Department of Labor: Strategic Planning and Information Management
Challenges Facing the Department (Testimony, 02/05/98, GAO/T-HEHS-98-88).
GAO discussed the: (1) Department of Labor's progress in strategic
planning as envisioned by the Government Performance and Results Act of
1993; and (2) challenge Labor faces in ensuring the effective
information management necessary for Labor to fully realize the benefits
of that planning.
GAO noted that: (1) Labor's decentralized management structure makes
adopting the better management practices envisioned by the Results
Act--that is, articulating a comprehensive departmentwide mission
statement linked to obvious results-oriented goals, objectives, and
performance measures--more challenging; (2) Labor's September 30, 1997,
strategic plan reflected its decentralized approach and the difficulty
it presents for establishing departmentwide goals and monitoring their
attainment; (3) Labor chose to present individual plans for 15 of its 24
component offices along with a strategic plan overview; (4) the overview
contained five departmentwide goals that are generally results-oriented
and a departmentwide management goal; (5) however, GAO is concerned that
the lack of a departmentwide perspective in the development of Labor's
strategic plan makes it organizationally driven rather than focused on
mission; (6) several of the goals of the component units responsible for
ensuring safe and healthful workplaces are similar yet listed separately
for each unit; (7) a more mission-focused approach would improve Labor's
ability to identify ways in which its operations might be improved to
minimize potential duplication and promote efficiencies; (8) in order to
measure performance--the next step required under the Results Act--Labor
will need information that is sufficiently complete, reliable, and
consistent to be useful in decisionmaking; (9) GAO's work has raised
questions about how well Labor is meeting this management challenge;
(10) GAO has found data to be missing, unreliable, or inconsistent in
agencies throughout the Department; (11) Labor, as well as all other
federal agencies, must also address two information management issues
GAO has described this year as high risk because of vulnerabilities to
waste, fraud, abuse, and mismanagement; (12) the first, information
security, involves the agency's ability to protect information from
unauthorized access; (13) the second requires Labor to rapidly change
its computer systems to accomodate dates in the 21st century; and (14)
while Labor has appointed a chief information officer, as required under
the Clinger-Cohen Act of 1996, to oversee these and other information
management issues, questions remain as to whether or not other duties
required of the individual appointed will allow her to devote the
attention necessary to ensure success in this critical management area.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: T-HEHS-98-88
TITLE: Department of Labor: Strategic Planning and Information
Management Challenges Facing the Department
DATE: 02/05/98
SUBJECT: Strategic planning
Agency missions
Public administration
Strategic information systems planning
Congressional/executive relations
Occupational health/safety programs
Employment or training programs
Information resources management
Data integrity
IDENTIFIER: GPRA
Government Performance and Results Act
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO report. Delineations within the text indicating chapter **
** titles, headings, and bullets are preserved. Major **
** divisions and subdivisions of the text, such as Chapters, **
** Sections, and Appendixes, are identified by double and **
** single lines. The numbers on the right end of these lines **
** indicate the position of each of the subsections in the **
** document outline. These numbers do NOT correspond with the **
** page numbers of the printed product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
** A printed copy of this report may be obtained from the GAO **
** Document Distribution Center. For further details, please **
** send an e-mail message to: **
** **
** **
** **
** with the message 'info' in the body. **
******************************************************************
Cover
================================================================ COVER
Before the Subcommittee on Labor, Health and Human Services, and
Education, Committee on Appropriations, House of Representatives
For Release on Delivery
Expected at 2:00 p.m.
Thursday, February 5, 1998
DEPARTMENT OF LABOR - STRATEGIC
PLANNING AND INFORMATION
MANAGEMENT CHALLENGES FACING THE
DEPARTMENT
Statement of Carlotta C. Joyner, Director
Education and Employment Issues
Health, Education, and Human Services Division
GAO/T-HEHS-98-88
GAO/HEHS-98-88T
(205366)
Abbreviations
=============================================================== ABBREV
BLS - Bureau of Labor Statistics
CPI - consumer price index
ESA - Employment Standards Administration
ETA - Employment and Training Administration
IMIS - ABC
JTPA - Job Training Partnership Act
MSHA - Mine Safety and Health Administration
OASAM - Office of Assistant Secretary for Administration and
Management
OMB - Office of Management and Budget
OSHA - Occupational Safety and Health Administration
DEPARTMENT OF LABOR: STRATEGIC
PLANNING AND INFORMATION
MANAGEMENT CHALLENGES FACING THE
DEPARTMENT
============================================================ Chapter 0
Mr. Chairman and Members of the Subcommittee:
We are pleased to be here today to discuss the major management
challenges the Department of Labor faces in carrying out its mission
in an efficient and effective manner. With a budget of $34.6 billion
and about 16,700 staff in fiscal year 1998, Labor's mission is to
"foster and promote the welfare of job seekers, wage earners, and
retirees of the United States by improving their working conditions,
advancing opportunities for profitable employment, and protecting
their retirement investments." Over the past several years, the U.S.
work environment has changed in such a way that achieving this
mission is more difficult. For example, the strength of
international competition has made the nation increasingly aware of
the need for a skilled labor force. At the same time, large numbers
of individuals in this country remain unprepared for such employment.
