For Release on Delivery

Expected at 10:00 a.m.

Wednesday, Sept. 27, 2000

GAO/T-HEHS-00-206

VETERANS’

EMPLOYMENT AND

TRAINING SERVICE

Better Planning Needed to

Address Future Needs

Statement of Sigurd R. Nilsen, Associate Director

Education, Workforce, and Income Security Issues

Health, Education, and Human Services Division

Testimony

Before the Subcommittee on Oversight and Investigations,

Committee on Veterans’ Affairs, House of Representatives

United States General Accounting Office

GAO
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Mr. Chairman and Members of the Subcommittee:

Thank you for inviting me here today to discuss the Veterans’ Employment

and Training Service (VETS) and its planning activities under the

Government Performance and Results Act of 1993 (GPRA).

The Congress has made it clear that alleviating unemployment and

underemployment among veterans is a national responsibility. Although

the Department of Veterans Affairs is responsible for most of the nation’s

services for veterans, the Veterans’ Employment and Training Service

(VETS), under the Department of Labor, administers programs and

activities designed to help veterans obtain employment and training

assistance. Recently, policymakers have focused increased attention on

VETS and its programs. For example, in January 1999, the Congressional

Commission on Servicemembers and Veterans Transition Assistance

issued a report that raised serious concerns about the performance and

effectiveness of VETS’ programs.1 Among the Commission’s

recommendations was that the Congress establish effective operational

outcome measures for VETS. The Congress has also been interested in

addressing the employment needs of the American workforce as a whole,

including veterans. In 1998, the Congress passed the Workforce

Investment Act (WIA) to begin unifying a fragmented employment and

training system—creating a new, comprehensive workforce investment

system. At its core, WIA focuses on integrating and streamlining services

by requiring most employment and training services to be provided

through a single system, called the One-Stop Center System. By

establishing one-stop centers for employment services, WIA will affect

how VETS will serve veterans. More recently, legislation was introduced in

the 106th Congress—H.R. 4765, the 21st Century Veterans Employment

and Training Act—intended to improve employment and training services

provided to veterans.

My comments today will focus on (1) our observations on VETS’ strategic

plan for fiscal years 2000 through 2005 and its fiscal year 2001

performance plan, (2) the adequacy of VETS’ plans to address, among

other things, how it will operate in the one-stop center environment, and

(3) issues related to the quality of VETS’ performance data. My testimony

is based on our review of VETS’ most current strategic plan (revised as of

1The Commission, established under the Veterans’ Benefits Improvement Act of 1996, was directed to

review programs that provide benefits and services to veterans and servicemembers making the

transition to civilian life and to make recommendations to the Congress for the improvement of such

programs. Report of the Congressional Commission on Servicemembers and Veterans Transition

Assistance (Arlington, Va.: Jan. 14, 1999).

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July 2000) and VETS’ fiscal year 2001 annual performance plan,

discussions with VETS officials about those plans and its strategic

planning efforts, our review of VETS’ fiscal year 1999-2004 strategic plan

and its fiscal year 2000 annual performance plan,2 and our comprehensive

1997 report on VETS’ grant programs.3

In summary, VETS has made some progress and improvements with

regard to its current strategic and performance plans. For example, VETS

has revised its mission statement to better focus on the outcomes

associated with accomplishing its mission—namely, to minimize

unemployment and underemployment among veterans. The plans no

longer contain much of the extraneous information found in past plans.

However, while VETS has improved the form and, to some degree, the

content of its plans, VETS is still not adequately describing the direction it

intends to take. For example, VETS has not established a consistent set of

priorities in terms of which veterans it intends to target for employment

assistance. Additionally, VETS has not developed sufficient strategies to

address the major and complex challenges it faces, such as how best to

incorporate its programs into the new workforce development system

established by WIA. In fact, VETS appears to be taking a reactive rather

than a proactive approach wherein it could help shape how its programs

will help veterans in the future. For example, while VETS recognizes that

the establishment of one-stop centers will increase the number of its

service delivery points, it has not developed any plans to address how it

will provide assistance at all centers. Finally, the quality of some of VETS’

program management data is questionable and, therefore, it is unlikely

VETS can accurately assess its performance nationally and know whether

it is improving from year to year.

