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United States General Accounting Office 


GAO 


Report to Congressional Requesters 


WORKFORCE 
INVESTMENT ACT 

Better Guidance 
Needed to Address 
Concerns Over New 
Requirements 



GAO 


-c 1 


^Accountability * Integrity * Reliability 


GAO-02-72 









Report Documentation Page 


Report Date Report Type 

00OCT2001 N/A 

Dates Covered (from... to) 

Title and Subtitle 

Contract Number 

WORKFORCE INVESTMENT ACT: Better Guidance 


Needed to Address Concerns Over New Requirements 

Grant Number 


Program Element Number 

Author(s) 

Project Number 


Task Number 


Work Unit Number 

Performing Organization Name(s) and Address(es) Performing Organization Report Number 

General Accounting Office, PO Box 37050, Washington, GAO-02-72 
DC 20013 

Sponsoring/Monitoring Agency Name(s) and Sponsor/Monitor’s Acronym(s) 

Address(es) 

Sponsor/Monitor’s Report Number(s) 

Distribution/Availability Statement 

Approved for public release, distribution unlimited 

Supplementary Notes 
Abstract 

A competitive national economy depends, in part, on a workforce development system that provides 
individuals with labor market skills and gives employers access to qualified workers. In the past, the 
nations job training system was fragmented, containing overlapping programs that did not serve job 
seekers or employers well. 1 To address these problems, the Congress passed the Workforce Investment 
Act (WIA) in 1998, seeking to create a system connecting employment, education, and training services to 
better match workers to labor market needs. WIAs requirements represented a significant change from 
prior workforce development efforts, including, among other things: 


Subject Terms 



Number of Pages 

62 






Contents 


Letter 


1 


Results in Brief 

3 


Background 

Participation in The One-Stop Limited by Programmatic and 

6 


Financial Concerns 

13 


Training Options May Become Limited as Training Providers Drop 
Out of the System 

Current Operations of Workforce Investment Boards and Affiliated 

22 


Entities May Discourage Private-Sector Participation 

29 


Conclusions 

36 


Recommendations to Executive Agencies 

37 


Matter for Congressional Consideration 

38 


Agency Comments and Our Evaluation 

38 

Appendix I 

Presence of Partners at Nine One-Stops and 

Method of Core Service Provision 

42 


Appendix II 

Comments From the Department of Labor 

43 

Appendix III 

Comments From the Department of Education 

45 

Appendix IV 

Comments From the Department of Health and 
Human Services 

50 

Appendix V 

Comments From the Department of Housing and 
Urban Development 

52 

Appendix VI 

GAO Contacts and Staff Acknowledgments 

GAO Contacts 

Staff Acknowledgments 

56 

56 

56 


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GAO-02-72 WIA Implementation Issues 




Related GAO Products 


57 


Tables 


Table 1: WIA’s Federal Programs: Funding Levels, Services 

Provided, and Target Populations (dollars in millions) 7 

Table 2: Membership Requirements for State and Local Boards 12 

Table 3: Programmatic Concerns Raised by Selected Partners and 

Related Guidance by Pertinent Federal Agencies 18 

Table 4: State and Local Implemented’ Ideas for Addressing 

Partners’ Programmatic and Financial Concerns 22 

Table 5: State and Local Implemented’ Ideas for Addressing 

Training Provider Participation Concerns 29 

Table 6: State and Local Implemented’ Ideas for Enhancing 

Private-Sector Participation 36 

Table 7: Partner Programs and Method of Core Service Provision at 

Nine One-Stops 42 


Figure 

Figure 1: Composition of Committees at the State Level in 

Vermont, California, and Pennsylvania 34 


Abbreviations 

ETPL 

eligible training provider list 

FERPA 

Family Educational Rights and Privacy Act 

GED 

general equivalency diploma 

HEA 

Higher Education Act 

HHS 

Department of Health and Human Services 

HUD 

Department of Housing and Urban Development 

ITA 

individual training account 

OMB 

Office of Management and Budget 

SSN 

social security number 

UI 

unemployment insurance 

WIA 

Workforce Investment Act 


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i 

GAO 

^^^^^^^^^Accountability * Integrity * Reliability _ 

United States General Accounting Office 
Washington, DC 20548 


October 4, 2001 

The Honorable Edward M. Kennedy 
Chairman 

The Honorable James M. Jeffords 
Committee on Health, Education, 

Labor and Pensions 
United States Senate 

A competitive national economy depends, in part, on a workforce 
development system that provides individuals with labor market skills and 
gives employers access to qualified workers. In the past, the nation’s job 
training system was fragmented, containing overlapping programs that did 
not serve job seekers or employers well. 1 To address these problems, the 
Congress passed the Workforce Investment Act (WIA) in 1998, seeking to 
create a system connecting employment, education, and training services 
to better match workers to labor market needs. WLA’s requirements 
represented a significant change from prior workforce development 
efforts, including, among other things: 

• The streamlining of employment and training services through better 
integration at the local level. In that respect, WIA requires state and local 
entities who carry out at least 17 federal programs 2 to participate in local 
one-stop centers (local centers offering job placement assistance for 
workers, and opportunities for employers to find workers) by making 
employment and training-related services available, 3 and by providing 
support for the establishment and operation of these one-stops through 
payment of rent or in-kind contributions. 4 


'GAO has reported in the past that the prior workforce development system was 
fragmented. See Related GAO Products. 

2 The entities carrying out these programs or their activities at the one-stops are termed 
“mandatory partners.” They are funded through four federal agencies: the Department of 
Labor (Labor), the Department of Education (Education), the Department of Health and 
Human Services (HHS), and the Department of Housing and Urban Development (HUD). 
See table 1 for a listing of the programs. 

3 These services include “core” services, such as initial eligibility, as well as access to the 
full range of services. 

4 WLA did not dictate how one-stops must be set up, but in guidance, Labor described a 
range of one-stop models. 


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• Enhanced training options for job seekers receiving training. WIA requires 
any training provider (such as a community college or a technical 
education program) wanting to participate in this new system to collect 
and report data on student outcomes (such as completion, placement, and 
wage rates). Job seekers could use this information to, among other 
things, decide what training provider or course offering to patronize. 

• A stronger role for the private sector in the workforce system. WIA 
requires that the private sector lead and represent the majority of 
members on state and local workforce investment boards. WIA created 
these boards to establish workforce development policies and oversee 
one-stop operations. 

The Congress passed WIA in August 1998, but many of its components 
took full effect on July 1, 2000. 5 As a result, state and local implementers 
(those responsible for carrying out WIA at the state and local level) are at 
different stages of implementation, with most just recently completing 
their first full year of WIA implementation. 6 In an effort to assess what 
progress states and localities are making implementing WIA’s 
requirements and what issues may be affecting one-stop partners’ ability to 
achieve full integration, Labor’s ultimate vision of future one-stop 
systems—you asked that we identify issues of particular concern to state 
and local implementers, as well as possible solutions to address these 
issues. For the purposes of this report, we focused on issues related to the 
three WIA requirements that represent the foundation of this new system. 
These issues are (1) mandatory partners’ participation in the one-stops, (2) 
job seekers’ ability to receive enhanced choices for training, and (3) 
private-sector participation on workforce boards. 

To more fully assess these issues, we interviewed officials from the 
Departments of Labor, Education, Health and Human Services (HHS), and 
Housing and Urban Development (HUD). We also interviewed officials 
from national associations representing a variety of state and local 


5 For example, creation of the one-stops, training provider requirements, and establishment 
of boards, which we focus on in this report, and which are in WIA’s Title I, were not 
required to take full effect until July 1, 2000. 

6 Examples of state and local implementers include, among others, those agency officials 
serving individuals eligible for any of the mandatory partners’ services, public and private- 
sector representatives serving on state and local workforce investment boards, governors 
and local elected officials, training providers, etc. “Mandatory partners” are a subset of all 
state and local implementers. 


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implementers (for example, local governments, state labor agencies, 
educational institutions, private-sector representatives). To further 
understand the effect these issues were having on local-level 
implementation and to determine possible solutions, we met with a wide 
range of officials during visits to three states (California, Pennsylvania, 
and Vermont), six local areas, and nine one-stop centers in those states. 

We selected the states based on a variety of economic, demographic, and 
other state-specific factors. 7 To further validate our findings, we sponsored 
a symposium that included officials from the key associations representing 
state and local implementers. Although our findings are not applicable to 
the universe of state and local implementers, they were corroborated by 
several sources, including surveys conducted for us by two national 
associations 8 and a survey conducted by the Department of Labor (Labor) 
on the status of WLA implementation efforts that included information 
representing 132 out of approximately 600 local areas. 9 We performed our 
work in accordance with generally accepted government auditing 
standards between December 2000 and August 2001. 


Results in Brief 


As required by WLA, mandatory partners are making efforts to participate 
in the one-stops. However, programmatic or financial concerns are 
affecting the partners’ level of participation, as well as their ability to fully 
integrate their services at the one-stops. First, several mandatory partners 
feared that one-stop participation would significantly alter their traditional 
service-delivery methods and could adversely affect the quality of services 
provided to their eligible populations. For example, staff for one program 
that serves the disabled expressed concerns that the special services their 
eligible population may need, such as sign language interpreters, are not 
available at many one-stops, but are available at existing program offices. 


For example, California has the largest WIA funding and the most local workforce 
investment areas, while Vermont has significantly less funding and only one workforce 
investment area. We selected Pennsylvania because it implemented WIA earlier than the 
other two states and we believed it might have had different implementation experiences. 
Other factors we considered included past and expected economic growth in these states. 
We utilized a range of criteria, such as population density, to select the local areas visited 
in each state. 

s The U.S. Conference of Mayors and the National Association of Counties conducted these 
surveys of their entire respective memberships. About 100 of the approximately 600 local 
areas responded. 

9 Labor’s study is not necessarily representative of all local areas because only about one 
quarter of the local areas responded. 


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Second, several mandatory partners were also concerned that full 
integration could lead them to serve individuals otherwise ineligible for 
their services. For example, local staff of one mandatory program, the 
Department of Education’s Vocational Rehabilitation Services program, 
said that they must serve those individuals who are most in need of 
services, and would violate their own program’s requirements if they were 
to serve an individual at the one-stop who did not meet that criteria. In 
addition, mandatory partners said that resource constraints limited their 
ability to fully integrate their services at the one-stops. For example, when 
mandatory partners have a lease on an existing facility that they cannot 
break, they can incur additional expenses by operating out of that 
location, providing staff to the one-stop, or establishing other links to the 
one-stops. The agencies that oversee the programs, such as Labor, have 
not provided adequate guidance as to how mandatory partners can resolve 
these concerns to achieve full integration at the one-stops. State and local 
implementers shared with us their ideas on how to address these 
problems, such as offering incentives to mandatory partners for 
participation. 

As implementation of WLA progresses, training options for job seekers 
may be diminishing rather than improving, as training providers reduce the 
number of course offerings they make available to WLA job seekers. 
According to training providers, the data collection burden resulting from 
participation in WIA can be significant and may discourage their 
willingness to participate. For example, the requirement that training 
providers collect outcome data on all students in a class may mean calling 
hundreds of students to obtain placement and wage information, even if 
there is only one WIA-funded student in that class. Even if they used other 
methods that may be less resource-intensive, training providers said 
privacy limitations might limit their ability to collect or report student 
outcome data. Training providers also highlighted the burden associated 
with the lack of consistency between the data reporting definitions states 
use for WIA and other mandatory partners. For example, the definition a 
state establishes for “program completer” for students enrolled in WIA can 
be different from the definition a state establishes for students enrolled in 
Education’s Carl D. Perkins Vocational Education Program (Perkins). 
Training providers find the reporting requirements particularly 
burdensome given the relatively small number of individuals who have 
been sent for training. Guidance from Labor and Education has failed to 
address how training providers can provide this information cost- 
effectively. State and local implementers shared their views on ways to 
reduce training providers’ burden and enhance job seekers’ training 


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options, such as allowing training providers to collect required data on 
only a sample of their students. 

Private-sector representatives may be discouraged from participating on 
workforce investment boards as a result of how states and localities are 
operating their boards and associated entities. Private-sector 
representatives and other implementers have said that the large size of the 
workforce investment boards at the state and local levels—54 in one state 
we visited—have made it difficult to conduct the board’s business in an 
efficient manner. In addition, according to private-sector representatives, 
the structures established to accommodate the boards’ large size might 
inaccurately reflect private-sector views. For example, the boards’ day-to- 
day operations are typically carried out by public-sector employees with 
few ties or little understanding of the employer community. In addition, 
committees that have been set up under the auspices of the boards that 
are tasked with researching key issues may not have sufficient 
membership from the private sector to ensure that they focus on the issues 
of concern to the private sector. Although Labor has offered information 
to the private sector related to boards through its contractors, several 
training sessions, and publications, it has not issued specific guidance to 
help states and localities overcome some of these issues. If these issues 
are left unresolved, several private-sector representatives told us they 
might reduce their level of participation. State and local implementers 
shared with us their ideas of ways to help maintain private-sector 
leadership, such as requiring a private-sector chair and private-sector 
majority on committees. 

We are recommending that the responsible federal agencies—Labor, 
Education, HHS, and HUD—work together to provide more effective 
guidance on how to address the specific concerns identified by state and 
local implementers. We are also presenting a matter for congressional 
consideration, suggesting that the Congress provide more time for training 
providers to adjust to the data collection and reporting requirements. 

Labor, Education, HHS, and HUD provided us with written comments on a 
draft of this report. HHS concurred with the recommendation that was 
applicable to its activities. Neither Labor, Education, nor HUD commented 
specifically on our recommendations, but reiterated the difficulties 
associated with WLA implementation. Education raised concerns about 
our assessment of mandatory partners’ progress towards the full 
integration model, rather than other acceptable models. We did not intend 
to imply that full integration is the only option for participation. However, 
because Labor highlighted full integration as its ultimate vision for 


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Background 


participation, our report sought to identify issues that would complicate 
partners’ efforts to achieve full integration. HUD said that it did not believe 
that WIA was directly applicable to its programs. We incorporated the 
agencies’ comments into the report as appropriate. 


