Before the Committee on Health,

Education, Labor, and Pensions,

U.S. Senate

United States General Accounting Office

GAO

For Release on Delivery

Expected at 10:00 a.m.,

Thursday, October 4, 2001 WORKFORCE

INVESTMENT ACT

New Requirements Create

Need for More Guidance

Statement of Sigurd R. Nilsen, Director

Education, Workforce, and Income Security Issues

GAO-02-94T
Page 1 GAO-02-94T

Mr. Chairman and Members of the Committee:

Thank you for inviting me here today to present the findings of our report

on Workforce Investment Act (WIA) implementation, which is being

released today.1

 As you know, WIA was a landmark piece of legislation

passed in 1998 to unify a fragmented employment and training system and

better serve workers and employers. WIA sought to significantly change

our country’s workforce development system by streamlining the delivery

of employment and training services, enabling job seekers to make

informed choices among training providers and course offerings, and

enhancing the private-sector role in the workforce system. It attempted to

accomplish these goals by requiring that

• mandatory partners—state and local entities that carry out selected

federal programs—provide their employment and training services

through local one-stop centers and support the operation of those centers;

• training providers collect data on student outcomes and meet established

performance levels for those outcomes; and

• private-sector representatives lead workforce investment boards set up at

the state and local level.

To help assess the progress being made in implementing WIA during its

first full year ending in June 2001, you asked that we identify issues of

particular concern for state and local implementers mandatory partners,

training providers, and private-sector representatives. You asked also that

we identify possible actions to address these concerns. We focused on

issues related to the three WIA requirements that represent the foundation

of the new system: (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 carry out this work, we contacted 12 national associations representing

state and local implementers, visited nine one-stops located in six local

areas in three states (California, Pennsylvania, and Vermont), and met

with officials and reviewed documents from the four federal agencies that

house the mandatory partner programs (Departments of Education, Health

 1

Workforce Investment Act: Better Guidance Needed to Address Concerns Over New

Requirements (GAO-02-72, Oct. 4, 2001).
Page 2 GAO-02-94T

and Human Services (HHS), Housing and Urban Development (HUD), and

Labor).

In summary, state and local implementers have faced challenges during

the early stages of WIA implementation because of the significant changes

to the workforce system WIA introduced. Mandatory partners have

wrestled with their concerns about how to participate in one-stops

without adversely affecting their respective target populations, violating

their own programs’ rules, or straining their financial resources. Training

providers have struggled to find ways to effectively meet WIA’s data

collection and reporting requirements that they believe are burdensome

and, as a result, have reduced the course offerings they make available to

WIA job seekers. Private-sector members of workforce investment boards

have grappled with their concerns that their input is diluted by staff and

committees set up to facilitate board operations. The federal agencies that

oversee the mandatory partners’ programs, particularly Labor and

Education, have not provided adequate guidance to address these

concerns. In our report, we make several recommendations to the

respective Secretaries to work together to provide more effective guidance

to address the concerns raised by state and local implementers. We also

recommend that the Congress consider providing more time for training

providers to adjust to the data collection and reporting requirements.

With WIA, the Congress sought to replace the fragmented employment and

training system that existed under the previous workforce system. Among

other things, WIA sought to streamline program services at one-stop

centers; offer job seekers the ability to make informed choices about

training, and provide private-sector leadership to manage this new

workforce development system.

To streamline services, WIA requires at least 17 programs administered by

four federal agencies to make their core services available through the

one-stops and support the operation of those one-stops. As shown in table

1, these programs represent a range of funding levels, from $2.4 billion for

the Department of Education’s Vocational Rehabilitation Program to $55

million for Labor’s Native American Employment and Training Program.

The programs also serve various target populations. For example, while

many of the programs serve either low-income or otherwise disadvantaged

or unemployed individuals, WIA’s Adult Program can serve any individual

aged 18 or older, as can Labor’s Wagner-Peyser Employment Service

(Employment Service). In contrast, Education’s Vocational Rehabilitation

Program can only serve disabled individuals, and even then, prioritizes

which of those it can serve.

