Veterans' Employment and Training Service: Focusing on Program Results to
Improve Agency Performance (Testimony, 05/07/97, GAO/T-HEHS-97-129).

GAO discussed the Veterans' Employment and Training Service (VETS) and
its initiatives in response to the Government Performance and Results
Act of 1993 (GPRA), focusing on: (1) the value of GPRA in improving
agency performance; (2) the employment and training performance measures
currently used in VETS; (3) VETS' response to GPRA; and (4) GAO's
assessment of VETS' response.

GAO noted that: (1) GPRA is a powerful tool that brings discipline to
program management by requiring agencies to clarify their missions,
establish goals and a strategy for reaching them, measure performance,
and report on their accomplishments; (2) GAO's work at VETS has shown
that its current performance measures focus more on process than on
results; (3) VETS has now developed a draft strategic plan and
performance measures, consistent with GPRA, and has submitted it to the
Office of Management and Budget for review; (4) GAO believes the
proposed performance measures for employment and training services are
an improvement over VETS' current approach because of their increased
focus on results; (5) but the plan, so far, is a draft and has not
received final approval by the Department of Labor or been incorporated
into an overall departmental strategic plan; (6) in addition,
development of a strategic plan and improved performance measures does
not guarantee improved performance; and (7) continued senior management
commitment and effective implementation are necessary to achieve the
improved agency performance that is envisioned by GPRA.

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

 REPORTNUM:  T-HEHS-97-129
     TITLE:  Veterans' Employment and Training Service: Focusing on 
             Program Results to Improve Agency Performance
      DATE:  05/07/97
   SUBJECT:  Agency missions
             Strategic planning
             Employment or training programs
             Veterans employment programs
             Veterans benefits
             Congressional/executive relations
IDENTIFIER:  DOL Disabled Veterans' Outreach Program
             DOL Local Veterans' Employment Reps Program
             
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Cover
================================================================ COVER


Before the Subcommittee on Benefits, Committee on Veterans' Affairs,
House of Representatives

For Release on Delivery
Expected at 8:30 a.m.
Wednesday, May 7, 1997

VETERANS' EMPLOYMENT AND TRAINING
SERVICE - FOCUSING ON PROGRAM
RESULTS TO IMPROVE AGENCY
PERFORMANCE

Statement of Carlotta C.  Joyner, Director
Education and Employment Issues
Health, Education, and Human Services Division

GAO/T-HEHS-97-129

GAO/HEHS-97-129T


(205343)


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

  DVOP - Disabled Veterans Outreach Program
  GPRA - Government Performance and Results Act of 1993
  LVER - Local Veterans Employment Representative
  OMB - Office of Management and Budget
  VETS - Veterans' Employment and Training Service

VETERANS' EMPLOYMENT AND TRAINING
SERVICE:  FOCUSING ON PROGRAM
RESULTS TO IMPROVE AGENCY
PERFORMANCE
============================================================ Chapter 0

Mr.  Chairman and Members of the Subcommittee: 

We are pleased to be here today to discuss the Veterans' Employment
and Training Service (VETS) and its initiatives in response to the
Government Performance and Results Act of 1993 (GPRA). 

Unemployment and underemployment have traditionally been serious
problems for veterans.  The Congress has made it clear that
alleviating these problems is a national responsibility.  Although
the Department of Veterans Affairs is responsible for most of the
nation's services for veterans, the Department of Labor administers
programs and other activities designed to help veterans find jobs and
training opportunities.  The Wagner-Peyser Act of 1933, which created
a national system of public employment offices, specifies that
veterans receive priority service and led to the establishment of a
veterans' bureau within the Department of Labor, which eventually
became VETS. 

My comments today will focus on four areas:  the value of GPRA in
improving agency performance, the employment and training performance
measures currently used in VETS, VETS' response to GPRA, and our
assessment of VETS' response.  The information we present is derived
from our ongoing work for this Subcommittee regarding the veterans'
representatives employed by the states under grants from VETS, our
review of the agency's draft strategic plan for fiscal years 1997
through 2002, and discussions with agency officials about VETS'
actions in response to GPRA. 

