U.S. Department of Labor 

FY 2005 Performance and Accountability Report

Table of Contents

Secretary’s Message...................................................................................................................................5

Management’s Discussion and Analysis..................................................................................................7

Mission, Vision and Organization .......................................................................................................................8

Executive Summary...........................................................................................................................................12

Introduction.................................................................................................................................................12

Performance Section ...................................................................................................................................13

Financial Section.........................................................................................................................................20

Major Management Challenges ..................................................................................................................26

The President’s Management Agenda ........................................................................................................33

The Program Assessment Rating Tool........................................................................................................37

Performance Section................................................................................................................................39

Strategic Goal 1: A Prepared Workforce..........................................................................................................41

Outcome Goal 1.1 – Increase Employment, Earnings, and Retention ........................................................43

Outcome Goal 1.2 – Increase Opportunities for Youth Employment.........................................................62

Outcome Goal 1.3 – Improve the Effectiveness of Information and Analysis On The U.S. Economy ......70

Strategic Goal 2: A Secure Workforce .............................................................................................................75

Outcome Goal 2.1 – Increase Compliance with Worker Protection Laws..................................................77

Outcome Goal 2.2 – Protect Worker Benefits.............................................................................................83

Strategic Goal 3: Quality Workplaces..............................................................................................................97

Outcome Goal 3.1 – Reduce Workplace Injuries, Illnesses, and Fatalities.................................................99

Outcome Goal 3.2 – Foster Equal Opportunity Workplaces.....................................................................109

Outcome Goal 3.3 – Reduce Exploitation of Child Labor, Protect the Basic Rights of Workers, and 

Strengthen Labor Markets............................................................................................................115

Strategic Goal 4: A Competitive Workforce ..................................................................................................123

Outcome Goal 4.1 – Build a Demand-Driven Workforce System to Address Worker Shortages and 

Equip Workers to Adapt to the Competitive Challenges of the 21st Century ..............................125

Outcome Goal 4.2 – Promote Workplace Flexibility and Minimize Regulatory Burden .........................133 

Financial Section....................................................................................................................................137

Chief Financial Officer’s Letter.......................................................................................................................138

Independent Auditor’s Report .........................................................................................................................140

2005 Top Management Challenges Facing the Department of Labor Identified by the Office of Inspector 

General......................................................................................................................................................149

Annual Financial Statements...........................................................................................................................157

Principal Financial Statements and Notes.................................................................................................159

Required Supplementary Stewardship Information ..................................................................................211

Required Supplementary Information.......................................................................................................234

Appendices..............................................................................................................................................247

1. Performance Goal Details............................................................................................................................248

2. Significant FY 2005 Audits and Evaluations ..............................................................................................269 

3. Improper Payments Information Act Reporting Details..............................................................................294

4. Acronyms.....................................................................................................................................................304

5. Internet Links...............................................................................................................................................306

This report can be found on the Internet at http://www.dol.gov/_sec/media/reports

If you have questions or comments regarding this report, contact: 

Center for Program Planning and Results 

U.S. Department of Labor 

200 Constitution Avenue, NW, Room S-3317 

Washington, DC 20210 

202-693-7120

FY 2005 Performance and Accountability Report 3 
The photographs in this publication were furnished by numerous individuals. All photographs are proprietary and

prior permission from the photographer is required for any use or reproduction of the photographs. All references to 

non-governmental companies or organizations, their services, products or resources in this report are offered for 

informational purposes and should not be construed as an endorsement by the Department of Labor, of any of the 

companies or organizations, or their services, products or resources. The Department of Labor does not endorse, 

takes no responsibility for, and exercises no control over non-governmental organizations’ websites mentioned in this 

report or its views, or contents; nor does it vouch for the accuracy of the information contained on other 

organizations’ websites. 

The following companies were contracted to assist preparation of the FY 2005 DOL Performance and Accountability 

Report: 

Accounting services − Martin and Yarbrough, Joint Venture 

Graphic design – Grafik Industries, Ltd.

4 United States Department of Labor 
Secretary’s Message 

November 15, 2005 

 

The Fiscal Year 2005 Performance and Accountability Report is the fifth report I 

have had the pleasure of submitting to the Congress and the American people on 

behalf of the hardworking and dedicated employees of the Department of Labor. 

This report is one way we can critically assess our progress in order to set new 

directions for the future of the programs we implement on behalf of America’s 

workers. Our four strategic goals – A Prepared Workforce, A Secure Workforce, 

Quality Workplaces, and A Competitive Workforce – have provided a clear focus for 

the program results we have been called upon to deliver to the Nation. 

President's Management Agenda 

We are proud of the management improvements made in Fiscal Year 2005 under the 

President's Management Agenda, which have helped us to support our program

activities in more effective and efficient ways. The Department of Labor has been 

working diligently and creatively to meet the President's Management Agenda

commitments in the government-wide initiatives of Strategic Management of Human Capital, Competitive Sourcing, 

Improved Financial Performance, Expanded Electronic Government, and Budget and Performance Integration; and 

in the agency-specific areas of Faith-Based and Community Initiatives, Real Property, and Eliminating Improper 

Payments. Not only have our achievements placed us among the best in government – the first Agency to achieve 

“green” scores in all government-wide initiatives – but the Department has also been awarded the President’s Quality 

Award in both Strategic Management of Human Capital and Budget and Performance Integration. 

 

Skills Competency for a Competitive Workforce – Moving Forward in Job Training Programs

The best way to create jobs is to encourage the conditions that foster growth, encourage innovation, and help workers 

invest in new job skills. Maintaining our competitive advantage is achieved by increasing the skill level of 

America’s workforce. To prepare for a lifetime of successful employment, workers must have the ability to 

continually upgrade their skills and access job training opportunities. The Department is continuing to reform the 

current job training system in order to arm workers with relevant skills so they can get good jobs. The Department is 

seeking ways to give States and local communities maximum flexibility while requiring them to set rigorous 

performance milestones; spend more of their allocated funds on actual worker training; enhance individual choice in 

creating customized training programs; and strengthen the One-Stop Career Center System. 

Strategies for Workforce Protections

Over the past few years, the Department has more effectively targeted our enforcement resources. One of the keys to 

strengthening worker protection is compliance assistance – so that workers and employers understand their rights and 

responsibilities. In the safety and health area, our partnerships and alliances with industry, trade associations, unions, 

and educational institutions are growing and getting stronger. 

Last year, when the new Overtime Security Rules went into effect, the Department launched the FairPay Web site 

(http://www.dol.gov/fairpay). The site provides comprehensive information, including on-line training seminars so 

that all interested parties can understand the new rules. 

The Department is also strengthening the protections afforded to members of labor organizations, empowering union 

members through greater financial transparency and accountability. 

Retirement Security – Meeting the Challenge 

A key priority of the Department is the security of workers’ pensions. The promises that companies have made to 

their workers and retirees must be kept, and tackling the problem of under-funded pension plans is critical. Working 

with Congress, the Department is pursuing legislation to ensure the financial health of the single-employer, defined 

benefit plan system. The Department will continue to provide a wide range of educational and outreach activities to 

plan sponsors, participants and beneficiaries to help them understand their legal obligations and rights, identify and 

correct problems early on, and redress inadvertent and intentional violations. 

FY 2005 Performance and Accountability Report 5
Secretary’s Message 

Supporting Our Military Service Members Is More Important Than Ever

The importance of the Department’s role in helping veterans and returning service members secure post-service 

employment opportunities cannot be overstated. The Department of Labor is committed to protecting the 

employment rights of returning service members, and will assist veterans, reservists, and transitioning service 

members in finding the jobs or job training opportunities that tap their unique skills and potential. 

Hurricane Response and Recovery 

The Department, along with many other Federal agencies, is playing a key role in cleanup and recovery efforts in the 

wake of Hurricanes Katrina and Rita. Even prior to the hurricanes making landfall, the Department was assessing 

response options and pre-positioning key personnel and resources for the disaster. The Department continues to 

work with state and local governments, faith-based and community organizations, relief agencies, and directly with 

impacted individuals to provide emergency jobs, income support, short-term skills development and other vital 

economic aid to rejuvenate the hurricane-impacted regions and their populations. In addition, the Department is 

continuing to ensure proper compliance with all applicable wage laws in the contracted cleanup and recovery work, 

and has funded health and safety training programs – as well as providing on-the-ground health and safety

compliance professionals – to minimize injuries and fatalities attributable to this potentially hazardous work. 

Program Data and Financial Performance 

DOL managers routinely use the performance and financial data summarized in this report to improve the quality and 

cost effectiveness of services to the public. Given its importance for purposes of accountability, it is crucial to have 

confidence in the validity of this information. Several procedures are used routinely to verify data quality; findings 

for the current fiscal year are described below. 

Performance information presented in this report is complete and reliable as defined by the Office of Management 

and Budget (OMB) in Circular A-11. The Federal Financial Management Improvement Act of 1996 (FFMIA) 

requires agencies to implement and maintain financial management systems that are in substantial compliance with 

OMB Circular A-127, Joint Financial Management Improvement Program (JFMIP) requirements, Federal accounting 

standards, and the United States Government Standard General Ledger (SGL) at the transaction level. All 

Department of Labor financial management systems substantially comply with FFMIA. 

The Federal Managers' Financial Integrity Act of 1982 (FMFIA) requires the Secretary to report to the President and 

the Congress on the adequacy of management controls in safeguarding resources. Based on the unqualified opinion, 

audit results and quarterly and year-end assurances given by the agency officials and other pertinent information, the 

Department of Labor's accounting systems and internal controls comply with the provisions of the FMFIA. 

Conclusion

This Performance and Accountability Report will provide a useful overview of this Department's core missions and a 

clear assessment of our program and financial results. The employees of the Department are dedicated to keeping the 

American workforce strong and competitive. We will continue to provide programs and services that keep 

America’s workers safe and healthy on the job, protect workers’ retirement security, ensure fair compensation, and 

maintain the competitiveness of our Nation’s workforce in the 21st century. 

Elaine L. Chao 

Secretary of Labor

6 United States Department of Labor 
Management’s Discussion and Analysis 

 
Management’s Discussion and Analysis

Mission, Vision and Organization 

Mission 

The Department of Labor promotes the welfare of the job seekers, wage earners, and retirees of the United States by

improving their working conditions, advancing their opportunities for profitable employment, protecting their 

retirement and health care benefits, helping employers find workers, strengthening free collective bargaining, and 

tracking changes in employment, prices, and other national economic measurements. 

Vision 

We will promote the economic well-being of workers and their families; help them share in the American dream

through rising wages, pensions, health benefits and expanded economic opportunities; and foster safe and healthful 

workplaces that are free from discrimination. 

Organization 

The Department of Labor is organized into component agencies and offices that administer the various statutes and 

programs for which the Department is responsible. These programs are carried out through a network of regional 

offices and smaller field, district, and area offices, as well as through grantees and contractors. The largest program

agencies, each headed by an Assistant Secretary or Commissioner, are the Employment and Training Administration 

(ETA), Employee Benefits Security Administration (EBSA), Pension Benefit Guaranty Corporation (PBGC), 

Employment Standards Administration (ESA), Occupational Safety and Health Administration (OSHA), Mine Safety

and Health Administration (MSHA), and Bureau of Labor Statistics (BLS). An organization chart and agency

mission statements appear on the following pages. 

8 United States Department of Labor 
Mission, Vision and Organization 

FY 2005 Performance and Accountability Report 9

DOL Organization Chart 
Management’s Discussion and Analysis

Agency Missions 

Bureau of Labor Statistics (BLS) 

To produce, analyze, and disseminate essential and accurate statistical data in the field of labor economics to the 

American public, the U.S. Congress, other Federal agencies, State and local governments, business, and labor.

 

Employee Benefits Security Administration (EBSA) 

To protect the retirement, health, and other benefits of over 150 million participants and beneficiaries in private 

sector employee benefit plans. 

 

Employment Standards Administration (ESA) 

To protect the welfare and rights of, and generate equal employment opportunity for, American workers by 

promoting compliance with the various laws that it administers; and to provide the best possible program for income

replacement, medical treatment, and rehabilitation for injured Federal workers, longshore workers, and miners. 

Employment and Training Administration (ETA) 

To contribute to the more efficient functioning of the U.S. labor market by providing high quality job training, 

employment, labor market information, and income maintenance services primarily through State and local 

workforce development systems. 

Bureau of International Labor Affairs (ILAB) 

To carry out the Secretary's international responsibilities, develop Departmental policy and programs relating to 

international labor activities, and coordinate Departmental international activities involving other U.S. Government 

agencies, intergovernmental organizations, and non-governmental organizations. 

Mine Safety and Health Administration (MSHA) 

To protect the safety and health of the Nation's miners by assuring compliance with Federal safety and health 

standards through inspections and investigations and working cooperatively with the mining industry, labor, and the 

States to improve training programs aimed at preventing accidents and occupationally-caused diseases. 

Office of the Assistant Secretary for Administration and Management (OASAM) 

To develop and promulgate policies, standards, procedures, systems, and materials related to the resource and 

administrative management of the Department and ensure execution of such policies and directives. OASAM

provides leadership and policy guidance in support of the President's Management Agenda, including the 

Department's efforts to achieve "green" scores on the Executive Branch Management Scorecard. In addition, 

OASAM produces the Department's Strategic Plan and Annual Performance and Accountability Report. 

Office of the Assistant Secretary for Policy (OASP) 

To provide advice and assistance to the Secretary and Deputy Secretary in a number of areas, including policy

development, regulations, program implementation, compliance assistance strategies, program evaluations, research, 

budget and performance analysis, and legislation. 

Office of the Chief Financial Officer (OCFO) 

To shape a fiduciary environment where decision makers readily have and actively use high quality financial and 

performance information to make and implement effective policy, management, stewardship, and program decisions. 

Office of Congressional and Intergovernmental Affairs (OCIA) 

To provide direction and coordination for congressional and intergovernmental liaison and outreach activities for the 

Department of Labor. OCIA assists the Secretary, Deputy Secretary, agency heads, and Departmental staff to

develop effective programs and strategies to promote the Department's goals and objectives on Capitol Hill as well as 

among State and local officials. 

Office of Disability Employment Policy (ODEP) 

To provide leadership to increase employment opportunities for adults and youth with disabilities on both the supply

and demand sides of the labor market, by expanding access to training, education, employment supports, assistive 

technology, integrated employment, entrepreneurial development, and small-business opportunities; and by building 

10 United States Department of Labor 
Mission, Vision and Organization 

partnerships with employers and State and local agencies to increase awareness of the benefits of hiring people with 

disabilities, and to facilitate the use of effective strategies related to employment of people with disabilities. 