Background
Page 3 GAO-02-94T

These programs also represent a range of service delivery methods. Public

agency personnel (such as state labor or education departments)

administer many of these programs’ services. Several programs are

administered by, among others, nonprofit or community-based

organizations, unions, Indian tribal governments, and community

development corporations. Several of these programs are block grants that

federal agencies provide to states and localities for a variety of efforts,

which may or may not include employment and training services. Although

many of the programs provide for training, such as WIA’s Adult and

Dislocated Worker Programs, some, such as employment and training

programs for veterans, must work with other programs to obtain training

for their participants.

Table 1: WIA’s Federal Programs: Funding Levels, Services Provided, and Target Populations

Required programsa

2001

Appropriation

(dollars in

millions) Services provided and target populations

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 schoolcompletion 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 $1,500bVariety 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 lowincome 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
Page 4 GAO-02-94T

Required programsa

2001

Appropriation

(dollars in

millions) Services provided and target populations

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 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 (Perkins)

$1,100cImprovement of vocational and technical education programs

through curriculum and professional development, purchase of

equipment, services to members of special populations, and other

activities

Health and Human Services (HHS)

Community Services Block Grant $600dA wide array of assistance, including but not limited to

employment or training, to low-income families and their

communities

Housing and Urban Development (HUD)

HUD-administered employment and training eA wide range of employment and training-related services to

residents of public and assisted housing and other low-income

persons

Total $14,162f

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.

a

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 WagnerPeyser Act (Employment Service) to require that the program’s activities be provided as part of the

WIA one-stop system. Title IV amended the Rehabilitation Act of 1973 (Vocational Rehabilitation).

b

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.

c

Postsecondary 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.
Page 5 GAO-02-94T

d

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.

e

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.

f

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

Source: Labor, Education, HHS, and HUD.

WIA did not prescribe how the one-stops should operate, but in guidance

produced in June 2000, Labor identified a range of options for one-stops,

including simple collocation of program staff at the one-stops or electronic

linkages between existing program offices and the one-stops. In this

guidance, however, Labor laid out a vision for one-stop operations that it

called “full integration.” The realization of a fully integrated system would

entail all partner programs operating under one management structure and

accounting system and offering joint delivery of program services from

combined resources. WIA also allowed partners a wide range of methods

to support the one-stop’s operation. For example, partners could pay rent

for the space occupied by program staff or could provide equipment or

shared services, such as providing initial intake services of greeting onestop visitors and collecting general information from them to assess

program eligibility or teaching classes to individuals at the one-stop.

WIA also required that any training provider wishing to provide training

services to any individual receiving training through WIA’s Adult and

Dislocated Worker Programs provide key data—such as (1) completion

rates, (2) job placement rates, and (3) wages at placement for students.

WIA required the collection of these outcome data so that job seekers

receiving training could use them to make more informed choices about

training providers. Unlike prior systems, WIA allowed individuals eligible

for training under the Adult and Dislocated Worker Programs to receive

vouchers—called Individual Training Accounts—which they could use for

the training provider and course offering of their choice, within certain

limitations.

WIA also required these data so that states and localities could assess

training providers’ performance. For example, a state might determine that

only training providers’ courses with an 80-percent completion rate would

be allowed to remain on the training provider list. If a course failed to

meet that level, it would no longer be available to receive WIA-funded

individuals. WIA provided a 1-year initial eligibility period before these

requirements went into effect. Labor’s final regulations allowed states to

extend the initial eligibility period for up to an additional six months under

certain circumstances.
Page 6 GAO-02-94T

Finally, WIA called for the development of workforce investment boards

to oversee WIA implementation at the state and local levels. At the state

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

oversee one-stop operations.2

 According to Labor, there are 54 state

workforce investment boards and approximately 600 local boards.3

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.4

WIA required that private-sector representatives chair the boards and

make up the majority of board members. This was to help ensure that the

private-sector would be able to provide information on the available

employment opportunities and expanding career fields and help develop

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

 2

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.

3

Boards have been established in all 50 states and the District of Columbia, the U.S. Virgin

Islands, Puerto Rico, and Guam.