Also, changes in employer and employee relations, such as increased
use of part-time and contract employees, pose new challenges for
worker protection. This environment increases the importance of more
rigorous accountability from government agencies like Labor. The
public is demanding more assurance that its tax dollars are not being
wasted and that government is operating in accordance with sound
business practices.
Today, I would like to discuss the Department of Labor's progress in
strategic planning as envisioned by the Government Performance and
Results Act of 1993 (hereafter referred to as the Results Act), and
the challenge Labor faces in ensuring the effective information
management necessary for Labor to fully realize the benefits of that
planning. My observations are based on the numerous studies we have
conducted regarding Labor over the past few years. (See the list of
related GAO products at the end of this testimony.)
In summary, Labor's decentralized management structure makes adopting
the better management practices envisioned by the Results Act--that
is, articulating a comprehensive departmentwide mission statement
linked to results-oriented goals, objectives, and performance
measures--more challenging. Labor's September 30, 1997, strategic
plan reflected its decentralized approach and the difficulty it
presents for establishing departmentwide goals and monitoring their
attainment. Labor chose to present individual plans for 15 of its 24
component offices along with a strategic plan overview. The overview
contained five departmentwide goals that are generally
results-oriented and a departmentwide management goal. However, we
are concerned that the lack of a departmentwide perspective in the
development of Labor's strategic plan makes it organizationally
driven rather than focused on mission. For example, several of the
goals of the component units responsible for ensuring safe and
healthful workplaces are similar yet listed separately for each unit.
A more mission-focused approach would improve Labor's ability to
identify ways in which its operations might be improved to minimize
potential duplication and promote efficiencies.
In order to measure performance--the next step required under the
Results Act--Labor will need information that is sufficiently
complete, reliable, and consistent to be useful in decisionmaking.
Our work has raised questions about how well Labor is meeting this
management challenge. We have found data to be missing, unreliable,
or inconsistent in agencies throughout the Department.
Labor, as well as all other federal agencies, must also address two
information management issues we have described this year as high
risk because of vulnerabilities to waste, fraud, abuse, and
mismanagement. The first--information security--involves the
agency's ability to protect information from unauthorized access.
The second requires Labor to rapidly change its computer systems to
accommodate dates in the 21st century. While Labor has appointed a
chief information officer, as required under the Clinger-Cohen Act of
1996, to oversee these and other information management issues,
questions remain as to whether or not other duties required of the
individual appointed will allow her to devote the attention necessary
to ensure success in this critical management area.
BACKGROUND
---------------------------------------------------------- Chapter 0:1
Established as a department in 1913, Labor carries out its mission by
administering and enforcing a variety of federal labor laws
guaranteeing workers' rights to a workplace free from safety and
health hazards, a minimum hourly wage and overtime pay, family and
medical leave, freedom from employment discrimination, and
unemployment insurance. Labor also protects workers' pension rights;
provides job training programs; helps workers find jobs; works to
strengthen free collective bargaining; and keeps track of changes in
employment, prices, and other national economic measures. About
three-fourths of Labor's almost $35 billion budget is composed of
mandatory spending on income maintenance programs, such as the
unemployment insurance program. Table 1 shows Labor's appropriation
and authorized staff-year spending for fiscal year 1998.
Table 1
Department of Labor Appropriations and
Authorized Staff-Year Spending, Fiscal
Year 1998
Fiscal year
1998 Full-time-
appropriations equivalent
Category (millions) staff years
-------------------------- -------------- --------------
Unemployment insurance and $26,501 \a
other income maintenance
expenses
Employment training\b 6,560 1,378
Worker protection 950 9,046
Occupational Safety and 337 2,212
Health Administration
Employment Standards 327 3,939
Administration
Mine Safety and Health 204 2,186
Administration
Pension and Welfare 82 709
Benefits Administration
Bureau of Labor Statistics 381 2,584
Departmental management 171 2,535
Office of the Inspector 47 417
General
Pension Benefits Guaranty 10 754
Corporation
==========================================================
Total $34,620 16,714
----------------------------------------------------------
\a Included under employment training.
\b Includes Employment Training Administration and Veterans'
Employment and Training Service.
Source: Department of Labor.