Office of Inspector General (OIG) 

To serve the American worker and taxpayer by conducting audits, investigations, and evaluations that result in 

improvements in the effectiveness, efficiency, and economy of Departmental programs and operations; prevent fraud 

and abuse in DOL programs and labor racketeering in the American workplace; and provide advice to the Secretary

and the Congress on how to attain the highest possible program performance.

Office of Public Affairs (OPA) 

To develop and implement policies and standards governing information and public affairs activities carried out by 

the Department, including planning and management of comprehensive national and regional public affairs programs 

and activities in support of the Secretary's goals and Departmental programs and activities. OPA also manages 

DOL's Internet and Intranet web sites to ensure that content and services are accurate, timely, regularly updated and 

aligned with the Department's mission and Secretarial goals. 

Occupational Safety and Health Administration (OSHA) 

To assure so far as possible for every working man and woman in the Nation safe and healthful working conditions. 

This includes such strategies as rulemaking, enforcement, compliance assistance, outreach, and partnerships to enable 

employers to maintain safe and healthful workplaces. 

Pension Benefit Guaranty Corporation (PBGC) 

To protect retirement-plan participants' pension benefits and support a healthy retirement plan system by encouraging 

the continuation and maintenance of private pension plans; protecting pension benefits in ongoing plans; providing

timely payments of benefits in the case of terminated pension plans; and making the maximum use of resources and 

maintaining premiums and operating costs at the lowest levels consistent with statutory responsibilities. 

Office of the Solicitor (SOL) 

To ensure that the Nation's labor laws are forcefully and fairly applied in implementing the priority enforcement 

initiatives of and defending the actions taken by the Department; and to advise agency officials on legal matters, 

including the development of regulations, standards, and legislation.

Veterans' Employment and Training Service (VETS) 

To provide veterans and transitioning service members with the resources and services to succeed in the 21st century 

workforce by maximizing their employment opportunities, protecting their employment rights, and meeting labor 

market demands with qualified veterans. 

Women's Bureau (WB) 

To improve the status of wage-earning women, improve their working conditions, increase their efficiency, and 

advance their opportunities for profitable employment. 

FY 2005 Performance and Accountability Report 11 
Management’s Discussion and Analysis

Executive Summary 

Introduction 

This report, prepared in accordance with the Reports Consolidation Act of 2000, presents the results of the 

Department of Labor’s (DOL) program and financial performance for FY 2005. It is divided into four sections: 

• The Secretary’s Message is a letter from the chief executive that identifies the Department’s “bottom line” at 

the mission level. It includes highlights of achievements for the year and communicates direction and 

priorities. 

• Management’s Discussion and Analysis (MD&A) introduces the Department’s mission, vision and 

organization, summarizes program and financial performance, and addresses major management challenges. 

The MD&A also reports on DOL’s progress in implementing the President’s Management Agenda. 

• The Performance Section narratives and graphic presentations of program results assess progress in 

achieving the Department’s goals as presented in the Strategic Plan and Performance Budget. 

• The Financial Section demonstrates our commitment to effective stewardship over the funds DOL receives 

to carry out the mission of the Department, including compliance with relevant financial management 

legislation. It includes the Independent Auditor’s Report – an independent opinion on the Financial 

Statements provided by the Department’s Office of Inspector General (OIG); Management and Performance 

Challenges – a report on the top management issues identified by the OIG and the Department’s progress in 

resolving them; and the Annual Financial Statements.

In addition, five Appendices supplement the performance and financial sections by providing detailed performance 

information, summaries of significant audits and evaluations, additional information on improper payments 

reduction, a list of acronyms and a list of Web sites featuring labor programs and issues. 

12 United States Department of Labor 
Executive Summary 

Performance Section 

FY 2005 marks the seventh year that the Department of Labor has reported program results under the Government 

Performance and Results Act (GPRA). Program goals that are key to the accomplishment of Departmental strategic 

and outcome goals as presented in the FY 2003-2008 Strategic Plan1

 were selected for inclusion in the Department’s 

FY 2006 Performance Budget Overview2

. These performance goals and their indicators provide the basis for 

assessments of the Department’s effectiveness in this section. 

This report includes performance goals from two different reporting periods in that Workforce Investment Act (WIA) 

programs are “forward-funded,” meaning that their spending and performance goals are tracked on a cycle that lags 

the Federal Fiscal Year (FY) by nine months. This period is referred to as a Program Year (PY); such goals being 

reported on in this document cover July 1, 2004 to June 30, 2005 (PY 2004). PY 2005 goals will appear in the FY 

2006 report. 

The Department’s goal structure has three levels. Strategic goals describe general aims that emerge from the 

Department’s mission. Each of these goals in turn has several outcome goals that define general results DOL

agencies can influence. These are long term objectives that in most cases involve more than one DOL agency. 

Finally, performance goals that support each outcome goal provide program-level clarity of purpose. Each 

performance goal has associated indicators and targets to measure our impact on a continuous basis. 

Program Performance Overview

DOL’s four strategic goals – A Prepared Workforce, A Secure Workforce, Quality Workplaces and A Competitive 

Workforce – express outcomes associated with our mission, vision and theme, and serve to focus Departmental 

efforts on the links between activities and their higher purpose. The table below indicates FY 2005 program

performance goal achievement by strategic goal. 

Of the 25 performance goals on which DOL is reporting in FY 2005, the Department achieved nine, substantially

achieved3

 six and did not achieve ten. The percentage achieved or substantially achieved totals 60 percent – 

comparable to the FY 2004 average of 63 percent (19 of the 30 performance goals supporting DOL strategic goals). 

DOL Strategic Goal Achieved Substantially 

Achieved

Not 

Achieved Total 

Goal 1 – A Prepared Workforce 

Enhance Opportunities for America’s Workforce 

4 1 4 9 

Goal 2 – A Secure Workforce

Promote the Economic Security of Workers and Families 2 3 1 6 

Goal 3 – Quality Workplaces 

Foster Quality Workplaces that are Safe, Healthy and Fair 2 1 3 6 

Goal 4 – A Competitive Workforce 

Maintain Competitiveness in the 21st Century Economy 

1 1 2 4 

Total 9 6 10 25

Below is a breakdown, by strategic goal, of FY 2005 achievements and significant developments. A tally of goals 

achieved, while providing an indication of whether DOL is on schedule with its plan, does not convey any actual 

performance information. To understand what was achieved in terms of benefits to the public, it is necessary to look 

not just at whether targets were reached but also at whether observed results indicate positive program impacts. The 

following summaries focus on significant trends and their implications. Tables present the goal number, responsible 

agency, goal statement, and result for each performance goal being reported on in this document. The first two digits 

 

1

 http://www.dol.gov/_sec/stratplan/main.htm 2

 http://www.dol.gov/_sec/Budget2006/overview-pb.htm#app1 3 The assessment category of substantially achieved recognizes results that were very close, which is defined as 80 percent of

targeted year-on-year improvement. 

FY 2005 Performance and Accountability Report 13
Management’s Discussion and Analysis

of each goal number indicate the funding year. In this report, all “04” goals are reporting on the Program Year period 

defined above. 

Strategic Goal 1 – A Prepared Workforce 

As indicated in the Program Performance Goal Achievement table above, DOL had nine performance goals under 

this strategic goal in FY 2005, of which five were achieved or substantially achieved (56 percent) – slightly below 

the Department wide average. However, the percentage of goals achieved understates progress, since at the 

indicator level, 37 of 41 targets were reached (90 percent). Entered employment, retention, education and earnings 

change, job training common measures tracked in most of the programs supporting this goal, improved over prior 

year results in every case. Although improving economic conditions helped, DOL had a significant role in 

facilitating more integrated employment and training service delivery by State Workforce Agency partners and 

encouraging them to focus on high growth occupations and industries in placement and training services. In 

addition, Office of Disability Employment Policy pilot programs exceeded expectations for identifying effective 

practices, and the Bureau of Labor Statistics improved its accuracy over FY 2004 results. 

Budget structures for Workforce Investment Act employment and training programs continue to inhibit program

performance by duplicating services and necessitating excessive expenditure on administration. DOL has proposed 

legislation to consolidate several funding streams. Another noteworthy challenge is the Job Corps program’s review 

of asset management practices for its residential training centers, which the Office of Inspector General has suggested 

could be a source of improved efficiency. 

Goal # 

Agency 

Performance Goal Result 

04-1.1A 

ETA 

Increase the employment, retention, and earnings of individuals registered under the Workforce 

Investment Act adult program. Achieved 

04-1.1B

ETA 

Improve the outcomes for job seekers and employers who receive One-Stop employment and

workforce information services. 

Not Achieved

04-1.1C

ETA 

Increase the employment, retention, and earnings replacement of individuals registered under the 

Workforce Investment Act Dislocated Worker Program. Not Achieved

04-1.1D 

VETS 

Improve employment outcomes for veterans who receive One-Stop and homeless veterans’ 

services. Achieved 

05-1.1A 

ETA 

Strengthen the registered apprenticeship system to meet the training needs of business and 

workers in the 21st Century. 

Achieved 

05-1.1B

ODEP 

Provide national leadership to increase access and employment opportunities for youth and adults 

with disabilities receiving employment, training, and employment support services by developing 

testing, and disseminating effective practices. 

Achieved 

04-1.2A 

ETA 

Increase placements and educational attainments of youth served through the WIA youth

program. Not Achieved

04-1.2B

ETA 

Improve educational achievements of Job Corps students, and increase participation of Job Corps 

graduates in employment and education. 

Not Achieved

05-1.3A 

BLS 

Improve information available to decision-makers on labor market conditions, and price and 

productivity changes. 

Substantially 

Achieved 

Strategic Goal 2 – A Secure Workforce 

Of six performance goals, DOL achieved or substantially achieved five (83 percent) – well above the Departmental 

average of 60 percent. Worker protection targets for processing timeliness, compliance with wage and hour 

regulations and union report transparency were all reached or substantially reached. In the worker benefits outcome

goal, results were better than they appear. Unemployment Insurance (UI) system performance was very good, thanks 

in part to improving economic conditions. The Federal workers’ compensation program results for return to work, 

reducing program expenses and customer service met expectations, overall. DOL’s Employee Benefit Security 

Administration’s (EBSA) enforcement efforts were successful by all measures. The Pension Benefit Guaranty 

14 United States Department of Labor 
Executive Summary 

Corporation (PBGC), while improving satisfaction of plan participants, slipped a bit in the judgment of its 

practitioner (employer) customers. 

The most significant concerns in this area are focused on solvency of the large trust funds for unemployment and 

pension benefits and integrity of payments to millions of beneficiaries annually by the UI system. To improve UI 

financial integrity, DOL is establishing processes for improving education of beneficiaries and assessments of their 

needs for reemployment services and continued eligibility. To improve defined benefit plan security, DOL included 

in the President’s FY 2006 Budget to Congress a proposal to strengthen plan funding rules, improve transparency, 

and reform the premium structure for insurance provided by PBGC. 

Goal # 

Agency 

Performance Goal Result 

05-2.1A 

ESA American workplaces legally employ and compensate workers. Achieved 

05-2.1B

ESA Ensure union financial integrity, democracy and transparency. 

Substantially 

Achieved 

05-2.2A 

ETA 

Make timely and accurate benefit payments to unemployed workers, facilitate the reemployment 

of Unemployment Insurance (UI) claimants, and set up unemployment tax accounts promptly for 

new employers. 

Substantially 

Achieved 

05-2.2B

ESA Minimize the impact of work-related injuries. Substantially 

Achieved 

05-2.2C

EBSA Secure pension, health and welfare benefits. Achieved 

05-2.2D 

PBGC Improve service to pension plan customers. Not Achieved

Strategic Goal 3 – Quality Workplaces 

DOL achieved or substantially achieved three of six performance goals (50 percent), which is below the 

Departmental average of 60 percent. Progress was made in workplace safety and health; fatalities were slightly more 

frequent but overall injury and illness incidence rates continued to fall, in part due to partnerships with employers and 

employees and better enforcement targeting. Dramatic, and in some cases record lows, in mine industry injury and 

fatality rates can be attributed in part to DOL strategies addressing the human factors that impact safety and health 

decisions of mine operators and miners. Illegal discrimination by contractors remained very rare, and veterans’ cases 

were resolved timely despite increased volume and complexity of complaints due to reserve mobilizations connected 

with the war in Iraq. Finally, DOL-funded international labor programs continued to demonstrate success by, for 

example, removing thousands of children from exploitive work and improving work conditions for the vast majority

of those targeted for assistance. 

A current DOL occupational safety and health challenge is obtaining timely outcome data. The latest available data 

on non-mining occupational injuries and illnesses are two years old. Mine safety challenges include developing 

strategies to reduce risks associated with the influx of inexperienced workers that accompanies growth in coal

production. Reemployment issues for armed service members continue to emerge with continuation of the war in 

Iraq. Beginning in FY 2006, the Veterans’ Employment and Training Service will monitor Guard and Reserve 

mobilization and demobilization figures to anticipate needs. 

Goal # 

Agency 

Performance Goal Result 

05-3.1A 

OSHA 

MSHA 

OSHA: Reduce work-related fatalities. Target not reached

MSHA: Reduce work-related fatalities. Target reached Not Achieved

FY 2005 Performance and Accountability Report 15
Management’s Discussion and Analysis

Goal # 

Agency 

Performance Goal Result 

05-3.1B

OSHA 

MSHA 

OSHA: Reduce work-related injuries and illnesses. Target reached

MSHA: Reduce work-related injuries and illnesses. Targets not reached Not Achieved

05-3.2A 

ESA Federal contractors achieve equal opportunity workplaces. Achieved 

05-3.2B

VETS 

Reduce employer-employee employment issues originating from service members’ military

obligations conflicting with their civilian employment. Not Achieved

05-3.3A 

ILAB Contribute to the elimination of the worst forms of child labor internationally. Substantially Achieved 

05-3.3B

ILAB Improve living standards and conditions of work internationally. Achieved

Strategic Goal 4 – A Competitive Workforce 

Of four performance goals, DOL achieved one and substantially achieved one (50 percent) – below the Departmental 

average of 60 percent. Nevertheless, more indicator targets were reached than not reached (14 vs. 4), and significant 

progress was made in making America’s workforce more competitive by a number of measures. Workforce 

Information job listings, resume searches and Occupational Information Network resource quality and traffic all 

posted impressive increases. Foreign Labor Certification (FLC) processing improved over FY 2004 and Trade 

Adjustment Assistance (TAA) continued to improve participants’ employment, retention and earnings. Child labor 

regulations were updated to eliminate confusion, and DOL proposed a rule to allow financial institutions to distribute 

the assets of abandoned individual pension plans to participants and beneficiaries. Significant improvement efforts 

under way include Workforce Information integration of services in programs funded by the Workforce Investment 

Act and the Wagner-Peyser/VETS-funded employment services; FLC fraud detection/prevention and backlog 

elimination; and TAA data quality initiatives. 

