many of its
associated agencies through a Web site.  However, Labor needs to work
more effectively with workers and the employer community to develop
other regulatory approaches.  Finally, Labor and its component
offices have made progress in addressing the Year 2000 issue, making
it a departmental priority and developing contingency plans to
respond to potential failures.  However, during 1999, Labor may need
to update its contingency plans as it learns more about the readiness
of its state partners for the year 2000. 


MAJOR MANAGEMENT AND PERFORMANCE
ISSUES
=========================================================== Appendix 1

Established as a department in 1913, Labor has primary responsibility
for overseeing the nation's job training programs and for enforcing a
variety of federal labor laws.  Labor's mission is defined as helping
workers find jobs and helping employers find workers; protecting the
retirement and health care benefits of workers and improving their
working conditions; strengthening free collective bargaining; and
tracking changes in employment, prices, and other national economic
measurements.  The Congress provided Labor with a budget of about $37
billion for fiscal year 1999 and funded nearly 17,000 staff to pursue
Labor's mission.  About three-fourths of Labor's budget consists of
mandatory spending on income maintenance programs, such as the
Unemployment Insurance and Black Lung programs. 

Labor's diverse functions are carried out through a decentralized
organizational structure by 22 component offices and more than 1,000
field offices that support Labor's various functional
responsibilities.  Many of these responsibilities fall into two major
categories:  enhancing workers' skills through job training and
ensuring worker protection.  A third category involves developing
economic statistics.  Within this decentralized organizational
structure, some individual programs for which Labor is responsible
are further decentralized, in that state and local agencies
administer the programs with funding and oversight provided by Labor. 

Labor's workforce development responsibilities are housed in the
Employment and Training Administration and the Veterans' Employment
and Training Service.  These agencies administer job training
programs authorized by the Job Training Partnership Act (JTPA), such
as those for economically disadvantaged adults and youth--including
Job Corps--and for workers who lose their jobs because of plant
closings or downsizing.  While Labor directly administers the Job
Corps program, state and local agencies administer other JTPA
programs.  The Congress passed legislation in August 1998 that will
make major changes to the nation's workforce development system, such
as requiring that one-stop career centers be established nationwide
to facilitate the access of job seekers and employers to assistance,
consolidating a number of programs, and streamlining the structure of
job training programs. 

Four agencies are responsible for most of Labor's worker protection
programs:  the Employment Standards Administration, the Pension and
Welfare Benefits Administration, OSHA, and the Mine Safety and Health
Administration.  These agencies operate a number of programs intended
to protect the wages and health and safety of workers.  For example,
the Employment Standards Administration has responsibility for
administering the Davis-Bacon Act, which requires that workers on
federally funded construction projects be paid the wages that the
Secretary of Labor determines to be prevailing in the locality.  OSHA
protects workers by establishing and enforcing standards that cover a
variety of threats to workplace safety and health. 

Labor's Bureau of Labor Statistics (BLS) is the principal
fact-finding agency for the federal government in the field of labor
statistics.  BLS produces important economic indicators, such as the
Consumer Price Index (CPI).  The CPI is used by business, labor, and
government in formulating fiscal and monetary policy and is also used
as the basis for cost-of-living adjustments for payments made under
many government programs, including Social Security. 

Over recent years, both the Department's Inspector General and we
have conducted various program evaluations of Labor's workforce
development and worker protection activities and its preparations for
the information technology challenges associated with the year 2000. 
In addition to these evaluations, we have reviewed Labor's strategic
and performance planning efforts required under the Results Act.  In
response to our work, Labor has implemented a number of changes to
improve its performance.  However, Labor still faces important
challenges in such areas as the availability and reliability of
certain program performance data, coordination among various
entities, and the Year 2000 issue that prevent its programs from
achieving as large an impact as they otherwise could. 

LABOR LACKS ACCURATE AND RELIABLE
INFORMATION TO ASSESS PROGRAM
PERFORMANCE

Labor lacks accurate and reliable information needed to effectively
assess whether many of its programs are producing their intended
results and to determine whether its resources are being used
effectively.  For Labor, this issue is particularly important,
because many of its activities are fragmented or duplicated either
within the Department or by other departments or state or local
governments.  Thus, major challenges facing Labor include determining
how to provide consistent outcome information across multiple
programs with similar objectives, ensuring that Labor's outcome
information is accurate, and monitoring program implementation.  In
addition, Labor needs to rely less on its component offices and the
Office of Inspector General (OIG) to ensure the reliability and
validity of program performance data. 

