JOB CORPS

Assessment of 

Internal Guidance 

Could Improve 

Communications with 

Contractors

Report to Congressional Requesters

January 2015

GAO-15-93

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-15-93, a report to 

congressional requesters

January 2015

JOB CORPS

Assessment of Internal Guidance Could Improve 

Communications with Contractors 

Why GAO Did This Study

Job Corps—funded at about $1.6 

billion in program year 2013—is the 

nation's largest residential, 

educational, and career training 

program for economically 

disadvantaged youth. In program years 

2011 and 2012, ETA projected that Job 

Corps’ costs would exceed its 

appropriations, and took action to 

resolve these gaps. In May 2013, 

DOL’s inspector general reported

internal control weaknesses and 

recommended improvements; 

however, questions remained about

the funding transfers and spending 

cuts ETA implemented. GAO was 

asked to review these measures.

This report examines (1) how ETA 

selected the measures it implemented

to address Job Corps’ financial 

challenges, (2) the timeliness and 

completeness of ETA’s

communications to contractors, 

including center staff, and Congress,

(3) how spending cuts affected

applicants and students, and (4) steps 

ETA has taken since to improve Job 

Corps’ financial management. GAO 

visited 8 of the 125 centers—selected 

based on their geographic diversity

and other factors—and interviewed 

staff and students; reviewed ETA’s 

internal notices to contractors and

DOL’s communications with Congress, 

and assessed ETA’s guidance for

internal notices using federal internal 

control standards; and analyzed ETA’s

enrollment data from program years 

2010 through 2013.

What GAO Recommends

GAO recommends that ETA review the 

sufficiency of its guidance for internal 

notices about program changes. ETA 

concurred with this recommendation.

What GAO Found

In selecting funding transfers and spending cuts to address Job Corps’ projected 

funding gaps in program years 2011 and 2012, the Department of Labor’s (DOL) 

Employment and Training Administration (ETA) considered various factors, 

including the potential effects on students and recommendations from 

stakeholders. After considering these factors, ETA used $38 million in funding 

transfers and implemented $75 million in spending cuts, which included several 

temporary suspensions of new enrollments, temporary cuts to training, and

permanent cuts to student benefits and services, and administrative costs. 

Job Corps’ contractors, including center staff, said ETA’s internal notices to 

implement spending cuts in program years 2011 and 2012 were sometimes not 

timely and complete. For example, in some cases, ETA issued a notice on a 

Friday that required a response by Monday or Tuesday. Staff at three of the eight

centers GAO visited said they or other staff worked over the weekend to prepare 

responses, such as revised spending plans. GAO’s review of ETA’s internal 

notices found that 11 of 19 gave contractors 3 business days or fewer to 

implement a program change, respond, or both. Contractors also said ETA’s 

notices sometimes lacked information they needed to effectively implement 

changes and communicate them to students and community partners, such as 

how long cuts would last. ETA officials said their communications were 

appropriate, given their oversight role and time constraints. Although ETA has 

guidance on the content of internal notices to contractors, it does not specify time 

frames for providing notice of program changes. Given challenges contractors 

identified, ETA’s guidance may not ensure that, in accordance with federal 

internal control standards, contractors receive sufficiently detailed information at 

the appropriate time to effectively communicate and implement changes. With 

regard to Congress, while DOL met requirements for notification of funding 

transfers, some members sent letters to DOL expressing dissatisfaction with the 

timing and completeness of DOL’s communications. The Workforce Innovation 

and Opportunity Act, subsequently enacted in 2014, requires DOL to provide 

more frequent and detailed reports to Congress on Job Corps’ financial position.

ETA’s spending cuts reduced the number of applicants and new enrollees, 

limited some training opportunities for students, and had other adverse effects. 

According to ETA data, Job Corps applicants decreased by about a third, from 

79,567 in program year 2010 to 53,725 in program year 2012, and new student 

enrollments decreased by about a quarter, from 56,171 to 40,792 over the same 

time period. The final enrollment suspension, along with other factors, such as a

reduction in outreach and admissions staff, also had subsequent effects on 

student recruitment. For example, after the enrollment suspension ended, it took 

Job Corps 8 months to reach over 90 percent of its planned enrollment goal.

In response to recommendations by DOL’s inspector general for internal control 

improvements, ETA has implemented several initiatives to improve the tracking 

and reporting of Job Corps’ financial information. ETA also has initiatives 

underway to help ensure that Job Corps’ costs and appropriations are aligned 

and to assess the financial implications associated with program changes. While 

these are all important steps, it is too early to determine the extent to which they 

will help ETA improve its financial management of the program in the future.

View GAO-15-93. For more information, 

contact Andrew Sherrill at (202) 512-7215 or 

sherrilla@gao.gov.
Page i GAO-15-93 Job Corps

Letter 1

Background 3

ETA Considered Overarching Goals and Various Factors in 

Selecting Measures to Address Job Corps’ Financial 

Challenges 8

Job Corps Contractors and Some Members of Congress Said 

That Communications Were Sometimes Not Timely and 

Complete 14

ETA’s Spending Cuts Adversely Affected Applicants and 

Students, and Had Other Wide-Ranging Effects 19

ETA Has Several Initiatives Underway to Improve Financial 

Management 26

Conclusions 27

Recommendation for Executive Action 28

Agency Comments and Our Evaluation 28

Appendix I Objectives, Scope, and Methodology 30

Appendix II Job Corps Spending Cuts by Program Year 33

Appendix III Stakeholder Recommendations Not Implemented by ETA 35

Appendix IV Comments from the Department of Labor 36

Appendix V GAO Contact and Staff Acknowledgments 37

Tables

Table 1: Job Corps Appropriations, by Account, Made in Fiscal 

Years 2011 through 2013 7

Table 2: Transfers and Spending Cuts Used to Address Job

Corps’ Financial Challenges, Program Years 2011 and 

2012 9

Table 3: Selected Job Corps Center and Regional Site Visits 31

Contents
Page ii GAO-15-93 Job Corps

Table 4: Job Corps Spending Cuts Implemented in Program Years 

2011 and 2012 33

Figures

Figure 1: Job Corps Center Locations 4

Figure 2: Job Corps’ Applicants, New Enrollees, and Average 

Enrollment Levels in Program Years 2010 through 2012 20

Figure 3: Job Corps’ Planned and Actual Enrollment in Program 

Years 2012 and 2013 22

Figure 4: Number of Job Corps Students Completing Additional 

Training in Program Years 2010 through 2013 24

Abbreviations

CRA Construction, Rehabilitation, and Acquisition

ETA Employment and Training Administration

DOL Department of Labor

USDA U.S. Department of Agriculture

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Page 1 GAO-15-93 Job Corps

441 G St. N.W.

Washington, DC 20548

January 22, 2015

The Honorable Patty Murray

United States Senate

The Honorable Robert P. Casey Jr.

United States Senate

The Honorable Jack Reed

United States Senate

Many low-income youth face multiple barriers to obtaining the skills they 

need to find and keep a job, go to college, or enter military service. The 

Job Corps program, which is administered by the Department of Labor’s 

(DOL) Employment and Training Administration (ETA), is the nation’s 

largest residential, educational, and career technical training program for 

economically disadvantaged youth between the ages of 16 and 24.1 In 

program year 2013, Job Corps received about $1.6 billion in funding and 

served on average approximately 32,000 youth through 125 centers in 48 

states, the District of Columbia, and Puerto Rico.2

In program years 2011 and 2012, ETA projected that Job Corps’ costs 

would exceed its appropriations by approximately $39 million and $62 

million, respectively, and took action to resolve the projected funding 

gaps.3 In May 2013, DOL’s inspector general reported that several 

factors, including budgetary and programmatic weaknesses, contributed 

to Job Corps’ financial challenges and made several recommendations to 

 1 Job Corps was originally established by the Economic Opportunity Act of 1964, and was 

most recently reauthorized by Title I, Subtitle C of the Workforce Innovation and 

Opportunity Act, Pub. L. No. 113-128, 128 Stat. 1425 (2014). Previously, Job Corps was 

authorized by Title I, Subtitle C of the Workforce Investment Act of 1998.

2 Congress appropriates funding for the Job Corps program annually in DOL’s fiscal year 

appropriations acts. The period of availability for most of these funds is the program year,

which runs from July 1 of a given year to June 30 of the following year. For example, 

program year 2013 started on July 1, 2013, and ended on June 30, 2014.

3 For this report, we are using the phrase “projected funding gaps” to refer to the financial 

challenges Job Corps experienced in program years 2011 and 2012.
Page 2 GAO-15-93 Job Corps

improve internal controls.4 You asked us to review the specific measures 

ETA implemented to address Job Corps’ financial challenges, as well as 

the effect they had on applicants and students. Specifically, we examined 

(1) how ETA selected the measures it implemented to address Job Corps’

financial challenges in program years 2011 and 2012, (2) the timeliness 

and completeness of ETA’s communications to Job Corps contractors, 

including center staff, and Congress, (3) the effects ETA’s spending cuts 

had on applicants and students, and (4) the steps ETA has taken since to 

improve Job Corps’ financial management.