VETS administers national programs intended to ensure that veterans

receive priority in employment and training opportunities. VETS assists

veterans, reservists, and National Guard members in securing employment

and protecting their employment rights and benefits. The key elements of

VETS’ services include enforcement of veterans’ preference and

reemployment rights, employment and training assistance, public

information services, interagency liaison, and training for those who assist

2Veterans’ Employment and Training Service: Strategic and Performance Plans Lack Vision and Clarity

(GAO/T-HEHS-99-177, July 29, 1999).

3Veterans’ Employment and Training: Services Provided by Labor Department Programs (GAO/HEHS98-7, Oct. 17, 1997).

Background
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veterans in finding employment. VETS’ programs are among those federal

programs whose services must be provided through one-stop centers.

VETS carries out its responsibilities through a nationwide network that

includes representation in each of Labor’s 10 regions and staff in each

state. The VETS staff at the state level monitors the operation of VETS’

two primary programs that provide employment and training assistance to

veterans: the Disabled Veteran’s Outreach Program (DVOP) specialists and

the Local Veterans’ Employment Representatives (LVER). DVOP and

LVER staff, whose positions are federally funded, are part of states’

employment service systems and provide direct employment services to

eligible veterans. States’ employment service systems were established by

the Wagner-Peyser Act of 1933. Under the act, funds are allocated to each

state to plan and administer a labor exchange program that meets the

needs of the states’ employers and job seekers. Labor’s Employment and

Training Administration (ETA) provides general direction, funding, and

oversight of states’ employment service systems. The total fiscal year 1999

appropriation for VETS was about $183 million, including $80 million for

DVOP specialists and $77 million for LVER staff. These funds paid for

1,413 DVOP positions and 1,309 LVER positions. The appropriation also

included about $24 million for administrative costs and $2 million for the

National Veterans’ Training Institute, which trains DVOP and LVER staff,

among others.

LVERs were first authorized under the original GI bill (the Servicemen’s

Readjustment Act of 1944); DVOP specialists were established by

executive order in 1977 and later authorized by the Veterans’

Rehabilitation and Education Amendments of 1980. The duties of DVOP

and LVER staff for serving veterans, as specified by law, include

• locating veterans;

• developing jobs for veterans;

• networking in the community for employment and training programs;

• providing labor exchange services to veterans, that is, bringing together

jobseekers and employers with jobs;

• making referrals to support services; and

• providing case management.

VETS Programs
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The DVOP and LVER programs give priority to the needs of disabled

veterans and veterans who served during the Vietnam era (generally

defined as August 5, 1964, to May 7, 1975). States are expected to give

priority to veterans over nonveterans for services in their state

employment service systems. Generally, this means that local employment

offices are to offer or provide all services to veterans before offering or

providing those services to nonveterans. To monitor the programs, VETS

has established, and used for several years, performance standards to

determine state compliance with requirements to give employment

services to veterans. These standards of performance evaluate states in

five service categories: (1) veterans placed in or obtaining employment;4

(2) Vietnam-era veterans and special disabled veterans5 placed in jobs on

the Federal Contractor Job Listing;6 (3) veterans counseled; (4) veterans

placed in training; and (5) veterans who received some reportable service,

such as job referrals. To ensure priority service to veterans, VETS expects

levels of performance for services provided to veteran applicants to be

higher than levels for nonveteran applicants. According to VETS’

performance standards, veterans and other eligible persons7 should be

served at a rate 15 percent higher than nonveterans, Vietnam-era veterans

at a rate 20 percent higher, and disabled veterans at a rate 25 percent

higher; the placement rates for special disabled veterans in jobs listed by

federal contractors should also be 25 percent higher than the rate for

nonveterans. Thus, if a state’s placement rate for nonveterans is 10

percent, the placement rate for veterans should be 11.5, or 15 percent

higher than the nonveteran placement rate.

4Labor defines placed in employment as the hiring of a veteran referred by a state employment office,

and obtaining employment as securing employment within 90 days of receiving services from the state

employment offices.

5A special disabled veteran is (1) a veteran entitled to compensation (or who, but for the receipt of

military retired pay, would be entitled to compensation) under laws administered by the Department

of Veterans Affairs for a disability rated at 30 percent or more, or (2) a person who was discharged or

released from active duty because of a service-connected disability.