Through WIA, the Congress sought to replace the fragmented training and 
employment system that existed under the previous workforce system. 
Among other things, WIA streaml in ed program services at one-stop 
centers, offered job seekers the ability to make informed choices about 
training, and provided for private-sector leadership to manage this new 
workforce development system. 


Streamlining Services To ensure better integration of employment and training services at the 

Through One-Stop Centers local level, WLA imposed requirements on at least 17 programs 

administered by four federal agencies. These requirements included, 
among others, making core employment and training services available 
through the one-stop centers, providing access to the programs’ other 
services to those eligible, and supporting the one-stops’ establishment and 
operation. 10 As shown in table 1, these programs represent a range of 
funding levels, from $2.4 billion for the Vocational Rehabilitation Program 
to $55 million for Native American employment and training programs. 
The programs also represent various target populations. For example, 
while many of the programs serve either low-income or otherwise 
disadvantaged or unemployed individuals, WIA’s Adult and Dislocated 
Worker programs can serve any individual 18 or older, as can Wagner- 
Peyser’s Employment Service (Employment Service). In contrast, 
Education’s Vocational Rehabilitation Services program can only serve 
disabled individuals and even then prioritizes which of those it can serve. 
These programs also represent a range of service-delivery methods. Many 
of these programs’ services are administered by public agency personnel 
(such as those from state labor or education departments). Other 
programs are administered by, among others, nonprofit or community- 
based organizations, unions, Indian tribal governments, and community 
development corporations. Several of these programs consist of block 
grants that are provided to states and localities for a variety of efforts, 
which may include employment and training services. Although many of 


10 Labor introduced the one-stop concept in 1994, when it began awarding implementation 
grants to help states bring Labor-funded employment and training programs into a single 
infrastructure. 


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the programs provide for training, such as WIA’s Adult and Dislocated 
Worker programs, others, such as veterans’ employment and training 
programs, must work with other programs to obtain training for their 
participants. 


Table 1: WIA’s Federal Programs: Funding Levels, Services Provided, and Target Populations (dollars in millions) 

Required programs’ 

2001 

appropriation 

Services provided and target population 

Department of Labor 

Adult Worker Program 

$950 

Assessment, counseling, job readiness skills, and 
occupational skills training to individuals age 18 or older 

Dislocated Worker Program 

1,590 

Assessment, counseling, job readiness skills, and 
occupational skills training to individuals age 18 or older, 
such as those who are unemployed or seeking 
reemployment 

Youth Program 

1,103 

Assistance for youth ages 14-21 to complete an 
educational program or to secure and hold employment. 
Priority is given to low-income individuals with particular 
employment or school-completion barriers 

Wagner-Peyser 

Employment Service 

1,016 

Assessment, counseling, job readiness and placement to 
any individual seeking employment who is legally 
authorized to work in the United States 

Trade Adjustment Assistance Training Program 

407 

Reemployment assistance to individuals who have become 
unemployed as the result of increased imports 

Employment and training services to veterans 

159 

Counseling and placement services to veterans, including 
those with service-connected disabilities; connections to 
other programs that can fund training 

Unemployment Insurance 

2,349 

Compensation to individuals who have become 
unemployed through no fault of their own and are looking 
for work 

Job Corps 

1,400 

A residential program that provides job training and job¬ 
readiness skills to disadvantaged at-risk youth, ages 16-24 

Welfare-to-Work Program 

1,500 b 

Variety of services, including transitional employment, wage 
subsidies, job training and placement, and postemployment 
services, to move welfare recipients, custodial parents with 
incomes below the poverty line, and noncustodial parents of 
low-income children into employment 

Senior Community Service Employment Program 

440 

Assessment, counseling, placement assistance, and 
occupational skills training for low-income persons age 55 
and over 

Migrant & Seasonal Farmworker Employment and 
Training Program 

77 

Assessment, counseling, placement assistance, 
occupational skills training, and other supportive services 
for economically disadvantaged migrant and seasonally 
employed workers 

Native American Employment and Training Programs 

55 

Assessment, counseling, placement assistance, 
occupational skills training, and other supportive services 
for Indian, Alaskan Native, and Native Hawaiian individuals 

Department of Education 

Vocational Rehabilitation Services Program 

2,376 

Assessment, counseling, placement assistance, 
occupational skills training, and other rehabilitative services 


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Required programs" 

2001 

appropriation 

Services provided and target population 

to individuals with disabilities; priority is given to those with 
the most significant disabilities 

Adult Education and Literacy 

540 

Assessment and basic skills and literacy training to adults 
over the age of 16, not enrolled in school, who lack a high 
school diploma or the basic skills to function effectively in 
the workplace and in their daily lives 

Carl D. Perkins Vocational Education Program 

1,100° 

Improvement of vocational and technical education 
programs through curriculum and professional 
development, purchase of equipment, services to members 
of special populations, and other activities. 

HHS 

Community Services Block Grant 

600 d 

A wide array of assistance, including but not limited to 
employment or training, to low-income families and their 
communities 

HUD 

HUD-administered employment and training 

e 

A wide range of employment and training-related services 
to residents of public and assisted housing and other low- 
income persons 

Total 

$14,162' 



Note: Local areas have the option of including other programs as well, such as those providing 
services under the Temporary Assistance to Needy Families program (a welfare program under 
HHS), and the Food Stamps Employment and Training program (an assistance program under the 
Department of Agriculture), to name a few. 

"Title I of WIA replaced those programs that had been under the Job Training Partnership Act for 
economically disadvantaged adults, youths and dislocated workers with three new programs - Adult, 
Dislocated Worker, and Youth. It also reauthorized several programs, such as Native American 
Employment and Training Programs, Job Corps, employment and training services to veterans, and 
Migrant and Seasonal Farmworker Training Program. Title II of WIA repealed the Adult Education Act 
and replaced it with the Adult Education and Family Literacy Act, Title III amended the Wagner- 
Peyser Act (Employment Service) to require that the program’s activities be provided as part of the 
WIA one-stop system, and Title IV amended the Rehabilitation Act of 1973 (Vocational 
Rehabilitation). 

"This figure represents fiscal year 2000 funding; no additional funding was provided in fiscal year 
2001. The amount of the unused prior years’ funds is not available. 

'Post-secondary institutions that receive funds are mandatory partners. States determine the 
proportion of funds allocated to secondary and postsecondary education. Nationwide, 38 percent of 
these funds were allocated to postsecondary institutions in fiscal year 2001. 

'Of this amount, only $590.5 million was available to states, territories, the District of Columbia, the 
Commonwealth of Puerto Rico and federal and state-recognized tribes. $9.5 million was available for 
training and technical assistance. 

"According to HUD, none of its many workforce development initiatives have employment and training 
as a primary purpose nor are they required to use their funding for employment and training 
purposes, although they may do so. 

'Total does not include fund totals for Welfare-to-Work or HUD's initiatives. 

Source: Labor, Education, HHS, and HUD. 


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While WIA created the establishment of one-stops, it did not prescribe 
their structure or specific operations. However, in guidance published in 
June 2000, Labor identified a range of models that could be used to comply 
with the law’s requirements. These models included simple collocation of 
program staff at the one-stops with coordinated delivery of services, or 
electronic data sharing between partners’ existing offices and the one- 
stops. According to Labor and others, however, the vision for future 
participation by partners in one-stop systems is “full integration.” Labor 
has defined full integration as all partner programs coordinated and 
administered under one management structure and accounting system, 
offering joint delivery of program services from combined resources. WIA 
gave local areas discretion to determine the means by which partners 
would participate in providing core services and support for the one-stops’ 
operations. The arrangements were supposed to be resolved in a 
memorandum of understanding between the local workforce investment 
boards and each partner. As an example of coordinated delivery systems, 
partners could develop contractual agreements with other partners to 
provide core services, which could include referral arrangements. WIA 
also provided a great deal of flexibility as to how partners could support 
the one-stops. For example, WIA allows making financial contributions 
(for example, paying rent for staff collocated at the one-stop), or providing 
equipment or shared services (for example, teaching a class, or greeting 
individuals who enter the one-stop). 

In addition to requiring the mandatory partners to provide their core 
services at the one-stop, WIA changed the way partners served job 
seekers. WIA initiated a sequencing of services for adults and dislocated 
workers to ensure that they were receiving the requisite amount of 
services needed to enter the workforce, and that funds for more intensive 
services or training were targeted to those who needed them most. 
Accordingly, WIA required that anyone coming into the one-stop would 
first receive only core services to aid them with their job search 
activities. 11 If these efforts were unsuccessful in helping the job seeker 
obtain or retain a job that allows for self-sufficiency, then he or she could 


^Section 134(d)(2) of WIA lists 11 core services, such as program eligibility determination, 
assessment, and provision of employment statistics. However, only the Adult and 
Dislocated Worker programs must offer the entire list of core services; other partners are 
only required to provide those that are applicable to their program. For example, a core 
service for Education’s Perkins program may be initial assessment of an individual’s 
vocational and academic skill levels as part of a program for members of special 
populations, while a core service for a partner providing Education’s Adult Education and 
Literacy program would be an assessment of an individual’s aptitudes and abilities. 


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receive intensive services. These services are conducted by one-stop staff 
to help the job seeker find, successfully compete for, and retain a job. 
Intensive services can include activities such as counseling, and in-depth 
skill assessment. Intensive services also include classes such as general 
equivalency diploma (GED), literacy, conflict resolution, and punctuality 
classes. If these activities still do not help the job seeker obtain and retain 
employment, then the individual may be eligible to receive occupational 
skills training. 12 WIA allowed local discretion regarding how individuals 
would move from one level to the next among those three levels of 
services. According to Labor, individuals may receive the three levels of 
service concurrently and the determination that an individual needs 
intensive and/or training services can be made without regard to how long 
the individual has been receiving core services. 


Training Provider One of the criticisms of past workforce systems was that few data were 

Performance and Informed available on the impact that training had on a job seeker’s ability to obtain 
Choice for Job Seekers and maintain employment. Consequently, there is a requirement, specific 

to WLA’s Adult and Dislocated Worker programs, for individuals seeking 
jobs through WIA. WIA requires the collection of outcome data to be used 
to assess training providers’ performance and also to allow job seekers 
receiving training the ability to make more informed choices about 
training providers. Unlike prior systems, WIA allows individuals eligible 
for training under the Adult and Dislocated Worker programs to receive 
vouchers—called Individual Training Accounts (ITAs)—which can be used 
for the training provider and course offering of their choice, within certain 
limitations. 13 

Training provider participation under WLA’s Adult and Dislocated Worker 
programs centers on an eligible training provider list (ETPL). This list 
contains all training course offerings that are available to WIA-funded 
individuals eligible for training. Course offerings from most community 
colleges and other technical education providers are automatically 
qualified to be on the ETPL for 1 year, as long as providers submitted 
paperwork to each local area where they wanted their course offerings to 
be available. When WIA-funded individuals with ITAs enrolled in a course, 


12 Candidates for skills training must, among other things, have the skill prerequisites to 
successfully complete the training selected. 

13 The course offering should be in a demand occupation, for example, an occupation for 
which labor market information suggests a current and continuing need for workers. 


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the training providers would, to stay on the ETPL after the first year of 
initial eligibility, need to collect and report data on all the students 
enrolled in that course. The providers need to collect data on (1) 
completion rates, (2) job-placement rates, and (3) wages at placement. 
WIA also required, among other things, collection of retention rates and 
wage gains for participants funded under the Adult and Dislocated Worker 
programs for 6 months following their first day of employment. 14 This 
procedure has to be repeated for any new course offering that training 
providers may want to place on the ETPL. 

To have course offerings remain on the ETPL after the 1-year initial 
eligibility period, training providers must meet or exceed performance 
criteria established by the state. For example, a state might determine that 
only training providers’ courses with an 80-percent-completion rate would 
be allowed to remain on the ETPL. If a course failed to meet that level, it 
would no longer be open to WIA-funded individuals. Labor’s final 
regulations allowed states to extend the initial eligibility period for up to 
an additional six months under certain circumstances. 


Forming Workforce WLA called for the development of workforce investment boards to 

Investment Boards Led by oversee WLA implementation at the state and local levels. At the state 

the Private Sector level, WIA required, among other things, that the workforce investment 

board assist the governor in helping to set up the system, establish 
procedures and processes for ensuring accountability, and designate local 
workforce investment areas. WIA also required that boards be established 
within each of the local workforce investment areas to carry out the 
formal agreements developed between the boards and each partner, and to 
oversee one-stop operations. 15 According to Labor, there are 54 state 
workforce investment boards and approximately 600 local boards. 16 


14 While this additional data collection requirement is only applicable to participants who 
had been funded under the Adult or Dislocated Worker programs, the Governor is 
permitted to require providers to submit this type of data for non-WIA individuals, as well 
as additional data for all individuals. 

15 WIA allowed states and localities to designate a preexisting structure from prior 
workforce efforts to serve as their board, as long as it met certain criteria. According to 
Labor, about 27 states and approximately 200 local areas designated such structures as 
their board, such as their State Human Resource Investment Councils. 

16 Boards have been established in all 50 states and the District of Columbia, the U.S. Virgin 
Islands, Puerto Rico, and Guam. 


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WIA listed what types of members should participate on the workforce 
investment boards, but did not prescribe a minimum or maximum number 
of members. Also, it allowed governors to select representatives from 
various segments of the workforce investment community, including 
business, education, labor, and other organizations with experience in the 
delivery of workforce investment activities to be represented on the state 
boards. The specifics for local board membership were similar to those for 
the state. 17 (See table 2.) 


Table 2: Membership Requirements for State and Local Boards 



Level of board 
applicable to 

Membership requirement 

State 

Local 

Governor 

X 



2 members of each chamber of state legislature 

X 



Representatives of businesses 

X 


X 

Chief elected officials representing cities and counties 

X 



Representatives of labor organizations 

X 


X 

Representatives of entities with experience in youth activities 

X 



Representatives of entities with experience in the delivery of workforce investment activities (including 
executive officers of community colleges and community-based organizations) 

X 



Lead state agency officials with responsibilities for programs carried out by one-stop partners 

X 



Other representatives designated by the Governor or local elected official (for example, juvenile justice and 
economic development officials) 

X 


X 

Representatives of local educational entities (including school boards, adult education and literacy entities, 
and postsecondary educational institutions) 



X 

Representatives of community-based organizations (including organizations representing veterans and 
individual with disabilities) 



X 

Representatives of economic development agencies 



X 

Representatives of each of the one-stop partners 



X 


Source: The Workforce Investment Act and Labor's regulations. 