In summary, GPRA is a powerful tool that brings discipline to program
management by requiring agencies to clarify their missions, establish
goals and a strategy for reaching them, measure performance, and
report on their accomplishments.  Our work at VETS has shown that its
current performance measures focus more on process than on results. 
VETS has now developed a draft strategic plan and performance
measures, consistent with GPRA, and has submitted it to the Office of
Management and Budget (OMB) for review.  We believe the proposed
performance measures for employment and training services are an
improvement over VETS' current approach because of their increased
focus on results.  But the plan, so far, is a draft and has not
received final approval by Labor or been incorporated into an overall
departmental strategic plan.  In addition, development of a strategic
plan and improved performance measures does not guarantee improved
performance.  Continued senior management commitment and effective
implementation are necessary to achieve the improved agency
performance that is envisioned by GPRA. 


   BACKGROUND
---------------------------------------------------------- Chapter 0:1

The mission of the Veterans' Employment and Training Service is to
help veterans, reservists, and National Guard members in securing
employment and protecting their employment rights and benefits. 
Services provided are to be consistent with the changing needs of
employers and the eligible veteran population, with priority given to
disabled veterans and other veterans with significant disadvantages
in the labor market.  The key elements of VETS' mission include
enforcement of veterans' preference and reemployment rights,
employment and training assistance, public information services,
interagency liaison, and training for those assisting veterans. 

VETS carries out its responsibilities through a nationwide network
that includes representation in each of Labor's 10 regions and staff
in each state.  The VETS staff at the state level monitor the
operation of VETS' two primary programs providing employment and
training assistance to veterans:  the Disabled Veterans Outreach
Program (DVOP) and the Local Veterans Employment Representative
(LVER).  DVOP and LVER staff, whose positions are federally funded,
are part of states' employment service systems and provide direct
employment services to eligible veterans.  The total fiscal year 1997
appropriation for VETS was about $182 million, including $82 million
for DVOP specialists and $75 million for LVER staff.\1

LVERs were first authorized under the original GI Bill, the
Servicemen's Readjustment Act of 1944; DVOP specialists were
established by executive order in 1977 and later authorized by the
Veterans' Rehabilitation and Education Amendments of 1980.  The
duties of DVOP and LVER staff for serving veterans, as specified by
law, include

  -- outreach to locate veterans,

  -- job development for veterans,

  -- networking in the community for employment and training
     programs,

  -- providing labor exchange services to veterans,

  -- making referrals to support services, and

  -- case management. 

These programs are required by law to provide employment and training
opportunities specifically for veterans, with priority given to the
needs of disabled veterans and veterans of the Vietnam era.  Each
state is expected to give priority to veterans over nonveterans for
services in their state employment service system.  In the simplest
terms, this means that the local employment office is to offer or
provide all services to veterans before offering or providing those
services to nonveterans. 


--------------------
\1 VETS provides formula staffing grants to the states for LVER and
DVOP staff.  Its fiscal year 1997 appropriation is planned to fund
1,397 LVER positions and 1,598 DVOP specialists.  The appropriation
also included about $23 million for administrative costs and $2
million for the National Veterans' Training Institute, which trains
service providers' staffs and managers. 


   MANAGING FOR RESULTS
---------------------------------------------------------- Chapter 0:2

The Government Performance and Results Act of 1993 is the centerpiece
of a statutory framework provided by recent legislation to bring
needed discipline to federal agencies' management activities.  Other
elements are the 1990 Chief Financial Officers Act, the 1995
Paperwork Reduction Act, and the 1996 Clinger-Cohen Act.  These laws
each responded to a need for accurate, reliable information for
executive branch and congressional decision-making.  In combination,
they provide a framework for developing (1) fully integrated
information about an agency's mission and strategic priorities, (2)
performance data to evaluate the achievement of these goals, (3) the
relationship of information technology investments to the achievement
of performance goals, and (4) accurate and audited financial
information about the costs of achieving the goals. 

GPRA is aimed at improving performance.  It does so by prompting each
major federal agency to ask some basic questions:  What is our
mission?  What are our goals and how will we achieve them?  How can
we measure our performance?  How will we use that information to make
improvements?  GPRA forces a shift in the focus of federal agencies
away from such traditional concerns as staffing and activity levels
and toward a single overriding issue--results. 