6Any contractor or subcontractor with a contract of $25,000 or more with the federal government must

take affirmative action to hire and promote qualified special disabled veterans, veterans of the

Vietnam-era, and any other veterans who served on active duty during a war or in a campaign or

expedition for which a campaign badge has been authorized. Contractors and subcontractors with job

openings, other than executive or top management jobs, must list themwith the nearest state

employment office. Qualified Vietnam-era and special disabled veterans receive priority for referral to

federal contractor job openings listed at those offices.

7Certain nonveterans who are dependents of veterans are also eligible for priority service, as provided

for in 38 U.S.C.
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In our past reviews of VETS’ programs, we pointed out that using such

standards means that states with poor levels of service to nonveterans are

held to lower standards for service to veterans than states with better

overall performance. In addition, while the first two of the five

performance standards are

results-oriented, they do not require information about the quality of job

placements, such as wages and benefits, or whether jobs are permanent

(defined by Labor as employment expected to last longer than 150 days).

The remaining three standards are activity- and volume-driven and provide

states little incentive to focus services on those veterans who are

marginally job-ready or are most in need of intensive employability

development services.

VETS will be affected by WIA, which streamlines the delivery of workforce

preparation and employment services. For well over a decade, states and

localities have engaged in efforts to integrate their employment and

training programs, often using a structure called a one-stop center that

provides access to many employment-related services in a single location.

Under WIA, states and localities are now required to use one-stop centers

to provide most federally funded employment and training services. About

17 categories of programs, funded through four separate federal agencies,

are required to provide services through the one-stop center system. VETS’

programs, as well as the states’ employment services programs funded

under the Wagner-Peyser Act, are among those programs that must

provide services through one-stop centers.

While WIA requires some program elements, many program policies are

left to states and localities to decide. For example, states and localities can

decide whether to provide services on site, through electronic linkages

with partner agencies, or by referral. Because of this flexibility, VETS’

current service delivery methods will be affected. For example, in

establishing these one-stop centers, some states are adopting universal

service delivery approaches that involve assigning a single staff member to

provide services offered under multiple programs to one-stop center

customers. However, because DVOP and LVER staff can provide

assistance only to veterans, and because their roles in one-stop centers

were not specifically addressed in WIA, it is unclear how they will function

with regard to new one-stop centers.

WIA
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Over the past several years, the Congress has taken steps to fundamentally

change the way federal agencies go about their work, through such means

as WIA and by passing other legislation intended to make agencies

accountable for their performance, such as GPRA. GPRA seeks to improve

the efficiency, effectiveness, and public accountability of federal agencies

as well as to improve congressional decision-making. It aims to do so by

promoting a focus on program results and providing the Congress with

more objective information on the achievement of statutory goals than

was previously available. The act outlines a series of steps in which

agencies are required to identify their goals, measure performance, and

report on the degree to which those goals were met. Executive branch

agencies were required to submit the first of their strategic plans to the

Office of Management and Budget (OMB) and the Congress in September

1997 and their first annual performance plans in the spring of 1998. Earlier

this year, agencies submitted their third annual performance plans

covering fiscal year 2001. Also beginning this year, each agency was

required to submit a report comparing its performance for the previous

fiscal year with the goals in its annual performance plan. Although not

required by GPRA, Labor’s component agencies, such as VETS, have

prepared strategic and performance plans at the direction of the Secretary

of Labor.

VETS’ most recent strategic plan, covering fiscal years 2000 through 2005,

and its fiscal year 2001 annual performance plan are both improvements

over its previous plans. Compared to its previous plans, VETS’ revised

strategic and performance plans include an improved mission statement

and set of related strategic and annual performance goals that are more

clearly articulated and better aligned with its mission. However, VETS’

plans could still be improved.

Last year, we reported to the Committee on the then-current VETS

strategic plan and fiscal year 2000 performance plan. Overall, we observed

that while those plans addressed many of the technical elements required

by GPRA, the plans failed to address most of the requirements in a clear,

Managing for Results

VETS Has Improved

the Format and

Structure of its

Strategic and

Performance Plans

but Futher

Improvement Is

Possible

Previous Plans Lacked

Vision and Clarity
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comprehensive, and meaningful manner.8 Instead of presenting a road map

of where VETS is headed and how it expects to get there, the plans

presented a muddled picture of its future direction. We stated that much

more work was needed to demonstrate that the programs are being

managed for results, thereby enabling the Congress to assess progress and

identify areas needing improvement.