Labor's diverse functions are carried out by different offices in a
decentralized organizational structure. Labor has 24 component
offices or units and more than 1,000 field offices to support its
various functional responsibilities (see fig. 1). However, its many
program activities fall into two major categories: enhancing
workers' skills through job training and ensuring worker protection.
A third category relates to developing economic statistics, such as
the Consumer Price Index (CPI) and unemployment data, which are used
by business, labor, and government in formulating fiscal and monetary
policy and in making cost-of-living adjustments.
Figure 1: Department of Labor
Organization Chart
(See figure in printed
edition.)
RESULTS ACT AND OTHER
LEGISLATION ARE INTENDED TO
IMPROVE MANAGEMENT
GOVERNMENTWIDE
-------------------------------------------------------- Chapter 0:1.1
Improving management practices can help federal agencies achieve
their mission more effectively. Recognizing that federal agencies
have not always brought the needed discipline to their management
activities, recent legislation provides a framework for addressing
long-standing management challenges. The centerpiece of this
framework is the Results Act, mandating a comprehensive planning
process throughout the federal government. Other elements of this
management framework are the 1990 Chief Financial Officers Act, the
1995 Paperwork Reduction Act, the 1996 Federal Financial Management
Improvement Act, and the 1996 Clinger-Cohen Act.\1 These laws each
respond to a need for accurate, reliable information for executive
branch and congressional decision-making.
The Results Act is aimed at improving program performance. It
requires that agencies, in consultation with the Congress and after
soliciting the views of other stakeholders, clearly define their
missions and articulate comprehensive mission statements that define
their basic purposes. It also requires that they establish long-term
strategic goals and link annual performance goals to them. Agencies
must then measure their performance against the goals they have set
and report publicly on how well they are doing. In addition to
monitoring ongoing performance, agencies are expected to evaluate
their programs and to use the results from these evaluations to
improve the programs.
The Results Act requires virtually every executive agency to develop
a strategic plan covering a period of at least 5 years from the
fiscal year in which it is submitted and to submit the plan to the
Congress and the Office of Management and Budget (OMB). OMB provided
guidance on the preparation and submission of strategic plans as a
new part of its Circular No. A-11--the basic instructions for
preparing the president's budget--to underscore the essential link
between the Results Act and the budget process. The strategic plans
are to include six elements: (1) a mission statement, (2) long-term
goals and objectives, (3) approaches or strategies to achieve the
goals and objectives, (4) a discussion of the relationship between
long-term goals and annual performance goals, (5) key external
factors affecting goals and objectives, and (6) evaluations used to
establish goals and objectives and a schedule for future evaluations.
OMB required agencies to submit major parts of their draft strategic
plans during the spring of 1997. The completed strategic plan was
due to OMB and the Congress by September 30, 1997. The act requires
agencies to submit annual performance plans tied to the agencies'
budget request to reinforce the connections between the long-term
strategic goals outlined in the strategic plans and the day-to-day
activities of program managers and staff. Labor is expected to
submit its first annual performance plan, which covers fiscal year
1999, this week along with its budget request.
--------------------
\1 The 1990 Chief Financial Officers Act established a financial
management leadership structure and requirements for long-range
planning, audited financial statements, and strengthened
accountability reporting. The Paperwork Reduction Act of 1995 is the
overarching statute dealing with the acquisition and management of
information resources. The Federal Financial Management Improvement
Act of 1996 is intended to increase the capability of agencies to
monitor execution of the budget by more readily permitting reports
that compare spending of resources to results of activities. The
Clinger-Cohen Act of 1996 elaborates on requirements that promote the
use of information technology to better support agencies' missions
and to improve program performance.
LABOR'S DECENTRALIZED
ORGANIZATION PRESENTS
CHALLENGES FOR STRATEGIC
PLANNING
---------------------------------------------------------- Chapter 0:2
Labor's decentralized structure makes it both more important and more
difficult to ensure a system of accountability as envisioned in the
Results Act. Labor's September 30, 1997, strategic plan reflects
Labor's decentralized approach and the difficulty it presents for
establishing departmentwide goals and monitoring their attainment.
Labor has traditionally operated as a set of individual components,
each working largely independently with limited central direction and
control. This decentralized organizational structure may allow Labor
more flexibility to meet a variety of needs and focus resources in
the field. However, it also makes adopting the better management
practices envisioned by the Results Act more challenging. That is,
articulating a comprehensive departmentwide mission statement, which
is linked to results-oriented goals, objectives, and performance
measures, is difficult because of the historical lack of central
planning and the existing decentralized organizational structure.