Private-sector leadership and involvement on these boards was seen as 
crucial to shaping the direction of the workforce investment system. In 
that respect, WIA required that private-sector representatives chair the 
boards and make up the majority of board members. This would help 
ensure that the private sector would be able to provide information on 
available employment opportunities and expanding career fields, and help 


^Exceptions are allowed for board membership; for example, an individual seated on the 
board can represent more than one entity or institution. 


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GAO-02-72 WIA Implementation Issues 





develop ways to close the gap between job seekers and labor market 
needs. 

Although state and local boards have some responsibility for implementing 
WIA, numerous public agencies and other entities in states and localities 
operate the various programs that are mandatory partners under WIA. WIA 
did not provide either the state or the local workforce investment boards 
with control over the funds for most mandatory partner programs. They 
only have limited authority concerning a portion of WIA funds designated 
for adult and youth activities and, even then, only under certain 
circumstances. 


Participation in The 
One-Stop Limited by 
Programmatic and 
Financial Concerns 


WIA required that the mandatory partners provide core services through 
the one-stop, as well as support the one-stop’s operations. The mandatory 
partners are generally making efforts to participate in accordance with the 
requirements of WIA. However, the partners raised a number of concerns 
that affect the level and type of participation they are able to provide and 
may prevent them from achieving the vision of full integration of services. 
Specifically, partners expressed concerns that their one-stop participation 
could result in changes to their traditional service-delivery methods. These 
changes might adversely affect their ability to serve their target 
populations, lead them to serve individuals otherwise ineligible for their 
services, or unnecessarily strain their financial resources. Implemented 
acknowledged that WIA gave them the flexibility to address many of these 
individual concerns at the local level. However, they noted that their 
ability to establish and maintain effective one-stop operations is hampered 
when each partner has significant limitations affecting how they can 
participate and may be unwilling or unable to fully integrate services. 
Available guidance from responsible federal agencies has not adequately 
addressed many of these specific concerns, resulting in continued 
confusion or reluctance to participate in the one-stops. 


Partners Concerned That 
Changes to Traditional 
Delivery Methods Could 
Adversely Affect Target 
Populations 


Many of the mandatory partners have raised concerns that altering their 
existing service-delivery methods to participate in the one-stops and 
respond to the vision of full integration could adversely affect the quality 
of services they provide to their target populations. Since the 
implementation of WIA, partners who serve special populations have 
repeatedly raised these concerns in comments to Labor and to their parent 
agencies. These issues were also raised in a study that found that 
Vocational Rehabilitation partners were concerned that one-stop facilities 
may not adequately accommodate the special needs of disabled 


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participants who may require more specialized services, equipment, or 
personnel, such as staff who know sign language. 18 As a result, even 
though Vocational Rehabilitation staff were present in some form (either 
through collocation or referral) at all of the nine one-stops we visited, 
Vocational Rehabilitation continued to maintain their own preexisting 
program offices to accommodate their eligible individuals’ special needs. 
Staff told us that because WIA did not require offices to close, they 
believed that it was prudent for them to maintain the existing service- 
delivery structures so as not to limit the quality of services for their 
eligible population. 

Other partners have said that they did not see how participation in the 
one-stop would benefit their eligible populations who were already 
receiving services through the existing structures. For example, California 
Department of Education officials told us that low-income and 
disadvantaged populations in California already have full access to the 
community college system at low or no cost, decreasing the incentive for 
partners providing services under Perkins and the Adult Education and 
Literacy Program to participate in the one-stops in that state. Other 
partners questioned the value of participation because of the type of 
individuals they serve or the method in which the services are provided. 
Across the nine one-stops we visited, there were programs, such as the 
Native American Program or the Migrant and Seasonal Farmworker 
Program, that may have had few eligible individuals in the area, which 
decreased the value of one-stop participation unless there was a critical 
mass of eligible individuals for them to serve at the one-stop. For example, 
for seven of the nine one-stops we visited, the Native American Program 
relied on referrals of potentially eligible individuals from other one-stop 
partners rather than providing staff to collocate at the one-stops. Other 
partners, such as those funded under the Community Services Block Grant 
or carrying out HUD’s employment and training activities, are only 
required to be involved if they offer employment or training services. This 
may explain why partners representing the Community Services Block 
Grant and HUD’s various workforce development initiatives were not 
present at three of the nine one-stops we visited. At four one-stops, these 
partners left information about their programs at the one-stop for 
individuals to access independently and/or had the one-stop staff direct 


ls Daniel O’Shea and Christopher T. King, The Workforce Investment Act of 1998: 
Restructuring Workforce Development Initiatives instates and Localities (Albany, N.Y.: 
The Nelson A. Rockefeller Institute of Government, 2001). 


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GAO-02-72 WIA Implementation Issues 



individuals to the grantees’ programs located elsewhere. 19 Additionally, 
according to HUD officials, in many cases, clients receiving HUD services, 
such as housing assistance, are located in centralized areas, such as 
subsidized housing projects. This means there are likely few potential 
HUD clients that would enter a one-stop not located at a housing project, 
and HUD clients located at housing projects would have little reason to go 
to the one-stop for services. 

Although state and local implemented reported that programs lack 
sufficient guidance addressing how one-stop participation will meet the 
needs of their eligible population, some have still found ways to encourage 
programs to participate. State and local implementers said that Labor’s 
and Education’s published guidance concerning how the programs can 
provide their core services has not sufficiently identified ways to address 
partners’ concerns about potential adverse effects on service to target 
populations. However, a private-sector consultant providing assistance to 
local areas said that in one local area, partners providing Vocational 
Rehabilitation services are willing to participate in the one-stop because 
staff became convinced that serving their eligible population there would 
improve the quality of service for disabled individuals. Rather than 
addressing partners’ concerns about the potential adverse effect their one- 
stop participation may have on their eligible populations, some state and 
local implementers have tried to encourage participation in one-stops by 
offering incentives. For example, one local area allows partners to use 
one-stop facilities to teach classes, while another allows partners to use 
the facilities to assess eligible individuals’ literacy levels. 


Partners Concerned That 
Changes May Lead to 
Serving Ineligible 
Individuals 


A number of partners with narrowly defined program requirements or 
special target populations have expressed concerns to their parent 
agencies and to us that altering traditional service-delivery methods to 
participate in the one-stops or respond to the vision of full integration 
could lead to a conflict with their own program’s requirements or 
commitments regarding which individuals are eligible for the services they 
offer. (See table 3.) As a result, even when programs met WIA’s 
requirements to provide core services at the one-stop, they focused on 
their own eligible populations. For the nine one-stops we visited, even 
though a majority of the partners were participating, only a few of them, 


19 Detailed information on the nature of partners’ participation at each of the one-stops 
visited is found in appendix I. 


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such as Employment Service, and WIA’s Adult and Dislocated Worker 
programs, are authorized to serve a broad range of individuals who came 
into the one-stop for services. The others served the more limited number 
of individuals specifically eligible for their services. The latter partners 
also tended to provide support services such as rent, rather than provide a 
shared service, because they believed doing so would conflict with their 
programs’ mandates. 

Vocational Rehabilitation staff have raised concerns to both Education 
and to us about how they can participate in the one-stop without violating 
their program’s mandates. Vocational Rehabilitation staff serve disabled 
individuals, yet many who come into the one-stop are either not disabled 
or do not meet their order-of-selection requirements in which individuals 
with the most significant disabilities are afforded priority for services. As a 
result, they do not believe they can provide core services to everyone 
coming into the one-stop. They also believe their order-of-selection 
requirements make it difficult to provide shared services, such as 
providing initial intake or serving as a greeter, because an individual— 
even a disabled one—may not meet previously set order of selection 
requirements. Other partners told us that they believe that all disabled 
individuals should first be served by the Vocational Rehabilitation 
program. They said that in some one-stops, an individual with disabilities 
might be sent to the Vocational Rehabilitation staff only to be sent back to 
WLA staff for core services. In response to concerns raised by Vocational 
Rehabilitation staff, Education issued regulations reaffirming that 
Vocational Rehabilitation staff must participate in the one-stop and 
provide one-stop operational support services. However, the regulations 
also noted that such participation must be consistent with existing 
Vocational Rehabilitation programmatic requirements. The lack of explicit 
direction leads to continued confusion and a general hesitancy to conduct 
activities not normally provided in their existing offices. This may explain, 
why at the one-stops we visited where Vocational Rehabilitation staff were 
collocated, they focused on their eligible population only and did not 
provide even permissible shared services, instead generally providing rent 
as their support of the one-stop’s operations. 

Veterans’ staff have also voiced their concerns regarding the relationship 
between their program mandate and WIA. Partners providing veterans’ 
services were collocated at the nine one-stops we visited; however, the 
veterans’ staff at those one-stops said they could not provide shared 
services, such as initial intake, because that would mean serving the entire 
range of one-stop users, whereas veterans’ staff are only allowed to serve 
veterans. We were also told by local implementers that veterans’ staff may 


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GAO-02-72 WIA Implementation Issues 



be unwilling to teach orientation or job preparation classes at the one-stop 
to any nonveterans, even if there were veterans participating in the 
classes. Labor officials with whom we spoke believed that it was 
permissible for veterans’ staff to teach such classes as long as the majority 
of students were veterans. However, the same officials said that having 
veterans’ staff serve nonveterans was a violation of the program’s 
mandate. In its comments to this report, Labor said that Veterans’ 
Employment and Training Service funding is provided to states to be used 
exclusively for services to veterans and that if services were to be 
provided to nonveterans, the funding connected with such service would 
be disallowed. Labor has not published adequate guidance to help staff 
resolve these specific issues. This may explain why there are varying 
degrees of participation in local one-stops by veterans’ staff. For example, 
we were told that there were one-stops where veterans’ staff provided 
services to support the one-stop’s operations, such as teaching classes 
attended by nonveterans. 

Adult Education and Literacy providers, who participated in all nine one- 
stops we visited, have also raised concerns about meeting both their own 
program commitments and WIA’s requirements for one-stop participation. 
WIA provides that, in competitively awarding funds to Adult Education 
and Literacy providers, a preference must be given to those providers that 
have a commitment to serve individuals in the community who are most in 
need of literacy services, including low-income individuals and individuals 
with minimal literacy skills. This means, in some cases, an individual at the 
one-stop needing literacy training may not meet the standards that Adult 
Education and Literacy providers apply to determine who will be given 
priority for services. As a result, the individual may be sent to Adult 
Education and Literacy for services, only to be sent back to WIA’s Adult 
program for services. Although both Labor and Education have 
emphasized that state and local partners must collaborate to identify and 
address literacy and other service needs in a community, neither agency 
has issued guidance to address those instances when such conflicts arise 
due to such lack of planning between Adult Education and Literacy and 
WIA. 


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Table 3: Programmatic Concerns Raised by Selected Partners and Related Guidance by Pertinent Federal Agencies 


Program 

Potential conflict 

Agency guidance 

Vocational 

Local Vocational Rehabilitation staff believe 

Education has said that it believes the Vocational Rehabilitation 

Rehabilitation 

Services 

that if they serve any disabled entering the 
one-stop or if they provide shared services 
to support the one-stop’s operation (such as 
initial intake or being a greeter), they may be 
serving nondisabled individuals or those that 
do not meet their order-of-selection 

program can comply with both WIA and Vocational Rehabilitation 
requirements. Features such as common intake and referral are 
permitted when determining individuals’ initial eligibility. 


requirements. 


Veterans’ staff 

Local veterans’ staff believe that if they 
provide shared services such as greeting 
individuals at the one-stops, they may serve 
nonveterans. 

None 


Local veterans’ staff believe that if they 
teach a class, they may be serving 
nonveterans. 

None 

Adult Education and 

Local Adult Education and Literacy staff 

None 

Literacy 

believe that if they accept individuals 
referred by the one-stop regardless of need 
level, they may go against Adult Education 
and Literacy program commitments. 



In some areas, partners tried to work around these limitations, such as by 
using WIA funds to obtain an outside tutor or other appropriate service for 
the individual. In other cases, Adult Education and Literacy charged a fee 
for services they provided to WIA clients, when those services were not 
consistent with service priorities. 20 Education officials also advocated 
various partners’jointly financing a separate staff person to perform 
greeter and initial intake services. 


Partners Identified 
Resource Constraints They 
Believe Affect Their Ability 
to Participate 


Many of WLA’s mandatory partners also identified resource constraints 
that they believe affected their ability to participate in as well as fully 
integrate their services into the one-stops. The first issue was the overall 
funding levels. Several of the partners we interviewed said they were not 
provided additional funding, which would have enabled them to provide 
services at the one-stops in addition to covering the expenses associated 
with their existing offices. This funding would have also allowed the 
partners to devote significant resources to establishing sophisticated 


“’’Education officials said that this was permissible because they had recently removed the 
regulation that prohibited charging a fee for Adult Education and Literacy services. 


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electronic links between existing offices and the one-stops. 21 The 
participants in the GAO-sponsored symposium also identified insufficient 
funding levels as one of the top three implementation problems. Labor 
also found that in many states, the agencies that administer the 
Employment Service program had not yet been able to collocate with the 
one-stops, although Labor’s regulations indicate that this is the preferred 
method for providing core services. We were told by Employment Service 
officials and one-stop administrators we spoke to that this was often 
because they still had leases on existing facilities and could not afford to 
incur the costs of breaking those leases. Limited funding made it even 
more difficult to assign additional personnel to the one-stop or to devote 
resources to developing electronic linkages with the one-stop. In the states 
we visited, mandatory partners told us that limited funding was also a 
primary reason why even when they collocated staff at the one-stop, they 
did so on a limited or part-time basis. 