To address our objectives, we reviewed agency documentation and 

summary-level financial data, and interviewed ETA and Job Corps 

officials to identify the measures ETA implemented to address Job Corps’

financial challenges in program years 2011 and 2012. We also reviewed 

the internal notices about program changes that ETA sent to Job Corps 

center contractors’ corporate office and center staff, and outreach and 

admissions contractors, and DOL’s communications with Congress. In 

addition, we interviewed officials and staff from Job Corps’ six regional 

offices, and visited eight Job Corps centers in five states: California, 

Illinois, Kentucky, Maryland, and Oregon. These centers were selected to 

reflect a mix of center operators, geographic diversity, and variations in 

center size. During our visits, we interviewed select Job Corps center 

contractors’ corporate office and center staff, outreach and admissions 

contractors, and students. In addition, we reviewed Job Corps’ applicant, 

enrollment, and student outcome data from program years 2010 through 

2013. Based on our interviews with agency officials and review of relevant 

documentation, we determined that these data, as well as ETA’s 

summary-level financial data, were sufficiently reliable for our purposes. 

To identify the steps ETA has taken since to improve Job Corps’ financial 

management, we interviewed ETA officials, contractors, and DOL’s 

inspector general. We also reviewed standards for internal control, and 

relevant federal laws and regulations. Appendix I provides a more 

detailed discussion of our scope and methodology.

We conducted this performance audit from September 2013 to January 

2015 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

 4 DOL Office of Inspector General, The U.S. Department of Labor’s Employment and 

Training Administration Needs to Strengthen Controls Over Job Corps Funds, Report No. 

22-13-015-03-370 (May 31, 2013). 
Page 3 GAO-15-93 Job Corps

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

ETA administers Job Corps’ 125 centers through its national Office of Job 

Corps under the leadership of a National Director and a field network of 

six regional offices located in Atlanta, Boston, Chicago, Dallas, 

Philadelphia, and San Francisco (see fig. 1).5 Job Corps is operated 

primarily through contracts,6 which according to ETA officials, is unique 

among ETA’s employment and training programs; other such programs 

are generally operated through grants to states. Ninety-seven of Job 

Corps’ 125 centers are operated under contracts with large and small 

businesses, nonprofit organizations, and Native American tribes. The 

remaining 28 centers (called Civilian Conservation Centers) are operated 

by the U.S. Department of Agriculture’s (USDA) Forest Service through 

an interagency agreement with DOL. Both center contractors and the 

USDA Forest Service employ Job Corps center staff who provide 

program services to students. In addition, ETA contracts with 15 

organizations to provide other supports for the program, including student 

outreach and career assistance.7

 5 ETA stated in its 2015 Congressional Budget Justification that it plans to open two new 

centers in New Hampshire and Wyoming—the only two states currently without a Job 

Corps center. DOL, FY 2015 Congressional Budget Justification, Employment and 

Training Administration.

6 Job Corps uses cost-reimbursement contracts, which means that ETA pays the 

contractor’s allowable costs incurred, to the extent prescribed by the contract.

7 Outreach and admissions contractors are responsible for recruiting applicants and 

explaining to them what is expected of them once they enroll in Job Corps. Career 

transition services contractors help graduates transition from the program to employment. 

Background

Job Corps’ Structure and 

Operations
Page 4 GAO-15-93 Job Corps

Figure 1: Job Corps Center Locations
Page 5 GAO-15-93 Job Corps

To be eligible for Job Corps, youth must be between the ages of 16 and 

24 at the time of enrollment;8 meet low-income criteria;9 and have an 

additional barrier to education and employment, such as being homeless, 

a school dropout, or in foster care. Once enrolled, youth are assigned to a 

specific Job Corps center, usually one that is located nearest their home 

and offers a job training program of interest. The vast majority of students 

live at Job Corps centers in a residential setting, while the remaining 

students commute on a daily basis from their homes to their respective 

centers. This residential structure is unique among federal youth 

programs and enables Job Corps to provide a comprehensive array of 

services, including housing, meals, clothing, financial assistance,10

medical and dental care, and recreational activities, as well as academic 

instruction and job training. Because Job Corps is self-paced, the length 

of time students participate in the program varies. On average, students 

participate in the program for 9.6 months; however, the maximum 

enrollment period is generally 2 years.

The Office of Job Corps is responsible for overseeing program operations 

and monitoring Job Corps costs. Two other offices work in conjunction 

with the Office of Job Corps and ETA’s six regional offices to monitor and 

manage Job Corps program costs:

• ETA’s Office of Financial Administration, which was created in August 

2012 to strengthen internal controls and separate Job Corps’ budget 

and accounting roles and responsibilities from the Office of Job Corps; 

and

• ETA’s Office of Contracts Management, which was created in 2010 to 

centralize ETA’s acquisition and procurement functions, including 

soliciting, evaluating, and awarding Job Corps contracts.

 8 No more than 20 percent of participants may be ages 22 through 24 on the date of 

enrollment. The age limit may be waived by DOL, in accordance with DOL regulations, for 

individuals with a disability.

9 The criteria for being considered low income include receiving public assistance or 

having a total family income that does not exceed the higher of the poverty level or 70 

percent of the lower living standard income level, which is adjusted annually by the 

Secretary of Labor to account for regional, metropolitan, urban, and rural differences and 

for family size.

10 Job Corps provides students with a biweekly stipend and transition pay upon 

graduation.

Job Corps’ Eligibility 

Criteria and Program 

Services

Job Corps Financial 

Management
Page 6 GAO-15-93 Job Corps

ETA also consults with and reports financial information on Job Corps to 

DOL’s Office of the Chief Financial Officer, which is responsible for 

department-wide financial management operations and reporting. In 

addition, ETA closely works with DOL’s Office of the Assistant Secretary 

for Administration and Management on budget and contracting issues.

ETA manages Job Corps funds across three different time periods: the 

fiscal year (October 1 – September 30), program year (July 1 – June 30), 

and contract year, which varies by contract.

• Fiscal year. In DOL’s annual appropriations acts, Congress provides 

funding for three Job Corps accounts—Administration; Construction, 

Rehabilitation, and Acquisition (CRA); and Operations.11

Administration funds are made available on a fiscal year basis, while 

Operations and CRA12 funds are made available on a program year 

basis.13 Table 1 shows the appropriations for each of Job Corps’

accounts made in fiscal years 2011 through 2013.

• Program year. Job Corps operates on a program year basis, which 

begins on July 1 of the fiscal year for which the appropriation is made, 

and ends on June 30 of the following year. According to ETA officials, 

operating on a program year gives Job Corps the flexibility to respond 

to budget uncertainty. For example, if Congress passes a continuing 

 11 Job Corps’ Administration account is used for salaries, travel, and training for national 

and regional staff. The CRA account is used to repair, rehabilitate, and modernize current 

facilities; construct new buildings when further repair is not cost effective; and, as directed 

by Congress, acquire sites and construct new centers. The Operations account provides 

funding for Job Corps centers, including student training, stipends, and center staff 

salaries. 

12 CRA funds are typically made available for multiple program years; that is, beginning on 

July 1 of the first program year and ending on June 30 of the third program year. See, for 

example, Departments of Labor, Health and Human Services and Education, and Related 

Agencies Appropriations Act, 2012, div. F , tit. I , Pub. L. No. 112-74, 125 Stat. 786, 1053 

(2011).

13 ETA must comply with various fiscal laws pertaining to the control and use of public 

funds. Specifically, the Antideficiency Act prohibits the making or authorizing of an 

expenditure or obligation exceeding an amount available in an appropriation or fund. 31 

U.S.C §1341(a)(1)(A). Accordingly, for Administration funds, ETA must ensure that it does 

not obligate or expend more than the amount made available for a fiscal year. For 

Operations and CRA funds, ETA must ensure that it does not obligate or expend more 

than the amount made available for a program year or years.
Page 7 GAO-15-93 Job Corps

resolution,14 Job Corps would be minimally affected, if at all, because 

its program year funding would cover its ongoing operations until June 

30. However, ETA officials noted that if a continuing resolution lasts 

beyond June 30, it would likely affect Job Corps’ operations.

• Contract year. ETA awards contracts—and contractors manage their 

budgets—on a contract year basis, which may begin and end at 

different times based on the terms of the contract.15

Table 1: Job Corps Appropriations, by Account, Made in Fiscal Years 2011 through 

2013

(Dollars in millions)

Fiscal year Administrationa

Construction, 

Rehabilitation, 

and Acquisitionb Operationsb Totalc

2011 $29.1 $104.8 $1, 570.9 $1,704.8

2012 $29.1 $104.8 $1,569.1 $1,702.9

2013 $27.6 $99.3 $1,487.0 $1,613.9

Source: Employment and Training Administration (ETA) budget information. │GAO-15-93

a

These funds are available on a fiscal year basis, October 1 to September 30.

b

These funds are available on a program year basis, July 1 to June 30.

c

Totals may not add due to rounding.