Goal # 

Agency 

Performance Goal Result 

04-4.1A 

ETA Build a demand-driven workforce system by increasing accessibility to workforce information. Substantially 

Achieved 

04-4.1B

ETA 

Assist employers in meeting their workforce needs by providing them with expeditious

determinations on their applications to hire foreign workers. 

Not Achieved

05-4.1B

ETA 

Increase the employment, retention, and earnings replacement of workers dislocated in important 

part because of trade and who receive trade adjustment assistance benefits. Not Achieved

05-4.2A 

OASP Maximize regulatory flexibility and benefits and promote flexible workplace programs. Achieved

The next table lists Program Year 2005 goals (July 1, 2005 – June 30, 2006) for which results will be reported in the 

FY 2006 Performance and Accountability Report. 

Goal# 

Agency 

Performance Goal 

05-1.1A 

ETA 

Increase the employment, retention, and earnings of individuals registered under the Workforce Investment Act

adult program.

05-1.1B

ETA Improve the outcomes for job seekers and employers who receive public labor exchange services. 

05-1.1C

ETA 

Increase the employment, retention, and earnings replacement of individuals registered under the Workforce

Investment Act dislocated worker program. 

16 United States Department of Labor 
Executive Summary 

Goal# 

Agency 

Performance Goal 

05-1.1D 

VETS 

Increase the employment outcomes for veterans who receive One Stop Career Center services and veterans’ 

program services. 

05-1.2A 

ETA Increase placements and educational attainments of youth served through the WIA youth program.

05-1.2B

ETA 

Improve educational achievements of Job Corps students, and increase participation of Job Corps graduates in

employment and education. 

05-4.1A 

ETA Build a demand driven workforce.

05-4.1B

ETA Increase accessibility to workforce information. 

Costs4 devoted toward achieving the Department’s strategic goals (see table below) are dominated by the second 

goal, A Secure Workforce, for which net costs in FY 2005 amounted to $40.811 billion – 82 percent of the total, 

$49.912 billion. Ninety two percent ($37.7 billion) of net costs associated with Strategic Goal 2 were for benefit 

payments to unemployed workers or workers disabled as a result of work-related injuries or illnesses. The first goal, 

A Prepared Workforce, required $6.865 billion (14 percent), mostly grants to States and other organizations for job 

training and a host of employment-related services. Approximately $1.062 billion (2 percent) went toward the third 

goal, Quality Workplaces, to fund direct services (such as salaries of Federal employees) aimed at improving safety

and health in the workplace. The fourth goal, A Competitive Workforce, accounted for $1.163 billion, two percent of 

the total, which went toward programs aimed at building a demand-driven workforce system. 

DOL Program Net Costs (Millions of Dollars) 

Goal FY 2003 FY 2004 FY 2005

Strategic Goal 1: A Prepared Workforce $6923 $8654 $6865

Outcome Goal 1.1 – Increase Employment, Earnings, and Assistance $3433 $5412 $3874

Performance Goal 04-1.1A (WIA adult) − − 922

Performance Goal 04-1.1B (One-Stop employment services) − − 725

Performance Goal 04-1.1C (WIA dislocated worker) − − 1455

Performance Goal 04-1.1D (VETS employment services) − − 196

Performance Goal 05-1.1A (Apprenticeship) − − 23

Performance Goal 05-1.1B (ODEP) − − 52

Other (Senior Community Service Employment Program, Indian and Native American 

Adult Programs, National Farmworker Jobs Program, Work Incentive Grants, etc.) 

− − 503

Outcome Goal 1.2 – Increase the Number of Youth Making A Successful Transition to Work $2957 $2703 $2455

Performance Goal 04-1.2A (WIA youth) − − 987

Performance Goal 04-1.2B (Job Corps) − − 1313

Other (Youth Offender Reintegration, Indian and Native American Youth Programs, etc.) − − 155

Outcome Goal 1.3 – Improve the Effectiveness of Information and Analysis On The U.S. 

Economy

$533 $539 $536

Performance Goal 05-1.3A (BLS) − − 536

 

4 Net cost data are presented. Net Cost reflects the full cost of each program as assigned by DOL entities to the Department’s 

outcome goals less any exchange revenue earned. Full cost consists of (a) both direct and indirect costs, and (b) the costs of 

identifiable supporting services provided by other segments within the reporting entity and by other reporting entities. 

FY 2005 Performance and Accountability Report 17
Management’s Discussion and Analysis

DOL Program Net Costs (Millions of Dollars) 

Goal FY 2003 FY 2004 FY 2005

Strategic Goal 2: A Secure Workforce $59,969 $46,957 $40,811

Outcome Goal 2.1 – Increase Compliance With Worker Protection Laws $273 $296 $277

Performance Goal 05-2.1A (Wage and Hour) − − 214

Performance Goal 05-2.1B (Labor-Management Standards) − − 63

Outcome Goal 2.2 – Protect Worker Benefits

5 $57,718 $46,661 $40,534

Performance Goal 05-2.2A (Unemployment Insurance) − − 34,243

Performance Goal 05-2.2B (Workers’ compensation) − − 6131

Performance Goal 05-2.2C (EBSA) − − 160

Outcome Goal 2.3 – Increase Employment and Earnings for Retrained Workers $1978 − −

Strategic Goal 3: Quality Workplaces $991 $1021 $1062

Outcome Goal 3.1 – Reduce Workplace Injuries, Illnesses, and Fatalities $815 $812 $823

Outcome Goal 3.2 – Foster Equal Opportunity Workplaces $118 $112 $115

Performance Goal 05-3.2A (Federal Contractor Compliance) − − 99

Performance Goal 05-3.2B (USERRA) − − 16

Outcome Goal 3.3 – Reduce Exploitation of Child Labor, Protect the Basic Rights of Workers,

and Strengthen Labor Markets

$58 $97 $124

Performance Goal 05-3.3A (Child Labor) − − 74

Performance Goal 05-3.3B (International Labor Standards) − − 43

Other (Other ILAB programs) − − 7

Strategies Goal 4: A Competitive Workforce − $6 $1163

Outcome Goal 4.1 – Build a Demand-Driven Workforce System to Address Worker Shortages 

and Equip Workers to Adapt to the Competitive Challenges of the 21st Century 

− − $1163

Performance Goal 04-4.1A (Workforce Information) − − 106

Performance Goal 05-4.1A (Foreign Labor Certification) − − 60

Performance Goal 05-4.1B (Trade Adjustment Assistance) − − 846

Other (Transition Assistance Program, Pilots, Demonstrations, Research & Evaluations, and

H-1B Technical Skills Training) 

− − 151

Outcome Goal 4.2 – Promote Workplace Flexibility and Minimize Regulatory Burden6 − $6 −

Costs Not Assigned to Goals $44 $38 $11

Total7 (may not be equal to sum of individual goal totals due to rounding) $67,927 $56,676 $49,912

Charts that display net costs from FY 1999-FY 2005 to illustrate trends are provided in each outcome goal summary; 

brief explanations of significant changes since FY 2004 are provided, as well. This is the first year for which DOL 

has had the capability of reporting costs at the performance goal level – thanks to more sophisticated cost models in 

 

5

 Costs for Performance Goal 05-2.2D (PBGC) are not included because the corporation’s financial statements are separate from

those of the Department and are not included in this document. 6

 Costs associated with this goal in FY 2004 were allocated to program performance goals in FY 2005. See the explanation in

the Outcome Goal 4.2 narrative under Net Cost of Programs. 7

 The total net costs for FY 2005 included in this table are $452 million less than the total net costs included in the Consolidated 

Statements of Net Cost as certain costs in this table are presented on a program year basis vs. a fiscal year basis in the 

Consolidated Statements of Net Cost. 

18 United States Department of Labor 
Executive Summary 

our managerial cost accounting system, Cost Analysis Manager (CAM), that describe relationships between 

resources, activities, outputs and performance goals. 

Reporting Performance Results 

The Performance Section presents, by strategic goal, summaries of performance at each level. Each strategic goal 

section is introduced by an overview of the goal, its component outcome goals, results for FY 2005 and near term

plans for improvement. Each outcome goal section similarly begins with a summary of results, adds net cost 

information and highlights and concludes with a brief discussion of future plans. Finally, within each outcome goal 

section are individual performance goal narratives that present results, describe the program and its operating 

environment, analyze performance and disclose management issues such as data quality and studies of program costeffectiveness. Appendix 1 contains performance goal histories and Appendix 2 summarizes significant audits and 

evaluations of DOL programs completed during FY 2005 that have implications for performance goals. 

Performance measurement is inherently difficult, especially for a large, diverse organization like DOL that works to 

accomplish its mission indirectly – in partnership and by assisting others. The Department seeks continuous

improvement in its selection of indicators and in policies and procedures for collecting and reporting program

performance data so that managers and other decision makers can rely on them. However, each program must 

consider the costs and benefits of gathering and managing such information. Changes take time to implement and 

reporting requirements can impose considerable burdens on staff, partners, beneficiaries and regulated entities. 

Timeliness is another important consideration in utility of performance data; most programs use real-time, monthly 

and quarterly reporting systems and estimate/reconcile annual totals or averages. 

New indicators often lack data needed to establish targets. For such indicators, the first year’s target may be to 

establish a baseline, and thus the Department gives the program a positive rating for gathering the data as planned 

and establishing targets for the subsequent year. 

The Office of Inspector General assesses the internal controls of DOL agencies – systems used to validate, verify and 

record data submitted by field staff and partners (e.g., grantees). These systems are identified as Data Sources in 

Appendix 1 at the bottom of each performance goal history. Material inadequacies, if any, are disclosed in this report 

in the Secretary’s Message. Lack of findings does not imply that data are factual; we can only infer that current 

practices and data are acceptable given available knowledge and resources. In other words, unless noted otherwise, 

performance data in this report should be considered sufficiently accurate and timely.

FY 2005 Performance and Accountability Report 19
Management’s Discussion and Analysis

Financial Section 

Financial Performance Report 

At the end of FY 2004, the Department received green on the President’s Management Agenda (PMA) scorecard for 

financial management. Since then, the Office of the Chief Financial Officer (OCFO) under the direction of the 

Secretary has devoted significant resources to secure its achievement of excellence in financial management in the 

Federal Government. Successes include updating the Department’s Cost Accounting Manager (CAM) models for all 

participating agencies, providing accurate and timely financial statements on a quarterly basis, migrating the 

Department’s payroll function to the National Finance Center, and beginning the implementation of a new core 

financial management system. While working on these key initiatives, the OCFO anticipated the new requirements 

related to internal controls by preparing and submitting an implementation plan to the Office of Management and 

Budget (OMB). As in previous years, the Department’s financial systems remained in substantial compliance with 

the Federal Financial Management Improvement Act of 1996 (FFMIA), ensuring that the systems support full 

disclosure of the costs of the Department’s programs and activities. In addition, the Department continued to comply

with the Federal Managers’ Financial Integrity Act (FMFIA), a sign that the Department’s accounting systems and 

internal controls were sufficient to safeguard its resources. Further, no material weaknesses were found in the audit 

of the Department’s financial statements for the fiscal year ended 2005. 

Financial Management Scorecard (as of 9/30/05) 

Current Status • Received ninth consecutive unqualified and timely audit opinion on annual financial 

statements; no material auditor-reported internal control weaknesses. 

• Produced accurate and timely financial information that is used by management to 

drive results in key areas of operations. 

• Integrated financial and performance management systems to support day-to-day

operations.

• Met FFMIA requirements.

Continued 

Progress 

To Implement a New Core Financial Management Information System: 

• Select Center of Excellence 

To Integrate Financial Data into Management: 

• Complete design of working capital fund model.

• Continue efforts to automate non-financial data. 

• Revise CAM models to support Budget and Performance Integration (BPI) efforts.

To Implement OMB A-123 revisions 

• Assess, test, and report on the adequacy of the Department’s internal controls.

For the ninth consecutive year, the Department received an unqualified opinion on its consolidated financial 

statements. During FY 2005, the OCFO provided timely quarterly audited financial statements to OMB, 21 days after 

the end of each quarter. 

The Department successfully implemented CAM, its managerial cost accounting system. CAM supports decisionmaking by providing program managers with cost of outputs and activities to better understand the cost of programs 

from an operational perspective. CAM information will be used to support Departmental initiatives related to Budget 

and Performance Integration and OMB PART efficiency measures. 

The Department continues to work on the implementation of a new core financial management information system

that will provide readily available, transparent data to managers and decision-makers for use on a day-to-day basis. 

This JFMIP-compliant COTS package will make available timely, accurate, and reliable financial information, and 

will provide the tools to conduct sophisticated financial analyses to better manage program resources. This will 

result in an increased use of integrated financial and performance information that will empower superior decision 

making through better business intelligence. When fully implemented, the new system will be a strategic asset for 

the Department allowing managers to create customized reports online at their desktops to meet their management 

needs in real time. The Department’s new core financial management system will be hosted by a Center of 

Excellence (CoE). The CoE is scheduled to be selected in FY 2006. 

20 United States Department of Labor 
Executive Summary 

The Department is committed to implementing the requirements outlined in the revised OMB’s Circular A-123, 

Management’s Responsibility for Internal Control over Financial Reporting. Strong internal controls already exist in 

the Department as evidenced by numerous clean audit opinions and no material weaknesses. OCFO continues to 

administer a Quarterly Financial Management Certification program, which requires managers at all levels to attest to 

the adequacy of program controls. OCFO will continue to work with program agencies to ensure effective 

management controls over program resources, financial systems and reporting. The Department has developed an 

implementation plan to establish an oversight committee consisting of representatives from the financial, 

administrative and information systems communities. OCFO will build upon existing processes to meet the 

requirements of A-123. The result of these efforts will support the Secretary’s annual FMFIA certification in the 

Performance and Accountability Report. Internal controls improve transparency to the public ensuring that resources 

are being wisely used to bring results that support the Department’s strategic goals – A Prepared Workforce, A 

Secure Workforce, Quality Workplaces, and A Competitive Workforce. 