Our work has shown that when multiple programs address similar
objectives, the Department lacks the complete information needed to
evaluate performance.  For example, while the Workforce Investment
Act consolidated several programs for youth, Job Corps and a separate
youth training program will continue to provide employment assistance
to disadvantaged youth separately.  Yet Labor does not have an
approach to assess how well youth are being served by its programs. 
Similarly, numerous programs are providing assistance to
disadvantaged adults.  States are providing employment assistance to
welfare recipients through their federal grants from the Department
of Health and Human Services (HHS), from Labor's welfare-to-work
grant program, and through programs funded by JTPA, yet a
comprehensive assessment of whether welfare recipients are better off
as a result of this assistance is lacking.  Thus, Labor cannot
determine whether certain approaches are more effective, or if some
segments of the population remain unserved. 

Relatedly, we have identified a lack of consistent data on Labor and
other agencies' employment-focused programs for the disabled.  Those
programs that collected data on program outcomes--such as on whether
participants got jobs and kept them; what wages participants were
paid; and whether participants received employee benefits, such as
health insurance--used different definitions for key data.  The
programs also had different eligibility criteria, paperwork
requirements, software, and confidentiality rules, which limit
Labor's ability to compare performance among programs. 

We are also concerned that some information that Labor reports is
misleading and overstates program results.  For example, job
placement and other outcome information reported by the Job Corps
program may be inaccurate.  One of our studies showed that about 15
percent of the job placements in our sample were potentially invalid. 
We found in another study that, while Labor reported that 48 percent
of program participants nationwide had completed vocational training,
only 14 percent had completed all requirements of their vocational
training curricula.  We also questioned Labor's assertions concerning
the number of participants reported to have obtained a job related to
their training. 

While Labor has made progress in recognizing and correcting its data
limitations, it agrees that significant challenges remain.  Labor
needs to provide more explicit information on how it intends to
correct problems with its performance measurement data and
successfully implement those strategies.  Doing so would give the
Congress and others more assurance that these data will, in fact, be
credible and provide a reasonable basis for measuring Labor's
progress toward achieving its goals. 

Data problems also affect Labor's ability to monitor program
activities.  For example, Labor lacks data to monitor and improve its
performance in processing agricultural employers' applications for
certification to bring nonimmigrant "guestworkers" into the country
when there is a shortage of domestic workers.  Even though some crops
have very short harvest times--which makes timely certifications
critical--our analysis showed that in fiscal year 1996 Labor issued
certifications after statutory deadlines at least one-third of the
time. 

Finally, Labor's reliance on OIG audits to ensure data quality and
accuracy is misplaced.  The OIG can play an important role in
ensuring that transactions and other data that support performance
measures are properly processed, recorded, and summarized to prepare
performance information in accordance with Labor's performance plan,
but the OIG's actions cannot substitute for Labor's own attention to
quality data. 

A departmentwide strategy aimed at ensuring the integrity,
reliability, and completeness of critical management and program
performance data would help Labor better achieve its mission.  Such a
strategy could include identifying the data that are critical to
achieving Labor's mission and ensuring that these data reflect the
actions of all Labor's programs as well as the effects of programs in
other agencies; developing data verification and validation
procedures to ensure that significant errors, including bias, are not
introduced during data collection, maintenance, or processing;
developing procedures to control data quality; and developing
procedures specific to the data required for performance measures
proposed in Labor's performance and strategic plans.  In addition to
increasing the Department's level of confidence in its data, such a
strategy would enhance the credibility of Labor's data, including the
performance information reported under the Results Act, outside the
Department. 


      KEY CONTACT
------------------------------------------------------- Appendix 1:0.1

Carlotta C.  Joyner, Director
Education and Employment Issues
Health, Education, and Human Services
 Division
(202) 512-7014
[email protected]

DECENTRALIZATION INTENSIFIES
LABOR'S COORDINATION CHALLENGE

Labor's decentralized structure and the numerous federal, state, and
local partners that share responsibility for Labor's programs
complicate its efforts to effectively coordinate the many programs it
oversees.  Not only does Labor itself have 22 offices, many of which
have overlapping responsibilities, but for many of its programs, such
as job training, enforcement, and data collection, Labor must work
with state and local governments or nongovernmental organizations
that often manage the programs on a day-to-day basis.  As a result,
the need for coordination, communication, and cooperation among Labor
and its partners is vital to ensuring that program services are
delivered efficiently.  While Labor's strategic and performance plans
acknowledged the need for coordination among some of its partners,
such as in job training, the plans generally lacked detail on how
such coordination will be achieved, especially given the rapidly
changing environment with regard to job training. 