4

Exceptions are allowed for board membership–for example, an individual seated on the

board can represent more than one entity or institution.
Page 7 GAO-02-94T

WIA’s mandatory partners are making efforts to participate in the onestops as required by the law. However, they are wrestling with questions

about how to accomplish the required participation, as well as move

closer to the vision of full integration, given their clients’ needs, their

programs’ rules, and their financial constraints. Responsible federal

agencies have published guidance in these areas, and Labor has recently

established an interagency workgroup to address these issues. However,

state and local implementers said they continue to lack a clear sense of

how one-stop participation, as well as rules for client eligibility and cost

accounting, is compatible with their clients’ needs.

First, many of the mandatory partners have expressed concerns that

significantly altering existing service delivery methods to participate in the

one-stops might adversely affect the quality of services they provide to

their target populations. For example, staff from Education’s Vocational

Rehabilitation Program, which serves the disabled, were concerned that

one-stops might not adequately provide the special services, equipment, or

personnel (such as staff who know sign language) that their clients need.

As a result, even though Vocational Rehabilitation staff were present in

some form at the nine one-stops we visited, they continued to maintain

existing program offices to ensure that the special needs of their eligible

clients were accommodated. Other partners said that they did not see how

participation in the one-stop would benefit their eligible populations, who

in some cases were already receiving services through other sources. For

example, California education department officials told us that lowincome and disadvantaged populations in California already have full

access to the community college system at low or no cost. According to

these officials, this access decreased partners’ incentive to provide Perkins

or Adult Education and Literacy Program services through the one-stops.

Second, a number of partners have expressed concerns that altering

traditional service delivery methods to participate in the one-stops may

lead to conflicts with their own program’s requirements regarding which

individuals are eligible for the services they offer. For example, at several

of the one-stops we visited, veterans’ staff believed they could not provide

shared services, such as greeting one-stop visitors and collecting general

information from them. They were concerned that doing so might mean

serving individuals who are not veterans, which is not allowed under their

authorizing legislation. We found that at some locations, veterans’ staff

were unwilling to teach orientation or job preparation classes if anyone in

the class was a not a veteran. Yet at other locations, veterans’ staff were

willing to teach classes attended by nonveterans. Labor has published no

guidance to address this confusion. However, Labor officials with whom

we spoke agreed that having veterans’ staff serve nonveterans was a

Participation in the

One-Stop Limited by

Concerns Over

Programmatic and

Financial Constraints
Page 8 GAO-02-94T

violation of the program’s mandate, but believed it was permissible for

veterans’ staff to teach such classes as long as the majority of students

were veterans. Nonetheless, Labor also said that any expenditures

associated with delivery of services to nonveterans would be disallowed.

The concerns that veterans’ staff have about violating program mandates

may explain why veterans staff were collocated at the nine one-stops we

visited, but served only veterans and paid rent as their required support of

the one-stop rather than providing a shared service.

Third, many of WIA’s mandatory partners said participation in the onestops was problematic given financial constraints. For example, Labor and

others have found that, at least in some locations, the Employment Service

operates at the one-stop and also at existing offices outside the one-stops.

We found this to be the case for at least two of the nine one-stops we

visited, largely because the Employment Service could not afford to break

leases on existing facilities. According to Employment Service officials we

spoke to, limited funding also makes it difficult to assign additional

personnel to staff the one-stop or to devote resources to developing

electronic linkages with the one-stop. In the states we visited, partners

told us that limited funding was also a primary reason why, when partners

did provide individuals to help staff the one-stop, they did so on only a

part-time basis. Some of the programs also have caps on 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 on their costs for the one-stops’

operation and staff who support the local workforce investment board.

According to a survey conducted for us by a national association, 61 of the

69 counties that responded stated that this cap limits the ability to serve

both functions, especially given the funding limitations of other programs.

Finally, many of the partners were not sure how to define or account for

allowable activities in the one-stop environment, given existing guidance

from the Office of Management and Budget (OMB) and Labor. For

example, OMB requires that all shared services be properly accounted for

by programs. This means that if a partner dedicated a copy machine to the

one-stop, the copy machine cannot be used for any purpose other than its

program. Any other partner who uses the machine would have to pay or

somehow reimburse that partner. According to a number of partners,

tracking this kind of activity is very difficult to do. Also, partners said the

guidance was not meant to address situations where costs must be

allocated across programs with different or competing missions. For

example, if partners are only willing to staff the one-stop 1 day a month,

they only pay for that percentage of the one-stop costs, leaving other

partners to make up the shortfall. According to partners we interviewed,
Page 9 GAO-02-94T

this has led to partners with a broad client base, or those with greater

connection to the one-stops—such as WIA’s Adult and Dislocated Worker

Programs—paying a greater share of the one-stop operations. Partners

also questioned how to account for personnel who, in the process of

providing support services, may provide services to potentially ineligible

populations.