Financial Statement Presentation 

We are proud to report our ninth consecutive unqualified audit opinion issued by the Department’s Office of 

Inspector General (OIG). Annually, we are challenged with improving and maintaining financial management 

practices and policies. This independent assessment provides assurance that the money entrusted to the Department’s

stewardship is accounted for properly. 

The principal financial statements summarize the Department’s financial position, net cost of operations and changes 

in net position, provide information on budgetary resources and financing, and present the sources and disposition of 

custodial revenues for FY 2005 and FY 2004. Highlights of the financial information presented in the principal 

financial statements are shown below: 

Financial Position 

The Department’s Balance Sheet presents its financial 

position through the identification of agency assets, 

liabilities and net position. Total assets increased from

$62.4 billion at the end of FY 2004 to $71.5 billion in FY 

2005 primarily due to the increase in unemployment 

taxes. Seventy seven percent of assets are invested in 

U.S. Government securities, compared to 73 percent in 

FY 2004. Liabilities totaled $20 billion and $15 billion at 

the end of FY 2005 and FY 2004 respectively, leaving a difference, or net position, of $51.4 billion and $47.4 billion 

at the end of each year. 

 

Net Cost of Operations 

The total net cost of operations in FY 2005 was 

$50.4 billion, an 11 percent decrease from the prior 

year. This decrease in program costs is mainly

attributable to a decrease in unemployment claims

during the fiscal year. 

Income Maintenance programs continue to 

comprise the major portion of costs. These 

programs include costs such as unemployment 

benefits paid to individuals who are laid off or out 

of work and seeking employment as well as payments to individuals who qualify for disability benefits due to injury

or illness suffered on the job. 

Balance Sheet (in thousands)

Fund Balance with Treasury $ 9,219,660

Investments $54,952,644 

Accounts Receivable $ 5,034,288 

 

Crosscutting Programs (in thousands)

Income Maintenance $42,236,284 

Employment and Training $ 6,009,384 

Labor, Employment and Pension Standards $ 714,351 

Worker safety and health $ 794,420 

Statistics $ 525,011 

 

FY 2005 Performance and Accountability Report 21
Management’s Discussion and Analysis

Employment and training programs comprise the second largest cost. These programs are designed to help 

individuals deal with the loss of a job, research new opportunities, find training to acquire different skills, start a new 

job, or make long-term career plans. 

Financing 

The Statement of Financing reconciles the net cost of operations with the obligation of budgetary resources. The 

Department’s operations are funded primarily by Unemployment Insurance (UI) program employer taxes, 

appropriations received, and investment interest earned from various trust funds. 

Statement of Budgetary Resources 

This statement reports the amount of resources received to effectively carry out the activities of the Department as 

well as the status of these resources at the end of the fiscal year. The Department had direct obligations of $51.3 

billion in FY 2005, a decrease of $10.3 billion from FY 2004. 

Limitations on the Principal Financial Statements 

As required by the Government Management Reform Act of 1994 (31 U.S.C. 3515 (b)), the principal financial 

statements report the Department’s financial position and results of operations. While the statements have been 

prepared from the Department’s books and records, in accordance with formats prescribed by OMB, the statements 

differ from the financial reports used to monitor and control budgetary resources, which are prepared from the same 

books and records. The statements should be read with the realization that they are a component of the U.S.

Government, a sovereign entity, and that liabilities reported in the financial statements cannot be liquidated without 

legislation providing resources to do so. 

IPIA Compliance 

Eliminating Improper Payments (as of 9/30/05) 

Current Status • Corrective action plan in place with OMB approved targets 

• Evidence that improper payment reduction targets are being met.

• Recovery targets in place and evidence that targets are being met.

Continued 

Progress 

• Work with OMB on WIA and FECA measurement and reporting requirements based 

on FY 2005 results. 

• Continue to roll-out the National Database for New Hires cross-match across 

multiple States for the Unemployment Insurance program.

Over the past several years, identifying and reducing improper payments has been a major financial management 

focus of the Federal Government. A PMA key component is to improve agency financial performance through 

reductions in improper payments. OMB originally provided Section 57 of Circular A-11 as guidance for Federal 

agencies to identify and reduce improper payments for selected programs.

8

 The Improper Payments Information Act 

of 2002 (IPIA) broadened the original erroneous payment reporting requirements to programs and activities beyond

those originally listed in Circular A-11. 

IPIA defines improper payments as those payments made to the wrong recipient, in the wrong amount, or used in an 

improper manner by the recipient. IPIA requires a Federal agency to identify all of its programs that are risk 

susceptible to improper payments. It also requires the agency to implement a corrective action plan that includes 

improper payment reduction and recovery targets. The act also requires the agency to report annually on the extent 

of its improper payments and the actions taken to increase the accuracy of payments. 

 

8

 Section 57 identified Unemployment Insurance (UI), Federal Employees’ Compensation Act (FECA) and Workforce

Investment Act (WIA) as programs required to report annual erroneous payments. 

22 United States Department of Labor 
Executive Summary 

To coordinate and facilitate the Department’s efforts under IPIA, the Chief Financial Officer (CFO) is the Erroneous 

Payment Reduction Coordinator for the Department. OCFO worked with program offices to develop a coordinated 

strategy to perform annual reviews for all programs and activities susceptible to improper payments. This cooperative 

effort included developing actions to reduce improper payments, identifying and conducting ongoing monitoring 

techniques, and establishing appropriate corrective action initiatives.

Methodology

Due to the inherent differences in managing and accounting for funds in a benefit versus a grant program, the 

Department conducted its FY 2005 risk assessment using different methodologies to assess their improper payment 

risk. Per OMB guidance, all Section 57 programs are deemed to be high risk irrespective of the determined

improper payment error rate. The Department has two Section 57 benefit programs, Unemployment Insurance (UI) 

and Federal Employees’ Compensation Act (FECA). It also has one Section 57 grant program, Workforce 

Investment Act (WIA). 

FY 2005 benefit programs with FY 2004 outlays totaling less than $200 million were deemed to be low risk, unless a 

known weakness existed in the program management based on reports issued by oversight agencies such as the 

Department’s Inspector General (IG) and/or the U.S. Government Accountability Office (GAO). Hence, these 

benefit programs were not statistically sampled. For benefit programs with outlays greater than $200 million, the 

Department conducted sampling to determine their improper payment rates. This sampling included FECA, UI, 

Black Lung Disability Trust Fund, and Energy Employees Occupational Illness Compensation Fund. UI was the 

only program determined to be susceptible to risk9

 as a result of this approach. However, the Department is also 

reporting on FECA’s improper payment rate since it is a Section 57 designated program. 

As mentioned earlier, the Department used a separate methodology to assess the risk of improper payments in grant 

programs except for Job Corps which was sampled. The Department analyzed all FY 2003 Single Audit Reports10 to 

identify questioned costs, which were used as a proxy for improper payments, and to estimate an approximate risk for 

each of the Department’s grant programs. The improper payment rate was determined by calculating the projected 

questioned costs and dividing this total projection by the corresponding outlays.

11 All error rates were determined to 

be well below the 2.5 percent threshold; therefore, no grant programs were determined to be susceptible to risk as a 

result of this approach. However, like FECA, the Department is reporting on WIA’s improper payment rate since it is 

a Section 57 designated program, even though its improper payment rate is well below the 2.5 percent threshold. 

Challenges for IPIA Compliance 

Like many other Federal agencies, the Department faces challenges in meeting its improper payment reduction and 

recovery targets, particularly with programs that are sensitive to the U.S. economy fluctuations, such as the UI 

program. Furthermore, meeting improper payment reduction and recovery targets of programs, such as UI and WIA, 

are contingent upon the cooperation and support of State agencies and other outside stakeholders who are intricately

involved in the day-to-day management of these programs’ activities. 

Accomplishments and Plans for the Future 

In FY 2005, the Department conducted the required risk assessment. It also established reduction and recovery

targets and developed corrective action plans for those programs for which it is required to report. Furthermore, the 

Department met its reduction and recovery improper payment targets set in FY 2004. 

In addition to implementing its corrective action plans, the Department also conducted pilot programs within the UI 

and WIA programs in an effort to identify new ways to detect and reduce these programs’ improper payments. 

During FY 2005, OCFO and the Employment and Training Administration (ETA) initiated the UI National Directory

 

9

 OMB Implementation Guidance, M-03-13 defines programs to be susceptible to risk if the improper payment rate exceeds 2.5 

percent and the amount of overpayment exceeds $10 million. 10 The Single Audit Act of 1996 provides for consolidated financial and single audits of State, local, non-profit entities, and 

Indian tribes administering programs with Federal funds. The most recent year available for Single Audit Reports is 2003. 11 In the case of the WIA program, the projection was based on the WIA-specific questioned costs. For the non-WIA grant 

programs, the projection was made for all programs as an aggregate. The improper payment rate was determined by dividing

this aggregate projection of questioned costs by the total outlays for all non-WIA grant programs. 

FY 2005 Performance and Accountability Report 23
Management’s Discussion and Analysis

of New Hires (NDNH) pilot across three states to determine how a cross-match between NDNH12 and State UI 

claimant data would help identify and reduce improper payments. The result of this pilot clearly indicated that a 

substantial amount of additional overpayments could be detected using NDNH. As a result of these positive 

experiences and the overall success of the pilot, many states have expressed interest in implementing the NDNH 

cross-match. ETA is already moving ahead with the implementation of the NDNH cross-match with five states 

(Utah, Virginia, Texas, Connecticut, and Washington). An additional 24 states have expressed interest in the use of 

NDNH by the end of FY 2006. The ultimate goal is for all states to use NDNH to detect and reduce the occurrence 

of Benefit Year Ending (BYE)13 overpayments. The WIA pilot entailed gathering and analyzing data using the 

Department’s single audits for FY 2002 and FY 2003 that identified WIA grant funds. The results indicate that 

questioned costs identified in the audits are less than one percent of WIA expenditures. The analysis also confirmed 

that the most efficient means to gather data regarding Federal grant programs is to use the existing infrastructure 

provided by the Single Audit Act. The Department used the single audits for the first time to estimate error rates for 

all grant programs except for Job Corps. 

Other Significant Information 

Audit Follow up 

The Inspector General Act Amendments of 1988 require Federal agencies to provide the status of their audit 

resolutions for all audit reports with recommendations open for more than one year. The Department’s management 

and auditors agree that some of Labor’s corrective action plans will take several years to complete. As of September 

30, 2005, 183 audit reports have been open for over one year. The total monetary value of open audit findings is 

$65.2 million, which covers 936 separate recommendations. 

Departmental agencies and the OIG jointly manage and update the audit tracking system where the current status of 

each open audit finding is maintained. Final closure of the audit finding is determined solely by the reviewing OIG 

officials. Due to the complexity of implementing some of the audit resolutions, many of these decisions take years 

before being rendered and the audit finding is closed. 

The most significant of the non-monetary open audit findings are discussed in this report. A listing of all open audits 

is available upon request from the Department’s OCFO. 

FY 2005 OIG Audit Recommendations Greater than One Year (amounts in thousands)

Affected accounts in 183 audit findings with 936 recommendations $ 65,236 

• 42 open recommendations under administrative law or Federal appeal $ 3,302 

• Funds put to better use $ 5,669 

• Referred/in the process of being referred to Department of the Treasury $ 2,726 

Balance of open audit findings $ 53,539 

Debt Management 

The Debt Collection Improvement Act of 1996 (DCIA) designated the Department of the Treasury as the central 

agency for collection of Federal debts over 180 days delinquent. The Department cross services all delinquent debts 

in accordance with this statute. Debt management accounts for a relatively small part of our financial management 

activity. The majority of debts managed by the Department relate to the assessment of fines and penalties in our 

enforcement programs. During FY 2005, the Department referred $67.7 million, which represents 70 percent of all 

eligible delinquent debt, to Treasury for collection. The Department continues to monitor and aggressively pursue its 

debt greater than 180 days old. 

User Charges - Policy Review 

In accordance with the Chief Financial Officers Act of 1990 (CFO Act) and OMB Circular A-25, department-wide 

guidance has been developed to establish policies, procedures, and responsibility for implementing and managing 

user charges within the Department. The guidance includes the biennial review requirements of the CFO Act. 

 

12 NDNH is a nationally consolidated database that contains employment and UI information on the nation’s workforce and is

maintained by the Department of Health and Human Services (HHS). 13 BYE violations are defined as individuals who return to work and continue to claim and receive UI benefits. 

24 United States Department of Labor 
Executive Summary 

Prompt Payment Act 

The Department works effortlessly to meet guidance and regulations outline in the Prompt Payment Act. The Prompt 

Payment Act requires Executive agencies to pay commercial obligations within discreet time periods and to pay

interest penalties when those time constraints are not met. 

In FY 2005, of approximately $1.9 billion in gross payments, $481,430 was paid in interest fees and penalties. 

Additionally, during FY 2005, there were over 69,000 payments made to vendors and travelers. Of this amount, 

2,773 invoices were paid late, resulting in only 4% of the total payments incurring interest penalties. 

Electronic Fund Transfer (EFT) 

The Department has worked aggressively with its agencies during this fiscal year to increase the number of vendors 

receiving payments electronically. As the chart below displays, this cooperative effort resulted in improved results 

across the board. The low rates for ESA programs are due to the low EFT participation and the heavy volume within 

its medical and benefits programs. 

DOL EFT Payments 

FY01 FY02 FY03 FY04 FY05

Administrative 

Vendors 

69% 74% 96% 78% 86%

Travel & 

Miscellaneous 

99% 99% 99% 99% 99%

Salary & Awards 96% 98% 99% 99% 99%

ESA Programs 26% 28% 53% 44% 46%

Total 38% 39% 65% 53% 57%

Source: DOL DOLAR$ and Payroll System EFT reports. 

FY 2005 Performance and Accountability Report 25
Management’s Discussion and Analysis

Major Management Challenges 

The table below lists management challenges the Department considers most important in terms of their impact on 

the accomplishment of goals in this report and their impact on the American workplace and taxpayers, overall. 

Management challenges for Goal 1, A Prepared Workforce, pertain to managing employment and training programs, 

foreign labor certification, and safeguarding real property. The GAO identified the management of employment and 

training programs as one of the three major challenges remaining for the Department in 2005. The Department’s 

OIG identified the foreign labor certification and the management of real property challenges for this goal. 