In program years 2011 and 2012, ETA officials projected that Job Corps’

Operations account would not have sufficient funds to cover program 

costs.16 In May 2013, DOL’s inspector general reported that several 

factors contributed to Job Corps’ financial challenges. These factors 

included a combination of (1) untimely communication about projected 

costs that exceeded appropriations; (2) initial planning for costs that did 

not account for increased expenditures for three new centers; (3) 

 14 A continuing resolution is an appropriations act that provides budget authority for 

federal agencies, specific activities, or both to continue in operations when Congress and 

the President have not completed action on the regular appropriation acts by the 

beginning of the fiscal year.

15 According to ETA officials, they have intentionally not aligned contract years with 

program years to avoid concentrating the workload associated with contract procurement 

in a short period of time. 

16 ETA implemented several measures to resolve Job Corps’ projected funding gaps by 

the end of both program years.

Job Corps’ Financial 

Challenges in Program 

Years 2011 and 2012
Page 8 GAO-15-93 Job Corps

inaccurate accounting for projected obligations; and (4) a lack of 

consistent monitoring of costs throughout the program year.17

In response to these findings, DOL’s inspector general recommended that 

ETA improve Job Corps’ internal controls in four areas: (1) policies, 

procedures, and communication of information; (2) budget execution; (3) 

data supporting spending projections and monitoring; and (4) monitoring 

of projected and actual costs. ETA officials told us that they have 

addressed all of the recommendations; however, as of January 2015, 

DOL’s inspector general had not closed most of them because it had not 

received sufficient documentation of ETA’s actions. ETA officials said that 

they plan to provide the additional documentation to the DOL inspector 

general, and are aiming to have all the recommendations closed in 2015.

ETA addressed Job Corps’ financial challenges in program years 2011 

and 2012 through a combination of funding transfers and spending cuts. 

In program year 2011, ETA primarily used transferred funds to resolve 

Job Corps’ projected funding gap, whereas in program year 2012, ETA 

relied more heavily on spending cuts. Over both program years, ETA 

used $38.4 million in funding transfers and implemented $75.3 million in 

spending cuts (see table 2). Most of these spending cuts—$60.3 million—

were made through modifications to individual Job Corps center contracts 

and reductions to the USDA Forest Service budget for operating its Job 

Corps centers; the remaining cuts were implemented by the Office of Job 

Corps across all centers and at the national level.

 17 DOL Office of Inspector General, Report No. 22-13-015-03-370.

ETA Considered 

Overarching Goals 

and Various Factors 

in Selecting 

Measures to Address 

Job Corps’ Financial 

Challenges

ETA Used Funding 

Transfers and Spending 

Cuts to Address Job 

Corps’ Financial 

Challenges in Program 

Years 2011 and 2012
Page 9 GAO-15-93 Job Corps

Table 2: Transfers and Spending Cuts Used to Address Job Corps’ Financial Challenges, Program Years 2011 and 2012

(Dollars in millions)

Program year Projected funding 

gap 

Amount 

transferreda Amount of spending cuts

Total amount of 

transfers and cutsb Unexpended funds at end of yearc

2011 $38.8 $28.4d $17.9 $46.3 $8.0

2012 $61.5 $10.0e $57.4 $67.4 $40.0

Total $100.3 $38.4 $75.3 $113.7 $48.0

Sources: Employment and Training Administration (ETA) officials and documentation. │GAO-15-93

a The total transfer authority available for the Job Corps program was $31.6 million in program year 

2011 and $45.7 million in program year 2012, for a total transfer authority of $77.3 million over both 

program years.

b The total amount of transfers and cuts was calculated by adding the amount transferred and the 

amount of spending cuts.

c This represents operations funds that ETA had obligated to contracts but contractors had not spent 

at the end of the program year. An obligation is a definite commitment that creates a legal liability of 

the federal government for the payment of goods and services. ETA reimburses contractors after they 

submit—and ETA approves—vouchers for their allowable expenses. In program years 2011 and 

2012, contractors’ expenses were less than the amount that was obligated to their contracts, so Job 

Corps had unexpended funds at the end of the program year.

d The funds transferred to Job Corps’ Operations account consisted of $26.2 million from Job Corps’

Construction, Rehabilitation, and Acquisition account and $2.2 million from the Dislocated Worker 

National Reserve account in ETA’s Training and Employment Services appropriation.

e The funds transferred to Job Corps’ Operations account came from the Dislocated Worker National 

Reserve Pilots and Demonstration account in ETA’s Training and Employment Services 

appropriation.

Over both program years, ETA’s spending cuts included:18

• Three temporary enrollment suspensions. ETA suspended 

enrollment of new students in June 2012, from late November to 

December 2012, and from late January to late April 2013.19

• Temporary cuts to training. ETA prohibited students from enrolling 

in advanced training or the college program from January to April 

2013.20

 18 Because individual cuts were rolled up into one overall contract modification amount for 

each center, ETA officials said they were unable to provide us with the actual dollar 

savings amount associated with individual spending cuts. For a complete list of spending 

cuts by program year, see appendix II.

19 The 2013 enrollment suspension for Job Corps centers operated by the USDA Forest 

Service lasted until June. ETA officials said this was because they were still negotiating 

USDA’s program year 2013 budget, and because USDA was delayed in submitting a 

center-by-center plan for increasing enrollment after the suspension was lifted.
Page 10 GAO-15-93 Job Corps

• Temporary reductions to maximum center enrollment levels. ETA 

reduced maximum enrollment levels by 22 percent, on average, 

across all centers. This eliminated unused slots but did not affect 

students who were already enrolled.

• Permanent cuts to student benefits and services. ETA reduced 

student stipends and transition pay that students receive upon 

graduation.21 ETA also increased the student-teacher ratio for 

academic classes and reduced health services and recreational 

activities.

• Permanent cuts to administrative costs. ETA reduced national 

contracts for academic support, career technical support, and the Job 

Corps Data Center. ETA also reduced national advertising as well as 

training and travel for center staff.

After using transferred funds and implementing spending cuts, ETA 

reported that Job Corps ended program years 2011 and 2012 with $8 

million and $40 million in obligated but unexpended operations funds, 

respectively.22 For example, ETA indicated that in program year 2012, it 

did not use these funds to make payments under the contracts because 

contractors’ costs were lower than expected.23 Specifically, ETA officials 

said that slower than anticipated enrollment after the final enrollment 

suspension was lifted resulted in lower than expected costs.24 ETA 

officials also noted that if Job Corps had been able to increase enrollment 

more quickly, the amount of obligated but unexpended funds would have 

been significantly less. Job Corps ended program year 2013 with $11 

 20 Advanced training offers students the opportunity to further develop their skills after 

they complete a basic training program. The college program—also known as advanced 

career training—offers students the opportunity to pursue an associate’s degree at an 

accredited institution of higher education while living at a Job Corps center.

21 These reductions to stipends and transition pay affected students who enrolled after 

November 1, 2012.

22 An obligation is a definite commitment, such as an ETA contract for the operation of a 

Job Corps center, that creates a legal liability of the federal government for the payment of 

goods and services.

23 ETA reimburses contractors after they submit—and ETA approves—vouchers for their 

allowable expenses. 

24 ETA officials explained that, after the suspension was lifted, they obligated funds for 

Job Corps center contracts based on contractors’ estimates of their costs for the 

remainder of the program year. However, these estimates were based on expectations 

that enrollment would increase more quickly than it did before the end of the program 

year. 
Page 11 GAO-15-93 Job Corps

million in obligated but unexpended funds, which ETA officials described 

as a typical amount of “carry-over funds.”

In a February 2014 response to a congressional inquiry and in its fiscal 

year 2015 Congressional Budget Justification, ETA stated that the $40 

million in obligated but unexpended program year 2012 operations funds 

were to be “offset” from the contractors’ remaining program year 2013 

allocations. This would allow program year 2013 funds to be used for a 

variety of purposes.25 In addition, according to ETA officials, the agency 

used funds that had been obligated for Job Corps contracts but remained 

unexpended at the end of program years 2011 and 2013 for Job Corps 

operations in program years 2012 and 2014, respectively, as specified in 

individual contracts. With respect to all three years—program years 2011, 

2012, and 2013—the basis and extent to which ETA used funds made 

available for one program year for a subsequent program year, and the 

mechanisms by which it did so, are unclear but beyond the scope of this 

review.26

 25 ETA said it would use the funds to modernize equipment and technology, revise the 

program’s Policy and Requirements Handbook, and acquire expert assistance to assist in 

responding to a recommendation from the DOL inspector general’s May 2013 financial 

audit. In addition, ETA stated that the program year 2013 funds would be used to increase 

enrollment to the level supported by the fiscal year 2014 enacted appropriation and to 

close out contracts and pay all liabilities owed to contractors.