Resource limitations may help explain why, at the nine one-stops we 
visited, mandatory partners employed a wide range of methods to provide 
the required support for the operation of the one-stops. Across all the sites 
we visited, WIA’s Adult and Dislocated Worker programs and, across most 
sites, Employment Service, were the only partners consistently making 
monetary contributions to pay for the one-stops’ operational costs. Other 
mandatory partners tended to make in-kind contributions—for example, 
Perkins and Adult Education and Literacy partners provided computer or 
GED training. Pennsylvania, however, was able to encourage all of its 
partners to provide some type of financial support; while in California and 
Vermont, many partners were not required to provide any financial 
support. 

Mandatory partners also identified how restrictions on the use of their 
funds can serve as another constraint affecting both their participation in 
the one-stops and the opportunity for full integration. For example, some 
programs have caps on administrative spending that affect their ability to 
contribute to the support of the one-stop’s operations. For example, WIA’s 
Adult and Dislocated Worker programs have a 10-percent administrative 
cap that supports both the one-stops’ operation and board staff at the local 
level. According to a survey conducted for us by a national association, 61 


21 Labor provided states with some initial funding assistance in the form of one-stop 
implementation grants, but most states have nearly exhausted these funds. These funds 
were spent primarily on the establishment of one-stop centers, not on altering delivery 
systems of partners. 


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of the 69 respondents stated that this cap limits their ability to serve both 
functions, especially given the funding limitations of other programs. In 
addition, Education reported that its regulations generally prohibit states 
from using Education funds for acquisition of real property or for 
construction. This means partners, such as those carrying out Perkins, 
cannot provide funds to buy or refurbish a one-stop. Moreover, Adult 
Education and Literacy and Perkins officials noted that they can only use 
federal funds for the purpose of supporting the one-stop under WIA. 
Because only a small portion of the funds they have available at the local 
level come from federal sources, their ability to contribute is further 
limited. 

Several of the partners reported to us, and to Labor and Education, that 
they are not sure how to define or account for allowable activities in the 
WIA environment. For example, partners said existing guidance from the 
Office of Management and Budget (OMB) and Labor might not address 
situations in which costs must be allocated across programs with different 
or competing missions. In that respect, several implementers said that if 
some programs are unwilling or unable to contribute, costs will tend to be 
shifted to the Adult and Dislocated Worker partners—the programs having 
the broadest mission of any partners at the one-stop and the greatest 
responsibility for ensuring their effective operation. OMB requires that all 
shared services be properly accounted for by programs, which means that 
if a partner dedicated a copy machine to the one-stop, and that copy 
machine was used by all partners, the partner providing the copy machine 
must be reimbursed by all of the partners using it to remain in compliance 
with OMB regulations. According to a number of partners, tracking that 
kind of information is very difficult in this shared environment. This may 
explain why, in most of the nine one-stops we visited, partners tended to 
bring and use their own administrative supplies and materials, and shared 
very few items. Partners have also stated that guidance from Labor does 
not provide adequate detail about how to account for personnel who, in 
the process of providing support services, may be providing services to 
potentially ineligible populations. For example, if Vocational 
Rehabilitation staff were willing to provide initial intake services at the 
one-stop, it is not clear how the time spent would be reported if no 
disabled individuals entered the one-stop. This may also help explain why, 
in most of the nine one-stops that we visited, only those partners with 
broad target populations provided shared services, such as intake. Labor 
has convened a one-stop workgroup that, according to Labor officials, 


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plans to continue examining these issues further, and work with OMB to 
establish guidelines on what partners can and cannot do. 22 In comments to 
us, Labor also reported that it has drafted a financial management 
technical assistance guide that provides information on financial and 
administrative requirements applicable to some of the Labor programs. It 
plans to finalize this guide and begin training in October 2001. 

Despite these problems, we found several local areas that were making 
efforts to compensate for funding limitations. For example, a number of 
one-stops in Pennsylvania have brought in additional paying partners, such 
as businesses and nonprofit entities, to provide funds to help support one- 
stop operations. In California and Vermont, officials are using various state 
sources of training funds to leverage WIA’s funds. In one of the states we 
visited, local areas made a decision to classify expenses associated with 
running the one-stop as programmatic rather than administrative so that 
the recorded administrative costs can be kept to a minimum. 


State and Local 
Implementers’ Ideas for 
Addressing Programmatic 
and Financial Concerns 


As a result of their experiences, state and local implementers have 
developed a number of ideas for actions that they believe could reduce 
what they see as programmatic and financial concerns affecting the level 
and type of partner participation at the one-stop (as shown in table 4). 
Although there was broad consensus among those we contacted that these 
concerns needed to be addressed, there was not consensus on how best to 
address these concerns, nor on how to maintain the flexibility that was 
key to WIA’s implementation. Some of the ideas include providing more 
specific guidance at the federal level to overcome these concerns, while 
others call for legislative and/or regulatory action. These actions include 
amending partners’ enabling legislation to mandate changes in their 
service-delivery methods, requiring additional partners to participate, or 
expanding the scope of partners’ allowable activities at the one-stop. 


22 Labor has convened four workgroups, comprised of local, state, and federal subject-area 
experts as a direct result of its recent survey of local areas. These workgroups have been 
tasked with providing feedback and suggestions on subjects related to WIA 
implementation. They are also tasked with developing technical assistance and training 
strategies to assist the workforce investment system address the issues identified as 
barriers to the successful implementation of WIA. 


Page 21 


GAO-02-72 WIA Implementation Issues 




Table 4: State and Local Implemented’ Ideas for Addressing Partners’ Programmatic and Financial Concerns 


Concern Ideas for addressing concern 

Changes to traditional delivery methods The Congress should amend partners’ authorizing legislation to mandate that the old 

could adversely affect target populations delivery systems are changed or altogether eliminated. _ 

The Congress and agencies should change requirements or regulations applying to 

service-delivery to harmonize them with the reality of the one-stop. _ 

The Congress, agencies, and local one-stops should give partners incentives for 
participation and relocation to the one-stop (for example, good building, state-of-the-art 
facilities, business centers to attract employers, the use of one-stop facility for partner 

functions or for community events). _ 

The Congress and agencies should redefine administrative limitations to encourage 

_ one-stop participation. _ 

Changes may lead to serving ineligibles The Congress and agencies should broaden allowable responsibilities of partners’ 

employees (for example, if there are no veterans at a given time, veterans’ staff should 

be allowed to carry out other duties at the one-stop). _ 

Agencies should provide additional guidance on the federal level that encourages 

partner participation. _ 

Agencies and states should encourage and reward creative local agreements between 

_ partners and cross-training of staff. _ 

Resource constraints affect participation The Congress and agencies should redefine program costs to include the costs 

associated with running of the one-stops. _ 

The Congress and agencies should make administrative caps across partners 

consistent. _ 

The Congress should mandate specific financial contributions for partners (for example, 

a percentage of program funds). _ 

States should get nonmandatory partners involved (for example, TANF, Food Stamps, 

etc.). _ 

Agencies should disseminate best-practice information about cost-sharing. 

The Congress should create a separate funding stream for one-stop costs. 

The Congress should provide program funds through block grants, at least for Labor 

programs. _ 

Agencies, along with states and local areas, should create a common intake form that 
all partners would use for their participants’ assessments, thus limiting expense 
associated with each partner performing this task independently. 


Training Options May 
Become Limited as 
Training Providers 
Drop Out of the 
System 


WIA job seekers may have fewer training options to choose from because 
training providers are reducing the number of course offerings they make 
available under WIA. According to training providers, WIA’s data 
collection and reporting requirements are burdensome and they question 
whether it is worthwhile to assume this burden because so few individuals 
have been referred to them under WIA. Among the workgroups Labor has 
established is one to address training provider concerns, but the 
workgroup has not yet provided detailed guidance to states and localities. 
If these data collection and reporting requirements succeed in 
discouraging training providers from participating, WIA’s goal that job 
seekers receive enhanced choice in training options might be jeopardized. 


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Training Providers See 
Required Data Collection 
and Reporting as 
Burdensome 


According to training providers and other state and local implementers we 
interviewed, WIA’s data collection and reporting requirements are 
burdensome for three reasons. First, providers have to collect data on a 
potentially large number of students. Second, there are problems with the 
methods available for collecting these data. Third, WIA data collection and 
reporting requirements are different from those of other programs for 
which training providers must also collect data. Moreover, training 
providers did not necessarily see the data they are required to collect as 
accurate and useful for assessing their performance. 


Training providers have voiced a number of concerns to us, and to 
Education, about the fact that the number of students for whom they must 
potentially collect data presents a significant burden for them. First, WIA 
requires that training providers report program completion, placement, 
and wage data for all students in a class, regardless of whether they were 
WIA-funded. In other words, if one student in a class of 100 was WLA- 
funded, the training provider would be required to provide data on all 100 
students. WIA also requires training providers to report additional 
information on WIA-funded students within 6 months of completion of the 
class. Part of the burden perceived by training providers may stem from 
their belief that WIA required them to perform this 6-month followup on 
all of the students in a particular course. Although WIA did not require this 
type of followup, it did provide the Governor, or the local board, with the 
option of requiring a provider to submit this additional information. WIA 
further provided that if such a request imposed extraordinary costs on 
providers, the Governor or the local board should provide access to cost- 
effective methods for the collection of this information, or supply 
additional resources to the provider to aid in the collection. 23 


Second, training providers have reported that the burden associated with 
collecting these data raises concerns. WIA did not specify how training 
providers would collect or report this information. In a number of states, 
training providers were providing student information, such as social 
security numbers (SSNs), to state agencies responsible for WIA 
implementation, such as state departments of labor. These agencies then 
attempted to match SSNs with unemployment insurance (UI) wage 
records (which are based on SSNs) to acquire the necessary data for WIA 


23 The training providers who believed they needed to perform the 6-month followup on all 
of the students in a course were unsure whether their Governor had requested this 
additional information. 


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as well as non-WIA participants. Training providers said that providing 
SSN information to states might be efficient because states are required to 
use UI data in assessing their own performance under WIA and would be 
able to incorporate the training provider outcome data in their ongoing 
data analysis efforts. Moreover, because states are required by WIA to 
verify the data provided by training providers, having access to SSNs 
would facilitate that process. However, training providers highlighted 
limitations in the UI data that needed to be addressed through additional 
data collection. For example, the UI data do not include federal 
employees, military personnel, farm workers, the incarcerated, the self- 
employed, and those employed out-of-state. Moreover, there is a 
significant time lag in the availability of the data. 

Training providers also highlighted privacy concerns regarding the 
provision of SSNs to state agencies. They said the Family Educational 
Rights and Privacy Act (FERPA) generally prohibits an educational 
institution from disclosing personally identifiable information (such as an 
SSN) from individual student records without prior written consent from 
the student unless the disclosure meets one of a number of exceptions 
envisioned by the law and implementing regulations (such as provision of 
the information to Education). In January 2001, Labor and Education 
issued joint guidance stating that certain exceptions that could allow 
educational institutions to disclose this information without a student’s 
prior consent were applicable to the WIA data collection reporting 
requirements. However, confusion and inconsistency continues within 
both federal and state Education departments as to the use of this 
exception. There is also confusion about the consequences of utilizing this 
exception, with some state-level education officials believing that a 
student could take them to court, alleging that disclosure, without the 
student’s consent, violates FERPA or similar state-level privacy laws. 

While several courts have held that there is no private right of action under 
FERPA, there have been cases where individuals have alleged that 
violations of FERPA are violations of their civil rights. According to one 
Education official, a court recently awarded a student $450,000 for the 
unauthorized disclosure of information from the student’s records by an 
educational institution. 

When training providers were unwilling, or believed that they were unable, 
to provide SSNs to the state, they used other methods to gather the 
information, which they said were even more resource-intensive. For 
example, in two of the states we visited, training providers told us that 
they planned to obtain the required information by calling all students who 
attended the course. This plan required them not only to track where the 


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students were located, but expend significant resources to call a sufficient 
number of them to acquire a representative sample. They said they did not 
have the staff available to collect data in this manner. 

Third, training providers reported that WIA’s data collection and reporting 
requirements are similar, but not exactly the same, as those of other 
programs, posing an additional data collection burden on providers. This 
is especially true for Education’s Perkins program, which generally allows 
state discretion as to what and how outcome data will be collected. For 
example, in Texas, Perkins and WIA have different definitions for a 
program completer. The state defined completion for most WIA-eligible 
training programs as receiving a 9-hour credit certificate, for example, 
enough training to get a job. For Perkins, however, the state set its lowest 
completion point as receiving a 15-hour credit certificate from an array of 
state-approved courses, for example, courses that would lead to student 
attainment of a state-established skill proficiency. Moreover, WIA’s data 
collection requirements often differ in scope from other programs. For 
example, Adult Education and Literacy providers must develop outcome 
information for all students enrolled in adult education and literacy 
programs. WIA requires outcome information for students in different 
groupings, for example, only in particular courses. 

Training providers did not necessarily see the data they are required to 
collect by WIA as accurate and useful for assessing their performance. 

This perception made them less willing to take on this data collection 
burden. For example, several community colleges told us that WIA’s 
measure of program completer fails to reflect how a community college 
serves individuals. For example, a student may leave a course midway 
through the class because the student had acquired the necessary skills, or 
had obtained employment. Thus, the community college may have met the 
needs of the individual, even though the individual did not necessarily 
complete the course. 

As a result of these concerns, training providers are withdrawing their 
participation from the WIA system, especially because they have access to 
the same populations of students through other programs, such as 
Welfare-to-Work, whose data collection requirements may be less 
burdensome. In fact, we found that the number of providers and course 
offerings on the ETPL has decreased in many locations. For example, 
between July 2000 and July 2001, Vermont’s list decreased from offering 
600 programs by 80 providers to offering 158 programs by 46 providers. 