Although both Education and Labor have provided information to states

and local implementers about how to interpret WIA’s requirements,

according to state and local implementers we interviewed, the guidance

does little to specifically address the concerns about how to integrate

services while not adversely affecting target populations or violating

program requirements. Labor has recently established a one-stop

workgroup that seeks to specifically address financial concerns, but as of

yet, has released no findings.

Although training providers are making efforts to participate in the WIA

system, they believe that the new data collection and reporting

requirements it imposed are too burdensome to warrant their participation

in the system, especially given the few individuals sent to training. As a

result, they are reducing the number of course offerings they make

available under WIA–in effect, reducing the training options from which

WIA job seekers have to choose. Labor has established a workgroup in an

effort to address many of the issues that training providers described as

burdensome, but this workgroup may not include all the key players and,

to date, has not provided any guidance.

Training providers and other state and local implementers we interviewed

identified the number of students for whom they potentially must collect

data as one factor that makes WIA’s data collection and reporting

burdensome. WIA requires that training providers report program

completion, placement, and wage data, among other data elements, for all

students in a class, regardless of whether they were WIA-funded. This

means that even if only one student in a class of 100 was WIA-funded, the

training provider would be required to provide data on all 100 students.

The methods available to collect the required data are a second factor that

makes data collection burdensome, according to training providers we

interviewed. WIA did not specify how training providers would collect or

report the required information, and in many locations, the methods being

used strain training providers’ resources or raise privacy concerns. For

example, in two of the states we visited, training providers planned to

track students after they graduated and call them to obtain the necessary

Training Options May

Become Limited as

Training Providers

Drop Out of the

System
Page 10 GAO-02-94T

data, but said they did not have the staff necessary to call hundreds of

students. In other states, training providers were considering meeting data

collection requirements by providing students’ social security numbers

(SSNs) to state agencies (such as departments of labor) responsible for

WIA implementation. These agencies would then match the SSNs against

unemployment insurance wage records (which are reported by SSNs).

Although this method was more efficient, training providers worried that it

might violate the privacy rights of students. They said that the Family

Educational Rights and Privacy Act (FERPA) generally prohibits an

educational institution from disclosing personally identifiable student

information (such as an SSN) without the student’s consent. There are a

number of exceptions where providing such data is allowed–for example,

to the Department of Education. Although Labor and Education issued a

January 2001 memo noting that certain exceptions could allow educational

institutions to disclose this information without a student’s prior consent,

many of the training providers we interviewed did not see the memo as

sufficient assurance that such a practice could be carried out without

violating FERPA.

Training providers identified differences between WIA’s data collection

and reporting requirements and those of other programs as a third factor

that makes data collection burdensome. Training providers noted that

these differences mean that data have to be collected twice for similar

outcomes. For example, in Texas, the state defined completion for most

WIA-eligible training programs as receipt of a 9-hour credit certificate. For

Education’s Perkins program, however, the state defined program

completion as receipt of a 15-hour credit certificate. While the outcomes

being measured are similar, the differences require two separate

measures.

According to training providers, the fourth factor that makes the training

requirements burdensome is their focus on process rather than the

outcomes training providers achieve. Training providers believed that at

least some of the required data focused on process rather than outcomes,

and as a result, did not accurately reflect their performance. For example,

WIA requires training providers to track the number of students who

complete a program, but several community colleges told us that this

measure fails to reflect how a community college serves individuals.