Labor's decentralized structure poses numerous challenges for
internal coordination.  Almost 15 years ago, we reported that Labor's
component offices operated independently and did not consistently
adhere to central policies, and just recently we reported that Labor
still operated as a set of individual components.  In fact, as
recently as 1996, Labor did not centrally maintain any information on
the number or location of its field offices.  Although this
decentralized organizational structure may allow Labor more
flexibility to meet a variety of needs and focus resources in the
field, this structure makes adopting good management practices,
including coordination, much more difficult.  In fact, we noted in
1998 that Labor's strategic and performance plans appeared to be
driven by its organizational structure rather than by Labor's overall
mission.  Labor subsequently revised its plans to better reflect its
mission and provided some information on the relationships among all
of its program activities.  However, it remains to be seen whether
these new goals will foster better coordination than has
traditionally been the case. 

The decentralization of responsibilities for key functions, such as
job training and worker protection, also complicates external
coordination.  In the past, we found that job training was carried
out by 15 federal agencies, including Labor, as well as by numerous
other organizations, associations, and community colleges.  Recent
legislative changes regarding the delivery of job training services
pose an even greater challenge for coordination.  These changes have
placed more responsibility at the state and local levels for
identifying who should be trained, what types of training are needed,
and how training dollars should be allocated to best serve particular
populations.  In addition, the 1996 welfare reform legislation and
Labor's welfare-to-work grant program created in 1997 have affected
the nation's job training system in ways that are just now beginning
to emerge.  With welfare reform's emphasis on job placement, the
demand for job training and placement assistance is likely to be
affected, and efficient delivery of assistance requires that
Labor-administered programs be well integrated with HHS-administered
programs for economically disadvantaged parents.  Similarly, the
Labor-administered welfare-to-work grant program requires a high
level of communication and integration between Labor and HHS as well
as between job training and welfare agencies at the state and local
levels. 

The patchwork of workforce protections, along with the number of
federal and state agencies responsible for enforcing these laws, is
another activity heavily dependent upon effective coordination. 
However, Labor has demonstrated limited capacity to follow
established coordination procedures that were designed to ensure that
the laws are adequately enforced.  For example, Labor established
procedures for referring potential cases, conducting joint
inspections, and exchanging information with key federal enforcement
agencies both within Labor (such as OSHA) and outside Labor (such as
the Immigration and Naturalization Service); these procedures were
also to be used when working with state labor agencies responsible
for enforcing state child labor laws.  However, in 1998, we found
that these procedures were not being followed and there were no
controls in place to alert Labor of any lack of coordination.  One
result of this lack of coordination is that farmworker children could
be working in violation of the law.  As Labor moves forward with its
plans to significantly increase its enforcement of workplace
protections, it needs to take greater advantage of opportunities to
enhance coordination with federal and state partners. 


      KEY CONTACT
------------------------------------------------------- Appendix 1:0.2

Carlotta C.  Joyner, Director
Education and Employment Issues
Health, Education, and Human Services
 Division
(202) 512-7014
[email protected]

ALTERNATIVE ENFORCEMENT STRATEGIES
COULD LEVERAGE LABOR'S LIMITED
RESOURCES

Labor faces a formidable challenge in enforcing basic workplace
protections, from ensuring that workers receive at least a minimum
wage, to allowing parents to take leave to spend time with their
newborn children, to protecting workers from occupational hazards. 
Labor must enforce these protections in millions of workplaces
employing millions of workers throughout the nation.  Given the
breadth of these mandates and the scope of its enforcement task,
Labor needs to more effectively leverage its limited resources beyond
traditional inspections, citations, and fines by using alternative
enforcement strategies. 