26 The agency’s description of its actions with respect to funds made available for program 

years 2011, 2012, and 2013 in the documents cited and related interviews raise questions 

as to whether those actions were consistent with a federal statute concerning the 

availability of fixed period appropriations, such as the 1-year appropriations for Job Corps 

operations. Section 1502(a) of title 31, United States Code, provides that fixed period 

appropriations are only available for genuine or bona fide needs arising during the period 

of availability for which they are made. Accordingly, agencies may not obligate 

appropriations available for 1 year for the needs of a subsequent year, unless a statutory 

exception applies. Whether ETA’s actions were consistent with section 1502(a) or a 

statutory exception depends on the nature of ETA’s contracts with Job Corps centers, 

including the time period covered by the contracts and the services to be provided, among 

other things. Given the scope of our work, we are referring this matter to DOL’s inspector 

general. Due to GAO’s responsibilities in this area, we will remain available to provide the 

inspector general with technical assistance as appropriate.
Page 12 GAO-15-93 Job Corps

ETA used different overarching goals to guide its decision-making 

process for selecting measures to address Job Corps’ financial 

challenges in program years 2011 and 2012. ETA officials said that in 

program year 2011, their overall goal was to act quickly to end the 

program year within budget because they had only 2 months to resolve 

the projected funding gap before the program year ended. Officials said 

that in program year 2012, their overall goals were to: (1) align Job Corps’

operating expenses with its appropriation, and (2) implement sufficient 

spending cuts to avoid making additional cuts under sequestration in the 

following program year.27

In deciding the extent to which it would use funding transfers to address 

Job Corps’ financial challenges in program years 2011 and 2012, ETA 

considered three factors: (1) the time frame it had in which to act, (2) the 

long-term effect on Job Corps’ financial position, and (3) the effect on Job 

Corps accounts or other programs from which funds would be transferred. 

For example, in program year 2011, ETA officials said they used most of 

the amount available for transfer because there was little time remaining 

in the program year to implement spending cuts and negotiate contract 

modifications. However, in program year 2012, ETA officials said they 

used transferred funds to a lesser extent because they believed that 

making permanent spending cuts would better position the program to 

absorb reductions under sequestration in the following program year. In 

addition, to avoid adversely affecting the safety of Job Corps center 

facilities, ETA officials said they decided not to transfer funds intended for 

facility maintenance and improvements to program operations again in 

program year 2012 after doing so the previous year.

In selecting spending cuts in program years 2011 and 2012, ETA 

considered four factors: (1) the potential effect on students already 

enrolled in Job Corps, (2) potential dollar savings, (3) the implementation 

time frame, and (4) equity across contractors. For example, to minimize 

adverse effects on students already enrolled in Job Corps, ETA officials 

said they reduced biweekly stipends and transition pay—which students 

 27 In March 2013, as required by section 251A of the Balanced Budget and Emergency 

Deficit Control Act of 1985, as amended, 2 U.S.C. § 901a, the President ordered a 

sequestration—an automatic, across-the-board cancellation of budgetary resources—

across federal government accounts. According to ETA officials, in program year 2012, 

they expected that Job Corps’ budget would be reduced by approximately $80 million 

under sequestration in program year 2013.

In Selecting Measures, 

ETA Considered 

Overarching Goals, 

Various Factors Including 

Potential Effects on 

Students, and 

Recommendations from 

Stakeholders
Page 13 GAO-15-93 Job Corps

receive upon graduation—only for new students who entered the program 

on or after November 1, 2012. In addition, ETA officials told us they 

considered reducing student enrollment at seven Job Corps centers in 

program year 2012, but decided against this approach because it would 

not have generated sufficient savings before the end of the program year, 

and because it would have disproportionately affected certain contractors. 

Instead, ETA officials said they decided to implement a third temporary 

enrollment suspension because they believed it would more quickly and 

equitably achieve sufficient savings.

ETA officials said they also considered all 38 recommendations received 

from internal workgroups and other stakeholders, and implemented 21 of 

them. In program year 2011, ETA received recommendations from the 

Job Corps Cost-Effectiveness Workgroup before it projected the funding 

gap.28 In program year 2012, ETA solicited recommendations for 

spending cuts by convening two national workgroups in the areas of 

health care and staffing, and asked contractors and the USDA Forest 

Service to nominate participants.29 In addition to the recommendations 

submitted by these workgroups, ETA also received several unsolicited 

recommendations from the National Job Corps Association and two 

center contractors, which offered alternatives to the third enrollment 

suspension in program year 2012.30 ETA officials told us that they 

implemented 21 of the 38 recommendations submitted by these 

stakeholder groups (appendix II provides a list of spending cuts 

implemented by ETA). ETA officials said they did not implement the 

remaining 17 recommendations for various reasons including potential 

adverse effects on students already enrolled; lack of evidence of savings; 

and, lack of timely savings (appendix III provides a list of 

recommendations not implemented by ETA). For example, officials said 

they decided not to implement a recommendation to conduct a staff 

compensation survey because it would have increased costs.

 28 This workgroup, which was created by ETA and the National Job Corps Association, 

submitted its recommendations to ETA in November 2011. The National Job Corps 

Association is a trade organization that generally represents Job Corps contractors.

29 Workgroup participants included federal officials and representatives of regional offices, 

contractors, the USDA Forest Service, and Job Corps centers.

30 Both workgroups made short-term and long-term recommendations, but we only 

examined their short-term recommendations for the purposes of this report. 
Page 14 GAO-15-93 Job Corps

While ETA considered recommendations from stakeholders in selecting 

spending cuts, it implemented a third enrollment suspension from late 

January to late April 2013 despite concerns raised by stakeholders. For 

example, the National Job Corps Association urged ETA to reconsider the 

planned suspension, calling it a drastic step that would compromise the 

mission of Job Corps. Similarly, a center contractor raised concerns that 

the suspension would “significantly hurt a large number of students.” In 

addition, more than 70 members of Congress expressed concerns about 

the suspension, stating that it would not only be detrimental to students, 

but would result in layoffs of Job Corps center staff. However, ETA 

officials said they decided to implement this suspension because they 

believed it would quickly and equitably achieve sufficient savings. ETA 

officials also noted that, as program year 2012 progressed, they had 

fewer options for spending cuts that would achieve sufficient savings.

Job Corps center contractors’ corporate and center staff, and outreach 

and admissions contractors, told us that the timing of ETA’s internal 

notices regarding spending cuts in program years 2011 and 2012 in some 

cases created challenges for staff.31 For example, in two cases, ETA 

issued a notice on a Friday that required all contractors to submit a 

response by the following Monday or Tuesday. Staff at three of eight 

centers we visited said they or corporate staff worked over the weekend 

to prepare responses, such as revised spending plans. Our review of 

ETA’s internal notices regarding spending cuts found that 11 of 19—8 of 

which were issued in program year 2012—provided all contractors, 

including center staff, with short notice of program changes or a short 

time frame in which to respond, or both.32 Specifically, seven notices 

provided contractors 3 or fewer business days notice of program 

changes; two required contractors to provide a response within 3 

business days; and two notices did both. ETA officials said the timing of 

their communications to contractors was appropriate, given their oversight 

 31 ETA communicated Job Corps program changes to contractors through a variety of 

internal notices, including Program Instruction Notices, Policy and Requirements 

Handbook Change Notices, and Information Notices. 

32 We reviewed the timeliness of ETA’s Program Instruction Notices, Policy and 

Requirements Handbook Change Notices, and Information Notices issued in program 

years 2011 and 2012. We did not review ETA’s informal communications with contractors, 

such as teleconferences. In addition, we did not review the timeliness of contract-related 

communications such as contract modifications.

Job Corps 

Contractors and 

Some Members of 

Congress Said That 

Communications 

Were Sometimes Not 

Timely and Complete
Page 15 GAO-15-93 Job Corps

role and the time constraints they faced, and noted that they discussed 

one program change with contractors before the related notice was 

issued. They also emphasized that the internal notices we reviewed were 

not contract modifications, which are the legally binding changes to the 

terms of a contract. However, officials acknowledged that contractors 

received these internal notices before they received contract-related 

communications such as contract modifications. In our review of the 11 

internal notices, we found that 2 informed contractors of upcoming 

contract modifications, but both of the notices stated that program 

changes were effective immediately.