VETS has worked to improve its plans. For example, VETS convened a

conference of its senior national and field officials to discuss the steps it

needed to take to improve its plans. Later, Labor provided VETS with

outside contractor assistance to help VETS officials refine its plans, as

well as to perform an assessment of the validity of and the internal

controls over its performance data.

VETS’ revised strategic and performance plans include a mission

statement and a set of related strategic and annual performance goals that,

compared to its prior plans, are presented in a more coherent fashion than

in last year’s plans. For example, the revised mission statement and

strategic goals address VETS’ key statutory responsibilities and provide

more focus on helping veterans get jobs. 9 In particular, the revised

mission statement better reflects the desired outcomes of achieving VETS’

mission—namely, promoting the economic security of America’s veterans

by minimizing unemployment and underemployment. As we pointed out

last year, VETS’ previous mission statement did not convey the specific

outcomes or results associated with accomplishing VETS’ mission.

In addition, VETS’ revised plans more clearly link its strategic and

performance goals with its overall mission, and exclude much extraneous

information found in past plans. For example, the strategic and

performance goals clearly flow from VETS’ mission statement. VETS’

overall strategic goals are broad and it has provided additional,

intermediate goals that further clarify and define these broad goals and

link the intermediate goals to more discrete performance goals in both its

strategic and annual performance plans. For example, under its overall

strategic goal of providing effective employment and training services to

8Veterans’ Employment and Training Service: Strategic and Performance Plans Lack Vision and Clarity

(GAO/T-HEHS-99-177, July 29, 1999).

9VETS’ revised mission statement is “To promote the economic security of America’s veterans by

minimizing unemployment and underemployment among veterans with service connected disabilities

and among other targeted veteran groups, and by providing the maximum of employment and training

opportunities to all veterans.”

VETS’ Mission Statement

Has Been Improved and

Goals Are Better Aligned

With its Mission
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minimize unemployment and underemployment among disabled veterans,

VETS’ defines increasingly more discrete goals, including one for a fiscal

year 2001 target of having at least 36 percent of registered disabled

veterans enter employment through assistance provided by VETS-funded

staff. Table 1 shows, for selected goals, how VETS links its broad goals

with more discrete goals.

Table 1: Selected Goals in VETS’ Strategic and Annual Performance Plans

Selected goals

Strategic goal Intermediate goal Targeted intermediate goal

Corresponding annual

performance goals for fiscal

year 2001

Achieve an entered- employment

rate among disabled veterans

registered for public labor

exchange services significantly

greater than that for nonveterans

registered for public labor

exchange core services.

By 2005, increase the 3-year

rolling average of the enteredemployment rate for registered

disabled veterans to 44% greater

than that for nonveterans

registered for public labor

exchange services.

Increase the 3-year rolling

average of the entered

employment rate for registered

disabled veterans to 40% greater

than that for nonveterans

registered for public labor

exchange services.

Provide effective Labor

employment and training

services to minimize

unemployment and

underemployment among

disabled veterans.

Achieve a significant enteredemployment rate among disabled

veterans registered for public labor

exchange services.

By 2005, at least 38% of

registered disabled veterans will

enter employment each year

through assistance provided by

VETS-funded staff.

At least 36% of registered

disabled veterans will enter

employment through assistance

provided by the VETS-funded

staff.

By 2005, at least 30% of those

veterans registering for public

labor exchange services will

enter employment each year

through staff assisted services

provided by the Wagner-Peyser

funded systems.

At least 27% of those veterans

and other eligible persons

registering for public labor

exchange services will enter

employment through assistance

provided by the Wagner-Peyser

funded system (including DVOP

and LVER).

Promote maximum

employment opportunities for

all veterans, with special

attention given to meeting the

needs of targeted groups,

which includes veterans who

have significant barriers to

employment, veterans who

served on active duty in the

armed forces during a war or

in a campaign or expedition for

which a campaign badge has

been authorized, and recently

separated veterans.

A significant number of all eligible

veterans, as well as of targeted

group veterans, requesting public

labor exchange core services will

receive successful and satisfactory

job placement assistance.

By 2005, increase the 3-year

rolling average of enteredemployment rate for registered

veterans to 33% greater than for

nonveterans registered for public

labor exchange services.

Increase the 3-year rolling

average of entered-employment

rate for registered veterans to

28% greater than that for

nonveterans (age 22 and over)

registered for public labor

exchange services.