One area that could benefit from an alternative enforcement strategy
is federal contract compliance.  For example, we found that billions
of dollars in federal contracts--$38 billion in fiscal year
1994--were awarded to employers already found to be violating
workplace safety and health standards.  Many federal agencies across
the government already have the authority to debar or suspend federal
contractors for violating safety and health regulations and could use
this authority to influence contractors to undertake remedial
measures to improve workplace conditions.  However, agency officials
responsible for awarding contracts have had no way of knowing which
federal contractors have violated safety and health standards. 
Consequently, it is possible that even contractors that have been
assessed high penalties by OSHA for willful or repeat violations
could be given additional federal contracts. 

To address this issue, we made a series of recommendations to Labor
to facilitate its sharing health and safety inspection information
with federal contracting officers during the procurement process. 
This would enable agencies to ensure that they contracted only with
those firms that were "responsible"--that is, in compliance with
applicable laws and regulations under the Occupational Safety and
Health Act.  While having taken some actions to improve access to
health and safety inspection data, Labor could do more to help other
agencies obtain and use this information during the contract
procurement process, for example, by developing procedures to
periodically transmit data on contractors' safety and health records
to agency contracting officers. 

In the past, we have also noted that federal labor law enforcement
and regulation efforts could be better served if Labor developed a
greater service orientation, such as by improving employer, worker,
and union access to information; strengthening the role of workers
and employers in compliance; and improving communication between
agency compliance officers and the regulated community.  For example,
many employers--both large and small--as well as union
representatives have reported that they have experienced difficulty
obtaining accurate and complete information from regulatory agencies
and that they are rarely confident that they know all the laws and
regulations that they need to comply with.  Labor has made some
effort to address this issue by making available a variety of
pamphlets as well as a small business handbook that summarizes the
laws Labor enforces, clarifies an employer's duties, and identifies
the appropriate Labor office to contact for answers to questions and
other assistance.  Labor has also created an Internet Web site that
provides interactive expert advice on workplace laws in a format that
mimics the interaction an individual might have with a human expert. 
Called Employment Laws Assistance for Workers and Small Business, the
system provides manufacturers and other employers with advice on such
issues as workplace safety and the Family and Medical Leave Act. 
Labor also offers employers opportunities to attend seminars that
provide technical assistance on how to comply with federal laws and
regulations. 

Labor has also attempted to enhance the role of workers and employers
in facilitating labor law compliance through OSHA's effort to develop
a work site safety and health program standard, although the standard
has not yet been issued.  Labor has halted its cooperative health and
safety compliance programs, like the Maine 200 program, in response
to a federal court order. 

Disseminating information could facilitate voluntary compliance with
federal labor laws and regulations by responsible businesses and make
workers and employers more knowledgeable about regulation. 
Nevertheless, more could be done.  For example, no one federal
agency, including Labor--the primary entity responsible for the
enforcement of workplace laws and regulations--has compiled a
comprehensive set of the federal laws applicable to employers.  In
addition, Labor could enhance the usefulness of its current
information dissemination efforts by including in pamphlets or at its
Web site links to complementary or additional state labor laws, where
applicable. 


      KEY CONTACT
------------------------------------------------------- Appendix 1:0.3

Carlotta C.  Joyner, Director
Education and Employment Issues
Health, Education, and Human Services
 Division
(202) 512-7014
[email protected]

YEAR 2000 PROBLEM COULD JEOPARDIZE
BENEFITS PAYMENTS AND ECONOMIC
STATISTICS

The rapidly approaching year 2000 presents a sweeping and urgent
challenge for virtually every organization, public and private, that
uses computers.  The management and systems conversion activities
that are taking place are probably the largest and most complex
projects many agencies have ever undertaken.  For this reason, we
have designated the Year 2000 computing problem a high-risk area for
the federal government.  If agencies' systems are not Year 2000
compliant on or before January 1, 2000, the potential impact could be
significant.  Because Labor shares the responsibility with others,
including state governments, to deliver services, the systems
compliance issues Labor faces are especially challenging.  According
to Labor officials, billions of dollars in benefits payments to
Americans, such as unemployment insurance, as well as systems that
produce labor and economic statistics used by both public and private
organizations could be at significant risk of disruption. 