In addition, Job Corps center contractors’ corporate and center staff, and 

outreach and admissions contractors, told us that ETA’s internal notices 

sometimes lacked information they needed to effectively implement 

changes and communicate them to students and community partners. For 

example, staff from 12 of the 15 contractors and centers we interviewed 

told us that the internal notices did not include the total amount of the 

projected funding gaps or how long the spending cuts would last. Five of 

these contractors said this lack of information made it difficult to answer 

questions from students and organizations they had formed partnerships 

with in their communities. However, ETA officials said that they chose not 

to share the total amount of the projected funding gaps with contractors 

because it could have affected ETA’s ability to maximize savings during 

contract negotiations. Further, three of the four outreach and admissions 

contractors we interviewed told us that a partial stop-work order issued in 

January 2013—which directed each contractor to immediately stop 

outreach and admissions activities and reduce its staff to one—lacked 

sufficient instructions.33 Specifically, two contractors said that the order 

did not provide guidance on whether staff could continue to work to 

accomplish required tasks, including notifying pending enrollees of the 

enrollment suspension and securing offices and student files. Two 

contractors said that the order did not provide sufficient guidance on staff 

reductions, such as whether staff who were laid off could receive 

severance pay or how long the reductions would last. Three contractors 

noted that regional officials were unable to provide clear answers to their 

 33 Because it was a contract-related communication rather than an internal notice 

implementing a spending cut, we did not include the partial stop-work order in the 19 

notices we reviewed for timeliness. However, we assessed the content of the partial stopwork order against the minimum content required by federal regulations. We did not 

assess the content of any other contract-related communications.
Page 16 GAO-15-93 Job Corps

questions. Due to this lack of guidance, two contractors decided not to lay 

off staff until they had completed the required tasks, despite uncertainty 

about whether they would be reimbursed for those costs. While these 

contractors told us that they needed more information on how to 

implement these changes, the partial stop-work order included the 

minimum content required by federal regulations.34 Specifically, the partial 

stop-work order included: (1) a description of the work to be suspended; 

(2) instructions concerning the contractor’s issuance of further orders for 

materials or services; (3) guidance to the contractor on action to be taken 

on any subcontracts; and (4) other suggestions to the contractor for 

minimizing costs. In addition, ETA officials said that the level of 

information they provided to contractors was appropriate, given ETA’s 

oversight role, and noted that contractors are responsible for internal 

personnel decisions such as paying benefits and terminating or laying off 

staff. Officials also noted that they negotiated the terms and conditions of 

the partial stop-work order separately with each contractor, so it would not 

have been appropriate for ETA to issue more detailed instructions to all 

contractors.

While ETA is subject to regulatory requirements regarding contractrelated communications, it also has internal guidance on the minimum 

content of the internal notices it uses to inform contractors about program 

changes.35 Specifically, ETA has templates requiring these notices to 

include information such as the purpose of the notice, an explanation of 

the program change, the effective or expiration date for the change, 

actions that contractors are required to take, and time frames for 

completing these actions.36 However, these templates do not specify the 

amount of notice that contractors should receive before program changes 

are expected to be implemented. According to federal internal control 

standards, federal agencies should ensure that pertinent information is 

distributed to the right people in sufficient detail and at the appropriate 

time to enable them to carry out their duties and responsibilities efficiently 

 34 48 C.F.R. § 42.1303(c).

35 We did not review ETA’s internal guidance regarding contract-related communications 

such as contract modifications.

36 ETA has a template for each type of internal notice. The Program Instruction Notice and 

Information Notice templates require the same content, while the Policy and Requirements 

Handbook Change Notice template requires slightly different content.
Page 17 GAO-15-93 Job Corps

and effectively.37 Given the challenges contractors identified, ETA’s 

internal guidance may not ensure that contractors receive sufficiently 

detailed information at the appropriate time to effectively communicate 

and implement program changes.

Similarly, while DOL met legal requirements for notifying the House and 

Senate Committees on Appropriations of funding transfers within certain 

time frames, some members of Congress expressed dissatisfaction with 

the timing and completeness of DOL’s communications. For example, our 

review of letters exchanged between DOL and Congress in program 

years 2011 and 2012 found that some members of the Senate Committee 

on Appropriations asked why DOL had not notified them as soon as the 

first projected funding gap was identified in April 2012.38 DOL explained 

that because information was evolving, it delayed notification until it had 

complete and accurate information. In addition, in a June 2012 report, the 

Senate Committee on Appropriations stated that it needed to understand 

the circumstances that led to the projected funding gap in order to 

conduct proper oversight, and requested that DOL submit a detailed 

report, including the impact of the projected funding gap on Job Corps’

program year 2012 budget.39 DOL subsequently provided the report in 

July 2012. Further, in a January 2013 letter to DOL, more than 70 

members of Congress expressed concerns about DOL’s plans to 

implement a third enrollment suspension, and noted that DOL had not 

responded to a previous request for the projected amount of savings 

associated with this suspension. When the congressional members did 

not receive a response in the time frame they requested, they sent a letter 

to the Administration, expressing frustration with DOL’s lack of attention 

and responsiveness. DOL subsequently provided a response in February 

2013. DOL officials said that they try to be as timely as possible in 

responding to congressional requests, and noted that the formal 

communications we reviewed were only part of their communications with 

 37 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999) and Internal Control Standards: Internal Control 

Management and Evaluation Tool, GAO-01-1008G (Washington, D.C.: August 2001).

These standards have since been updated, but agencies are not required to follow them 

until fiscal year 2016. GAO, Standards for Internal Control in the Federal Government, 

GAO-14-704G (Washington, D.C.: September 2014).

38 We did not review DOL’s informal communications with congressional committees and 

staff, such as informal briefings and teleconferences.

39 S. Rep. No. 112-176, at 22 (2014).
Page 18 GAO-15-93 Job Corps

Congress. According to DOL officials, during the last 2 months of program 

year 2011 and in program year 2012, they also held at least 13 informal 

briefings and teleconferences with congressional staff about the projected 

funding gaps and actions to address them.

The Workforce Innovation and Opportunity Act, which was enacted in 

2014, requires DOL to provide more frequent and detailed reports to 

several congressional committees and subcommittees on Job Corps’

financial position.40 Specifically, beginning in January 2015, the Act 

requires DOL to report every 6 months on: (1) the status of the 

implementation of the DOL inspector general’s recommendations to 

improve internal controls over Job Corps’ funds and expenditures, (2) a 

description of any budgetary shortfalls and the reasons for them, and (3) 

a description and explanation of any contract expenditures that exceed 

the amount of the contract. After 3 years, the Act requires DOL to submit 

these reports on an annual basis for 2 additional years, unless Job Corps 

experiences a budgetary shortfall, which triggers additional reporting 

requirements.41

 40 The committees and subcommittees to which DOL is required to report are, in the 

Senate, the Committee on Health, Education, Labor, and Pensions, as well as the 

Subcommittee on Labor, Health and Human Services, Education, and Related Agencies 

of the Committee on Appropriations, and in the House of Representatives, the Committee 

on Education and the Workforce and the Subcommittee on Labor, Health and Human 

Services, Education, and Related Agencies of the Committee on Appropriations. 

Workforce Innovation and Opportunity Act, Pub. L. No. 113-128, § 161(d), 128 Stat. 1425, 

1559 (2014).

41 Workforce Innovation and Opportunity Act, Pub. L. No. 113-128, § 161(a), 128 Stat. 

1425, 1558-1559 (2014).
Page 19 GAO-15-93 Job Corps

The three enrollment suspensions ETA implemented in program years 

2011 and 2012 restricted access to Job Corps for all but a few types of 

applicants, which reduced the number of students who applied to and 

entered the program (new enrollees) in those program years.42

Specifically, in program year 2012, Job Corps had nearly a third fewer 

applicants and more than a quarter fewer new enrollees than it did in 

program year 2010. During the same time period, Job Corps’ average 

total enrollment dropped 12 percent (see fig. 2).

 42 Applicants who were homeless, runaways, or in foster care were exempted from the 

enrollment suspensions.

ETA’s Spending Cuts 

Adversely Affected 

Applicants and 

Students, and Had 

Other Wide-Ranging 

Effects

Enrollment Suspensions 

Reduced the Number of 

Applicants and New 

Enrollees, and Had Other 

Effects
Page 20 GAO-15-93 Job Corps

Figure 2: Job Corps’ Applicants, New Enrollees, and Average Enrollment Levels in 

Program Years 2010 through 2012

a This represents the average total daily enrollment in each given program year.

The enrollment suspension implemented from January to April 2013 also 

restricted access for other groups, including approved applicants who had 

not yet started in Job Corps and enrolled students who were on medical 

or administrative leave. For example, some youth who had been 

approved for the program were unable to enroll until after the suspension 

was lifted. Students at two centers who were in this group told us that 

they had to wait 4 to 6 months to enroll in Job Corps, and in some cases 

took temporary jobs while they waited. One outreach and admissions 

contractor we interviewed told us that they had about 130 applicants 

ready to enroll before the enrollment suspension, but only 30 enrolled 

once the suspension ended. In addition, the 2013 enrollment suspension 

restricted some students who were already enrolled but were on medical 
Page 21 GAO-15-93 Job Corps

or administrative leave from returning to the program until the suspension 

was lifted.43

While ETA allowed applicants who were homeless, runaways, or in foster 

care to enroll in Job Corps during the 2013 enrollment suspension, fewer 

were enrolled relative to previous years. According to ETA data, 40 

percent fewer youth who were homeless, runaways, or in foster care 

entered the program during January to April 2013 compared to the same 

time period of the prior year.44 ETA officials said that fewer of these 

applicants applied during the enrollment suspension but stated that the 

acceptance rate for these applicants did not change. However, two 

outreach and admissions contractors told us that the restrictions imposed 

on them through the partial stop-work order made it difficult to enroll these 

applicants.45 For example, they said that the travel restrictions made it 

difficult to assist and maintain contact with homeless, runaway, or foster 

care applicants throughout the application and enrollment process. 