Another significant improvement in VETS’ strategic and annual

performance plans is the addition of absolute goals with respect to the

proportion of veterans registered with state employment security agencies

who are expected to enter employment. One such goal developed by VETS

is that by 2005, at least 30 percent of registered veterans and other eligible

persons will enter employment each year. This is an improvement

because, in the past, VETS has traditionally negotiated only relative
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performance goals with state employment service agencies. That is, to

ensure priority service to veterans, VETS has negotiated standards with

states that require veteran applicants to be served at a rate exceeding the

service to nonveteran applicants.

In our past reviews of VETS’ programs, we have pointed out that the use of

relative standards results in states with poor levels of service to

nonveterans being held to lower standards for service to veterans than

states with better overall performance. For example, in program year 1998,

Rhode Island reported an entered-employment rate of 3.06 percent for

nonveterans. Because VETS required the state to ensure that it achieve an

entered-employment rate for veterans that was 15 percent higher than that

for nonveterans, the state’s 1998 performance standard was thus 3.52

percent of registered veterans entering employment—obviously a low

performance standard. On the other hand, Wisconsin reported an enteredemployment rate for nonveterans of 43.76 percent. Based on this figure,

the corresponding performance standard for veterans would be 50.32

percent—much higher than Rhode Island’s standard. While VETS

negotiates individual goals with states in order to take into account local

economic conditions and other considerations, such conditions do not

always differ significantly among the states. For example, during

December 1998, the rate of unemployment in Rhode Island was 4.5

percent, compared with 3.4 percent in Wisconsin.

Both VETS’ current strategic plan and 2001 annual performance plan have

also been improved by more explicitly linking strategies to goals. In its

prior plans, we noted that VETS often did not provide clearly stated

strategies for its goals and, in many cases, appeared to confuse goals with

strategies—that is, it confused where it wanted to go with how it would

get there.

While VETS has made important improvements to its plans, it still needs to

provide additional details concerning many of its strategies. Without

additional clarification, it is difficult to assess how useful the listed

strategies will be toward helping VETS achieve its goals. Additional details

are also required to serve as a basis for holding VETS accountable for

making progress toward achieving its goals. For example, VETS strategies

include conducting three national marketing campaigns. One campaign,

according to VETS, will be conducted in conjunction with VA and is

intended to “market the advantages that hiring disabled veterans can bring

to employers;” another is aimed at “marketing” veterans who are on public

assistance to employers; yet another is aimed at specific industries

experiencing labor shortages. However, VETS has not explained why there

Plans’ Strategies Are More

Clearly Linked With Goals

but Are Not Sufficiently

Explained
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is a need for such an effort, how extensive these campaigns will be, or

how it intends to fund such efforts.

Despite longstanding and widespread criticism, VETS is still not

adequately planning for achieving the results it seeks—that is, minimizing

unemployment and underemployment among veterans. VETS has not yet

established clear priorities, such as determining which veterans it should

be targeting for assistance. In large part, VETS appears to be developing a

results-oriented approach based on the way it has traditionally managed

its programs, rather than reexamining structures and processes that are

rooted in the past. Such a reexamination is critical because the workforce

development system in which VETS’ programs operate is changing as a

result of the establishment of one-stop centers nationwide.

To date, VETS has not clearly established a strategic direction by

establishing clear priorities, such as exactly which veterans it intends to

help and why. Instead, it has inconsistently identified various “targeted”

groups of veterans it plans to help. While its strategic planning documents

identify some targeted groups, its strategic goals are targeted toward

others. For example, while VETS notes in its strategic plan that women,

minority, and 20 to 24-year-old veterans have higher-than-average rates of

unemployment and that it intends to target these veterans, none of its

strategic or performance goals specifically address such veterans.

Moreover, the agreements it negotiates with states target yet other groups

of veterans, such as veterans of the Vietnam era. Overall, VETS notes in

various documents that it is targeting

• all veterans;

• those veterans with higher-than-average rates of unemployment, such as

women, minority, and young veterans;

• those veterans who may need special assistance, such as disabled

veterans;

• veterans who are unemployed for particular reasons, such as being

dislocated or lacking necessary skills; or

• those veterans that VETS has traditionally required states to focus on,

including Vietnam-era veterans.

VETS Is Still Not

Adequately Planning

How Best to Achieve

Desired Outcomes

VETS Has Not Established

Clear Priorities to Help

Guide Programs
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As a result of appearing to target some and all veterans at once, VETS does

not communicate a consistent or coherent message in terms of who it

actually it intends to help.