Management challenges for Goal 2, A Secure Workforce, include reducing overpayments (improper payments) of 

unemployment insurance and safeguarding funds for Employee Benefit Plan Assets and unemployment insurance 

and real property. These challenges are well documented and were identified by the OIG, the GAO, and the 

Department. 

For Goal 3, Quality Workplaces, the GAO identified a challenge to fostering safe workplaces that the Department 

recognizes as important. 

The achievement of all the Department’s goals is influenced by the successful management of its procurement 

operations, its information technology capabilities, and its data quality. These challenges have been identified by the 

Department’s OIG and are included in the table, as well. 

This year’s list includes ten items, each of which has been identified as a concern by DOL’s Office of Inspector 

General (OIG), the U.S. Government Accountability Office (GAO), DOL’s Office of the Chief Financial Officer 

(OCFO), or some combination thereof: 

• Reducing Improper Payments 

• Foreign Labor Certification 

• Security of Employee Benefit Plan Assets 

• Manage Employment and Training Programs to meet the Demands for the Workforce of the 21st Century

• Procurement System Concerns 

• Foster Safe Workplaces 

• Real Property 

• Information Technology Systems 

• Data Quality 

• Safeguarding Unemployment Insurance 

Summaries of the issue, actions taken and those remaining are presented for each item. More information on many

of them may be found elsewhere in this report in discussions of program performance or in the Financial Section. 

The Department aggressively pursues corrective action for all significant challenges, whether identified by the OIG, 

the GAO, OCFO or other sources within the Department. 

Management Challenge/ 

Significant Issue Actions Taken in FY 2005 Actions Remaining and Expected Completion Date 

Reducing Improper Payments 

Improper payments are payments made 

to the wrong recipient, in the wrong

amount, or used in an improper manner 

by the recipient. 

Reducing improper payments is a 

Departmental initiative under the 

President’s Management Agenda. 

Unemployment Insurance (UI) made

up most of DOL’s $ 3.9 billion in 

improper payments in FY 2004. 

Reducing UI improper payments impacts 

Goal 05-2.2A, Make timely and accurate 

benefit payments to unemployed workers. 

DOL proposed legislative changes to

prevent and recover overpayments of

Unemployment Insurance benefits, 

saving an estimated $4.7 billion over 10

years 

Focus Departmental efforts to detect, 

prevent, and recover improper payments

so that taxpayers can be assured that 

their dollars are spent as intended: 

FY 2006

26 United States Department of Labor 
Executive Summary 

Management Challenge/ 

Significant Issue Actions Taken in FY 2005 Actions Remaining and Expected Completion Date 

Formed partnerships with States, other 

Federal agencies and the OCFO to

prevent UI fraud and abuse 

Facilitated and funded State access to 

the National Directory of New Hires to

identify individuals claiming benefits

after returning to work (the number one

cause of UI overpayments). 

Awarded grants to 21 States to conduct 

in-person claimant interviews in OneStop Career Centers to assess 

beneficiaries’ need for reemployment 

services and their continued eligibility 

Issued a State-level Detection of OverPayments Core Measure in States’ 

performance budget plans, giving States 

an additional incentive to prevent and

detect UI overpayments 

Facilitate States’ use of the National 

Directory of New Hires and issue report 

on use of the directory: ongoing

Collect information on results of grants 

to conduct in-person claimant 

interviews: May 2006

Implement beneficiary eligibility 

reviews in One-Stop Career Centers that 

are projected to save up to $225 million 

annually 

The Federal Employees’ Compensation 

Act provides income replacement and 

medical cost protection to covered 

Federal civilian and Postal Service 

employees injured on the job, and to 

employees with work-related diseases 

(and their beneficiaries). Cases were 

found without current medical 

information on file, resulting in payments 

to claimants who were no longer 

disabled. Without adequate controls over

the processing of medical bill payments, 

amounts paid are not always calculated 

in accordance with fee schedules. 

Impacts Goal 05-2.2C, Minimize the 

impact of work-related injuries.

Rolled-out a new case management and

benefit payment system (Integrated

Federal Employee Compensation 

System) that automatically tracks the 

due dates of medical evaluations 

Full functionality of Integrated Federal 

Employee Compensation System:

 March 31, 2006

Foreign Labor Certification 

Labor’s OIG investigations revealed that 

corrupt employers, labor brokers, and 

lawyers file fraudulent applications. 

Problems with integrity of the labor 

certification process and fraud may result 

in economic hardship for American 

workers, the abuse of foreign workers,

and may have national security

implications when applications are not 

adequately screened before being 

certified. This management challenge

impacts Outcome Goal 1.1, Increase 

Employment, Retention and Earnings.

Amended regulations governing the 

filing and processing of labor 

certification applications for the 

permanent employment of aliens to

implement a new system for filing and 

processing such applications. The

system allows for electronic filing of 

some applications and requires 

employers to conduct recruitment before

filing their applications. The rule 

applies to labor certification applications

for the permanent employment of aliens

filed on or after that date. 

Developed a module for the permanent

application processing system that 

validates applicant information and 

highlights signs of risk or fraud.

Change the current regulation to: 1) 

eliminate the current practice of allowing 

the substitution of alien beneficiaries on

applications and approved labor

certifications; 2) implement a 45-day 

deadline to file approved permanent 

labor certifications in support of a 

petition with Homeland Security; 3)

prohibit the sale, barter, or purchase of 

permanent labor certifications or 

applications, as well as related payments; 

and 4) provide enforcement mechanisms

to protect program integrity, including

debarment with appeal rights: FY 2006

FY 2005 Performance and Accountability Report 27
Management’s Discussion and Analysis

Management Challenge/ 

Significant Issue Actions Taken in FY 2005 Actions Remaining and Expected Completion Date 

Security of Employee Benefit Plan Assets 

The Pension Benefit Guaranty

Corporation (PBGC) encourages

continuation and maintenance of 

voluntary private defined benefit pension 

plans, provides timely and uninterrupted 

payment of benefits and is self-financing. 

PBCG experienced a substantially

increased workload in FY 2005. 

PBGC implemented performance plans,

performance-based and fixed price 

contracts; sought to use technology to

improve customer service and leverage 

resources; implemented a new 

investment policy and strong internal

controls environment; and improved risk

management. 

Work with DOL/EBSA and IRS to

implement electronic processing of 

information about private pension plans: 

FY 2006

The Administration proposed pension 

reform to streamline, simplify and

strengthen regulations. 

Security of Employee Benefit Plan 

Assets 

- Inspected operations of CPAs

performing significant numbers of 

plan audits and, with the American

Institute of Certified Public 

Accountants (AICPA), created the

Employee Benefit Plan Audit

Quality Center 

- Referred deficient audit work to 

State boards of accountancy or the

AICPA’s Professional Ethics 

Division

Implement CPA firm inspection 

program, augment reporting compliance 

cases with audit work paper reviews,

refer deficient audit work for 

disciplinary action, and, with 

professional organizations, develop 

accounting and auditing guidance: FY 

2006 

Pension Plan Fraud

- 69 indictments were returned as a 

result of criminal investigations (as 

of the third quarter of FY 2005) 

- DOL entered convictions or pleas 

in 43 cases and recovered over $2.5 

million. 

Make criminal enforcement a top 

priority: FY 2006 

Cash Balance Plans

− Confer with the IRS concerning 

guidance on calculations for benefits

from cash balance pension plans. 

Continue to confer with the IRS 

concerning guidance on calculations for 

benefits from cash balance pension 

plans: FY 2006

DOL safeguards approximately 730,000 

private pension plans and 6 million 

health and welfare plans by ensuring that 

annual audits of large employee benefit 

plans meet requirements. These pension 

plans hold over $4.5 trillion in assets and

cover more than 150 million American

workers. Areas of concern include 

ensuring security of employee benefit 

plan assets, pension plan fraud, cash

balance plans, and corrupt multiple 

employer welfare arrangements.

Corrupt Multiple Employer Welfare 

Arrangements 

- From 1995 to Q3 FY 2005, 

initiated 670 civil and 134 criminal 

investigations

- Obtained monetary results of over 

$162 million 

- Filed 75 civil complaints 

- Indicted 112 individuals with 76

convictions resulting in prison terms

Place a top priority on stopping abusive 

practices: FY 2006 

Work closely with Department of Justice 

to prosecute these complex financial, 

white-collar crimes and include these as 

an emerging area of health care fraud: 

FY 2006

Manage Employment and Training Programs to meet the Demands for the Workforce of the 21st Century 

The goal of the Workforce Investment 

Act of 1998 (WIA) is to increase 

employment, retention, and earnings of

Implemented requirements for WIA 

Standardized Record Data to facilitate 

reporting across DOL employment and

President’s FY 2006 Budget includes 

proposal for reforming job training

programs and consolidating the WIA 

28 United States Department of Labor 
Executive Summary 

Management Challenge/ 

Significant Issue Actions Taken in FY 2005 Actions Remaining and Expected Completion Date 

participants and thus improve the quality 

of the workforce to sustain economic 

growth, enhance productivity and 

competitiveness, and reduce welfare 

dependency. Authorization for WIA 

ended in 2003. Reauthorization is 

pending before Congress. WIA is

significant both in terms of its impact on 

the Nation’s workers and the extent of 

funding. 

The program is large and complex and 

impacts Goals 04-1.1A, 04-1.1B, 04-

1.1C and 04-4.1A. WIA could be 

improved through changes to increase

training provider participation, improve

dislocated worker program services and 

outcomes, and better document youth

program outcomes and assess State WIA 

funding availability. 

The Workforce Investment Act (WIA) 

Youth program authorizes services to 

low-income youth (ages 14-21) with

barriers to employment. The program

serves in- and out-of-school youth, 

including those with disabilities and

those requiring assistance to complete an 

educational program or to secure and 

hold employment

DOL is challenged to connect dropouts 

to WIA youth programs. This challenge 

pertains to Goal 04-1.2A, Increase 

placements and educational attainments

of youth served through the WIA youth 

program. A recent GAO study found 

that despite DOL’s guidance, local areas 

faced challenges in identifying and 

retaining out-of-school youth, providing

youth with mentoring and follow-up

services, and using interim measures for 

ongoing program assessment. 

training programs 

Provided States with software, 

handbooks, training and assistance to

validate annual reports and a sampling 

mechanism to select files from each 

program for manual review 

Held forums of education agencies, 

workforce development, juvenile justice 

and child welfare agencies from 45 

States to identify opportunities to align

services and create strategies for 

improvement 

Created Federal/State support teams to

provide guidance and assistance 

Funded demonstration grants to:

- assist youth transitioning out of foster 

care in accessing employment and 

training opportunities; and

- prepare youth offenders to enter high

growth and high demand industries 

Provided assistance to help States meet

performance goals through the 

Performance Enhancement Project 

Emphasized accountability, particularly 

by implementing Federal Job Training

Program Common Measures

Conducted on-site assessments to 

determine the effectiveness of youth

programs and help regional offices 

improve outcomes 

Adult, Dislocated Worker, and Youth 

funding streams and the Employment

Service proposal allow governors to

restructure for results, achieve 

administrative savings, and increase the

number of workers receiving training: 

FY 2006

Feasibility study on final reporting 

design: FY 2007 

Work with States to develop a more 

complete reporting system that will 

provide greater comparability and clarity 

of performance data: FY 2006

Require States to validate annual reports 

and perform annual data element

validation to improve quality of data in

performance reports: FY 2006 

 

Work with States to identify best 

practices and technology solutions to

collect and report customer information: 

FY 2006

Invest in innovative solutions to address 

challenges in high growth industries and

efforts to improve the skills and 

expertise of youth service providers: FY

2006

Collaborate with Education and the other 

Federal partner agencies through the 

Federal/State support teams: FY 2006

Procurement System Concerns 

The Chief Acquisition Officer (CAO) 

oversees DOL’s procurement functions. 

DOL’s ability to effectively execute and

manage its procurements affects the 

attainment of all goals. Recently, the 

DOL OIG noted a reportable condition 

and identified weaknesses in file 

documentation and organization, and

compliance with Federal Acquisition

Regulations regarding contract

competition.

There are several appropriated funds 

Improved internal policy and procedures 

and controls 

Set a goal to provide effective contract 

and procurement policy support and

compliance to be accomplished by

audits, performance metrics, use of the 

E-procurement system, managerial

oversight, and timely issuance of

procurement guidance 

CAO and Procurement Executive 

disseminated policy information 

Pursue excellence by enhancing the 

training, professionalism and 

commitment of the staff: FY 2006 

Meet for FY 2006 targets for:

- percent audits with major findings

- percent satisfactory procurement

management reviews met

- percent contracts awarded in

compliance with customers’ 

requests/requirements 

FY 2005 Performance and Accountability Report 29
Management’s Discussion and Analysis

Management Challenge/ 

Significant Issue Actions Taken in FY 2005 Actions Remaining and Expected Completion Date 

procurement activities under the CAO; 

the Office of Procurement Services (full 

delegation); BLS (limited delegation); 

MSHA (full delegation); ETA (full 

delegation); regional offices (limited

delegation). DOL’s OIG has 

independent procurement authority. 

The OIG found deficiencies in two other 

procurement audits – one of a major 

DOL contract and the other of an agency 

with full procurement delegation – and 

recommended that DOL put effective 

controls in place and separate

procurement and programmatic 

responsibilities. 

Provided extensive written guidance to

customers and staff and others in

procurement functions to increase 

standardization and knowledge 

Replaced and/or supplemented

management and contracting officers 

with staff having more current

acquisition training

Added Federal and contract staff to

attain staffing levels in order to process 

actions in accordance with regulations 

and sound business judgment and to

undertake corrective actions

Trained incumbent procurement staff 

The agency where deficiencies were 

found made changes, including review

by the DOL solicitor of certain

contracts, hiring a Certified Professional

Contract Manager and contracting 

professionals, and training senior

executives, managers, and acquisition

staff. 

The CAO considered the delegations of

the various procurement offices to

determine if acquisition staffing levels 

and DOL-wide training initiatives were 

still appropriate. 