Additionally, these outreach and admissions contractors said that ETA 

established a new rule that required verifications of homelessness to be 

submitted to and approved by the national Office of Job Corps.

The 2013 enrollment suspension also had subsequent effects on student 

recruitment and enrollment. While outreach and admissions contractors 

were allowed to begin operating again shortly before the end of the 

enrollment suspension, ETA did not allow them to immediately return to 

full staffing levels.46 Three outreach and admissions contractors told us 

that most of their former staff did not return so they had to recruit, hire, 

 43 Typically, students on medical leave with reinstatement rights have 6 months to return 

to the program. Students who reached this limit during the enrollment suspension were 

granted an extension.

44 According to ETA data, between January and April 2013, 676 applicants who were 

homeless, runaways, or in foster care enrolled in Job Corps, as compared with 1,132 

during the same time period in 2012. 

45 The remaining admissions counselor for each contractor could not travel, conduct 

interviews, take applications, or process background checks, except when an inquiry was 

determined to be from a homeless, runaway, or foster care youth. Job Corps used a toll 

free number to accept inquiries during the enrollment freeze. 

46 ETA lifted the stop-work order 11 days before it ended the enrollment suspension. The 

stop-work order was lifted on April 11, 2013, while the enrollment suspension was lifted on 

April 22, 2013. This was done to allow time for contract modifications that reduced 

centers’ enrollment goals. 
Page 22 GAO-15-93 Job Corps

and train new staff. Besides staffing challenges, four outreach and 

admissions contractors told us that they had to reestablish partnerships 

with community organizations and build a new applicant pool since they 

were not allowed to collect applications during the suspension. Outreach 

and admissions contractors also told us that because of the smaller 

applicant pool and the push from ETA to fill centers quickly with limited 

staffing levels, they have had difficulties meeting enrollment goals. 

Although ETA lowered its planned enrollment goals for Job Corps after 

the enrollment suspension was lifted, it did not come within 10 percent of 

its enrollment goal until December 2013—8 months after the 2013 

enrollment suspension was lifted (see fig. 3).

Figure 3: Job Corps’ Planned and Actual Enrollment in Program Years 2012 and 2013
Page 23 GAO-15-93 Job Corps

Although ETA tried to minimize adverse effects on students who were 

already enrolled in Job Corps, some of the spending cuts reduced 

students’ benefits and temporarily limited their training options. Because 

much of Job Corps’ budget is dedicated to student-related costs, ETA 

officials said that they had to make cuts that would affect new and current 

students to address the program’s financial challenges. While some of the 

cuts affected only newly enrolled students, others affected both new and 

current students. ETA temporarily restricted some training options that 

would have given students the opportunity to stay in Job Corps longer 

and earn additional credentials. All students participate in training for at 

least one trade, but some take an additional trade, participate in 

advanced training, or take college courses. Students at two centers told 

us that they anticipated taking a second trade because they were unable 

to take their preferred trade when they first enrolled.47 In an effort to 

reduce overall enrollment during the 2013 suspension, however, ETA 

prohibited students from participating in advanced training or entering the 

college program from January through April 2013. In addition, ETA 

officials told us that they limited the number of students who could pursue 

a second trade. According to ETA data, there has generally been a 

decline in the number of students who have completed additional training 

over the last 3 program years (see fig. 4). The number of students who 

completed the college program declined 40 percent from program year 

2012 to program year 2013.

 47 Centers can offer a second trade if students need to supplement their skills to be more 

employable.

Students Enrolled in Job 

Corps Were Adversely 

Affected by Cuts to 

Training and Program 

Benefits
Page 24 GAO-15-93 Job Corps

Figure 4: Number of Job Corps Students Completing Additional Training in 

Program Years 2010 through 2013

In addition, ETA reduced financial assistance available to students, 

making it more difficult for them to support themselves while in Job Corps 

and after they complete the program. Biweekly stipends for newly 

enrolled students were reduced from a maximum of $50 to $35,48 and the 

maximum clothing allowances for all students were cut by more than a 

 48 Students enrolled on or after November 1, 2012, receive $25, on a biweekly basis, for 

the first 182 days they are enrolled and $35 (reduced from $50) thereafter. 
Page 25 GAO-15-93 Job Corps

third.49 Staff at four centers and four groups of students we interviewed 

said that these reductions made it more difficult for students to purchase 

necessities such as toiletries and clothing. One staff member noted that 

students come into Job Corps with very little and, while the amount they 

receive is small, the financial resources that Job Corps provides makes a 

big difference in the students’ lives. Additionally, ETA reduced the amount 

that newly enrolled students receive in transition pay upon graduation.50

The purpose of this funding is to provide students with an incentive to 

complete the program, and also provide them with the resources they 

need to live independently after they graduate from Job Corps. Center 

staff, regional officials, and students told us that reduced transition pay 

would not be enough for students to live independently after Job Corps. 

For example, students at one center told us that the reduced transition 

pay would not be sufficient for a deposit on an apartment.

ETA also limited students’ access to health and wellness services by 

reducing the number of hours of most health professionals at each center. 

Some students we spoke with at four centers said they had difficulty 

getting appointments to see a doctor or dentist. Staff at one center told us 

that if a doctor was not available when emergency situations arose, 

students were taken to the hospital and the related expenses were paid 

for by the center contractor. Students in need of drug and alcohol 

counseling faced similar issues with access to services. At one center we 

visited, a drug and alcohol counselor noted that due to such cuts, the 

center is now less capable of providing for the needs of students who 

have substance abuse issues.

 49 Students received $100 after they had been enrolled for 30 days under the old policy 

and receive the same amount under the new policy. Students used to receive additional 

clothing allowance payments every few months during their stay in Job Corps under the 

old policy. The new policy only allows for payments when the student graduates or enrolls

in advanced training. The maximum benefit of the old policy was $523, versus $325 under 

the new policy. The reductions to the clothing allowance, as well as some of the other 

spending cuts ETA implemented, were recommended by Job Corps internal workgroups

and stakeholders, which included contractors. For more information, see appendix II.

50 Students enrolled prior to November 1, 2012, received $250 for a high school diploma 

or general education development (GED) certificate, $750 for completing a trade, and 

$1,200 for attaining both. Students enrolled on or after November 1, 2012, received $200 

for a high school diploma or GED, $500 for completing a trade, and $1,000 for attaining 

both. 
Page 26 GAO-15-93 Job Corps

Further, ETA implemented a hiring freeze, increased the student-teacher 

ratio, and cut funding for student recreation, which affected students’

experiences while in Job Corps. Cuts to center staff created a sense of 

instability within the program, according to students we spoke with. 

Students at four centers said they faced overcrowded classrooms, and 

some noted other negative impacts that staff layoffs had on the program 

such as the loss of experienced staff that built strong relationships with 

students and helped set their goals. Students at one center also told us 

that of all the cuts, those to recreational activities had the most significant 

impact on them. Recreational activities provide students with 

opportunities for social development when they are not in the classroom, 

according to officials in one region.

ETA has undertaken several initiatives to improve Job Corps’ financial 

management. In response to the DOL inspector general’s 

recommendations, ETA has implemented several initiatives to improve 

the tracking and reporting of Job Corps’ financial information. According 

to ETA officials, they have developed guidelines to identify potential 

financial risks related to contractors’ spending levels. Specifically, officials 

now use monthly financial reports to identify and investigate instances 

where contractors’ expenses are 5 percent higher than their monthly 

budgets or 1 percent higher than their program year budgets. Also, ETA 

officials said that they have formalized their monthly reporting on the 

status of Job Corps’ contract obligations and funds to Job Corps, ETA, 

and DOL management, and have developed reports to reconcile their 

financial data recorded in various systems. ETA officials have also 

developed standard operating procedures to reflect current financial 

processes and systems, and defined staff roles and responsibilities.

Beyond these steps to address the DOL inspector general’s 

recommendations, ETA has initiatives underway to better align Job 

Corps’ costs with its appropriations. Specifically, ETA is currently making 

limited increases to the number of students who can be served by certain 

Job Corps centers, while seeking to ensure that planned enrollment levels 

align with Job Corps’ appropriations. As part of this initiative, officials told 

us they are using a phased approach to increase student enrollment. ETA 

has assessed enrollment levels at the 65 highest-performing Job Corps 

centers to determine whether they can serve additional students without 

significantly increasing costs. ETA officials also said that they have begun 

assessing enrollment levels at the next 32 highest-performing centers to 

determine whether increases can be made, but did not provide any 

specific time frames for when this would be completed. In another 

ETA Has Several 

Initiatives Underway 

to Improve Financial 

Management
Page 27 GAO-15-93 Job Corps

initiative to improve financial management of the Job Corps program, 

ETA is monitoring the total value of Job Corps’ contracts in an effort to 

ensure they align with the program’s appropriations. Additionally, in 

February 2014, ETA created the Job Corps Financial Management 

Workgroup to facilitate communication about financial management 

challenges between national officials and contractors.51 Specifically, the 

workgroup is examining challenges and potential solutions related to 

tracking Job Corps funding across the program year and contract year, 

among other issues.