VETS is also not adequately planning for how it can best serve veterans by

understanding what problems veterans face in finding jobs. Obtaining such

an understanding is important to determine the type of assistance that its

programs should provide to veterans. In addition, VETS planning has been

encumbered because it is has not adequately identified and analyzed the

characteristics of unemployed veterans overall in comparison to those

who typically use its programs. If VETS hopes to use its programs to

reduce reported unemployment rates among targeted groups of veterans,

for example, then it needs to determine whether, and to what extent, such

veterans are aware of and using its programs.

It is also unclear whether VETS adequately ensures that its strategic and

performance plans do not provide state employment service agencies with

disincentives to help those veterans who need the most help. VETS is

planning on requiring states to meet absolute standards in the future; for

example, in 2001, VETS is seeking to ensure that nationally, at least 30

percent of veterans and other eligible persons who register for services

enter employment. This is an improvement over its traditional relative

performance standards. However, absolute standards can also produce

unintended consequences if not carefully designed. If VETS intends to

target a certain group of disadvantaged veterans for assistance but does

not establish performance standards for them, states may still be faced

with a disincentive to helping those veterans if they require more time and

effort to assist. That is, states may have an incentive to help those veterans

who need the least help in order to obtain specified goals, rather than

serve veterans who may need more help.

Despite the significant challenges it faces, such as the implementation of

one-stop centers established by WIA, VETS has not developed adequate

plans or strategies to address how its programs can best serve veterans in

such centers. For over a decade, states and localities have engaged in

efforts to integrate their employment and training programs through

means similar to one-stop centers. In fiscal year 1994, Labor began

awarding one-stop planning and implementation grants to help states

integrate employment and training services for Labor-funded programs.

Rather than use the opportunity to understand what problems states and

localities have had in integrating VETS’ programs into these predecessors

to one-stop centers, VETS’ strategy to address this challenge has consisted

primarily of waiting for states to decide how they will do the integrating.

VETS Has Not Developed

Strategies to Address

Significant Challenges

Facing the Agency
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In fact, VETS fiscal year 2001 performance plan states that “there are some

areas of WIA implementation that will require considerable thought and

coordination, but action cannot be taken until states submit their

implementation plans.” By not more fully addressing this challenge, VETS

appears to be taking a reactive approach rather than a proactive approach

wherein it could help shape how its programs will help veterans in the

future.

Recently, state officials have testified before congressional hearings that

more flexibility in VETS’ programs would help them improve services to

veterans. For example, a representative of the Interstate Conference of

Employment Security Agencies noted that services to veterans would be

improved if the role of the DVOPs and LVERs shifted from searching for

and notifying veterans about jobs, which many veterans can now do for

themselves in the self-service environment and which computers can do

more quickly without human intervention, to helping veterans present

themselves in the most attractive way possible. While the Assistant

Secretary for VETS recently testified that the duties of DVOP and LVER

staff need to be revisited in light of technological and other changes,

VETS’ plans do not include any specific legislative or programmatic

strategies to do so.

In addition, VETS’ plans do not include any strategies to address other

problems it anticipates with regard to one-stop centers. For example,

VETS is anticipating that the expansion of one-stop service delivery

locations will make providing services at more service delivery points

difficult. This challenge is exacerbated because, according to VETS,

turnover among DVOP and LVER staff is consistently high and is creating

management planning challenges to maintaining a trained workforce to

assist veterans. However, VETS has not developed any strategies for

dealing with the high turnover of staff other than providing additional

training to new DVOPs and LVERS.
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Our previous governmentwide work has shown that federal agencies need

reliable data during their planning efforts to set realistic goals and later, as

programs are being implemented, to gauge their progress toward

achieving those goals. However, our work has found serious shortcomings

in federal agencies’ ability to generate reliable and timely data to measure

their progress in achieving goals and in their analytic capacity to use those

data.10 VETS faces such shortcomings and will need to address this critical

challenge. A significant challenge is that one of VETS’ critical reporting

systems—known as the ETA 9002 system—appears to be inadequate to

judge VETS’ performance at the national level because of measurement

inconsistencies among states and the impact that states’ policy choices

have on reported data. Moreover, these data limitations impede VETS’

ability to compare program performance from one year to another—that

is, VETS cannot be certain if the measures are improving and that its

performance is in fact improving over time. While ETA is planning to

replace its 9002 system, no firm schedule has yet been established for

when such a new system will be in place.