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In some locations, state agencies and training providers are trying to work 
together to overcome some of these concerns. For example, in California, 
community colleges in one county have chosen to classify WIA-funded 
training participants as being enrolled in a separate college. Only the name 
of this college, and not the name of the community college where the 
classes were actually held, has been placed on the ETPL, easing the 
burden on providers who previously had to collect data on non-WIA 
students as well. In addition, WIA allows local boards to accept certain 
other program-specific performance information for the purposes of 
fulfilling WIA’s eligibility requirements, if the information is “substantially 
similar” to what WIA requires. In this regard, California’s education 
community received approval from the state workforce investment board 
to use Perkins’ outcome data as substantially similar measures until the 
state is able to fully implement other outcome data measures. In addition, 
at least one state was able to address concerns about privacy protections 
under FERPA because the agency receiving and analyzing the data was 
located within the state Department of Education. 

Labor has established a workgroup—its adult and dislocated worker 
workgroup—to address many of the issues that training providers 
described as burdensome. Labor’s goal is to craft solutions that do not 
penalize states already collecting the data successfully. However, the 
workgroup has no deadline for completion and does not include all the 
key players. For example, the workgroup does not include training 
provider representatives, although Labor officials said they invited an 
association representing community colleges to meetings. However, the 
lack of formal membership of these key players may limit the value of any 
solutions developed or the willingness of training providers to adopt those 
solutions. Moreover, the workgroup has not yet provided guidance, such 
as products and materials on subsequent eligibility and consumer report 
requirements. Some state and local implementers we spoke to felt that the 
continued confusion surrounding the provision of SSNs to noneducational 
entities needed to be resolved at the state or federal level through a 
mechanism stronger than guidance, such as through an amendment to 
FERPA itself. 


Data Collection Burden 
Exacerbated Because Few 
Individuals Sent to 
Training 


Training providers have said that the data collection requirements are 
even more burdensome given that they have received few job seekers for 
training since WIA was implemented in their states. According to regional 
Labor officials and several of the national associations we interviewed, 
training providers are receiving relatively few training referrals under WIA. 
For the nine one-stops we visited, training providers had been sent, on 


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average, only six individuals with ITAs since July 2000. Moreover, officials 
from a local area encompassing nine counties told us that their two one- 
stops had provided no ITAs to individuals until March 2001, and had sent a 
total of 11 individuals to training offered by four of its eligible providers 
between March and July 2001. In addition, in some of the local areas we 
visited, there were financial limitations on the amounts of the ITAs, which 
did not necessarily cover the cost of some of the course offerings on the 
ETPL. Therefore, not all classes on the ETPL were available to some WIA- 
funded individuals. In addition, training providers are not always able to 
recoup the costs they are expending to collect and report the required data 
unless they build this extra cost into the cost of training. 

There are a variety of reasons why the number of job seekers who have 
been sent to training is low. These reasons were identified by the state and 
local implementers as well as several national associations we 
interviewed, and by the respondents to the surveys conducted for us. First, 
local areas have generally adopted a “work-first” approach to 
implementing WLA, encouraging job seekers to try to obtain employment 
without training. In that respect, local areas have set a level for what 
constitutes a “sustainable wage” (the minimum wage level at which a job is 
considered to provide for self-sufficiency and qualify as an acceptable 
placement for a job seeker) that allows them greater flexibility in placing 
an individual in a job without training. We also found that many local areas 
required job seekers to perform a number of activities before they were 
able to qualify for training. For example, job seekers were often required 
to spend a certain amount of time looking for a job, or go on a certain 
number of interviews before they could be approved to receive training 
with WIA funds. This may have also reduced the number of individuals 
who received training. 

Second, some state and local implementers said that, given the strong 
economy, employers were more interested in hiring workers than waiting 
for them to complete training classes. 24 Third, according to local 
implementers, the Adult and Dislocated Worker programs have had little 
money left over for training because they, along with the Employment 
Service, have had to consistently bear a greater share of the costs 
associated with establishing and maintaining the one-stop, as well as 


24 It is possible that, in these situations, the job seeker may receive customized training or 
on-the-job training, both of which are not subject to the ITA requirements. We did not find 
anyone tracking how much training is occurring through these methods. 


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providing core and intensive services to job seekers. Moreover, WIA 
required using alternative funding sources, such as Pell grants (a form of 
federal financial aid available to students), to leverage their training 
dollars, but state and local implementers were uncertain whether they 
could do this. 25 Finally, according to the state and local implementers we 
interviewed and the national associations representing them, the 
establishment of performance measures for adult and dislocated workers 
may be discouraging one-stops from placing individuals into training. Due 
to the fact that incentives and financial sanctions, such as a loss of 
program funds, are now linked to performance on a series of measures 
(for example, employment entry, earnings gain, or job retention), one- 
stops may be hesitant to send individuals to training who, in the minds of 
one-stop administrators, are not likely to complete training and receive a 
job that meets performance measures. This particularly affects certain 
types of individuals, such as incumbent workers whose wage gain may not 
meet performance levels, or hard-to-serve individuals who may be diverted 
to other partners’ programs for training or placement. 


State and Local 
Implementers’ Ideas for 
Addressing Training 
Provider Concerns 


As a result of their experiences, state and local implementers have 
developed a number of ideas for actions that they believe could address 
the concerns raised by training providers and other state and local 
implementers (as shown in table 5). Although there was broad consensus 
among those we contacted that these concerns needed to be addressed, 
there was not consensus on which ideas had greater potential to address 
these concerns, nor which ones would best maintain the flexibility that 
was key to WLA’s implementation. Some of the ideas included actions that 
could be taken on the local level, such as the suggestion that one-stops 
increase their use of customized and on-the-job training in partnership 
with training providers. Others would require regulatory or legislative 
action, such as giving training providers additional funds to offset the cost 
of data collection or amending FERPA to allow for the use of SSNs to 
satisfy WIA’s data collection requirements. 


“ ’This confusion centers on how sources of funding should be prioritized. For example, 

WIA specifically states that training services should be limited to individuals who are 
unable to obtain other grant assistance for such services or who require assistance beyond 
that made available under other grant assistance programs. The Higher Education Act 
(HEA) prohibits consideration of HEA student aid (for example, Pell grants, among others) 
in determining the need or eligibility of any person for benefits or assistance, or the amount 
of such benefits or assistance, under any federal, state, or local program financed in whole 
or in part with federal funds. 


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Table 5: State and Local Implemented’ Ideas for Addressing Training Provider Participation Concerns 


Concern 

Ideas for addressing concern 

Training providers see required data collection and reporting as 
burdensome 

The Congress and agencies should allow training providers to 
collect data on a sample of WIA or non-WIA participants. 


Agencies should focus on one aspect of performance measures 
and allow locals flexibility in developing remaining measures. 


The Congress should eliminate Governor’s authority to require 
additional performance data. 


The Congress should extend the initial eligibility period before 
training provider performance requirements go into effect. 


The Congress or the agencies should mandate or develop single 
data-collection method using Ul or other data. 


States should allow schools to access wage records. 


Agencies should develop a common set of data collection 
requirements for training providers. 


The Congress should amend FERPA to allow for the use of SSNs 
to satisfy WlA’s data collection requirements. 

Data collection burden exacerbated because few individuals sent 
to training 

The Congress and/or agencies should allow for additional funds to 
go to providers to cover costs associated with collecting 
performance data. 


Current Operations of 
Workforce Investment 
Boards and Affiliated 
Entities May 
Discourage Private- 
Sector Participation 


Private-sector representatives we spoke with are frustrated with the 
operations of the workforce investment boards under WIA, believing that 
the boards are too large to effectively address their concerns, and that 
board-related entities created to help deal with the size of the boards may 
not reflect employer views. Labor’s guidance in this area has not 
specifically addressed these issues. Although some private-sector 
representatives still appear to be making efforts to meet WLA’s 
requirement of private-sector leadership, they told us that, if their 
concerns are not addressed, they may decide to decrease their 
involvement or stop participating. This could limit the ability of the boards 
to develop and establish the strong links with the business community 
needed to develop workforce development strategies that effectively 
address the needs of all individuals. 


Private-Sector 
Representatives Believe 
Large Boards Preclude 
Efficient Operations 


Based on the results of surveys and reports of national associations 
representing workforce investment boards, and according to the majority 
of private-sector employers and other state and local implementers we 
interviewed, the large number of members on boards has made it very 
difficult to conduct operations efficiently. For example, according to a 
national board association, the average number of members on workforce 
boards exceeds 40 in most of the places where new boards have been 
established since the passage of WIA. In our work, we found that Vermont 
had over 40 seats on its state board, California had 64, and Pennsylvania 


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had 33. Local boards can be just as large. For example, we found one in 
Pennsylvania with 43 members and two in California with 45 members. 

The size of these boards is especially large in comparison to various 
private-sector corporate boards. For example, General Motors’ board of 
directors has 13 members, while Intel’s board has 11. 

We were told that the size of the boards makes it difficult to recruit the 
necessary private-sector board members for several reasons. First, 
because private-sector representatives must make up the majority of 
board membership, the larger the board, the greater the requirement for 
private-sector members, which increases the difficulty of recruiting the 
requisite number of private-sector members. We found several boards that 
had been unable to achieve the private-sector majority required by WIA. 
For example, Vermont’s state board had about 42 percent private-sector 
membership, although the state is working to fill additional private-sector 
vacancies. Pennsylvania and California used private nonprofit institutions 
to achieve their private-sector majorities. Labor’s survey of 132 local areas 
found that local areas were more successful recruiting private-sector 
representatives who had retired than those who were still working, which 
may limit the current knowledge of workforce issues brought by the 
private-sector to the board. 

Second, the large number of board members makes it difficult to set up 
meetings. For example, officials in one local workforce investment area 
said they attempted to meet quarterly to accommodate the schedules of 
the various members. However, because members often are dispersed 
throughout the state, it may be difficult to handle the logistics for so many 
participants, or to find locations for the board meetings that are 
convenient to all members and do not pose transportation obstacles. If 
members are unable to attend the meetings, boards may not be able to 
achieve a quorum (usually a simple majority), and therefore may be unable 
to make decisions. 

Third, the large number of board members makes it difficult to run 
meetings efficiently. It may be difficult to ensure that the numerous board 
members all have the same information prior to the meeting, and to keep 
members apprised of the board’s activities. In addition, it is difficult to 
reach agreement on important issues because having more members 
results in having more opinions that need to be addressed and reconciled. 
These difficulties have been especially prevalent this past year when 
boards have had to perform many administrative tasks, such as developing 
strategic plans or certifying one-stops, in order to set up the WIA system. 
Private-sector representatives and other implementers in the three states 


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we visited said that the boards did not operate in an efficient manner. This 
inefficiency led to meetings that focused on administration and process 
rather than on outcomes and broad strategic goals, both of which the 
private-sector representatives see as an appropriate role for a board of 
directors. 

Some board members and association representatives indicated that it 
would be easier to deal with the large size of the board if they could meet 
in smaller groups outside of the formal board meetings to discuss 
important issues. At the same time, WIA’s requirement that boards make 
available to the public, information regarding their activities through open 
meetings may preclude such action. State and local implementers in one 
state told us that they believe WIA’s sunshine provision prohibits decisions 
from being made in private, and has prevented board members from 
meeting in smaller groups to discuss issues. In one state we visited, 
employers told us that a required 72-hour public comment period for any 
agenda item precludes board members from putting on the agenda any 
important items that might have come up at the last moment. 

Despite these difficulties, we found several local areas making efforts to 
address the problems associated with large boards. For example, some 
local areas have divided their boards into smaller committees focusing on 
specific issues, thus increasing member participation and creating a more 
manageable governance structure. As the next section shows, however, 
the downside of this approach is the potential dilution of private-sector 
influence if private-sector board members are not included as members of 
the committees. To make a state board smaller, more manageable, and 
more efficient, one state board chair said he hopes to remove, but not 
replace, board members who fail to take their participation seriously. 
Labor has contracted with organizations, offered training sessions, and 
developed publications that provide information on how boards should 
operate. For example, it has contracted with a coalition of 20 private- 
sector organizations to produce publications and guides on WIA. 

However, it has not provided guidance specifically on ways to ensure that 
boards maintain private sector leadership. It has also recently formed a 
workforce investment board workgroup, one of six workgroups formed 
since its implementation status survey, to consider these issues. 


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Private-Sector 
Representatives Believe 
Board Staff and Committee 
Structures May Not Reflect 
Employer Interests 

Board Staff May Not Reflect 
Employer Views 


According to our interviews with private-sector representatives and 
private-sector information from national associations, additional 
structures that have been developed to accomplish many of the day-to-day 
board activities may not reflect or may dilute employer’s input into the 
system. 

Virtually every state and local board has assigned staff that is responsible 
for carrying out much of the detail associated with the board operations, 
such as setting up meetings, developing the agenda, and ensuring that 
boards stay current with compliance issues. 26 Private-sector 
representatives were concerned, however, that the staff may lack 
knowledge of or interest in the needs of the private sector. 

According to private-sector representatives and other implementers, staff 
are often employed by the public-sector agency responsible for carrying 
out WIA’s Adult, Dislocated Worker and other mandatory partners’ 
programs in each state, which in most cases is a labor or human services 
agency. As a result, private-sector and other representatives expressed 
concerns regarding how staff can carry out their primary focus of serving 
the board when they report to supervisors in their respective agencies. In 
that respect, we were told that staff sometimes dismissed issues that 
private-sector representatives tried to raise because the issues were not 
deemed important by the state agency. In two states, private-sector and 
other representatives also complained that staff failed to provide them 
with key information for the board meetings early enough to allow them to 
prepare, leaving them unable to participate at the board meetings to the 
same extent as public officials. Private-sector representatives also 
questioned whether the existing public-sector staff have sufficient 
understanding of the environment in which business representatives 
operate. Finally, although staff generally offer extensive expertise of 
working with job training programs, staff experienced in prior workforce 
systems may be hesitant to embrace WIA’s vision of a more private-sector- 
driven and strategic system. 

Labor has provided little guidance or information in this area, but there are 
some locations that appear to have hired staff that adequately represents 
the private sector. For example, in a local area in California, the WIA funds 
have been provided to the Office of Economic Development, from which 


26 In some cases, the size of the staff can be large itself; for example, there are 25 staff 
supporting California’s state board. 


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the staff originate, to ensure that the board staff have a private-sector 
focus. In a local area in Pennsylvania, staff is employed by an incorporated 
board, which gives the staff greater independence from the state public 
agencies. 