- t with

DOL procurement policy 

courses 

 training: 

September 30, 2006

percent agencies complian

Acquisition staff complete core

and 40 hours per year

Foster Safe Workplaces 

DOL’s occupational safety and health

agencies – OSHA and MSHA – face 

challenges in establishing performance 

measurement systems that accurately 

assess success in fostering safe and 

healthful workplaces. The GAO 

identified this as one of the three major 

management challenges at DOL. GAO

has stated that “MSHA is not effectively 

monitoring the timeliness of certain

aspects of mine plans nor always 

ensuring that hazards found during 

inspections are corrected promptly.... In 

addition, while OSHA’s voluntary 

compliance programs appear to have 

yielded many positive outcomes, much

of the agency’s data are insufficient for 

evaluation. Finally, OSHA’s oversight

of its regional and area office activities 

has limitations.” This challenge affects 

Outcome Goal 3.1 – Reduce Workplace 

Fatalities, Injuries, and Illnesses. 

MSHA headquarters monitored reports

from the Mine Plan Approval database

to ensure that mine plans were approved 

by MSHA and entered in timely fashion

into their database. MSHA’s 

supervisors used a tracking system to 

monitor hazard abatement 

Collected information on OSHA

Voluntary Protection Program (VPP) 

site injury and illness data and the costs 

and benefits of participating in VPP 

Developed a new Field Audit Program

that provides for tracking and review of 

OSHA and Regional Area Office 

adherence to established policies and 

procedures 

Implement OSHA’s Management

Accountability Program, a new field

audit system: FY 2006

30 United States Department of Labor 
Executive Summary 

Management Challenge/ 

Significant Issue Actions Taken in FY 2005 Actions Remaining and Expected Completion Date 

Real Property 

Executive Order 13327 addresses the 

Federal Asset Management initiative of

the President’s Management Agenda.

The lack of reliable and useful property

data impacts the Department’s ability to

use funds most efficiently and therefore 

attain its goals. A financial audit 

conducted in FY 2004 revealed that Job 

Corps was not adequately accounting for 

real property, and that DOL’s property 

reporting and tracking system did not 

establish sufficient controls to ensure that 

real property was safeguarded and 

accurately reported in tracking and 

general ledger systems. Later in 2004, an

OIG audit of management controls over 

Federal equity in State Workforce

Agency real property found that DOL 

had not established adequate

management controls over accounting for 

DOL’s equity interest. This challenge

affects Goal 05-1.2B – Improve 

educational achievements of Job Corps

students and increase participation of

Job Corps graduates in employment and 

education and Goal 05-2.2 A – Make 

timely and accurate benefit payments to

unemployed workers, facilitate the 

reemployment of Unemployment

Insurance claimants, and set up

Unemployment tax accounts promptly for

new employers.

Established a Departmental real property

workgroup lead by DOL’s Senior Real 

Property Officer 

Job Corps

Revised entries in the Capitalized Asset 

Tracking And Reporting System 

Strengthened control systems to ensure 

that data remain accurate and current. 

Completed corrective action plan with

two OIG recommendations closed and 

the remaining items resolved with

closure pending 

State Workforce Agencies

Issued instructions requiring States to

report changes and/or updates to their

real property data and re-emphasizing

the requirement that they remit proceeds 

from property sales to DOL 

Issued instructions requiring regional

offices to ensure that States promptly 

update property inventory records and 

provide these for inclusion in the 

national property inventory

Job Corps Centers complete online 

training to ensure proper preparation of

the ETA-2110: December 31, 2005 

Complete State Workforce Agency 

property inventory: December 31, 2007 

Information Technology Systems 

DOL relies heavily on Information

Technology. Developing efficient and 

effective systems to perform daily 

activities remains a significant challenge. 

OIG audits found that IT system

development life-cycle activities need

strengthening in the areas of planning, 

project management, and decision

making. OIG audit identified 

weaknesses in OSHA’s $12.6 million IT

project to redesign its integrated

management information system and a

DOL procurement of software to store 

use of electronic signatures securely to 

enable use of IT to transact business with

the public. In addition, DOL is likely to

experience security threats associated 

with wireless technology and needs to 

plan to protect its informational assets 

and confidential and sensitive 

information. This challenge affects all 

outcome goals. 

Implemented IT Governance Structure 

Defined outcomes desired:

- Value for dollars expended and staff 

time invested

- Expert guidance and assistance for 

agencies on resource management 

issues 

Assessed IT initiatives via an established

Control Review Process and bi-annual

assessments of compliance with 

Enterprise Architecture, Capital 

Planning and Investment Control, and 

Security through an internal eGov

scorecard 

Provided IT Project Management

training

Emphasized the importance of Systems 

Development Lifecycle Methodology

Improve the IT governance process and 

procedures: FY 2006

Conduct quarterly reviews, Internal 

eGov reviews, and Federal Information 

Security Management Act (FSMA)

reviews, Enterprise Vulnerability 

Management System (EVMS) reports, 

etc: FY 2006 

Maintain over 90 percent of major IT 

investments within 10 percent of cost, 

schedule, performance and compliance 

with target Enterprise Architecture: 

FY 2006

Identify a shared service provider to

enable DOL to accept and protect 

electronic signatures: FY 2006 

100 percent of DOL major information 

systems operating securely: FY 2006 

FY 2005 Performance and Accountability Report 31
Management’s Discussion and Analysis

Management Challenge/ 

Significant Issue Actions Taken in FY 2005 Actions Remaining and Expected Completion Date 

for IT projects (documentation from

concept to design, pilot, and production) 

so acquisition of unacceptable software 

should not occur 

Issued a standard for implementing 

wireless technologies via the DOL’s 

Technical Security Standards Manual 

Data Quality

DOL strives to have the most timely 

financial data possible, a well

functioning managerial cost accounting 

system that matches cost information 

with program outcomes, quality

performance data, and useful information 

from single audits. Much of DOL’s 

program results data required are 

generated by States and other sources

below the Federal level. OIG audit work

has disclosed high error rates in granteereported performance data. DOL relies 

on audits conducted under the Single 

Audit Act to provide oversight of more 

than 90 percent of its expenditures. 

DOL’s OIG expressed concern about the

adequacy of information from these 

audits, which are conducted by public 

accountants or State auditors and 

procured with DOL grant funds. This 

challenge affects all goals. 

Further implemented the Department

wide managerial cost accounting system, 

Cost Analysis Manager (CAM). 

Developed cost models for most major 

DOL agencies and continued to improve

capabilities for integrating cost and

performance information. 

Developed a data validation program to

improve the reliability of program data. 

OIG quality control reviews since 2002 

have revealed serious deficiencies in 

single audits, including inadequate

sampling, which would make the audits

unreliable. 

Expand and refine agency cost models

and reporting capabilities, map CAM

outputs to agency performance goals, 

and provide cost information for selected

efficiency measures using CAM: 

FY 2006

OIG audit of ETA’s data validation 

system: FY 2006 

Receive and respond to

recommendations from the report on the 

National Single Audit Sampling Project 

which is designed to determine the 

quality of Single Audits by providing a 

statistically reliable estimate of the 

extent that Single Audits conform to

applicable requirements and standards: 

FY 2006

Safeguarding Unemployment Insurance

The Department faces challenges in 

safeguarding the funds in the 

Unemployment Trust Fund (UTF). 

Over-charging for Unemployment Trust 

Fund administration by the Internal

Revenue Service (IRS) poses a major 

challenge for the Department. In 

addition, investigations found 

increasingly complex, costly and 

pervasive UI fraud schemes involving

identify theft and organized crime 

resulting in program losses in the 

millions of dollars. Safeguarding UI

funds impacts Goal 05-2.2A, Make 

timely and accurate benefit payments to

unemployed workers, facilitate the 

reemployment of Unemployment

Insurance claimants, and set up

Unemployment tax accounts promptly

for new employers. 

DOL requested that the Treasury 

Inspector General for Tax

Administration audit the new 

methodology’s adequacy for charging

UTF administrative expenses. 

Treasury Inspector General for Tax 

Administration Audit of IRS 

methodology for charging the

Unemployment Trust Fund for 

administrative expenses: FY 2006

Contingent upon the appropriation of

funds and the passage of the Integrity 

Act included in the DOL FY 2006

budget request, DOL will prevent and

detect fraudulent unemployment benefit

claims using stolen personal information 

− otherwise known as identity theft −

that would result in annual trust fund

savings of as much as $105 million.

32 United States Department of Labor 
Executive Summary 

The President’s Management Agenda 

On June 30, 2005, The US Department of Labor became the first Executive Branch department or agency to achieve 

a green status for all five government-wide President’s Management Agenda (PMA) initiatives. This achievement is 

not an end in itself — it represents an ongoing commitment to good management to bring quality services to the 

American people. Commenting on this accomplishment, Secretary Elaine L. Chao said, “This is a tremendous 

achievement by DOL employees who are committed to excellence on behalf of American workers and taxpayers.” 

President George W. Bush’s Management Agenda, announced in 2001, is a strategy for improving the management 

and performance of the Federal government. The objective is a Federal government that is: 

• Citizen-centered, not bureaucracy-centered; 

• Results-oriented, not output-oriented; and 

• Market-based, actively promoting rather than stifling innovation through competition. 

Together, initiatives created to achieve these goals are referred to as the President’s Management Agenda (PMA). 

The five government wide initiatives are: Strategic Management of Human Capital, Competitive Sourcing, Improved 

Financial Performance, Expanding Electronic Government, and Budget and Performance Integration. 

The Office of Management and Budget (OMB) regularly assesses all Federal agencies’ implementation of the PMA, 

issuing a quarterly Executive Branch Management Scorecard rating of green, yellow or red for both status and 

progress on each initiative. The breakdown by initiative, comparing last year’s ratings with those for FY 2005, is 

indicated in the table below. Under the OMB-led Proud to Be campaign, DOL set ambitious goals, demonstrated 

measurable progress and ultimately achieved green status scores in all five government-wide initiatives. The 

Department is now rated highest of all Cabinet agencies in overall implementation of the PMA. Highlights of 

achievements associated with each initiative follow the table. The Department uses a similar scorecard on a semiannual basis to measure individual agency progress on the PMA. 

Department of Labor’s PMA Scorecard Status

Executive Branch Management Scorecard September 2004 Status September 2005 Status 

Human Capital 

Green Green

Competitive Sourcing 

Yellow Green 

Financial Performance 

Green Green

E-Government 

Green Green 

Budget & Performance Integration 

Green Green 

Strategic Management of Human Capital 

The Human Capital initiative requires Federal agencies and departments to develop and use a comprehensive human 

capital plan, with the aim of significantly reducing mission-critical skill gaps. 

The PMA has provided the impetus for DOL to overhaul the Department’s entire performance management system

in order to hold managers and employees accountable for achieving results. Previous to Secretary Chao’s leadership, 

DOL’s performance management system operated 16 different employee rating cycles and used ten different rating 

FY 2005 Performance and Accountability Report 33
Management’s Discussion and Analysis

systems. The Department has developed a streamlined rating system for all 17,000 DOL employees. More

importantly, the performance management system reinforces the connection between resources, performance against 

the Department’s strategic goals, and individuals’ ties to both. We are pleased to say that 100 percent of missioncritical occupations at the Department are linked to DOL’s strategic goals. 

The Department also created performance plans for DOL managers and members of the Senior Executive Service 

(SES) – the cadre of top civil servant executives in the Federal government – to better link agency mission, goals, 

and outcomes. Each SES performance plan now includes four core management skills or competencies – such as 

leadership, human resource management, and coalition building – as well as four measurable results linked to

organizational or Departmental goals. 

Critical to DOL’s success in implementing the PMA was having a roadmap of what we wanted to accomplish. Our 

roadmap is the Department’s Human Capital Strategic Plan, published in 2003. The Department’s Human Capital 

Strategic Plan tracks key activities and metrics to measure results. The Department’s success in this area is bolstered 

by the Department’s status as a President’s Quality Award winner in 2004 for its Strategic Management of Human 

Capital efforts and by the International Personnel Management Association’s Leading Edge Award received in 2003. 

Competitive Sourcing 

Competitive Sourcing is DOL’s most recent PMA initiative to achieve green status. Competitive Sourcing allows the 

government to take advantage of market-based competition while simultaneously allowing the existing Federal 

employees to compete for the work. Competitive sourcing requires Federal employees to compete against private 

sector bidders for work that is deemed “commercial activity.” These skills and competencies, which are not missioncritical, can be performed more effectively and efficiently when subject to the competition of the marketplace. 

In the past two years, DOL announced and carried out eight competitions for IT services, invoice payments, 

administrative services, printing and reprographics, reports disclosure, conference center, statistical systems, and 

finance and accounting. Seven of these competitions were won by the in-house workforce and one was decided in 

favor of an outside contractor, with savings and/or cost avoidance achieved by each of these competitions. The 

combined projected savings/cost-avoidance for the eight competitions completed to date is over $12,000,000. DOL 

has an ambitious plan to compete designated commercial functions by the end of FY 2007. In FY 2005, DOL 

completed eight competitions, involving 125 FTE and announced 4 streamlined competitions and 1 standard

competition involving approximately 187 FTE. These latter competitions are currently in-progress. 

Improved Financial Performance 

The availability of timely, accurate, and useful financial information is essential to any well-managed, effective 

organization. The Improved Financial Performance initiative requires Federal agencies to receive clean audit 

opinions on their annual financial statements, meet accelerated financial reporting deadlines, implement managerial 

cost accounting practices, improve internal controls, and have financial management systems that are compliant with 

Federal laws and regulations. 

The Department continues to expand the use of integrated financial and performance information in the planning, 

budgeting, and decision-making activities throughout its agencies. It also remains focused on improving 

accountability and transparency for how well tax dollars are spent. 

In FY 2005, DOL received its ninth clean audit opinion on our consolidated financial statements, fifth consecutive 

CEAR award, and has consistently met the accelerated OMB financial reporting deadlines. To ensure that the 

Department’s financial operations comply with all Federal financial management laws, regulations, and standards 

and to quickly identify and address potential financial management problems, Agency Heads attest on a quarterly

basis to the adequacy of internal controls in their agencies. 

Expanding Electronic Government (E-government) 

The Expanding Electronic Government (E-government) initiative requires Federal agencies and departments develop 

secure Information Technology (IT) systems and strictly adhere to IT project cost, schedule, and performance 

projections. E-government is really about becoming a better steward of Federal IT investment dollars. Government 

IT projects suffer from the same problems as private sector IT projects, namely, scope creep, slipping schedules and 

cost overruns. The only way to prevent this is to develop solid plans and to stick with the plans. To ensure that 

34 United States Department of Labor 
Executive Summary 

major IT investments adhere to cost, schedule, and performance measures, DOL has adopted an Earned Value 

Management System (EVMS) Policy and targeted several major IT projects to rollout the new methodology. The 

success of our new EVM policy is exemplified by having 96 percent of our IT projects within 10 percent of cost, 

schedule, and performance in FY 2005. In FY 2002, only 70 percent of DOL’s IT projects were within 10 percent of 

cost, schedule, and performance. 