VETS has traditionally relied on the ETA 9002 system, which collects data

on persons registering with state employment service agencies and tracks

the services provided to registrants as well as information on registrants’

employment outcomes for performance reporting purposes. VETS uses

these data as the basis for measuring its performance toward several

critical strategic and performance goals. In particular, these data are used

to indicate how many veterans who received employment-related services

got jobs, which is a critical dimension of performance for VETS’ largest

programs—the DVOP and LVER programs.

From a review of reported data at the national level, however, the variance

in state-reported results raises concerns. For example, in program year

1998, state-reported data on entered-employment rates for veterans—that

is, the percentage of veterans who registered with the employment service

and eventually found jobs—varied dramatically, from 68.9 percent in

Tennessee to 3.7 percent in California. The average rate across all states

was 26.7 percent. Substantial variation has occurred for years and

indicates the need to determine whether the data reflect real differences in

performance or whether the data are unusable for performance

measurement purposes.

10Managing for Results: Challenges Agencies Face in Producing Credible Performance Information

(GAO/GGD-00-52, Feb. 4, 2000).

Data Quality

Concerns Make

Judging VETS’

Performance Difficult

Significant Interstate

Variation in ETA 9002

System Limits Usefulness

of Data as Performance

Measure
Veterans’ Employment and Training Service:

Better Planning Needed to Address Future

Needs

Page 14 GAO/T-HEHS-00-206

The case of California illustrates some of the reasons why the reported

ETA 9002 data varies. Over the last 3 years, the reported enteredemployment rate has dropped from over 18 percent to less than 4 percent.

In our discussions, California officials noted that they have changed the

source of the data used to track employment outcomes for veterans and

others who register with the employment service. The state is now using

employer-reported wage data to obtain information on the employment

outcomes of individuals. However, the state cannot obtain and submit

these data in time to be included in the ETA 9002 data system. As a result,

the data do not reflect actual results with regard to California’s program,

and the state’s reported entered-employment rates are likely significantly

understated and do not reflect the actual level of performance.

Other changes currently taking place will also affect the ETA 9002 data

that VETS uses to measure its progress. For example, states are taking

different approaches to providing services to customers. In some cases,

customers who use resource rooms, the Internet, or other self-help tools

are not required to register; only customers who require assistance from

employment office staff must do so. Differences among states in

registration policies will affect national data reported to VETS because not

everyone receiving assistance is being counted. These different policies

will affect national data reported to VETS. Table 2 illustrates how such

differences can affect entered-employment rates, the rates VETS uses to

measure its performance. In this example, while 100 veterans enter the

employment service for assistance and ultimately 40 get jobs, in one case

the placement rate is 40 percent and in the other is 50 percent–a 10-point

difference that results from counting all job-seekers in one case, and only

those requiring staff assistance in the other.

Table 2: How Registration Policies Affect Reported Entered-Employment Rates

All customers required to register Self-service customers do not register

Customers counted Customers counted

20 Customers use selfhelp services 20 20 Customers use self-help services –

80 Customers require

staff assistance 80 80 Customers require staff assistance 80

40 Customers get jobs 40 40 Customers get jobs 40

Entered-employment rate 40/100 = 40 percent Entered-employment rate 40/80 = 50 percent

State Policy Choices Also

Affect Usefulness of ETA

9002 Data as Performance

Measure
Veterans’ Employment and Training Service:

Better Planning Needed to Address Future

Needs

Page 15 GAO/T-HEHS-00-206

According to ETA officials, a new system to replace the ETA 9002 system

is being considered but no replacement schedule has been established.

ETA officials hope the new system will more accurately reflect the

performance of employment service offices. In addition, VETS is working

on developing additional performance measures which might be more

useful for judging states’ and local offices’ performance in the future.

However, it is unclear whether the effort will resolve inconsistencies in

measurement among states and yield useful information at the national

level. We will be pursuing these matters in our future work for the

Committee.

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

answer any questions that you or other Members of the Subcommittee

may have.

For future contacts regarding this testimony, please contact Sigurd R.

Nilsen at (202) 512-7003. Individuals making key contributions to this

testimony included Jeff Appel, Dennis Gehley, Peter Minarik, and Raun

Lazier.

New ETA 9002 System and

Performance Measures Are

Being Considered

GAO Contacts and

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