Committee Structure May To address many of the difficulties stemming from the large size of the 

Dilute Employer Input boards, many states and localities have established committees under the 

auspices of the board. Committees are generally established to address 
particular topics, such as youth activities or performance measures, with 
the goal that the committees will research the issues and decide upon a 
particular course of action for the board to take. 

However, according to our interviews with private-sector representatives 
and survey results, the establishment of committees to address particular 
topics of interest for the board could serve to dilute private-sector input 
into key decisions. There is no requirement that the private-sector 
members chair these committees or even be included on them. WIA is 
silent on the establishment of the committees and the form that they 
should take, but some private-sector representatives told us that, given the 
important role these committees play in influencing board activities, they 
felt alienated when they were underrepresented or not represented on the 
committees. In all of the states we visited, we found that committees at 
both the state and local level had little private-sector membership. Figure 1 
shows that only one of the state board committees, each labeled with their 
specific committee name, had more than 50 percent private-sector 
membership. 


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Figure 1: Composition of Committees at the State Level in Vermont, California, and 
Pennsylvania 

Percent of Business Members 

100 — 

90 — 


83 



Vermont California Pennsylvania 


Committees 


In the states we visited, we also found that there were public-sector 
committee members who were not board members. According to private- 
sector representatives in one state, this membership problem further 
decreases private-sector input in the system. At the same time, however, 
ensuring private-sector involvement on these committees is problematic, 
since private-sector employers serve on the boards as volunteers in 
addition to their regular responsibilities, with time constraints often 
precluding them from attending both board and committee meetings. 

Labor has provided technical assistance to state and local boards, and has 
arranged peer assistance and provided information on promising practices 
to help local boards deal with some of these challenges. However, 
information is still lacking on how to balance the requirements of the 
board operations with the needs of the private sector. Despite this, some 
locations appear to be making progress in ensuring private-sector input to 
committees. For example, some local areas in California are requiring 
committees to have a business majority and define a quorum in terms of 
the business majority. 


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State and Local 
Implementers’ Ideas for 
Enhancing Private-Sector 
Participation 


As a result of their experiences, state and local implementers have 
developed a number of ideas for actions that they believe could enhance 
the role of the private-sector on workforce investment boards (as shown 
in table 6). Although there was broad consensus among those we 
contacted that these concerns needed to be addressed, there was not 
consensus on which ideas had greater potential to address these concerns, 
nor which ones would best maintain the flexibility that was key to WIA’s 
implementation. Some of the ideas focused on those actions that could be 
taken at the local level, such as clearly delineating the responsibilities of 
staff members to ensure a private-sector focus. Others may involve 
legislative or regulatory action, such as giving responsibility for WIA 
programs to public-sector entities (for example, economic development 
agencies) or nonprofit entities that reflect employer outlook, or limiting 
authority of public-sector staff. In addition, some state and local 
implementers suggested mandating a maximum number of staff members 
and providing financial incentives to business members to take over the 
tasks currently performed by the staff. 


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Table 6: State and Local Implemented’ Ideas for Enhancing Private-Sector Participation 


Concern Ideas for addressing concerns 

The Congress should leave membership decisions to states and 

locals. _ 

The Congress and agencies should alter interpretation of WlA’s 
sunshine provision or clarify the requirements to allow board 
members to convene outside of regularly scheduled public 

meetings. _ 

The Congress should allow states and locals to give more weight 
to private-sector votes on boards that may not have a business 

majority. _ 

Private-sector representatives believe board staff and committee The Congress, agencies, or states should clearly delineate 
structures may not reflect employer interests responsibilities of staff to the Board to limit staff authority and 

require greater control by the private sector. _ 

The Congress should mandate that nonpublic agency 

representatives be included as staff to the Board. _ 

The Congress and agencies should limit size of staff. 

The Congress and agencies should require Governors to give 
responsibility for WIA to Chambers of Commerce, State 
Departments of Commerce, or other entities with a business 

outlook, as well as hire staff from those entities _ 

Agencies should limit the number of staff who have worked under 

the prior workforce development system _ 

The Congress and agencies should mandate private-sector 

leadership and majority on committees _ 

The Congress should mandate a business majority for quorum. 
Agencies should allow for separate private-sector advisory 
committees even if the participants are not on the larger board. 


Private-sector representatives believe large boards preclude 
efficient operations 


Conclusions 


The workforce development system WIA sought to create represents a sea 
change for workforce development, not only because it attempted to 
significantly change how employment and training services are provided, 
but also because it provided significant latitude to those implementing 
WIA at the state and local level. Given the early stage of this process, and 
the new and additional partners involved in the process, it is not surprising 
that implementation has been affected by concerns over the new 
requirements. Unless these concerns are addressed in some fashion, there 
is a risk that the flexibility provided to states and local areas under WIA, 
instead of fostering innovation, will continue to lead to confusion, 
unnecessary burden, and resistance to change. Moreover, although states 
and localities will continue to participate as required by WIA, the vision for 
one-stops—full integration—may not be achieved. In effect, complying 
with WIA could result in additional requirements rather than the 
replacement of traditional service-delivery structures. The opportunity for 
the federal government to foster fundamental change in the workforce 
development system of the future could be lost. 


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While state and local implementers agreed that these concerns needed to 
be addressed, there was no consensus on a single course of agency or 
congressional action that would be most effective in addressing these 
concerns. Moreover, some of the concerns may stem from confusion about 
what states and localities can already do to embrace WIA’s requirements. 
As a result, states and localities need more time to fully understand and 
embrace these new ways of operating in conjunction with appropriate 
guidance and technical assistance. Guidance from all responsible agencies 
can go a long way towards addressing concerns; it will also help identify 
issues that may require action beyond guidance. First, the vision of a 
seamless system of employment and training services depends upon states 
and localities having better information about the benefits of integrating 
their services at one-stops. Second, states and localities need better 
information on cost-effective methods for training provider data collection 
and reporting. They need tools to address the burden associated with 
conflicting program requirements and clarification about the confusion 
surrounding the allowed use of SSNs under FERPA and related policy 
guidance to meet data collection requirements. Also, training providers 
need another year of initial eligibility exempt from the data collection 
requirements while they work with state and local implementers to 
explore ways to resolve data collection difficulties. Until these issues are 
resolved, dropping training providers from consideration or having them 
withdraw their services when the initial eligibility period ends would be at 
odds with WIA’s goal of providing job seekers with better training options. 

Third, unless action is taken to ensure that the states and localities 
understand and can implement ways to achieve effective workforce 
investment board operations consistent with private-sector needs, WIA’s 
requirement of private-sector leadership for this new workforce system 
may be at risk. Moreover, the private sector has the necessary labor 
market knowledge to create a strategic workforce investment system, 
without which the new system may be adversely affected. 


Recommendations to 
Executive Agencies 


To facilitate the implementation of WIA, as well as to help state and local 
implementers move closer to the vision of a fully integrated system, we 
recommend that the Secretary of Labor, along with the Secretaries of 
Education, HHS, and HUD, jointly explore the specific programmatic and 
financial concerns identified by state and local implementers that affect 
their ability to fully integrate their services at the one-stops, and identify 
specific ways in which these concerns can be overcome. 


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To help ensure that there is a sufficient quality and quantity of training 
programs and providers available for individuals, we recommend that the 
Secretary of Labor, along with the Secretary of Education 

• Disseminate best-practice information on cost-effective methods being 
used by states and localities to collect and report the required training 
provider data; 

• Address confusion arising from dual reporting for WLA requirements and 
those for other education programs; and 

• Establish a unified federal position on whether SSNs can be provided by 
training providers to state agencies (such as departments of labor) for the 
purposes of meeting WLA’s data collection requirements, if it is determined 
that the most cost-effective data collection methods require the use of 
SSNs. 

To help maintain private-sector leadership in the system, the Secretary of 
Labor should disseminate information on successful practices by states 
and local areas to ensure effective board operations and the effective 
operations of their affiliated entities consistent with strong private-sector 
leadership. 


Matter for 

Congressional 

Consideration 


To ensure that training providers are not unnecessarily withdrawing their 
course offerings, the Congress may wish to allow training providers to 
remain on the list of eligible providers for another year without meeting all 
the data collection requirements while they work with state and local 
implementers to explore ways to resolve data collection difficulties. 


Agency Comments 
and Our Evaluation 


We provided a draft of this report to Labor, Education, HHS and HUD for 
review and comment. The comments from the agencies are reproduced in 
appendixes II through V, respectively. Labor appreciated our work in 
identifying issues and problems associated with WIA implementation, and 
Education said that the report and recommendations provided insight on 
ways it can help state and local implementers. HHS, which is responsible 
for one of the mandatory partner programs, concurred with the 
recommendation that the respective Secretaries jointly explore the 
specific programmatic barriers affecting programs’ ability to achieve the 
vision of full integration. Neither Labor, Education, nor HUD responded 
directly to any of our recommendations. 

The majority of the comments made by Labor, Education, and HUD 
reiterated the difficulties associated with WIA implementation. Labor said 


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that the specific issues we identified in the report must be considered in 
the broader context of the massive reform of the workforce development 
system anticipated by this landmark legislation. We believe that our report 
highlights the difficulties that states and localities are having implementing 
many of these new, complicated requirements and discusses those issues 
that need to be addressed to ensure successful implementation. According 
to Labor, integrating the many partners into one system is a challenging 
task, and it has no authority to direct or mandate participation of others, 
nor can it deliver guidance that must come from other partners. For WIA 
to succeed, partnership among agencies at the federal level is key, which is 
why we recommended that the respective Secretaries work together 
jointly to address limitations to participation. 

Education said it was concerned that our report would set a benchmark 
for measuring the success of WIA against the vision of full integration, 
rather than the coordination that was required by the law. We did not 
intend to imply that full integration is the only option for participation. 
However, because Labor highlighted full integration as its ultimate vision, 
our report sought to identify those issues that would serve as impediments 
to achieving full integration. If policymakers want full integration to be a 
viable option, the issues we highlighted in our report—and reiterated by 
Education in its comments—need to be considered and addressed. 
Education also highlighted the concerns we raised in our report 
concerning privacy protections under FERPA, saying that the protection 
under FERPA cannot be ignored or sacrificed when faced with the 
separate, independent challenge of meeting the accountability 
requirements of WIA. This comment supports our recommendation that 
Education and Labor work together to establish a unified federal position 
on what is allowed under FERPA for purposes of WIA. 

HUD’s comments focused on its viability as a partner in the one-stops. 
Although HUD noted that it is participating in interagency workgroups and 
has provided guidance, it said that WIA did not directly apply to the 
majority of HUD’s programs, pointing out that HUD’s programs d iff er 
significantly from those of Labor and Education. It also suggested that 
none of its workforce development initiatives have a primary mission of 
employment and training. HUD’s response reiterates the need for it to 
work to resolve the programmatic limitations that affect the ability of its 
programs from participating in the one-stop system. 

Labor said our report did not fully reflect the unprecedented level of 
guidance and technical assistance that it and its federal and state partners 
have provided to state and local implementers since the passage of WIA. 


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Throughout the report, we clarified this point and provided more 
examples of such guidance. However, much of the guidance that Labor has 
issued to date has focused on helping state and local implementers set up 
the system. State and local implementers now need guidance that 
addresses concerns specific to a system that is in the critical early stages 
of operation, such as how to effectively collect performance data and 
operate boards. 

Both Education and Labor highlighted the importance of state and local 
flexibility for WIA implementation. Labor said that our report needs to 
more explicitly acknowledge this flexibility, and that the differences we 
observed among various one-stop systems reflect decisions based on state 
and local circumstances to achieve state and locally established goals. We 
believe our report fully acknowledges that WIA did not prescribe how 
states and locals would implement WIA. We did note, however, that 
flexibility without guidance or implementation assistance can sometimes 
lead to confusion. Education and Labor both believed that detailed 
guidance was not compatible with the flexibility WIA affords states and 
localities. However, we believe that guidance can be detailed without 
being prescriptive, and that federal partners play a vital role in helping 
state and local implementers optimize the flexibility provided by WIA. 

In addition to these comments, each of the agencies provided technical 
comments that we incorporated, where appropriate. 


As arranged with your offices, unless you publicly announce its contents 
earlier, we plan no further distribution of this report until 10 days after the 
date of this report. At that time, we will send copies to the Secretary of 
Labor, the Secretary of Education, the Secretary of Housing and Urban 
Development, the Secretary of Health and Human Services, appropriate 
congressional committees, and other interested parties. We will also make 
copies available to others upon request. 


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GAO-02-72 WIA Implementation Issues 




Please contact me on (202) 512-7215 if you or your staff have any 
questions about this report. Other contacts and staff acknowledgements 
are listed in appendix VI. 



Sigurd R. Nilsen 
Director, Education, Workforce 
and Income Security Issues 



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Appendix I: Presence of Partners at Nine 
One-Stops and Method of Core Service 
Provision 


Table 7 shows the range of methods used by partners to meet the 
requirement of core service provision through the one-stops at each of the 
nine locations we visited. 


Table 7: Partner Programs and Method of Core Service Provision at Nine One-Stops 



One-stops where the program was providing core services through.. 

a 

Program 

One-stops 

where 

program 

present 

Collocation 

Referral 

Electronic 
linkages Contract 

Mandatory programs 

WIA Adult 

9 


9 

- 

- 

- 

WIA Dislocated 

9 


9 

- 

- 

- 

WIA Youth 

9 


9 

- 

- 

- 

Employment Service 

9 


9 

- 

- 

- 

Trade Adjustment Assistance 

9 


9 

- 

- 

- 

Employment and training services to 
veterans 

9 


9 




Unemployment Insurance 

9 


3 

- 

6 

- 

Welfare-to-Work 

9 


7 

2 

- 

- 

Vocational Rehabilitation 

9 


7 

3 

1 

- 

Adult Education and Literacy 

9 


5 

4 

1 

- 

Senior Community Service 
Employment Program 

9 


6 

- 

2 

1 

Carl D. Perkins Vocational 

Education 

8 


4 

4 


- 

Migrant and Seasonal Farmworker 
Program 

7 


5 

3 

- 

- 

Native American Program 

8 


2 

7 

1 

- 

Job Corps 

7 


2 

4 

- 

1 

HUD-administered employment and 
training 

6 


1 

4 

2 

- 

Community Services Block Grant 

6 


2 

4 

1 

- 

Nonmandatory programs 11 

School-to-Work 

4 


2 

1 

2 

- 

Temporary Assistance for Needy 
Families 

9 


5 

4 


2 

Food stamps 

7 


2 

3 

- 

2 

Transportation 

2 


- 

2 

- 

- 

Employers 

1 


1 

- 

- 

- 


“These columns may add up to more than nine because partners may be using more than one 
method of core service provision at a one-stop. 