Labor chose to present individual plans for 15 of its 24 component
offices along with a strategic plan overview. This option was not
inappropriate--it was specifically allowed by OMB. While OMB
Circular A-11 strongly encourages agencies to submit a single,
agencywide strategic plan, it states that an agency with disparate
functions, such as Labor, may prepare several strategic plans for its
major components or programs. Circular A-11 further provides that
when an agency does prepare multiple strategic plans for component
units, these should not be merely packaged together and submitted as
a single strategic plan because the size and detail of such a
compilation would reduce the plan's usefulness. Moreover, the agency
is to prepare an agencywide strategic overview that will link
individual plans by giving an overall statement of the agency's
mission and goals.
Labor's overview contains six departmentwide goals. Five of these
are results-oriented, and the sixth describes the process that will
support the achievement of the other goals:
-- lifelong learning and skill development;
-- promoting welfare to work;
-- enhancing pension and health benefits security;
-- safe, healthy, and equal opportunity workplaces;
-- helping working Americans balance work and family; and
-- maintaining a departmental strategic management process.
The strategic plan Labor submitted to OMB and to the Congress on
September 30, 1997, addressed many of the concerns we raised in our
review of the draft plan submitted to OMB and provided to the
Congress for consultation 4 months earlier, and it incorporated many
improvements that made it more responsive to the Results Act.\2
Labor's revised strategic overview and all but one of the 15
component unit plans include all six elements required by the act.
Further, the overview's mission statement provides a more complete
description of Labor's basic purpose. Moreover, discussions of
strategies to achieve goals and external factors that could affect
the achievement of goals are discussed alongside individual goals,
which facilitates the understanding of how particular strategies and
external factors are linked to each goal.
The overview also attempts to address Labor's traditionally
decentralized management approach, which has posed numerous
management challenges for Labor in the past. For example, the sixth
departmentwide goal, maintaining a departmental strategic management
process, was added to the formally submitted plan. This may be an
indication of a renewed emphasis by Labor to develop a more strategic
approach to departmental management, an improvement that we have
recommended in the past.\3
Other indications of this renewed approach to departmentwide
leadership are evident in the similar organizational style of each of
the component plans and the clear links between the strategic
overview and the plans. For example, in the revised overview, the
strategic goals of each of the units are highlighted under the
appropriate departmentwide goal.
Similarly, in the plans for each of the component units, the unit
strategic goals are categorized according to the departmentwide goal
to which they correspond.
--------------------
\2 The Results Act: Observations on Department of Labor's June 1997
Draft Strategic Plan (GAO/HEHS-97-172R, July 11, 1997).
\3 Strong Leadership Needed to Improve Management at the Department
of Labor (GAO/HRD-86-12, Oct. 21, 1985).
LABOR'S STRATEGIC OVERVIEW
PLAN CAN BE FURTHER IMPROVED
-------------------------------------------------------- Chapter 0:2.1
Although Labor has made significant improvements to its strategic
plan overview, the plan does not fully overcome the challenges posed
by Labor's decentralized structure. The plan, by packaging together
the strategic goals of units and subunits, appears to be driven by
the current organizational structure rather than by Labor's mission.
For example, the 15 agency goals listed under departmental goal
4--safe, healthy, and equal opportunity workplaces--are
organization-specific rather than reflective of goals necessary to
achieve the overall mission regardless of where the responsibility is
placed organizationally. For example, there is no single stated goal
of reducing workplace fatalities, injuries, and illnesses. Instead,
four separate goals reflect that intended result in different kinds
of workplaces where the Occupational Safety and Health Administration
(OSHA), the Mine Safety and Health Administration (MSHA), the
Employment and Training Administration (ETA), or the Office of the
Assistant Secretary for Administration and Management (OASAM) has
responsibility. A fifth goal reflects the responsibility of yet
another component unit--the Employment Standards Administration
(ESA)--to "minimize the human, social, and financial costs of
work-related injuries" by encouraging the prompt return to work after
injury in federal workplaces.
Establishing goals that reflect organizational units is useful for
traditional accountability purposes, such as monitoring resources,
processes, and outputs, but less useful for results-oriented
planning. A mission-focused rather than organizationally focused
planning process would improve Labor's ability to examine its
operations to find a less costly, more effective means of meeting its
mission. In past work, we have traced the management problems of
many federal agencies to obsolete organizational structures that are
inadequate for modern demands.\4 For example, our work has shown that
the effectiveness of federal program areas as diverse as employment
assistance and training, rural development, early childhood
development, and food safety has been plagued by fragmented or
overlapping efforts.\5 A frequently cited example of overlap and
ineffectiveness is the federal food safety system, which took shape
under as many as 35 laws and was administered by 12 different
agencies, yet had not effectively protected the public from major
foodborne illnesses.\6 As federal agencies become more
outcome-oriented, they sometimes find that outmoded organizations
must be changed to better meet customer needs and address the
interests of stakeholders.