One program susceptible to Year 2000 difficulties is the Unemployment
Insurance program.  The Congress established the Unemployment
Insurance program to provide partial income assistance to temporarily
unemployed workers with substantial work histories.  The program is a
federal-state partnership.  Within overall federal guidelines, state
employment security agencies (SESA) operate the Unemployment
Insurance programs in accordance with their own state priorities and
unemployment compensation laws.  Therefore, each SESA levies and
collects its own payroll taxes, places the receipts in a trust fund,
and determines the level and duration of benefits and the conditions
for benefit eligibility.  Labor is responsible for maintaining the
fiscal integrity of the program, including the individual state
program trust funds.  In fiscal year 1998, states collected $22
billion in state unemployment insurance taxes.  During fiscal year
1999, the program will pay an estimated $24 billion to about 8
million workers.  Because each of the 53 SESAs (one for each state,
the District of Columbia, Puerto Rico, and the Virgin Islands) uses
its own computer systems to operate its program, Labor faces a
particularly complex challenge. 

In September 1998, both Labor's Inspector General and we reported
that Labor could experience significant Year 2000 problems with the
Unemployment Insurance program even before January 1, 2000, because
states' unemployment insurance systems involve benefit date
calculations that extend 1 year into the future.  For example, claims
filed in January 1999 will have a benefit year ending in January
2000.  We noted that Labor was encouraging states to address the
Year-2000-related vulnerabilities of their unemployment insurance
systems and was helping fund their efforts to address these problems. 

We also reported that other systems at Labor were at risk.  For
example, more than one-third of the systems Labor identified as
mission-critical were concentrated within one of its component
agencies:  BLS.  Among other important indicators, BLS produces the
CPI--the principal source of information concerning trends in
consumer prices and inflation in the United States.  Should the CPI
system fail, other federal programs--such as the Social Security
program, which uses the CPI to adjust payments to recipients--could
be affected.  We noted that the CPI schedule for replacement was very
tight.  Eight other systems at BLS were scheduled for replacement. 
In general, system replacement is a high-risk activity, especially
given the long history of difficulties federal agencies have
experienced in delivering planned systems on time.  As a result, we
are concerned that BLS' systems may not be ready in time. 

In light of the Year 2000 challenges facing Labor, and because it
appeared that some SESAs could experience systems failures as early
as January 1999, in September 1998, we reported that it was
imperative that Labor develop realistic contingency plans to ensure
the continuity of core business processes.  Such contingency plans,
we noted, needed to be formulated to respond to two types of
failures:  those that can be predicted (for example, systems
renovations that are already far behind schedule) and those that are
unforeseen (such as systems that fail despite having been certified
Year 2000 compliant, or those that are not corrected by January 1,
2000, despite having appeared to be on schedule).  In addition,
because Labor depends on data provided by its program partners,
contingency plans need to consider all critical core business
processes and supporting systems of the partners as well.  In
September 1998, we reported that Labor had drafted contingency plans
for key benefits processes and supporting systems and was expecting
to complete plans for other business areas and supporting systems by
the end of the year.  Labor needs not only to complete these plans
but also to continually update them as more becomes known about
Labor's partners' readiness for the year 2000. 

Because the unemployment insurance systems are susceptible to Year
2000 failure during 1999, Labor will gain valuable experience in
dealing with its Year 2000 challenge early.  Labor can use the
lessons it learns--such as whether its contingency planning efforts
were adequate--in dealing with its remaining Year 2000 challenges. 
Moreover, on the basis of its experience, Labor can play an important
leadership role in helping other federal agencies prepare for their
Year 2000 challenges. 


      KEY CONTACT
------------------------------------------------------- Appendix 1:0.4

Joel C.  Willemssen, Director
Civil Agencies Information Systems
Accounting and Information Management
 Division
(202) 512-6408
[email protected]


RELATED GAO PRODUCTS
=========================================================== Appendix 2

ACCURATE AND RELIABLE INFORMATION

Job Corps:  Links With Labor Market Improved but Vocational Training
Performance Overstated (GAO/HEHS-99-15, Nov.  4, 1998). 

Department of Labor:  Further Strategic Planning and Data Quality
Refinements Would Assist in Oversight (GAO/T-HEHS-98-249, Sept.  28,
1998). 

Job Corps:  Vocational Training Performance Data Overstate Program
Success (GAO/T-HEHS-98-218, July 29, 1998). 

Managing for Results:  Agencies' Annual Performance Plans Can Help
Address Strategic Planning Challenges (GAO/GGD-98-44, Jan.  30,
1998). 