GPRA requires that agencies clearly define their missions; establish
long-term strategic goals, as well as annual goals linked to them;
measure their performance against the goals they have set; and report
on how well they are doing.  In addition to ongoing performance
monitoring, agencies are also expected to perform discrete
evaluations of their programs and to use information obtained from
these evaluations to improve the programs.  Each agency's strategic
plan--laying out its mission, long-term goals, and strategies for
achieving these goals--must be submitted to OMB and the Congress by
September 30, 1997.  To help ensure that these plans reflect the
views, as appropriate, of the Congress and other stakeholders, GPRA
requires that, as agencies develop their strategic plans, they
consult with the Congress and solicit the views of other
stakeholders.  Next, beginning with fiscal year 1999, executive
agencies are to use their strategic plans to prepare annual
performance plans.  These performance plans are to include annual
goals linked to the activities displayed in budget presentations as
well as the indicators the agency will use to measure performance
against the results-oriented goals.  Agencies are subsequently to
report each year on the extent to which goals were met, provide an
explanation if these goals were not met, and present the actions
needed to meet any unmet goals. 

Over the last few years, we have done a large body of work on
management and operational issues across agencies and levels of
government.\2 For example, we have studied leading public sector
organizations that successfully pursued management reform initiatives
and became more results-oriented.  This work has identified
principles and approaches that may be helpful to agencies and the
Congress in carrying out the activities set out by GPRA, such as
developing strategic plans through consultation with stakeholders and
selecting performance measures that are results-oriented and can be
used to improve agency performance. 


--------------------
\2 See, for example, Executive Guide:  Effectively Implementing the
Government Performance and Results Act (GAO/GGD-96-118, June 1996),
Managing for Results:  Using GPRA to Assist Congressional and
Executive Branch Decisionmaking (GAO/T-GGD-97-43, Feb.  12, 1997),
Managing for Results:  Enhancing the Usefulness of GPRA Consultations
Between the Executive Branch and Congress (GAO/T-GGD-97-56, Mar.  10,
1997), and Agencies' Strategic Plans Under GPRA:  Key Questions to
Facilitate Congressional Review (GAO/GGD-10.1.16, May 1997). 


   CURRENT PERFORMANCE MEASURES
---------------------------------------------------------- Chapter 0:3

In our ongoing work on the activities of DVOP and LVER staff for this
Subcommittee, we have learned that VETS' performance measures are
focused more on process than on results, and performance is evaluated
only in relative, not absolute, terms.  VETS uses 14 performance
standards in five service categories:  (1) veterans placed in or
obtaining employment, (2) Vietnam-era veterans and special disabled
veterans\3 placed in jobs with federal contractors, (3) veterans
counseled, (4) veterans placed in training, and (5) veterans who
received some reportable service.  The first two, which concern job
placement, are results-oriented, but they do not require information
about the quality of the job placement, such as wages and benefits,
or whether the jobs are permanent. 

The Assistant Secretary for Veterans' Employment and Training, in
directing VETS field staff and state partners to provide input
regarding the development, piloting, and evaluation of new
performance measurement systems, characterized VETS' current system
as having been developed more than a decade ago with little or no
change since then.  He also noted that these performance standards
are activity- and volume-driven and provide states little incentive
to focus services on those veterans who are marginally job-ready or
are most in need of intensive employability development services.  In
addition, he did not believe the current performance measures
provided useful information on the impact of services on veterans
served. 

In each of the five service categories, performance is measured in
terms of priority given to veterans compared with nonveterans in the
services provided by the states' employment service system.  The
minimum goals established by VETS state that veterans should be
served at a rate exceeding the service to nonveterans.  Veterans and
eligible persons should be served at a rate 15 percent higher than
nonveterans; Vietnam-era veterans should be served at a rate 20
percent higher; disabled veterans should be served at a rate 25
percent higher; and placement rates for special disabled veterans
should also be 25 percent higher than the rate for other clients
relative to jobs listed by federal contractors.\4 For example, in one
state, the placement rate for nonveterans was 14.65 percent; thus,
the required placement rate for veterans was 16.85 percent, or 15
percent higher than the nonveteran placement rate.  The
state-by-state measures are based on providing a higher level of
services to veterans than nonveterans rather than on establishing any
goal for an absolute level of performance.  Thus, a state with poor
services to nonveterans would be held to a low standard for service
to veterans. 

According to VETS directives, failure to meet one or more of the
quantitative performance standards does not itself constitute failure
to provide priority services to veterans.  State VETS directors
identify other factors that may affect the delivery of quality
services before making any noncompliance determinations. 