Labor could also improve its planning process by making greater use
of evaluations, the sixth required element in the plans. For
example, the overview does not detail how information from
evaluations was used to develop the plan, nor does it specify how
future evaluations will help assess Labor's success in achieving its
stated goals. Instead, the overview discusses how evaluations in the
regulatory agencies have lagged behind those in the employment and
training area. In that respect, it is even more important that Labor
provide schedules or timelines for future evaluations, identify the
evaluations that will be done, and highlight how future program
evaluations will be used to improve performance. Along those lines,
we reported earlier that the experiences of OSHA as a pilot project
could provide insight into how evaluations can be managed. OSHA has
been involved in a number of activities geared toward making the
management improvements intended by the Results Act. We believe that
although not a requirement of the strategic planning process, it
would be helpful for Labor to build on the experiences gained from
the OSHA pilot project--identifying lessons learned and whether best
practices or other lessons could be applied departmentwide or in
units with similar functions.
A focus on results, as envisioned by the Results Act, implies that
federal programs that contribute to the same or similar results
should be closely coordinated to ensure that goals are consistent
and, as appropriate, program efforts are mutually reinforcing. In
our review of the strategic plan, we noted that Labor should improve
the management of crosscutting program efforts by ensuring that those
programs are appropriately coordinated to avoid duplication,
fragmentation, and overlap. For example, while Labor's plan refers
to a few other agencies with responsibilities in job training
programs and notes that Labor plans to work with them, the plan
contains no discussion of what specific coordination mechanism Labor
will use to realize efficiencies and possible strategies to
consolidate or coordinate job training programs to achieve a more
effective job training system.
--------------------
\4 Executive Guide: Effectively Implementing the Government
Performance and Results Act (GAO/GGD-96-118, June 1996).
\5 Government Reorganization: Issues and Principles
(GAO/T-GGD/AIMD-95-166, May 17, 1995).
\6 Food Safety: A Unified, Risk-Based Safety System Needed to Ensure
Food Safety (GAO/T-RCED-94-71, Nov. 4, 1993).
EFFECTIVE INFORMATION
MANAGEMENT IS ESSENTIAL
---------------------------------------------------------- Chapter 0:3
Realizing the benefits of strategic planning will require that Labor
has effective information management systems. Instead, we have found
a lack of reliable and consistent information needed to monitor
performance of individual programs and to disseminate information for
use by others. Labor must also meet the challenge that faces all
government agencies of ensuring information security, getting ready
for the year 2000, and ensuring that it has an adequate systems
architecture.
The Clinger-Cohen Act of 1996 requires that a qualified senior-level
chief information officer be appointed to guide all major information
resource management activities, which would include addressing these
specific and general issues. Labor appointed a chief information
officer in August 1996. In 1996, OMB raised a question regarding
this individual also serving as the Assistant Secretary for
Administration and Management, since the Clinger-Cohen Act requires
that information resources management be the primary function of the
chief information officer. Because it is unclear whether one
individual can fulfill the responsibilities required by both
positions, OMB has asked Labor to evaluate its approach and report to
OMB by the end of fiscal year 1998.
LABOR LACKS PERFORMANCE
MANAGEMENT DATA
-------------------------------------------------------- Chapter 0:3.1
Performance measurement, one of the Results Act's most important
features, will require that Labor address a lack of reliable
management information across the Department. Under the act,
executive branch agencies are required to develop 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. The annual
performance plans are to include performance goals for an agency's
program activities as listed in the budget, a summary of the
necessary resources to conduct these activities, the performance
indicators that will be used to measure performance, and a discussion
of how the performance data will be validated and verified.
Successful performance measurement requires that agencies recognize
that they must balance their ideal performance measurement systems
against real-world considerations, such as the cost and effort
involved in gathering and analyzing data, while ensuring that the
data they do collect are sufficiently complete, accurate, and
consistent to be useful in decisionmaking.
Although we have not yet reviewed Labor's performance plan for fiscal
year 1999, our past reviews of individual programs throughout the
agency have found critical program performance information to be
lacking, unreliable, or inconsistent. Examples can be found in ETA
and OSHA.
ETA lacks information that would allow it to monitor its performance
in processing agricultural employers' applications for the
certification of temporary and seasonal agricultural guestworkers
under the H-2A program.\7 Our analysis of the program showed that in
fiscal year 1996, ETA issued Labor certifications after the statutory
deadlines for at least one-third of all applications. ETA does not,
however, collect key program management information that would allow
it to monitor its performance in meeting the program's statutory and
regulatory deadlines. Without information on the extent and cause of
missed time periods, ETA cannot ensure that agricultural employers
have workers when they are needed.