Two examples of DOL’s use of E-government to provide citizens better service are GovBenefits.gov and the Safety

and Health Information Management System (SHIMS). Before 2002, government benefits eligibility information 

was spread across 31 million Web sites. DOL established and is managing GovBenefits.gov, a web portal that 

organizes 500 Federal and State benefit programs, where citizens can get personalized benefit information within 

three easy steps. GovBenefits.gov offers diverse and extensive benefit program information for veterans, seniors, 

people with disabilities, disaster victims, job seekers and others. In April 2005, DOL launched GovLoans.gov en 

Español, which offers Spanish-speaking communities greater access to available Federal and State loan program

information. 

DOL developed SHIMS – a Web-based workers compensation and safety filing system – to enable DOL workers and 

managers to submit Federal workers' compensation claims electronically. Since its deployment in 2001, DOL has 

developed hosting capabilities providing the potential for reporting work-related injuries and illnesses and filing of 

compensations claims throughout the Federal workforce. The Transportation Security Administration currently uses 

SHIMS and the Department of Education and the Federal Air Marshal Service will use the electronic system in the 

near future. 

Budget and Performance Integration 

The Budget and Performance Integration initiative requires agencies and departments use performance goals and 

results as an integral element in program operations and budget formulation. This initiative allows decision-makers 

within the Administration, DOL, and Capitol Hill to make connections between budget dollars and what programs 

produce. At a more fundamental level, it allows executives within programs to manage toward program performance 

and make resource decisions accordingly. 

In June 2004, DOL was the first of only two Federal agencies to achieve a green status score in budget and 

performance integration. DOL had to demonstrate improvement in both performance and efficiency; operate by

strategic plans containing a limited number of outcome-oriented goals and measures; appraise employee performance 

and provide consequences tied to individual’s contribution toward performance of agency mission, goals, and results; 

and demonstrate the full cost of achieving performance goals. 

Agency Specific PMA Initiatives 

In addition, DOL is responsible for three of the PMA components found in selected departments: Eliminating 

Improper Payments, Faith-Based and Community Initiative, and Federal Real Property Asset Management. DOL’s

status for all three of these initiatives is yellow. DOL’s progress in implementing these initiatives, however, is green. 

Eliminating Improper Payments 

The Improper Payment Information Act of 2002 defines improper payments as those payments made to the wrong 

recipient, in the wrong amount, or used in an improper manner by the recipient. The Eliminating Improper Payments 

initiative requires a Federal agency to identify all of its programs that are risk susceptible to improper payments. It 

also requires the agency to implement a corrective action plan that includes improper payment reduction and 

recovery targets. 

The Department has successfully met all the reporting requirements of the Improper Payment Information Act. It has 

developed and implemented corrective action plans that have reduced the amount of its erroneous payments within 

the FECA and UI programs. 

Faith-Based and Community Initiative 

The Faith-Based and Community Initiative strengthens and expands the role of faith-based and community

organizations in addressing the nation's social problems. The Department’s Center for Faith-Based and Community

Initiatives seeks to empower faith-based and community organizations (FBCOs) as these organizations help 

neighbors enter, succeed and thrive in the workforce. DOL targets those organizations that are trusted institutions 

FY 2005 Performance and Accountability Report 35
Management’s Discussion and Analysis

providing valuable services but that may not be partnering with government programs. To accomplish this mission, 

DOL works to remove administrative and regulatory barriers and develop innovative programs to foster partnerships 

between DOL-funded programs and FBCOs. The Department is working with workforce investment boards 

nationwide to increase partnerships with faith-based and community organizations that help transition hard-to-serve 

individuals into employment. 

DOL extends its outreach to FBCOs well beyond the confines of direct grant programs. Forty-eight intermediaries 

have worked with over 300 grassroots organizations since 2001 through DOL’s coordination and funding support. 

By linking the administrative and reporting expertise of intermediary organizations to the human and program

resources of small FBCOs, we are providing workforce development and other essential human services to 

populations not previously reached by DOL programs. 

Federal Real Property Asset Management 

The Federal Real Property Asset Management Initiative promotes the efficient and economical use of America's real 

property assets and assures management accountability for implementing Federal real property management reforms. 

In June 2005 — in keeping with the purposes of the real property initiative — DOL Deputy Secretary Steven Law 

established a Departmental workgroup consisting of senior executives throughout the Department to implement this 

key President's Management Agenda initiative. In addition, the Inspector General’s “Top Management Challenges” 

addressed in this report also highlights the need to improve management of real property assets. Even in this early

phase of implementing this real property initiative, DOL is quickly making progress. For example, the Job Corps 

program is implementing new data validation procedures and is continuing to look closely at whether its physical 

assets (its residential centers) are being utilized as efficiently as possible. 

President Bush has stated that “Government likes to begin things – to declare grand new programs and causes. But 

good beginnings are not the measure of success. What matters in the end is completion. Performance. Results. Not 

just making promises, but making good on promises.” At DOL, we are not just making promises; we’re making 

good on promises. 

36 United States Department of Labor 
Executive Summary 

The Program Assessment Rating Tool 

The Program Assessment Rating Tool (PART) was developed to assess and improve program performance so that 

the Federal government can achieve better results. A PART review helps identify a program’s strengths and

weaknesses to inform funding and management decisions aimed at making the program more effective. Through a 

PART assessment, Federal programs are rated in terms of their purpose and design, strategic and performance 

planning, management, and results and accountability. Based on a PART score and the quality its performance 

measures and performance data, each program receives one of five PART Ratings: Effective, Moderately Effective, 

Adequate, Ineffective, and Results Not Demonstrated. To date, 21 DOL programs have been assessed through the 

PART. Of DOL’s 21 assessed programs: one is rated Effective, seven are rated Moderately Effective, eight are rated 

Adequate, four are rated Ineffective, and one is rated Results Not Demonstrated. 

Specifically related to performance and accountability, the rating of Results Not Demonstrated is an assessment that a 

program’s performance goals are not sufficiently outcome (results) oriented and/or the program does not have 

adequate data to demonstrate its performance results to decision makers and the public. In FY 2006, DOL will 

publish the scores and ratings for seven additional programs in the President’s FY 2007 Budget and will complete all 

remaining PART assessments, totaling 39 over a five-year period. 

In addition to a score and a rating, PART assessments are useful because they include specific recommendations 

intended to improve accountability and performance. PART recommendations DOL has recently implemented 

include: develop efficiency measures, baselines and targets for all programs assessed through the PART; reporting 

against a uniform set of measures (Federal job training program common measures) for Workforce Investment Act 

(WIA) programs; establish ambitious performance targets for the majority of programs; and use PART results to 

justify proposed program terminations and cuts. 

DOL PART SCORES AND RATINGS 

Program 2004

Score 2004 Rating

2005

Score 2005 Rating

2006

Score 2006 Rating

Bureau of Labor Statistics 79 Moderately 

Effective 88 Effective − −

Dislocated Workers 36 Results Not 

Demonstrated 50 Adequate − −

Employee Benefits Security Administration 57 Results Not 

Demonstrated 58 Results Not 

Demonstrated 71 Moderately 

Effective 

Federal Employees Compensation Act 75 Moderately 

Effective − − − −

Office of Federal Contract Compliance 

Programs 

43 Results Not 

Demonstrated 43 Results Not 

Demonstrated 65 Adequate

Occupational Safety and Health Admin 62 Adequate − − − −

Community Service for Older Americans 26 Results Not 

Demonstrated 27 Ineffective − −

Trade Adjustment Assistance 53 Results Not 

Demonstrated 45 Ineffective − −

Youth Activities 31 Results Not 

Demonstrated 45 Ineffective − −

Black Lung Benefits Program − − 71 Moderately 

Effective − −

Davis-Bacon Wage Determination − − 29 Results Not 

Demonstrated − −

FY 2005 Performance and Accountability Report 37
Management’s Discussion and Analysis

DOL PART SCORES AND RATINGS 

Program 2004

Score 2004 Rating

2005

Score 2005 Rating

2006

Score 2006 Rating

Migrant and Seasonal Farm Workers − − 38 Ineffective − −

Mine Safety and Health Administration − − 55 Adequate − −

Unemployment Insurance Administrative 

Grants − − 74 Moderately 

Effective − −

Employment Service − − − − 56 Adequate

H-1B Labor Conditions Applications − − − − 78 Moderately 

Effective 

Int’l Child Labor/Off. of Foreign Relations − − − − 51 Adequate

Job Corps − − − − 70 Moderately 

Effective 

Native American (WIA) − − − − 51 Adequate

Pension Benefit Guarantee Corporation − − − − 79 Moderately 

Effective 

Permanent Labor Certification − − − − 64 Adequate

38 United States Department of Labor 
Performance Section 

Strategic Goal 1: A Prepared Workforce 

Enhance Opportunities for America’s Workforce

America’s engine of prosperity is its skilled workforce. The maintenance of our strong national economy depends, in 

part, on developing a steady stream of workers that are qualified job candidates possessing skills that are relevant to 

the needs of today's employers. The Department must ensure that every available labor pool is tapped, including job 

seekers with special needs such as the people with disabilities, veterans, disadvantaged youth, and those who have 

lost their jobs due to foreign competition. Addressing the job seekers' needs is further complicated by the changing 

workplace. New technologies, increased competition, and changing labor markets have prompted employers to 

downsize, change employment patterns, and seek alternative labor sources. Furthermore, the nature of work itself is 

changing, and the Department must support the need of our workforce for lifelong learning and skills upgrades. 

The Department has a leadership responsibility to support the needs of the changing workforce and position the U.S. 

for continued economic development and growth. This aspect of our mission is captured by the first strategic goal – 

A Prepared Workforce. Agencies with programs supporting this goal are the Employment and Training 

Administration (ETA), Veterans’ Employment and Training Service (VETS), the Bureau of Labor Statistics (BLS), 

and the Office of Disability Employment Policy (ODEP). 

The Department’s performance in achieving this goal is determined by accomplishments organized at the outcome 

goal level and measured at the performance goal level. Three broad objectives – Outcome Goals 1.1, 1.2 and 1.3 – 

support Strategic Goal 1, and they contain nine performance goals (see table below). In FY 2005, the Department 

achieved or substantially achieved four of its goals for A Prepared Workforce – a record that understates actual 

accomplishments, since most targets were reached even in goals falling into the “not achieved” category. Entered 

employment, retention, education and earnings change improved over prior year results in every instance, largely due 

to DOL’s strategic integration of service delivery and targeting of services. 

Outcome Goal 1.1 − Increase Employment, Earnings, and Retention 

Four performance goals achieved & two not achieved 

FY 05/PY 04

Costs 

(millions) 

WIA Adult (04-1.1A) Goal achieved. Four targets reached. $922

One-Stop employment services (04-1.1B) Goal not achieved. Two targets reached, one not reached. 725

Dislocated Workers (04-1.1C) Goal not achieved. Three targets reached, one not reached 1455

Veterans’ employment (04-1.1D) Goal achieved. Six targets reached. 196

Apprenticeship (05-1.1A) Goal achieved. Three targets reached. 23

Disability Employment Policy (05-1.1B) Goal achieved. Five targets reached. 52

Other

14 (Community Service Employment for Older Americans, Native American Adult, National 

Farmworker, and Work Incentive Grants programs, etc.) 503

Outcome Goal 1.2 – Increase Opportunities for Youth Employment 

Two performance goals not achieved

WIA Youth (04-1.2A) Goal not achieved. Three targets reached, one not reached. $987

Job Corps (04-1.2B) Goal not achieved. Two targets reached, one substantially 

reached, and one not reached. 1313

Other (Youth Offender Reintegration, Native American Youth, etc.) 155

Outcome Goal 1.3 – Improve the Effectiveness of Information and Analysis On The U.S. Economy 

One performance goal substantially achieved

Bureau of Labor Statistics (05-1.3A) Goal substantially achieved. Six targets reached, one

substantially reached, and one not reached. 

$536

 

14These programs report against goals that are included in the annual budget, but not the Performance and Accountability Report. 

FY 2005 Performance and Accountability Report 41
Performance Section 

The following charts illustrate DOL’s strategic goal net costs in FY 2005, with A Prepared Workforce shares set 

apart. The first allocates total Departmental costs of $49.912 billion; the second allocates an adjusted net cost of 

$12.222 billion that excludes major non-discretionary items associated with Strategic Goal 2.15 Net costs of this goal 

in FY 2004 were $8.654 billion. 

 FY 2005 Strategic Goal 1

Percent of Net Cost excluding Income 

Maintenance 

2-Secure

26%

4-Competitive

9%

1-Prepared

56%

3-Quality

9%

FY 2005 Strategic Goal 1 - $6.865 billion 

Percent of Net Cost

2-Security

82%

1-Prepared

14%

4-Competitive

3-Quality 2%

2%

The outcome goals and programs listed above, along with their results, costs, and future challenges are discussed in 

more detail on the following pages. 

 

15 The excluded costs are referred to as Income Maintenance – unemployment benefit payments to individuals who are laid off or

out of work and seeking employment ($31.488 billion) plus disability benefit payments to individuals who suffered injury or

illness on the job ($5.936 billion). 

42 United States Department of Labor 
Outcome Goal 1.1 

Outcome Goal 1.1 – Increase Employment, Earnings, and Retention 

The Department assists workers and employers with valuable information and specific training to help them take full 

advantage of the constantly changing demands and resources in the labor market. Central to this effort is a 

nationwide network of approximately 2000 One-Stop Career Centers which assist communities to match adults to 

work and skill enhancement opportunities. This comprehensive workforce investment system also helps businesses 

meet their ongoing recruitment and human services needs. Through a national business services model, the 

Department helps national employers understand and use the full resources of the One-Stop system to better access 

trained workers. For individuals with disabilities, the One-Stop Centers have improved access to their facilities and 

services by installing assistive technologies. DOL is also making a special effort to help our nation's military service 

members adjust to and re-enter the civilian workforce by providing priority services at all One-Stop Centers pursuant 

to the Jobs for Veterans Act of 2002. 