VETS is required to report annually to the Congress on the success of
the states in meeting their performance standards with regard to
veterans' services.  Although VETS has up-to-date quarterly data on
states' performance, annual reports for fiscal years 1994, 1995, and
1996 have not yet been submitted to the Congress.  These reports
would document the states' annual performance against their
standards.  According to a draft of the 1994 annual report, VETS
determined that all but 14 states met all of their performance
standards during program year 1993 (July 1, 1993, through June 30,
1994).  Of these, 11 states were able to show good cause for their
inability to meet the standards (California, Iowa, Kansas, Missouri,
Nevada, New Hampshire, New Jersey, New Mexico, Virginia, West
Virginia, and Wisconsin).  The remaining states--Ohio, Nebraska, and
the District of Columbia--provided VETS with an acceptable corrective
action plan. 


--------------------
\3 A special disabled veteran is (1) a veteran who is entitled to
compensation (or who, but for the receipt of military retired pay,
would be entitled to compensation) under laws administered by the
Department of Veterans Affairs for a disability rated at 30 percent
or more or (2) a person who was discharged or released from active
duty because of a service-connected disability. 

\4 These rates may vary from state to state because states may
negotiate higher rates. 


   VETS' RESPONSE TO GPRA INCLUDES
   PROPOSED NEW PERFORMANCE
   MEASURES
---------------------------------------------------------- Chapter 0:4

The current version of the draft plan has been submitted to OMB for
review and is to be finalized on the basis of OMB's and other
stakeholders' comments.  The plan includes mission and vision
statements; strategic goals and objectives; specific performance
measures; and discussions of the relationship between the general
goals and annual performance goals.  The draft plan also discusses
VETS' strategy to reach its goals and key factors likely to affect
its ability to do so.  The plan also lists relevant stakeholders,
including the Employment and Training Administration within Labor,
congressional committees, veterans service organizations, and the
Interstate Conference of Employment Security Agencies.  No specific
reference to the Department of Veterans Affairs as a stakeholder is
included in the draft plan. 

The draft plan identifies goals and objectives for each element of
its mission:  enforcement, employment and training assistance, public
information services, interagency liaison, and training.  But it
notes that the greatest challenge faced by VETS in implementing GPRA
is setting forth appropriate outcome measures for the public
employment service agencies.  One reason for this difficulty, the
plan notes, is that technological advances are changing the labor
exchange environment as more employers and job seekers use personal
computers, electronic bulletin boards, and websites to announce job
openings and apply for jobs.  Without the opportunity to register job
seekers, the public employment service system loses its ability to
measure the numbers of individual job seekers who benefit from its
services.  As a result, whereas in the past VETS relied on a
relatively simple measure of "priority"--comparison of the rates of
service achieved for registered veterans with the rates achieved for
registered nonveterans--such measures will no longer completely
reflect the actual services provided if a significant number of users
are not being registered and counted.  As a partial response to this
challenge, VETS is proposing to measure results through population
sampling and postservice studies as well as data collected at the
employment service office. 

The new set of measures for employment and training services
continues to reflect a mixture of activity measures, such as
"received counseling or vocational guidance," and results measures,
such as "entered employment." New measures, however, go beyond
measures of immediate outcome to include the average wage of those
who entered employment and a 2-year follow-up measure. 

In addition to comparing the results for veterans with those for
nonveterans, the plan describes measures that apparently will be
tracked for veterans independent of the results for nonveterans. 
This focus would allow VETS to emphasize providing services that lead
to high levels of results for veterans in all locations, without
setting a lower standard for the results expected for veterans in
states with a less effective employment service. 


   CONCLUSIONS
---------------------------------------------------------- Chapter 0:5

The draft plan represents an improvement over the current employment
and training performance measures, because the performance measures
in the plan put a greater emphasis on results and will provide
information on absolute levels of performance for veterans as well as
a comparison with nonveterans.  But VETS still must collect the
necessary performance data and use that information to focus its
efforts on improving the results of its activities.  Strong
commitment of the political and senior career leadership will be
essential to ensure that the agency's strategic planning and
performance measurement efforts will become the basis for its
day-to-day operations. 


-------------------------------------------------------- Chapter 0:5.1

Mr.  Chairman, this concludes my prepared statement.  I will be happy
to answer any questions that you or members of the Subcommittee may
have. 


   CONTRIBUTORS
---------------------------------------------------------- Chapter 0:6

For more information on this testimony, please contact Sigurd R. 
Nilsen at (202) 512-7003 or Betty S.  Clark at (617) 565-7524. 
Denise D.  Hunter also contributed to this statement. 


*** End of document. ***