OSHA provides an example of the questionable reliability of some of
Labor's data. As we reported in December 1996, OSHA, in its
Integrated Management Information System (IMIS), does not always
appropriately characterize or fully capture information on settlement
agreements it has reached with employers, nor does it always change
inspection data in a timely manner to reflect the terms of a
settlement agreement.\8 As a result, information regarding the number
or type of violations and penalty amounts associated with a
particular inspection can be distorted or inaccurate because it may
not include reductions in penalties that occur as part of the
settlement process. In addition, the depiction within its database
of the relationship between a fatality or injury and the violations
detected can be misleading. Not only do unreliable data limit
effective management of OSHA's programs; they can also affect the
private sector because, unlike some other government-maintained
databases, OSHA's IMIS database is publicly accessible. Academia
relies on its accuracy in conducting policy research, while some
private sector employers use its data in their commercial activities.
For example, a database information service company based in
Maplewood, New Jersey, offers standard reports and customized
searches of Labor's data to assist both public and private sector
organizations with screening companies before contracting with them
for products or services.
In our work on Job Corps--administered by ETA--we also found that
reported information did not provide an accurate picture of program
activities and results. Our survey of employers who were reported as
hiring Job Corps participants showed that about 15 percent of the job
placements in our sample were potentially invalid: A number of
employers reported that they had not hired students whom Labor had
reported placed with their businesses, and other employers of Job
Corps participants identified by Labor could not be found.\9
In addition, some data that are collected lack the consistency that
is essential to evaluating performance when multiple programs address
similar missions and goals. This is particularly important for
Labor, where many of the programs are administered by state and local
agencies with federal funding and oversight, such as ETA's Job
Training Partnership Act (JTPA) programs. For example, as we
reported in September 1996, we found a lack of consistency among
Labor and other agencies administering employment-focused programs
for the disabled. Those that collected data on program
outcomes--such as data on whether participants got jobs and kept
them, what wages they received, and whether they received employee
benefits such as health insurance--used different definitions for key
data. They also had different eligibility criteria, paperwork
requirements, software, and confidentiality rules that limited
comparisons of program performance.\10
The need for consistent data is particularly significant given the
challenges Labor faces in meeting the goals of workforce development
within the context of an uncoordinated system of multiple employment
training programs operated by numerous departments and agencies. For
fiscal year 1995, we identified 163 federal employment training
programs, with a total budget of $20.4 billion, operated by a total
of 15 federal departments and agencies; Labor had responsibility for
37 of these programs.\11 Although many of these programs had similar
goals and overlapping missions, they often had inconsistent measures
for program success--where there were measures at all. As a result,
we do not know whether individual programs are effective or whether
the federal government's efforts to improve skills, employment, and
wages of workers are successful.\12
--------------------
\7 H-2A Agricultural Guestworker Program: Changes Could Improve
Services to Employers and Better Protect Workers (GAO/HEHS-98-20,
Dec. 31, 1997).
\8 OSHA's Inspection Database (GAO/HEHS-97-43R, Dec. 30, 1996).
\9 Job Corps: High Costs and Mixed Results Raise Questions About
Program's Effectiveness (GAO/HEHS-95-180, June 30, 1995).
\10 People With Disabilities: Federal Programs Could Work Together
More Efficiently to Promote Employment (GAO/HEHS-96-126, Sept. 3,
1996).
\11 Multiple Employment Training Programs: Information Crosswalk on
163 Employment Training Programs (GAO/HEHS-95-85FS, Feb. 14, 1995)
and Multiple Employment Training Programs: Major Overhaul Needed to
Reduce Costs, Streamline the Bureaucracy, and Improve Results
(GAO/T-HEHS-95-53, Jan. 10, 1995).
\12 Multiple Employment Training Programs: Basic Program Data Often
Missing (GAO/T-HEHS-94-239, Sept. 28, 1994) and Multiple Employment
Training Programs: Most Federal Agencies Do Not Know If Their
Programs Are Working Effectively (GAO-HEHS-94-88, Mar. 2, 1994).
INFORMATION PRODUCED FOR USE
BY OTHERS IS VULNERABLE TO
LABOR'S INFORMATION
MANAGEMENT WEAKNESSES
-------------------------------------------------------- Chapter 0:3.2
In carrying out its mission, Labor produces some information for use
outside the Department by both government and private sector
entities. Examples include the prevailing wage rates applicable
under certain statutes and statistical data in the field of labor
economics, such as the CPI. This information--like the performance
management information Labor uses--can be affected by weaknesses in
Labor's information management systems.
ESA, for example, sets prevailing wage rates under the Davis-Bacon
Act for construction job classifications in some 3,000 individual
counties or groups of counties and for four different types of
construction. Employers on federal construction projects must pay
workers wages at or above these rates. Wage rate determinations are
based on voluntarily submitted wage and benefit data from employers
and third parties, such as unions or trade groups, on construction
projects. In May 1996, we reported that Labor's wage determination
process contained weaknesses that could permit the use of fraudulent
or inaccurate data in the setting of prevailing wage rates.\13 If
these weaknesses allow the use of erroneous data, the result may be
in either of two directions. If the wage rate is set too low,
construction workers may be paid less than the amount to which they
are entitled; if the rate is too high, the government may pay
excessive construction costs.