Job Corps:  Need for Better Enrollment Guidance and Improved
Placement Measures (GAO/HEHS-98-1, Oct.  21, 1997). 

DECENTRALIZATION AND COORDINATION

Child Labor in Agriculture:  Changes Needed to Better Protect Health
and Educational Opportunities (GAO/HEHS-98-193, Aug.  21, 1998). 

Results Act:  Observations on Labor's Fiscal Year 1999 Performance
Plan (GAO/HEHS-98-175R, June 4, 1998). 

Department of Labor:  Strategic Planning and Information Management
Challenges Facing the Department (GAO/T-HEHS-98-88, Feb.  5, 1998). 

The Results Act:  Observations on Department of Labor's June 1997
Draft Strategic Plan (GAO/HEHS-97-172R, July 11, 1997). 

Strong Leadership Needed to Improve Management at the Department of
Labor (GAO/HRD-86-12, Oct.  21, 1985). 

ALTERNATIVE ENFORCEMENT STRATEGIES

Business Regulation:  California Manufacturers Use Multiple
Strategies to Comply With Laws (GAO/HEHS-98-208, Sept.  30, 1998). 

Department of Labor:  Challenges in Ensuring Workforce Development
and Worker Protection (GAO/T-HEHS-97-85, Mar.  6, 1997). 

Occupational Safety and Health:  Violations of Safety and Health
Regulations by Federal Contractors (GAO/HEHS-96-157, Aug.  23, 1996). 

Workplace Regulation:  Information on Selected Employer and Union
Experiences (GAO/HEHS-94-138, June 30, 1994). 

Occupational Safety and Health:  Options for Improving Safety and
Health in the Workplace (GAO/HRD-90-66BR, Aug.  24, 1990). 

YEAR 2000 PROBLEM

Year 2000 Computing Crisis:  Progress Made at Department of Labor,
but Key Systems at Risk (GAO/T-AIMD-98-303, Sept.  17, 1998). 


PERFORMANCE AND ACCOUNTABILITY
SERIES
=========================================================== Appendix 3

Major Management Challenges and Program Risks:  A Governmentwide
Perspective (GAO/OCG-99-1)

Major Management Challenges and Program Risks:  Department of
Agriculture (GAO/OCG-99-2)

Major Management Challenges and Program Risks:  Department of
Commerce (GAO/OCG-99-3)

Major Management Challenges and Program Risks:  Department of Defense
(GAO/OCG-99-4)

Major Management Challenges and Program Risks:  Department of
Education (GAO/OCG-99-5)

Major Management Challenges and Program Risks:  Department of Energy
(GAO/OCG-99-6)

Major Management Challenges and Program Risks:  Department of Health
and Human Services (GAO/OCG-99-7)

Major Management Challenges and Program Risks:  Department of Housing
and Urban Development (GAO/OCG-99-8)

Major Management Challenges and Program Risks:  Department of the
Interior (GAO/OCG-99-9)

Major Management Challenges and Program Risks:  Department of Justice
(GAO/OCG-99-10)

Major Management Challenges and Program Risks:  Department of Labor
(GAO/OCG-99-11)

Major Management Challenges and Program Risks:  Department of State
(GAO/OCG-99-12)

Major Management Challenges and Program Risks:  Department of
Transportation (GAO/OCG-99-13)

Major Management Challenges and Program Risks:  Department of the
Treasury (GAO/OCG-99-14)

Major Management Challenges and Program Risks:  Department of
Veterans Affairs (GAO/OCG-99-15)

Major Management Challenges and Program Risks:  Agency for
International Development (GAO/OCG-99-16)

Major Management Challenges and Program Risks:  Environmental
Protection Agency (GAO/OCG-99-17)

Major Management Challenges and Program Risks:  National Aeronautics
and Space Administration (GAO/OCG-99-18)

Major Management Challenges and Program Risks:  Nuclear Regulatory
Commission (GAO/OCG-99-19)

Major Management Challenges and Program Risks:  Social Security
Administration (GAO/OCG-99-20)

Major Management Challenges and Program Risks:  U.S.  Postal Service
(GAO/OCG-99-21)

High-Risk Series:  An Update (GAO/HR-99-1)


The entire series of 21 performance and accountability reports and
the high-risk series update can be ordered by using the order number
GAO/OCG-99-22SET. 


*** End of document. ***