“These were some of the nonmandatory partners we observed; this is not an exhaustive list of the 
various nonmandatory partners participating in one-stops. 


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Appendix II: Comments From the 
Department of Labor 


U.S. Department of Labor Assistant Secretary for 

Employment and Training 
Washington, D.C. 20210 

iEP 2 I 200! 

Mr. Sigurd R. Nilsen 
Director, Education, Workforce, 
and Income Security Issues 
United States General Accounting Office 
Washington, DC 20548 

Dear Mr. Nilsen: 

On behalf of the Secretary of Labor, thank you for the opportunity to review the draft of 
your proposed report. Workforce Investment Act: Better Guidance Needed to Address 
Concerns Over New Requirements (GAO-01-1030). 

The report focuses on three aspects of implementation of the Workforce Investment Act 
(WIA) of 1998: (1) participation in the One-Stop delivery system by mandatory 
partners; (2) participation by training providers in the eligible training provider system; 
and (3) participation by private sector representatives in the governance of the 
workforce investment system. We appreciate the work of the General Accounting 
Office (GAO) in identifying issues and problems with WIA implementation in these 
three areas. Many of these issues were ones that we identified in our "WIA Readiness 
Review" that we shared with the GAO. As noted by the GAO, we have convened four 
work groups - on One-Stops, Employers on Workforce Boards, Youth Program 
Services, and Adult Services - to provide feedback and suggestions about products, 
materials, and policy guidance to help states and local communities address WIA 
implementation issues. 

We agree with the GAO's assessment that the Workforce Investment Act anticipates 
massive reform of the workforce development system in the form of seamless delivery 
of services by separate organizations operating under different rules. We think that it is 
important to view the specific issues identified by the GAO in the broader context of the 
changes made by this landmark legislation. 

First, the Department recognized early on the magnitude of changes that would be 
required of the workforce development system. Accordingly, in consultation with the 
Department's state, local, and other federal partners, we provided unprecedented levels 
of guidance and technical assistance on implementing WIA that are not fully reflected 
in the GAO report. Specifically, from the moment WIA passed, policy concept papers 
were prepared in consultation with state and local partners and stakeholders. Town 
hall meetings were held around the country, providing an opportunity for the partners 
and the public to comment on the various policy directions in the proposed 

A Proud Member of America’s Workforce Network 




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Appendix II: Comments From the Department 
of Labor 


implementing regulations and strategic planning guidance, including guidance on 
unified planning with other partner agencies. Department of Labor regional office staff 
visited each state, developing appropriate responses to problems and issues and 
focusing on the planning and governance structures and implementation of the new 
provisions of WIA. 

The Department established work groups with representatives of state and local 
partners to share input on ways to address common issues and challenges. 
Implementation training; "voice of experience" forums; financial and performance 
reporting training; and training on the eligible training provider system have been 
offered to the system by the Department of Labor. Several organizations funded by the 
Department also have offered technical assistance and training on state and local board 
management and leadership to support the establishment and effective operation of 
Workforce Investment Boards at both levels. 


Second, WIA anticipates seamless service delivery through the One-Stop system by 19 
different partners that are brought together to provide customer-driven services. Each 
of these partner programs operates under its own rules. Integrating them into one 
system is a challenging task to say the least. While the Department of Labor does not 
have the authority to direct or mandate the participation by other federal agencies in 
the One-Stop delivery system in states, we have taken the lead on many occasions to 
work on joint policy, guidance, and technical assistance with the Office of Management 
and Budget and other federal partners in such areas as resource sharing and unified 
planning. 

Finally, one essential underlying principle of WIA is not addressed in the report - state 
and local flexibility to implement the provisions of the Workforce Investment Act. We 
believe that this point needs to be more explicitly acknowledged in the GAO report. 
Flexibility is critical to the implementation of the principles of customer service and 
choice and increased participation by the private sector. The differences that we see 
among state and local One-Stop systems reflect decisions based on state and local 
circumstances to achieve state and locally established goals. For the Department of 
Labor to direct or require compliance with rules and procedures set at the national level 
would undermine this key principle and strength of WIA. 


We have enclosed some additional specific comments on the GAO's findings. 



'o 


Enclosure 


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Appendix III: Comments From the 
Department of Education 


UNITED STATES DEPARTMENT OF EDUCATION 

THE. DEPUTY SECRETARY 

September 21, 2001 


Sigurd R. Nilsen 
Director, Education, Workforce, 
and Income Security Issues 
U.S, General Accounting Office 
441 G Street, N.W. 

Washington, DC 20548 

Dear Mr. Nilsen: 

The Department of Education appreciates the opportunity to comment on the draft report 
entitled Workforce Investment Act: Better Guidance Needed to Address Concerns Over 
New Requirements (GAO-01-1030). The report highlights the complex challenges States 
and localities face in implementing Title I of the Workforce Investment Act (WIA), 
including, particularly, the law’s one-stop coordination requirements. The report will be 
useful to us in identifying additional ways the Department can be helpful to State and 
local agencies in mastering these challenges. 

We are concerned, however, that the report sets a benchmark for measuring the success 
of the implementation of WIA Title I’s one-stop coordination requirements that is 
inconsistent with the law and Department of Labor (DOL) regulations. The report deems 
successful implementation to be the “full integration of services” by mandatory partner 
programs at the State and local level, which is defined as “all partner programs 
coordinated and administered under one management structure and accounting system, 
offering joint delivery of program services from combined resources” (page 9). This 
definition seems to be derived from one-stop cost-allocation guidance published by the 
Department of Labor on May 31, 2001 in the Federal Register. That guidance described 
“full integration” as one segment in a continuum of options for implementing the one- 
stop coordination requirements established by Title I of WIA. It recognized that the 
authorizing statutes for some partner programs do not permit the “full integration of 
services” it references. WIA refers to coordination and consolidation; the report does 
not. 

In crafting WIA and the Carl D. Perkins Vocational and Technical Education Act 
(Perkins Act), Congress established several separate programs with different funding 
streams, and eligibility and other requirements, including adult and youth workforce 
development services, adult education and literacy instruction, vocational rehabilitation, 
and vocational education program improvement. Congress went on to require that the 
services and activities funded by each of these programs be made accessible at no fewer 
than one single access point in each community—one-stop career centers. Regardless of 


400 MARYLAND AVE. S.W., WASHINGTON, D.C. 20202-0500 
Our mission is to ensure equal access to education, and to promote educational excellence throughout the Nation. 



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Appendix III: Comments From the 
Department of Education 


2 

who administered a program or where it was located, individuals would be able to access 
the program’s services at the community’s one-stop career center. 

Mandatory one-stop partner programs, including adult education, vocational 
rehabilitation, and postsecondary vocational education must “to the extent not 
inconsistent with the Federal law authorizing the partner’s program:” (1) make available 
“applicable” core services through the one-stop system; (2) use a portion of Federal 
program funds to support the one-stop system; and (3) be represented on State and local 
workforce development boards. State and local elected officials and program 
administrators are given broad discretion to determine how best to accomplish these 
objectives, enabling them to design service delivery systems that are responsive to State 
and local needs and priorities through the development of local memoranda of 
understanding. 

In some cases, the integration of services across programs is an appropriate and viable 
strategy. For example, the full integration of some core services offered by many DOL 
and other partner programs that have common objectives and authorized activities is 
readily achievable and should be expected. It makes little sense, for example, for 
Employment Service and adult and dislocated worker program staff to offer job search 
services separately. Nor does it make much sense for the Department of Education’s 
adult education and literacy programs and various DOL programs to administer their own 
separate assessments of basic skills. 

In other instances, however, opportunities for service integration might be more limited 
given both the scope of relevant programs and the needs of the individuals whom those 
programs serve. WIA recognizes this by requiring that each partner participate in the 
one-stop system in a manner that is consistent with the individual partner’s authorizing 
legislation. That condition was established not as a stumbling block to a vision of full 
integration favored by Department of Labor funded programs (and implicitly adopted by 
GAO throughout the report), but as a recognition that coordination through the one-stop 
system can greatly enhance access and efficiency without compromising the extent to 
which program resources are used for their intended purpose. 

For example, Title I of the Rehabilitation Act and its implementing regulations 
authorizing the vocational rehabilitation (VR) program limit services to eligible persons 
with disabilities and require that State VR agencies give priority to persons with the most 
significant disabilities (i.e., those who typically have the most complex and costly 
rehabilitation needs). Moreover, the VR program includes important procedural 
protections for persons with disabilities, including qualification standards for 
rehabilitation professionals able to address the unique employment and training needs of 
persons with disabilities. Clearly, as the Department has emphasized in its 
communications with States, the one-stop system enables VR agencies to partner with 
other programs in order to jointly address the rehabilitation needs of persons with 
disabilities in a comprehensive and efficient fashion. That effort may include sharing in 
the costs of services that are applicable to each partner, including intake, information and 
referral services, accommodations, or other activities. However, the commenters noted in 


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Appendix III: Comments From the 
Department of Education 


3 

the report are correct in indicating that VR agencies cannot pay for services for 
individuals who do not have disabilities or do not otherwise meet program eligibility 
criteria. Again, that result is mandated by WIA and is reflective of the fact that VR 
program resources are to be used to meet the extensive, unique, and critical employment 
and training needs of eligible persons with disabilities. Thus, we recommend that the 
final report clarify the requirements of WIA and, correspondingly, the extent to which the 
local areas studied have coordinated service delivery pursuant to those requirements. 

In that same regard, few of the one-stop core services are applicable to the Perkins Act, 
which generally supports activities to improve the quality of vocational education 
programs through curriculum and professional development, the purchase of equipment, 
and services to members of special populations. Most direct services, such as career 
guidance and academic counseling, may only be provided after a student has enrolled in a 
vocational education program. Given these and other statutory limitations, State and local 
implementers should not be expected to integrate fully ail Federal program services and 
activities under the management of a one-stop center operator. Moreover, the report 
should not implicitly endorse the full integration model without first addressing the 
reasons, some of which we have outlined above, as to why that model would not be in the 
best interest of populations served by some partner programs. 

On the other hand, State and local partner programs should be expected to coordinate 
service delivery more effectively than was evident at some of the one-stop centers GAO 
staff visited. In particular, the report noted that, in some cases, individuals in need of 
adult education and literacy instruction were being sent back and forth among programs 
because they did not meet the separate service priorities established by each program. 

This is unacceptable. Adult education and literacy instruction may be provided with 
funds under the Adult Education and Family Literacy Act and, when offered in 
combination with skill training, the DOL adult and dislocated worker program. DOL 
youth program funds may also be used to provide basic skills instruction to individuals 
who are ages 14 through 21 and meet the other statutory eligibility requirements. Title I 
of WIA establishes a collaborative framework of State and local boards and other 
mechanisms that are designed to facilitate decision-making across programs about how 
best to use these combined Federal resources to address State and local needs. Not every 
program will have the same service priority, but, collectively, the priorities should come 
together in a coherent way that all partner programs understand and implement. No 
individual who wants to learn should be bounced from program to program in search of a 
willing teacher. We would appreciate learning more about where these problems were 
found by your staff so that we can work with States to correct them. 

Similarly, we would like to know more about those instances noted in the report in which 
VR agencies were unwilling to partner with other programs in delivering services that are 
clearly common to each. However, we do question the breadth of support among VR 
agencies for the position noted in the report that partnering in the one-stop center is ill- 
advised on the basis that one-stop facilities may not adequately accommodate the special 
communication, equipment, or other needs of persons with disabilities. We find such 
statements suspect since many State VR agencies work closely with their one-stop 


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GAO-02-72 WIA Implementation Issues 





Appendix III: Comments From the 
Department of Education 


4 


partners to address accessibility and accommodation issues. In fact, VR agencies are 
often among those demanding that other programs make available necessary 
accommodations so that persons with disabilities can participate in those programs’ 
activities. VR agencies recognize the value that access to DOL and other programs offers 
people with disabilities. Thus, many are more apt to lend their expertise to the one-stop 
center so that the center’s programs are accessible than to refuse to partner altogether. 

Need for Additional Guidance and Technical Assistance 

As this and several examples cited in the report suggest, there is a continued need for 
guidance and technical assistance from the Department to assist States and localities in 
implementing the WIA Title I one-stop coordination requirements. However, we 
continue to believe that State and local flexibility remains key to successful 
implementation. Additional guidance should be limited to offering options rather than 
imposing detailed Federal prescriptions. Federal efforts should be focused primarily on 
identifying effective practices and strategies and providing technical assistance to help 
States and localities adopt and pursue them. 

Administrative Costs 

We reject the suggestion of some State and local implementers that the amount of funds 
available for State and local administrative costs must be increased to facilitate the 
implementation of the one-stop requirements. If anything, the one-stop system and the 
collaboration it demands offer programs opportunities to reduce administrative costs by 
eliminating duplication and achieving greater economies of scale. It is not clear to us 
why or how the one-stop system cannot be implemented effectively without diverting 
more Federal dollars from the classroom and direct services for individuals. Congress 
specifically limited administrative costs in most of these statutes. 

Coordination of Federal Accountability Provisions 

While the Department has no role in implementing the WIA Title I eligible training 
provider provisions discussed in the report, we have worked closely with DOL in the 
implementation of the accountability requirements of the WIA Title I, adult education, 
vocational education, and vocational rehabilitation programs to increase consistency 
across programs and ease the data collection and reporting burden on States and local 
programs. Where possible, the Departments have aligned the definitions and measures 
they use or provided flexibility so States can create common definitions. Under the 
Perkins Act, for example, States have complete discretion to devise accountability 
systems that measure the core performance indicators identified by Congress. As a result, 
they have the freedom to establish common definitions for measuring performance under 
the Perkins Act and the WIA Title I eligible training provider provisions. We hope that 
more States will take advantage of this flexibility in the future. 