Labor has begun to address these process weaknesses. Its long-term
strategy involves an initiative funded at about $4 million in its
fiscal year 1997 budget to develop, evaluate, and implement
alternative reliable wage determination methodologies that would
provide accurate and timely wage determinations at reasonable cost.
We recommended some additional steps, however, that would, in the
short-term, improve the verification of wage data submitted by
employers. The House Appropriations Committee subsequently directed
Labor to ensure that an appropriate portion of the funds appropriated
for the program in fiscal year 1997 is used to implement those
recommendations and requested that we review the success of those
efforts. We expect to begin this study in early 1998.
The Bureau of Labor Statistics (BLS) produces the CPI, the principal
source of information on trends in consumer prices and inflation in
the United States. It is used as an economic indicator of inflation
and an escalator for wages, income payments, and tax brackets. In
fiscal year 1996, about $656 billion of federal tax receipts and $458
billion in federal spending such as for social security payments and
food stamps were automatically linked to price changes measured by
the CPI. In our October 1997 report, we assessed how often
expenditure weights are updated in the CPI. These weights are used
to give proportionate emphasis for price changes for one item in
relation to other items in the CPI. We have found that the accuracy
of the CPI as a measure of inflation could be improved if the
expenditure weights were updated more frequently. Because BLS has
updated these weights only every 10 years or so, we recommended more
frequent updating of the market basket expenditure weights to make
the CPI more timely in its representation of consumer expenditures.
--------------------
\13 Davis-Bacon Act: Process Changes Could Raise Confidence That
Wage Rates Are Based on Accurate Data (GAO/HEHS-96-130, May 31, 1996)
and Davis-Bacon Act: Process Changes Could Address Vulnerability to
Use of Inaccurate Data in Setting Prevailing Wage Rates
(GAO/T-HEHS-96-166, June 20, 1996).
SOME CHALLENGES OF
INFORMATION RESOURCE
MANAGEMENT ARE COMMON TO
LABOR AND OTHER FEDERAL
AGENCIES
-------------------------------------------------------- Chapter 0:3.3
Information management is the subject of two new areas we have added
this year to our list of areas at high risk of fraud, waste, abuse,
or mismanagement: information security and the year 2000 problem,
both of which apply to Labor as well as to all other government
agencies. Information security generally involves an agency's
ability to adequately protect the information it collects from
unauthorized access.\14 Ensuring information security is an ongoing
challenge for Labor, especially given the sensitivity of some of the
employee information being collected. Ensuring confidentiality is
also essential to the quality of the information collected, given the
voluntary nature of many of the surveys that Labor administers, such
as the wage reports used to set Davis-Bacon prevailing wage rates.
The second area involves the need for computer systems to be changed
to accommodate dates beyond the year 1999. This year 2000 problem
stems from the common practice of abbreviating years by their last
two digits. Thus, miscalculations in all kinds of activities, such
as benefit payments, could occur because the computer system would
interpret 00 as 1900 instead of 2000. Labor, along with other
agencies that use dates to process information, is faced with the
challenge of developing strategies to deal with this potential
problem area in the near future. We have been asked to look at a
number of efforts in individual Labor units to assess their progress
toward making their computer systems capable of accommodating 21st
century dates.
These two areas, computer security and the year 2000 computer
problem, are just a part of the plethora of management challenges
organizations such as Labor face in the complex world of information
management and technology. As stated earlier, Labor's decentralized
management and structure make adopting better management practices
even more challenging. Also, because Labor's agencies maintain
multiple computer systems, operated by several contractors,
incorporating a variety of differing architectural
characteristics--including hardware, operating systems, application
languages, and database management systems--the challenge to obtain
complete, reliable, and consistent information throughout the
Department is formidable. However, while solutions to complex
information management and technology problems are not simple, they
do exist.
For example, as computer-based information systems have become larger
and more complex over the past 10 years, the importance of, and
reliance on, what is called a "systems architecture" has
correspondingly increased. Simply put, an architecture is the
blueprint to guide and constrain the development and evolution of a
collection of related systems. This is done first in logical terms,
such as defining the organization's functions, providing high-level
descriptions of its information systems and their interrelationships,
and specifying how and where information flows. Second, this
blueprint explains operations in technical terms, such as specifying
hardware, software, data communications, security, and performance
characteristics. The Congress has recognized the importance of such
architecture in improving the effectiveness and efficiency of federal
information systems. The Clinger-Cohen Act of 1996 requires, among
other provisions, that department-level chief information officers
develop, maintain, and facilitate the implementation of integrated
systems architecture. A sound systems architecture would ensure that
data being collected and maintained within an organization are
structured and stored in a manner that makes them accessible,
understandable, and useful throughout the organization.