According to training providers, often students acquire the skills they need

and/or find jobs before a program is over, and so they leave the program

without completing it. In such cases, a state or locality could penalize a

training provider for not achieving a particular level of program

completion, even though the training provider achieved one of WIA’s

goals helping people find employment.
Page 11 GAO-02-94T

Training providers we spoke with said that the few WIA clients that have

been sent to training since WIA was passed made the data collection and

reporting requirements even more onerous. For example, each of the nine

one-stops we visited had sent training providers, on average, only six

individuals for training since July 2000. According to training providers we

interviewed, this is significantly fewer than they had received under the

workforce system predating WIA. A variety of reasons may explain the low

number of job seekers sent to training. First, many state and local

implementers we interviewed, as well as federal agency officials, believe

that WIA calls for a work-first approach, which encourages job seekers to

obtain employment without training. Second, the strong economy over the

past several years has encouraged employers to be more interested in

getting workers on board quickly than waiting for them to complete

training. Third, states may be discouraging one-stops from placing hard-toemploy individuals into training, fearing that this may affect their

achievement of WIA performance measures that focus on employment.

Finally, because the Adult and Dislocated Worker Programs have had to

consistently bear a greater share of the costs associated with establishing

and maintaining the one-stops, they have had little money left for training,

according to local implementers.

WIA data collection coupled with the few job seekers sent to training has,

to date, resulted in training providers reducing the number of programs

they offer. We found that the number of providers and course offerings on

available course listings 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.

Labor has established an adult and dislocated worker workgroup in an

effort 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 although it invited training provider

representatives to a meeting, the formal membership does not include

these representatives. This may limit the value of any solutions developed

and the willingness of training providers to adopt those solutions.
Page 12 GAO-02-94T

Private-sector representatives who are supposed to be leading workforce

investment boards have expressed frustrations that the manner in which

boards are operated may be diluting their input and, ultimately,

discouraging their participation. Private-sector representatives we spoke

with believed that state and local boards are too large to efficiently

address key workforce issues and that staff and committees intended to

help deal with the size of the boards may not reflect private-sector views.

Labor has issued little guidance on this matter, but has recently formed a

workgroup to examine these concerns.

Private-sector representatives and others believed that the large number of

board members—exceeding 40 in most places, according to a national

board association—makes it difficult to set up meetings and run them

efficiently. For example, officials in one local workforce investment area

noted that as the number of board members increased, so did their

dispersion throughout the state. These officials said that the dispersion of

members throughout the state made it difficult to find locations for the

board meetings that were convenient to all members. If members were

unable to attend the meetings, boards might not be able to achieve a

quorum (usually a simple majority) and, therefore might be unable to vote

on courses of action. Ensuring that the numerous board members all have

the same information before a meeting and keeping members apprised of

the board’s activities also becomes more difficult as the size of a board

increases. Addressing issues, reconciling disagreements, and reaching

agreements would also become more challenging because having a large

number of members results in more opinions. These difficulties have been

especially prevalent this past year as boards have had to perform many

administrative tasks to set up the WIA system, such as developing strategic

plans or certifying one-stops.

Private-sector representatives also believed that the staff put in place to

serve the boards may not share employer’s perspectives regarding the

system. Every state and local board has assigned staff that are responsible

for setting up meetings, developing the agenda, and ensuring that boards

stay current with compliance issues.5

 However, according to private-sector

representatives and other implementers, the public-sector agency

responsible for carrying out many of WIA’s mandatory programs, usually a

labor or human services agency, employs these staff. Private-sector and

other representatives expressed concerns regarding how staff are to carry

 5

In some cases, the size of the staff can be large itself; for example, there are 25 staff

supporting California’s state board.

Current Operations of

Workforce Investment

Boards and Affiliated

Entities May

Discourage PrivateSector Participation
Page 13 GAO-02-94T

out their primary focus of serving the board when they report to

supervisors in their respective agencies.

In addition, private-sector representatives believed that committees

serving under the auspices of the boards may dilute employer’s input into

the system. These committees research particular issues that the board

may ultimately address. WIA is silent on the establishment of the

committees and the form that they should take, but we were told that

private-sector representatives are often underrepresented or not

represented at all on the committees, even though the committees play an

important role in influencing board activities. In the states we visited,

committees generally had less than 50-percent private-sector membership,

and only one committee at the state level had more than 50-percent

private-sector membership.

Labor has recently established a workforce investment board workgroup

to consider these issues, 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, private-sector representatives and other state and

local implementers said they lack information on how to balance the

requirements of the board operations with the needs of the private sector.

Despite the struggles of state and local implementers in these areas, many

of them have found ways to overcome these difficulties. Some examples

follow.