Furthermore, ETA officials told us that they are assessing the financial 

implications associated with current and future program changes. For 

example, officials said that as they have made limited increases to 

centers’ enrollment levels, they have modified contracts—and contractors 

have modified their budgets—accordingly. Moving forward, ETA officials 

said that they will use monthly reports to identify and investigate 

instances where contractors’ expenses are higher than their revised 

budgets, as described above. In addition, ETA officials acknowledged that 

closing low performing centers could potentially increase costs in the 

short-term.52 The officials added that they have already begun to identify 

potential costs such as those associated with breaking leases or 

transferring current students to other Job Corps centers. Officials noted 

that they plan to take an incremental approach to spending any savings 

generated by closing centers in an effort to help ensure that they only 

spend savings as they are realized. While these initiatives address 

important financial management challenges for the Job Corps program, it 

is not yet known the extent to which they will help ETA to improve its 

financial management of the program in the future.

While the financial challenges ETA faced in program years 2011 and 

2012 were difficult for the Job Corps program, ETA’s response to them 

 51 The workgroup consists of a representative from the Office of Financial Administration, 

a regional director from ETA’s Office of Job Corps, representatives of several Job Corps 

contractors, and a representative of the National Job Corps Association.

52 In August 2014, ETA published a Federal Register notice outlining its final methodology 

for closing low performing Job Corps centers. ETA plans to consider a variety of factors, 

including centers’ historical performance and enrollment levels, and facility conditions. 

Final Methodology for Selecting a Job Corps Center for Closure and Center Selected for 

Closure: Comments Request, 79 Fed. Reg. 51,198 (August 27, 2014). 

Conclusions
Page 28 GAO-15-93 Job Corps

revealed issues that may have relevance for any similar situations in the 

future. As the program moves forward, it will be important for ETA to 

ensure that contractors, including center staff, receive the information 

they need at the appropriate time to effectively communicate and 

implement program changes. Given the challenges contractors identified, 

ETA’s current guidance for its internal notices may not be sufficient to 

ensure that they receive information that is timely and of sufficient detail. 

Without such information, contractors may continue to face challenges 

effectively communicating and implementing program changes, such as 

ongoing changes to center enrollment levels and future closures of lowperforming centers.

It will also be important for ETA to continue its efforts to improve Job 

Corps’ financial management. The internal controls deficiencies identified 

by the DOL inspector general were significant and wide-ranging. In 

addition, the spending cuts implemented in program years 2011 and 2012 

had adverse effects on students and others. While ETA is working to 

close the inspector general’s recommendations, it is too early to 

determine the extent to which the steps ETA has taken will help improve 

its financial management of the program in the future.

To enhance communication with contractors about Job Corps program 

changes, we recommend that the Secretary of Labor direct the Assistant 

Secretary for Employment and Training to review the sufficiency of ETA’s 

guidance for internal notices—including Program Instruction Notices, 

Policy and Requirements Handbook Change Notices, and Information 

Notices—to ensure that contractors are provided with adequate 

notification of program changes before they are expected to be 

implemented, and an adequate level of information to assist them in 

carrying out their responsibilities.

We provided a draft of this report to DOL for review and comment. We 

received written comments from DOL, which are reproduced in appendix 

IV. In addition, DOL provided technical comments that we have 

incorporated in the report as appropriate. DOL concurred with our 

recommendation for ETA to review the sufficiency of its guidance for 

internal notices provided to contractors. Specifically, DOL acknowledged 

the importance of ensuring that Job Corps contractors are provided 

adequate notification of program changes before their expected 

implementation. To address this, DOL stated that it would review the 

sufficiency of Job Corps guidance for internal notices, and execute and 

Recommendation for 

Executive Action

Agency Comments 

and Our Evaluation
Page 29 GAO-15-93 Job Corps

distribute any contractual actions, such as modifications, in a timely 

manner.

We are sending copies of this report to appropriate congressional 

committees, the Department of Labor, and other interested parties. In 

addition, the report is available at no charge on the GAO website at 

http://www.gao.gov.

If you or your staff have any questions about this report, please contact 

me at (202) 512-7215 or sherrilla@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff who made key contributions to this report 

are listed in appendix V.

Andrew Sherrill

Director, Education, Workforce,

and Income Security Issues
Appendix I: Objectives, Scope, and 

Methodology

Page 30 GAO-15-93 Job Corps

The objectives of this report were to examine (1) how ETA selected the 

measures it implemented to address Job Corps’ financial challenges in 

program years 2011 and 2012, (2) the timeliness and completeness of 

ETA’s communications to contractors, including center staff, and 

Congress, (3) the effects ETA’s spending cuts had on applicants and 

students, and (4) the steps ETA has taken since to improve Job Corps’

financial management.

To address our objectives, we used a variety of methodologies. 

Specifically, we reviewed agency documentation and interviewed ETA 

and Job Corps officials to identify the measures ETA implemented to 

address Job Corps’ financial challenges in program years 2011 and 2012, 

and how they were selected. We also reviewed summary-level financial 

data from DOL’s New Core Financial Management System1 to identify the 

dollar amount associated with ETA’s spending cuts. Through our 

interviews with knowledgeable agency officials and our review of system 

documentation, we determined these data to be sufficiently reliable for 

our purposes.

To provide information on ETA’s communications, we reviewed the 

agency’s internal notices about program changes sent to Job Corps 

contractors’ corporate office and center staff, and outreach and 

admissions contractors, as well as DOL’s communications with 

Congress.2 We also assessed ETA’s internal communications guidance 

using GAO’s standards for internal control in the federal government.3 In 

addition, we interviewed staff from all six Job Corps regional offices,4 and 

conducted site visits to eight Job Corps centers, which were selected to 

 1 New Core Financial Management System is DOL’s official department-wide financial 

data system. It contains high-level data on all DOL contract obligations and modifications, 

including Job Corps contracts. 

2 We did not assess ETA’s informal communications to contractors or Congress, such as 

teleconferences or briefings. In addition, we did not review the timeliness of ETA’s 

contract-related communications, such as contract modifications, or related guidance. We 

did not conduct a comprehensive review of ETA’s compliance with contracting 

requirements.

3 GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999) and Internal Control Management and Evaluation 

Tool, GAO-01-1008G (Washington, D.C.: August 2001). 

4 We conducted in-person interviews with the Chicago and San Francisco regional offices, 

and phone interviews with the Atlanta, Boston, Dallas, and Philadelphia regional offices.

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 31 GAO-15-93 Job Corps

reflect a mix of center operators, geographic diversity, and variations in 

center size. Table 3 provides more information on our site visit selections. 

Table 3: Selected Job Corps Center and Regional Site Visits

Site visit Location Center operator 

Planned student enrollment for 

program year 2012

Chicago Job Corps Region

Joliet Job Corps Center Joliet, IL Adams and 

Associates, Inc. 280

Paul Simon Chicago Job Corps Center Chicago, IL Management &

Training 

Corporation 354

Philadelphia Job Corps Region

Great Onyx Job Corps Civilian Conservation Center Mammoth Cave, 

KY

USDA Forrest 

Service 214

Woodland Job Corps Center Laurel, MD Adams and 

Associates, Inc. 300

Earl C. Clements Job Corps Center Morganfield, KY Management &

Training 

Corporation 1300

San Francisco Job Corps Region

San Jose Job Corps Center San Jose, CA Career Systems 

Development 

Corporation 465

Timber Lake Job Corps Civilian Conservation Center Estacada, OR USDA Forest 

Service 234

Treasure Island Job Corps Center San Francisco, CA Adams and 

Associates, Inc. 600

Source: GAO analysis of Job Corps data. │GAO-15-93

During our visits, we interviewed select Job Corps contractors’ corporate 

office and center staff, and outreach and admissions contractors to 

understand their involvement in ETA’s process for selecting the spending 

cuts implemented.5 In total, we interviewed 10 corporate office staff, 86 

center staff, and 19 outreach and admissions staff. We also interviewed 

46 students at six of eight Job Corps centers we visited to identify how 

 5 We interviewed corporate office staff from Adams and Associates, Inc., Career Systems 

Development Corporation, and Management & Training Corporation. We also interviewed 

outreach and admissions’ staff from Career Development Services, Dynamic Educational 

Systems Inc., Davis and Associates Communications, Inc., and Insights Training Group, 

LLC.
Appendix I: Objectives, Scope, and 

Methodology

Page 32 GAO-15-93 Job Corps

they were affected by the spending cuts.6 We generally interviewed those 

students who were enrolled in Job Corps in program year 2012 because 

that is the time period in which ETA implemented its longest enrollment 

freeze and most of the spending cuts. 