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GAO-02-72 WIA Implementation Issues 







Appendix III: Comments From the 
Department of Education 


5 


Privacy Rights 

Though the report discusses the release and use of students’ Social Security numbers for 
accountability purposes, it fails to give a complete picture of the Family Educational 
Rights and Privacy Act (FERPA), and the importance of protecting student privacy. 
FERPA’s underlying purpose is to ensure that a student’s education records, including 
personally identifiable information such as a Social Security number, are not disclosed to 
others, absent the written consent of the student. The entire statutory scheme of FERPA 
expresses a clear Congressional intent that certain personal information about students be 
protected from disclosure. This protection cannot be ignored or sacrificed when faced 
with the separate, independent challenge of meeting the accountability requirements of 
WIA Title I. 

We value the insights and recommendations provided in the report. They will inform our 
ongoing work with States to improve the implementation of the WIA Title I coordination 
requirements. You will find additional, detailed comments in the enclosure to this letter. 
Please let us know should you need clarification of any of the material we have outlined 
or need additional information. 

Thank you for the opportunity to participate in this important endeavor. 

Sincerely, 

William D. Hansen 

Enclosure 


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Appendix IV: Comments From the 
Department of Health and Human Services 


DEPARTMENT OF HEALTH & HUMAN SERVICES 


Office of Inspector General 


Washington, D.C. 20201 


SEP 2 4 2G01 


Mr. Sigurd R. Nilsen 
Director, Education, Workforce, 
and Income Security Issues 
United States General 
Accounting Office 
Washington, D.C. 20548 

Dear Mr. Nilsen: 

Enclosed are the Department's comments on your draft report, 
"Workforce Investment Act: Better Guidance Needed to Address 
Concerns Over New Requirements." The comments present the 
tentative position of the Department and are subject to 
reevaluation when the final version of this report is received. 

The Department appreciates the opportunity to comment on this 
draft report before its publication. 


Sincerely, 


Jy/net Rehnquist 
Inspector General 


The Office of Inspector General (OIG) is transmitting the 
Department's response to this draft report in our capacity as 
the Department's designated focal point and coordinator for 
General Accounting Office reports. The OIG has not conducted 
an independent assessment of these comments and therefore 
expresses no opinion on them. 


Page 50 


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Appendix IV: Comments From the Department 
of Health and Human Services 


COMMENTS OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES ON THE 
U.S. GENERAL ACCOUNTING OFFICE DRAFT REPORT. "WORKFORCE INVESTMENT 
ACT: BETTER GUIDANCE NEEDED TO ADDRESS CONCERNS OVER NEW 
REQUIREMENTS" (GAQ-01-1030~> 

General Comment 

The Department of Health and Human Services appreciates the opportunity to comment on the 
General Accounting Office’s (GAO) draft report, which addresses an important topic. 

GAO Recommendation 

To facilitate the implementation of WIA, as well as to help states and local implementers move 
closer to the vision of a fully integrated system, we recommend that the Secretary of Labor, 
along with the Secretaries of Education, HHS, and HUD, jointly explore the specific 
programmatic and financial concerns identified by state and local implementers that affect their 
ability to fully integrate their services at the one-stops, and identify specific ways in which these 
concerns can be overcome. 

Department Comment 

We concur with the GAO recommendation. 

The Department's Administration for Children and Families, Office of Community Services 
notes that the community services network they support has a long history of working in 
collaboration and partnership with other local agencies. Under the Community Services Block 
Grant (CSBG) Act, the CSBG supports a range of programs designed to assist low-income 
people in obtaining and maintaining employment. Utilizing CSBG funds, Community Action 
Agencies nationwide have always provided job seekers, workers, and retired workers support in 
job placement and retention services. Such services include skills training, opportunities to work 
in local agency programs and on-the-job training. Various employment projects managed or 
supported by local agencies are designed to provide new job opportunities for low-income 
people. Additionally, CSBG provides support in job placement and development, including 
locating vacant positions, creating job banks, and facilitating interviews. There are supportive 
services for those new to the workforce, such as child care, providing work clothing, 
transportation, job counseling and job retention training. 


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GAO-02-72 WIA Implementation Issues 








Appendix V: Comments From the 
Department of Housing and Urban 
Development 


U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

WASHINGTON, D.C. 20410-6000 

September 19, 2001 

OPFJCE OF THE ASSISTANT SECRETARY 
FOR POLICY DEVELOPMENT AND RESEARCH 

Mr. Sigurd R. Nilsen 
Director, Education, Workforce, 
and Income Security Issues 
United States General Accounting Office 
Washington, DC 20548 

Dear Mr. Nilsen: 

Thank you for the opportunity to comment on your draft report entitled, 
"Workforce Investment Act: Better Guidance Needed to Address Concerns Over New 
Requirements (GAO-01-1030). The Department of Housing and Urban Development 
(HUD) commends the GAO on this report which focuses on issues related to the three 
Workforce Investment Act (WIA) requirements that represent the foundation of this new 
system. These issues are: 1) mandatory partners' participation in the one-stop centers; 2) 
job seekers' ability to receive enhanced choices for training; and 3) private-sector 
participation on workforce boards. 

The Department of Housing and Urban Development (HUD) encourages the 
development of partnerships between its grantees and those of other Federal agencies 
engaged in similar or compatible activities. We recognize that the Workforce Investment 
Act (WIA) calls for the development of such partnerships in the area of workforce 
development. 

HUD’s Involvement in Implementation of WIA 

Since the passage of WIA in 1998, HUD has been actively involved in 
interagency efforts to implement WIA. For example: 

• Interagency Working Groups. HUD has actively participated as a member of the 
OMB WIA work group, the WIA Federal partners work group, the one-stop work 
group, and regional WIA interagency partner groups. HUD hosted two national 
call-in sessions in which all Federal partners explained their roles and answered 
questions. 

• Technical Assistance. HUD field staff has provided information and assistance to 
state and local Workforce Investment Boards (WIBs). HUD has provided WIA 
training to staff and grantees at dozens of conferences and meetings. The focus of 
this training has been to encourage HUD grantees that are involved in 
employment and training activities to become one-stop partners. 



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Appendix V: Comments From the Department of Housing and Urban Development 


• Guidance to HUD grantees. HUD issued guidance to public housing agencies 

(PHAs) in 2000 encouraging them to establish cooperation agreements with 

workforce investment boards and one-stops. 

General Applicability of WIA to HUD Programs 

While HUD strongly supports the goal of improving coordination in federally- 
funded workforce development activities, it does not appear that the WIA is, in general, 
directly applicable to the majority of HUD programs. HUD’s programs, which are 
primarily geared towards providing affordable housing and economic development 
activities, differ significantly from the programs of the Department of Labor (DOL) and 
other WIA partners, which are often primarily intended as employment and job training 
activities. As a result of these differences, which are outlined in greater detail below, we 
believe that the WIA does not directly apply to many of the HUD programs that are 
identified in the draft report as falling under the WIA’s coverage. We respectfully 
request that the report be amended to reflect this position. 

First and foremost, there are very few HUD programs for which employment and 
training is a primary purpose. For the maj ority of HUD programs - including most of the 
programs that we believe are incorrectly listed in the draft report as triggering required 
one-stop partnerships - employment and training is ancillary to the main purpose and use 
of funds. Second, many HUD programs are formula block grants which give grantees 
substantial discretion to decide how to spend HUD funds. While employment and 
training is an optional use of funding for some of these programs, HUD has no control 
over whether grantees spend these funds on employment and training. Third, there are 
few HUD programs structured with intermediary entities such as state agencies between 
HUD and local grant recipients; almost all other WIA-covered programs have this 
structure. 

Finally, HUD programs that serve public and assisted housing residents are unlike 
other employment and training programs in that they are place-based. They are often 
successful precisely because outreach, recruitment and sendees themselves are located 
right where participants live. In these cases, it is not clear what benefits a one-stop at 
another location could provide to participants or program entities. 

HUD Programs Required to be One-Stop Partners 

For all other Federal agencies, WIA legislation identifies the specific authorizing 
legislation of programs of required local one-stop partners. In contrast, the WIA statute 
and regulations do not clearly state which HUD employment and training programs are to 
be considered required partners, referring only to “employment and training activities 
carried out by the Department of Housing and Urban Development.” 

Because of the WIA statute’s lack of specificity about which HUD programs are 
to be considered required partner programs, HUD’s Office of General Counsel consulted 
with their counterparts at DOL in 1999 to discuss this issue. They reached agreement 


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GAO-02-72 WIA Implementation Issues 






Appendix V: Comments From the Department of Housing and Urban Development 


that the recipients of HUD’s formula grant programs would not be required one-stop 
partners because the funds were not provided by HUD specifically for employment and 
training activities. Of the programs listed in footnote c of page 8 of the draft report, the 
following are formula grant programs that should be excluded on this basis: Community 
Development Block Grants, the Public Housing Drug Elimination Program, and the 
Public Housing Capital Fund. 

Recipients of several other HUD programs should be excluded from the list of 
required one-stop partners because employment and training is neither a required nor the 
primary purpose of these funds. Such programs include: the HOPE VI program 
(inadvertently listed as HOPE IV), the Community Outreach Partnership Center program, 
the Homeless Assistance Programs, and Empowerment Zones / Enterprise Communities. 
Of course, programs that receive no funds - such as Neighborhood Networks, 2020 
Education Centers, and Step-Up - cannot contribute to the operation of One-Stops as 
required partners. 

The Family Self-Sufficiency (FSS) Program illustrates well many of the problems 
posed by applying WIA to HUD programs. FSS is designed to help families in 
subsidized housing build assets. As participating families’ rents go up due to increases in 
income, the increase is deposited into an escrow account that families can access upon 
successful completion of the program. In addition to funding the escrow accounts, HUD 
provides funding to housing agencies to cover the costs of one or more coordinators for 
the program. Among other things, the coordinator provides case management and 
referral services to participants to help link them to services in the community. Most 
PHAs receive funding for one coordinator only. 

While the FSS coordinators do provide services that fall within the Act’s 
definition of core and intensive services, we do not believe that the WIA is directly 
applicable to the FSS program. We also do not believe it would be feasible for PHAs that 
receive funding to hire a single FSS coordinator to give up a portion of that person’s time 
to the one-stop or to give up a part of their administrative fees for their housing programs 
to cover one-stop costs. 

FSS participants are recruited directly through the PHA. FSS funds can only be 
used for the salary and benefits of case managers. There are no FSS funds for 
administration, overhead or program operations. Moreover, FSS is a very small part of 
the overall mission, funding and activities of PHAs. An added problem is that FSS is, to 
a substantial extent, an optional program. Requiring PHAs that wish to participate in FSS 
to also contribute to a one-stop could act as a deterrent to participation in the program, 
undermining that program’s goals. 

Many of the practical considerations that would arise from applying WIA to FSS 
are also applicable to the Youthbuild and Resident Opportunities and Self Sufficiency 
(ROSS) Programs. Youthbuild serves a distinct population group of severely 
disadvantaged 16-to-24 year-old youth who live in distressed neighborhoods. Grantees 
are community-based organizations that have a presence and positive reputation in these 


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Appendix V: Comments From the Department of Housing and Urban Development 


4 

communities. Recruitment is done through established networks within these 
communities. Also, like public housing programs, Youthbuild is successful because 
outreach, recruitment, services and construction activities are located in the participants' 
neighborhoods and not at an agency in some distant location. 

The ROSS Program can be used for many purposes, only one of which is to 
provide employment and training activities. Since employment and training is neither a 
required nor the primary purpose of ROSS funds, it does not appear that ROSS fits the 
model of an employment and training program covered by W1A. The ROSS Program is 
restricted to serving residents of specific public housing agencies or developments. 
Adding an additional requirement to offer services through a one-stop center would not 
likely be an effective means of outreach and recruitment within the discrete population 
that is eligible for those services. 

Conclusion 

HUD will continue to encourage its grantees to work closely with one-stop 
centers when this adds value to the grantees and their programs. There are already a 
number of encouraging examples of cooperative ventures such as PHAs operating one- 
stop satellites at public housing developments. We plan to continue to encourage these 
partnerships to ensure more effective cooperation at the local level. 

Thank you for the opportunity to comment on this draft report. 



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Appendix VI: GAO Contacts and Staff 
Acknowledgments 


GAO Contacts 


Lori Rectanus, (202) 512-9847 
Monika Gomez, (202) 512-9062 


Staff Natalya Bolshun also made significant contributions to this report, in all 

aspects of the work throughout the review. In addition, Dianne Murphy 
Acknowledgments Blank, Andrea Sykes, and Andrew Von Ah, aided in the gathering and 

analyses of information collected on our site visits, Jessica Botsford and 
Richard Burkard, provided legal support, and Patrick DiBattista assisted in 
report and message development. 


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GAO-02-72 WIA Implementation Issues 



Related GAO Products 


Department of Labor: Status of Achieving Key Outcomes and Addressing 
Major Management Challenges (GAO-Ol-779, June 15, 2001). 

Major Management Challenges and Program Risks, Department of Labor 
(GAO-Ol-251, Jan. 2001). 

Multiple Employment Training Programs: Overlapping Programs 
Indicate Need for Closer Examination of Structure (GAO-01-71, Oct. 13, 
2000 ). 

Workforce Investment Act: Implementation Status and the Integration of 
TANFServices (GAO/T-HEHS-OO-145, June 29, 2000). 

Multiple Employment Training Programs: Major Overhaul Needed to 
Create a More Efficient, Customer-Driven System (GAO/T-HEHS-95-70, 
Feb. 6, 1995). 

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: Overlap Among Programs 
Raises Questions About Efficiency (GAO/HEHS-94-193, July 11, 1994). 

Multiple Employment Training Programs: Overlapping Programs Can 
Add Unnecessary Administrative Costs (GAO/HEHS-94-80, Jan. 28,1994). 


(130007) 


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