--------------------
\14 High-Risk Series: Information Management and Technology
(GAO/HR-97-9, Feb. 1997). See also High-Risk Series: An Overview
(GAO/HR-97-1, Feb. 1997) and High-Risk Series: Quick Reference
Guide (GAO/HR-97-2, Feb. 1997).
CONCLUSION
---------------------------------------------------------- Chapter 0:4
Labor's programs touch the lives of nearly every American because of
the Department's responsibilities for employment training, job
placement, and income security for workers when they are unemployed,
as well as workplace conditions. Labor's mission is an urgent one.
Each day or week or year of unemployment or underemployment is one
too many for individuals and their families. Every instance of a
worker's being injured on the job or not paid legal wages is one that
should not occur. Every employer frustrated in attempts to find
competent workers or to understand and comply with complex or unclear
regulations contributes to productivity losses our country can ill
afford. And every dollar wasted in carrying out the Department's
mission is one we cannot afford to waste.
Labor currently has a budget of $34.6 billion and about 16,700 staff
to carry out its program activities. Over the years, our work on the
effectiveness of these programs has called for more efficient use of
these resources, and we have recommended that Labor improve its
strategic planning process.
The current federal effort to improve strategic planning seeks to
shift the focus of government decision-making and accountability away
from a preoccupation with activities--such as awarding grants and
conducting inspections--to a focus on the results of those activities
such as real gains in employability, safety, or program quality.
Labor's strategic planning efforts are still very much a work in
progress. Like other agencies, Labor must focus more on the results
of its activities and on obtaining the information it needs for a
more focused, results-oriented management decision-making process.
The Results Act provides a statutory framework needed to manage for
results, and Labor has begun to improve its management practices in
ways that are consistent with that legislation. The benefits of the
Results Act can be particularly important for a decentralized
department such as Labor. However, such an organizational structure
provides challenges in meeting the legislation's objectives.
Today's information systems offer the government unprecedented
opportunities to deliver high-quality services, tailored to the
public's changing needs, more effectively, faster, and at lower cost.
Moreover, better systems can enhance the quality and accessibility of
important knowledge and information, both for the public and for
federal managers. It is increasingly important that Labor take
advantage of these opportunities and address its information
management weaknesses as it implements the Results Act if the
benefits envisioned are to be fully realized.
-------------------------------------------------------- Chapter 0:4.1
Mr. Chairman, this concludes my prepared statement. I will be happy
to answer any questions that you or Members of the Subcommittee may
have.
RELATED GAO PRODUCTS
H-2A Agricultural Guestworker Program: Changes Could Improve
Services to Employers and Better Protect Workers (GAO/HEHS-98-20,
Dec. 31, 1997).
Job Corps: Participant Selection and Performance Measurement Need to
Be Improved (GAO/T-HEHS-98-37, Oct. 23, 1997).
The Results Act: Observations on Department of Labor's June 1997
Draft Strategic Plan (GAO/HEHS-97-172R, July 11, 1997).
Managing for Results: Using GPRA to Assist Congressional and
Executive Branch Decisionmaking (GAO/T-GGD-97-43, Feb. 12, 1997).
High-Risk Series: Information Management and Technology
(GAO/HR-97-9, Feb. 1997).
OSHA's Inspection Database (GAO/HEHS-97-43R, Dec. 30, 1996).
Information Technology Investment: Agencies Can Improve Performance,
Reduce Costs, and Minimize Risks (GAO/AIMD-96-64, Sept. 30, 1996).
Education and Labor: Information on the Departments' Field Offices
(GAO/HEHS-96-178, Sept. 16, 1996).
People With Disabilities: Federal Programs Could Work Together More
Efficiently to Promote Employment (GAO/HEHS-96-126, Sept. 3, 1996).
Executive Guide: Effectively Implementing the Government Performance
and Results Act (GAO/GGD-96-118, June 1996).
Davis-Bacon Act: Process Changes Could Raise Confidence That Wage
Rates Are Based on Accurate Data (GAO/HEHS-96-130, May 31, 1996).
Multiple Employment Training Programs: Major Overhaul Needed to
Reduce Costs, Streamline the Bureaucracy, and Improve Results
(GAO/T-HEHS-95-53, Jan. 10, 1995).
Multiple Employment Training Programs: Basic Program Data Often
Missing (GAO/T-HEHS-94-239, Sept. 28, 1994).
Executive Guide: Improving Mission Performance Through Strategic
Information Management and Technology (GAO/AIMD-94-115, May 1994).
*** End of document. ***