Furthermore, we reviewed Job Corps’ applicant, enrollment, and student 

outcome data generated by the Job Corps Data Center from program 

years 2010 through 2013 to identify how ETA’s spending cuts affected 

applicants and students. We began our analysis with program year 2010 

because it preceded the program years in which Job Corps faced its 

financial challenges—program years 2011 and 2012. We assessed the 

reliability of the data by reviewing existing documentation and 

interviewing knowledgeable agency officials. Based on these efforts, we 

found the data to be sufficiently reliable for our purposes.

To identify the steps ETA has taken to improve Job Corps’ financial 

management, we reviewed relevant agency documentation and 

interviewed national and regional ETA and Job Corps officials, as well as 

contractors and center staff. We also interviewed DOL’s inspector general 

to identify ETA’s progress in implementing its May 2013 

recommendations. In addition, we reviewed standards for internal control, 

as well as relevant federal laws and regulations.

 6 We were unable to interview students at the Paul Simon Chicago Job Corps Center and 

the Great Onyx Job Corps Civilian Conservation Center because there were not enough 

students to conduct a group interview with from program year 2012. Almost all of these 

students had graduated. 
Appendix II: Job Corps Spending Cuts by 

Program Year

Page 33 GAO-15-93 Job Corps

Of the 24 Job Corps spending cuts ETA implemented in program years 

2011 and 2012, 18 were suggested by ETA management and 6 were 

suggested by internal workgroups and other stakeholders (see table 4).1

These 6 spending cuts originated from 14 individual recommendations 

that ETA received from internal workgroups and other stakeholders.

Table 4: Job Corps Spending Cuts Implemented in Program Years 2011 and 2012

Program year 2011 Source of measurea

Reduced all center contracts for June 2012 (administrative expenses, purchasing, staff 

travel, hiring freeze)

ETA management

Reduced funding for Civilian Conservation Centers operated by the U.S. Department of 

Agriculture (USDA)

ETA management

Delayed start of summer break by three days so that it started in program year 2012 ETA management

Suspended enrollment for new students during June 2012, except for homeless youth ETA management

Program year 2012 Source of measurea

Reduced General Services Administration vehicle fleet; removed General Services 

Administration fleet costs from contract value

ETA management

Converted Office of Job Corps accounting services contract ETA management

Discontinued lease of site for Los Angeles Job Corps Center ETA management

Further reduced contractors’ administrative costs (with goal of reducing costs by 10-30 

percent)

ETA management

Further reduced USDA’s administrative costs (with goal of reducing costs by 10-30 

percent)

ETA management

Reduced biweekly stipend for new students ETA management

Suspended enrollment for new students, except for homeless youth, runaways, and youth 

involved in foster care (late November – December 2012)

ETA management

Reduced national media advertising ETA management

Eliminated stipend during summer and winter breaks for all students ETA management

Reduced national academic support contract ETA management

Reduced national career technical support contract ETA management

Suspended enrollment for new students, except for homeless youth, runaways, and youth 

involved in foster care (late January – late April 2013) 

ETA management

Reduced Job Corps Data Center contract ETA management

Renegotiated national training contracts ETA management

Directed centers to consider cost efficiency when planning recreational activities outside 

of the center

Job Corps Staffing Cost-Efficiency 

Workgroup

 1 Job Corps contractors participated in all of the internal workgroups.

Appendix II: Job Corps Spending Cuts by 

Program Year
Appendix II: Job Corps Spending Cuts by 

Program Year

Page 34 GAO-15-93 Job Corps

Program year 2012 Source of measurea

Reduced transition pay for new students upon graduation Job Corps Staffing Cost-Efficiency 

Workgroup

Reduced clothing allowance for all students Job Corps Staffing Cost-Efficiency 

Workgroup

Increased student-to-teacher ratio from 15:1 to 18:1 Job Corps Cost-Effectiveness Workgroup

Revised health and wellness program services offered by centersb Job Corps Cost-Effectiveness Workgroup, 

Job Corps Health Care Cost-Efficiency 

Workgroup, and center contractorc

Reduced maximum center enrollment levels Center contractors and National Job 

Corps Association

Source: Employment and Training Administration (ETA) interviews and documentation, and documentation from the National Job Corps Association. │ GAO-15-93

Note: ETA implemented some of the spending cuts recommended by stakeholders in a slightly 

different way than was proposed. In addition, ETA implemented seven stakeholder recommendations 

that are not reflected in this table because they recommended efficiency improvements rather than 

direct spending cuts. For example, ETA eliminated a temporary requirement that regional and 

national office staff approve all center staff hires, and allowed contractors the flexibility to reduce their 

total costs across multiple contracts.

a “Source of measure” indicates whether the measure was initially proposed by ETA management or 

stakeholders, including internal workgroups.

b Of the nine health and wellness recommendations submitted by these stakeholders, ETA fully 

implemented the following seven recommendations: (1) reduce physician hours and add a mid-level 

practitioner; (2) reduce hours for dentists and dental staff; (3) eliminate the requirement for at least 

one full-time drug counselor at each center; (4) revise drug counselor hours to align with center 

enrollment levels; (5) increase hours for mental health staff; (6) restructure dental services; and (7) 

require applicants to provide current immunization records. ETA partially implemented the other two 

recommendations. Specifically, ETA redefined program requirements with a greater focus on 

substance abuse prevention and education, but did not change its policy of testing students for drug 

use upon enrollment. In addition, while ETA did not eliminate sub-contracted dental services, ETA 

officials said that the other changes they made to dental services partially addressed this 

recommendation.

c While contractors participated in all of the internal workgroups, in this instance, one contractor also 

submitted a recommendation separate from those made by the workgroups.
Appendix III: Stakeholder Recommendations 

Not Implemented by ETA

Page 35 GAO-15-93 Job Corps

Job Corps Cost-Effectiveness Workgroup 

Participate in Defense Logistics Agency nationwide direct supply natural gas program.

Eliminate the requirement for the provision of on-site dental services at Job Corps centers.

The national office should encourage and approve waivers for certain staffing requirements if an operator’s proposed approach is 

likely to be more cost-effective without jeopardizing performance or services.

Disallow regional offices from imposing additional staffing requirements on Job Corps centers beyond national guidelines.

Conduct a new Job Corps staff compensation survey.

Develop model staffing plans that would identify appropriate staff/student ratios for all Job Corps centers.

Modify the goals under which outreach and admissions contracts are rewarded for performance to reflect actual center needs.

Eliminate requirements for the provision of post-placement career transition services in order to focus resources on initial placements.

Track college program slots and off-center training slots for accountability purposes.

Switch Job Corps operations contracts to a 2-year base with five option years without precluding incumbents from bidding on 

contracts per year and requiring strict standards for the award of option years.

Job Corps Staffing Cost-Efficiency Workgroup 

Evaluate overall staffing levels at centers with higher than average staff to student ratios (e.g., over 35 percent).

Compare current staffing levels and positions to those of 10 years ago to determine if the gradual increase in overall staffing is 

justified by an increase in program requirements. Conduct an annual slot utilization study at each center to identify the extent to which 

student slot utilization supports staffing.

Evaluate the need for the off-center training and the college program coordinator position on a case by case basis. Consider the 

extent of program slot utilization compared to the number of staff assigned. Eliminate positions, or assign responsibilities as collateral 

duties where caseloads do not support dedicated staffing. 

Review the need for and function of deputy director positions at centers with a contracted enrollment of less than 500 students.

Consider changing the deputy director position to a program director, or eliminating deputy positions that are designated as 

developmental positions to prepare staff for center director positions.

Evaluate the work-based learning program to determine if current staffing levels could be reduced in light of a continual shortage of 

work-based learning sites and new stringent program (safety) requirements.

Redesign the work-based learning program so that paid work-based learning students can provide some routine functions that have 

typically been provided by staff (e.g., food service helper, maintenance helper, custodian, groundskeeper, utility worker). Reduce 

staffing levels for those functions by attrition.

Center Contractor 

Consider the immediate transfer of the allowable $15 million from the Construction, Rehabilitation, and Acquisition (CRA) 

account to the Operations account to avoid more deleterious effects of the proposed center reductions.

Source: Employment and Training Administration (ETA) interviews and documentation, and documentation from the National Job Corps Association. │GAO-15-93

Appendix III: Stakeholder Recommendations 

Not Implemented by ETA
Appendix IV: Comments from the Department 

of Labor

Page 36 GAO-15-93 Job Corps

Appendix IV: Comments from the 

Department of Labor
Appendix V: GAO Contact and Staff 

Acknowledgments

Page 37 GAO-15-93 Job Corps

Andrew Sherrill, (202) 512-7215 or sherrilla@gao.gov.

In addition to the contact listed above, individuals making key 

contributions to this report were Mary Crenshaw (Assistant Director), 

Ashanta Williams (Analyst-in-Charge), Jessica Botsford, Caitlin Croake, 

Helen Desaulniers, Danielle Giese, Carol Henn, John Hocker, Paul 

Kinney, Kathy Leslie, Julia Matta, Jean McSween, Sheila McCoy, Megan 

Mumford, Mimi Nguyen, Jerome Sandau, Kathleen van Gelder, and Bill 

Woods.

Appendix V: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(131241)
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