• One-stop partners jointly financed a separate staff person to perform

shared support services, such as initial intake, to allow partners to provide

shared services without violating their program requirements.

• A state board decided to classify expenses associated with running the

one-stop as programmatic rather than administrative as a way to lessen

the impact of a cap on certain spending.

• A state board gave the education community approval to use existing

Perkins’ outcome data for the purposes of WIA data collection and

reporting until the state is able to fully implement other outcome data

measures. This was intended to lessen the burden posed by similar, yet

different, data collection and reporting requirements.

• A community college enrolled WIA-funded training participants in a

“separate” college. This college exists in name only and stands in for the

Local Efforts to

Address Concerns

and Ideas for Action
Page 14 GAO-02-94T

community college where WIA-funded training participants actually take

classes. This was done to avoid collecting data on non-WIA-funded

students.

• Several local areas required that all committees have private-sector

leadership and a private-sector majority and that quorums have a privatesector majority.

State and local implementers we contacted also identified a number of

actions they believed could enhance their ability to implement WIA in

these areas and move closer to the vision of full integration. However,

there was no consensus on which of these ideas had the greatest potential

to address these concerns while preserving the local flexibility key to WIA.

Some of the ideas included providing more specific guidance at the federal

level, while others could require legislative and/or regulatory action. For

example,

• amending the enabling legislation to more explicitly detail the level or type

of one-stop participation partners should achieve;

• leaving partners’ authorizing legislation as is but providing incentives for

participation (for example, not requiring partners to financially support

the one-stops or expanding the scope of activities allowable at the onestop);

• giving training providers additional funds to offset the cost of data

collection; and

• appointing board staff either from private-sector-oriented entities (for

example, economic development agencies) or nonprofit entities that

reflect employers’ outlook.6

The workforce development system envisioned under WIA represents a

sea change from prior systems, not only because of WIA’s new

requirements and the additional partners involved, but also because of the

flexibility allowed to state and local implementers to determine how to

implement these new requirements. Given this, it is understandable that

skepticism and resistance to change continue to affect the speed and

caliber of implementation efforts.

 6

For a more complete listing of ideas provided by state and local implementers, see

GAO-02-72, Oct.4, 2001.

Conclusions and

Recommendations for

Executive Action
Page 15 GAO-02-94T

State and local implementers agreed that the issues we highlighted need to

be addressed to enhance WIA implementation, but there was no consensus

on which efforts would best achieve WIA’s goals while maintaining state

and local flexibility. As a result, more specific guidance to address these

concerns, in addition to time, may be what is required. Better guidance can

help ensure that the flexibility provided to states and local areas under

WIA fosters innovation rather than confusion, unnecessary burden,

diminished customer choice, and a decline in private-sector participation.

Specific guidance may also help states and localities make progress

toward a seamless system of service delivery.

In line with this thinking, in our report, we make several recommendations

to the respective Secretaries to work together to provide more effective

guidance to address the concerns raised by state and local implementers.

In all of these areas we believe guidance can be detailed without being

prescriptive, since the goal would be to focus on the benefits and

incentives of participation rather than the requirements.

Specifically, the report being issued today recommends that the

Secretaries of Labor, Education, HHS, and HUD, jointly explore the

programmatic and financial concerns raised by state and local

implementers that affect their ability to participate and fully integrate

services. We also recommend that Education and Labor disseminate bestpractice information on the cost-effective methods the states and localities

are using to comply with WIA’s data collection and reporting

requirements, as well as address confusion concerning dual reporting

requirements and FERPA privacy concerns. In addition, because training

providers will also need time to resolve data collection issues before they

are judged on their performance, we recommend that Congress consider

giving training providers additional time to receive WIA-funded students

before they have to meet all the new WIA requirements. Finally, we

recommend that Labor disseminate information on successful practices by

states and localities to help ensure that boards gain the most from privatesector participation.

Mr. Chairman, this concludes my prepared statement. I will be happy to

answer any questions that you or other members of the Committee may

have.
Page 16 GAO-02-94T

For future questions regarding this testimony, I can be contacted at (202)

512-7215. Key contributors to this testimony were Lori Rectanus, Monika

Gomez, and Natalya Bolshun.

GAO Contact and

Staff

Acknowledgments

(130082)