The Employment and Training Administration (ETA), the Veterans’ Employment and Training Service (VETS) and 

the Office of Disability Employment Policy (ODEP), with support from the Women’s Bureau and the Center for 

Faith-Based and Community Initiatives, operate a number of programs and projects that provide information, 

assistance, skill-building opportunities, and effective strategies for providing the programs and services that lead to 

increased employment and earnings. In the first column of the table below are the numbers, agencies, reporting 

periods16, goal statements, achievement, and a summary of results at the performance indicator level for DOL 

performance goals associated with this outcome goal. 

Goal (Agency) and Statement Performance Summary 

FY 05/PY 04

Costs 

(millions) 

04-1.1A (ETA) 

Increase the employment, retention, and earnings of individuals registered

under the Workforce Investment Act (WIA) Adult program.

Goal achieved. Four targets 

reached. $922

04-1.1B (ETA) 

Improve outcomes for job seekers and employers who receive One-Stop 

employment and workforce information services. 

Goal not achieved. Two targets 

reached, one not reached. 725

04-1.1C (ETA) 

Increase the employment, retention, and earnings replacement of 

individuals registered under the WIA Dislocated Worker program.

Goal not achieved. Three 

targets reached, one not 

reached. 

1455

04-1.1D (VETS)

Improve employment outcomes for veterans who receive One-Stop and 

homeless veterans’ services. 

Goal achieved. All six targets

were reached. 196

05-1.1A (ETA) 

Strengthen the registered apprenticeship system to meet the training needs 

of business and workers in the 21st Century.

Goal achieved. All three 

targets were reached. 23

05-1.1B (ODEP)

Provide national leadership to increase access and employment 

opportunities for youth and adults with disabilities receiving employment, 

training, and employment support services by developing testing, and 

disseminating effective practices. 

Goal achieved. Five targets 

reached. 52

Other (Community Service Employment for Older Americans, Native American Adult, National 

Farmworker, and Work Incentive Grants programs, etc.) 503

Results Summary 

Of the six performance goals listed, DOL achieved four and did not achieve two. As illustrated, primary outcomes of 

participant employment and retention improved over the prior year for every program. Results were also positive for 

the two programs with targets for increasing participants’ earnings – WIA Adults and Dislocated Workers. 

 

16 Those indicating a Program Year (PY) are reporting on the period from July 1, 2004 to June 30, 2005 due to the forward 

funding mechanism of the Workforce Investment Act (WIA) of 1998.

FY 2005 Performance and Accountability Report 43
Performance Section 

Entry to Employment

85%

90%

40%

45%

50%

55%

60%

65%

70%

75%

80%

Adult

One-Stop services

VETS Employment

Dislocated Worker

DOL Program

Prior Year Target Result

Retention in Employment

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

Adult

One-Stop services

VETS Employment

Dislocated Worker

Apprenticeship

DOL Program

Prior Year Target Result

Disappointing results were confined to efficiency measures ( ts

that were established without reliable trend data proved overl

Performance for most of DOL’s employment and training pr

percentage of participants who obtain jobs subsequent to rec

those who obtained jobs who are still employed six months l

because the two programs that have data used different indic

training program common measures are implemented. Base

little useful information at this point. 

These charts show, for each program in this outcome goal th

the previous year, the target for the reporting period and the

retention rates between programs; this can be explained by th

serve. Increases across the board are partially attributable to

Key DOL contributions were facilitating more integrated ser

encouraging them to focus on high growth occupations and i

surprise in employment and retention results was a pleasant o

employment services exceeded expectations for the second c

rates are being raised by several p

cost per participant), which were new this year. Targe

y ambitious. 

ograms is measured by entered employment – the 

eipt of services – and by retention – the percentage of 

ater. Earnings are important, too; no chart is provided

ators. This will be resolved over time as Federal job 

line efficiency data exist for a few programs but offer 

at tracks employment and retention rates, the result for

result. There are significant differences in entry and 

e types of services offered and the populations they

improving overall economic growth and employment.

vice delivery by State Workforce Agency partners and 

ndustries in placement and training services. The only

ne. Outcomes for job seekers using One-Stop

onsecutive year. Accordingly, PY 2005 targets for 

employment and retention ercentage points. 

Coletta lost all her belongings and her job due to

Hurricane Katrina. A hurricane survivor from

New Orleans, Coletta attended a job fair 

sponsored by the North Central Texas WorkForce 

Board (NCTWFB) and found a position with The 

Reel Thing, a catfish restaurant. She began work

immediately and expressed her appreciation to the

entire community for other support, including

shelter, clothes, and hot meals. The job fair, held

at space donated by the Comfort Suites in 

McKinney, featured more than 16 employers.

“Our goal is to provide each person arriving in

our area with an opportunity to work. Texas, and 

especially the North Central Texas area, is eager 

to aid those surviving Hurricane Katrina and help

them get back on their feet. We do not plan to 

stop with this one job fair. We will continue to

work tirelessly toward our goal,” said Linda 

Davis, executive director of the NCTWFB. 

Photo credit: Texas Workforce Commission and North Central Texas WorkForce Board 

44 United States Department of Labor 
Outcome Goal 1.1 

DOL also played a crucial role in our Nation’s response to Hurricane Katrina. Within days of Katrina’s landfall, 

k.

f $3.874 billion supported Employment and Training Administration programs to provide 

e

ely from moving the Dislocated Worker 

OL

DOL awarded up to $191 million to affected States, including those States hosting evacuees. The funds, from the

National Emergency Grant program, helped to create temporary jobs. These jobs put displaced people to work 

performing crucial jobs, such as providing shelter, food, and clothing, and performing clean-up and restoration wor

These jobs also provide short-term training for vocational skills, which create new career pathways to help evacuees 

return to jobs in their community or where they choose to settle. 

Net Cost of Programs 

FY 2005 program costs o

employment and training for adults through formula grants to States, registered apprenticeship, and employment 

services; programs for dislocated workers; Veterans’ Employment and Training Service assistance to veterans; Offic

of Disability Employment Policy efforts to develop, evaluate, and disseminate strategies to improve employment 

outcomes for job seekers with disabilities; Center for Faith Based and Community Initiatives contracting outreach; 

and Women's Bureau efforts to increase job opportunities for women. 

The $2 billion increase in costs from 2003 to 2004 resulted almost entir

Program and Trade Adjustment Act (TAA) performance goals from Strategic Goal 2 (Outcome Goal 2.3 in the D

FY 2003 Performance and Accountability Report). The TAA performance goal was moved again in FY 2005, along 

with several smaller ETA programs, to Strategic Goal 4 – accounting for roughly $1 billion of the decrease shown 

here. The additional decrease is primarily the result of reductions in the Dislocated Worker and Welfare-to-Work 

programs. 

Outcome Goal 1.1

Net Costs ($Billions)

3.0 3.1 3.2

3.6 3.4

5.4

3.9

0

1

2

3

4

5

6

1999 2000 2001 2002 2003 2004 2005

Fiscal Year

Future Challenges 

rove outcomes for WIA participants, the Department is focusing on int delivery

found room for improvement in 

encies

m

To continuously imp egrated service

and new approaches to workforce investment designed to ensure workers have the right skills to get and retain good 

jobs with good wages. Separate funding streams for the Wagner-Peyser Act funded employment services and the 

WIA Adult and Dislocated Worker programs continue to present challenges to program performance as services are 

duplicated and additional funds are spent on administrative support. With WIA Reauthorization, DOL proposes to 

combine these funding streams with WIA Youth into one consolidated program. 

The Government Accountability Office (GAO) completed a study in FY 2005 that

access to One-Stops for persons with disabilities. DOL, in collaboration with the Rehabilitative Services 

Administration and the Social Security Administration, is developing a strategic plan to address the matter. 

The voluntary nature of the Apprenticeship program’s relationships with employers and State Workforce Ag

makes it difficult to capture information consistent with the Federal job training program common measures. To 

encourage States’ cooperation, Apprenticeship has been expanding its Registered Apprenticeship Information Syste

(RAIS) electronic registration project. 

FY 2005 Performance and Accountability Report 45
Performance Section 

Increase Employment, Retention, and Earnings for Qualified Adults 

Performance Goal 04-1.1A (ETA) – PY 2004 

Increase the employment, retention, and earnings of individuals registered under the Workforce Investment Act Adult 

program. 

Indicators, Targets and Results PY 2003 

Result 

PY 2004 

Target 

PY 2004 

Result 

Target 

Reached*

Percent of participants employed in first quarter after program exit 74% 75% 77% Y

Percent of those employed in the first quarter after program exit still 

employed in the third quarter after program exit 85% 85% 86% Y

Average earnings change for those who are employed in the first 

quarter after program exit and still employed in the third quarter 

after program exit 

$3,260 $3,300 $3,746 Y

Average cost per participant N/A $2,192 $2,153** Y

PY 2004 Costs $922 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) 

** Estimated based on quarterly reports

Goal Achieved

Program Perspective 

The Workforce Investment Act (WIA) Adult program is designed to help adult workers (employed and unemployed) 

acquire the skills and jobs they need to compete in a global economy. WIA Adult program funds are provided by

formula to States and local communities that operate statewide networks of One-Stop Career Centers. The Centers 

provide a continuum of seamlessly-integrated services (including services under the Wagner-Peyser Act and the WIA 

Dislocated Worker program) which offer comprehensive assistance to workers and employers. States also use the 

WIA Adult program to leverage additional, non-Federal resources to increase the quality and variety of assistance. 

The Department uses four indicators to evaluate the success and cost effectiveness of WIA employment and training 

services for adults: entered employment, retention, earnings change, and cost per participant. A high entered 

employment rate indicates that participants have improved financial security. A high retention rate indicates stability

of participants’ new positions. Higher earnings change reflects effective assistance, especially of training services. 

The cost per participant gauges program efficiency. Successful leveraging of non-Federal funds can lower the cost 

per participant by allowing the program to increase the number of people served. 

As a single father, Kenneth had experienced a great 

deal of adversity in his life. While incarcerated due 

to his dependence on drugs and alcohol, Kenneth

realized he needed to find a better path. With

encouragement from family, friends and his parole

officer, Kenneth obtained a job at a local restaurant 

earning $12,000 a year after his release from prison. 

While he remained drug-free for three years,

Kenneth looked for employment that provided a 

more stable and higher income. He visited Ozark 

Action, Inc. in Missouri, and enrolled in the WIA 

Adult program. Kenneth completed his C-1 Truck 

Driver training with the assistance of the program

and began driving for the trucking company. He

bought his own truck and currently makes nearly

$40,000 per year! He is clearly traveling down a far

brighter path. 

Photo Credit: Kenneth Duncan & Michael Kelley

46 United States Department of Labor 
Outcome Goal 1.1 

National labor market conditions strongly influence the WIA Adult program outcomes. In recent years, during 

recovery from the economic downturn of 2000 and 2001, the program outcomes continuously improved as the 

unemployment rate decreased. Throughout this period, DOL continued to improve its integrated One-Stop delivery

system and raise its performance standards accordingly. Over the past four years, targets for entered employment 

and retention increased a total of six and seven percentage points respectively. DOL adjusted the earnings change 

target to more accurately reflect current economic conditions. 

Analysis and Future Plans

The Department achieved its performance goal for the WIA Adult program. The entered employment rate, 

employment retention rate and earnings change results exceeded targets, and efficiency was only slightly off the 

target. As illustrated below, performance is trending upward for all three outcome indicators. Entered employment 

and retention have remained above the targets, while earnings increase rose significantly from $3,260 in Program

Year (PY) 2003 to $3,746 in PY 2004. This is the first year for which efficiency data have been reported. 

Entered Employment

60%

65%

70%

75%

80%

2000 2001 2002 2003 2004

Program Year

Result Target

The broad economic indicators were positive over the 

past twelve months and provided a boost to the 

performance outcomes for the Adult program. During 

this period, the economy added about 2.2 million jobs, 

unemployment fell from 5.4 percent to 4.9 percent; and 

interest rates remained low. Productivity was up and 

average weekly earnings increased by 2.7 percent as 

reported by the Bureau of Labor Statistics. 

To continuously improve outcomes for WIA 

participants, the Department is focusing on integrated 

service delivery and new approaches to workforce 

investment designed to ensure workers have the right 

skills to get and retain good jobs with good wages. Key

strategies include: 1) Strengthening strategic p

workforce solutions that are responsive to State and local economies and that that relate specifically to high demand 

occupations and industries; 2) Assuring that every individual, including individuals with disabilities, veterans, new

Americans, older workers and others have access to the full array of integrated services through the One-Stop 

delivery system; and 3) Leveraging a wide array of non-WIA resources to maximize the impact of WIA investments

and to train more workers with the skills they need to be successful. 

artnerships with the business and education communities to develop 

anagement Issues

response to concerns raised by the Office of Inspector General regarding accuracy of data 

ftware 

M

As part of an on-going

reported by States for WIA performance, in PY 2004 DOL developed and implemented a data validation 

methodology for WIA programs. State Workforce Agencies (SWAs) used handbooks, user guides, and so

(developed by DOL) to validate outcomes reported in PY 2003 and PY 2004. In PY 2005, SWAs will implement

Employment Retention

70%

75%

80%

85%

90%

2000 2001 2002 2003 2004

Program Year

Result Target

Earnings Change

$2,500

$2,700

$2,900

$3,100

$3,300

$3,500

$3,700

$3,900

2000 2001 2002 2003 2004

Program Year

Result Target

FY 2005 Performance and Accountability Report 47
Performance Section 

common performance measures (for Federal job training programs). DOL will revise the data validation materials 

and software to support accurate and reliable data reporting. 

Separate funding streams for the Wagner-Peyser Act funded employment services and the WIA Adult and Dislocated 

Worker programs continue to present challenges to program performance, as services are duplicated and additional 

funds are spent on administrative support. DOL took steps to consolidate the reporting on all programs and is 

conducting a feasibility study in several State agencies. With WIA Reauthorization, DOL proposes to combine these 

funding streams together with WIA Youth funding into one consolidated program. 

The Government Accountability Office (GAO) issued its report in December 2004, Labor Has Taken Several Actions 

to Facilitate Access to One-Stops for Persons with Disabilities, but These Efforts May Not Be Sufficient (Study 2 in 

Appendix 2). DOL instituted a workgroup – including the Rehabilitative Services Administration and Social 

Security Administration, as well as DOL’s Civil Rights Center, Office of Disability Employment Policy and 

Veterans’ Employment and Training Service – that has met consistently since January 2005. In collaboration with 

the workgroup, DOL has begun to develop a comprehensive, long-term strategic plan to address the One-Stop 

system’s provision of services to people with disabilities. This workgroup’s mission is to develop an inter-agency

work plan that will promote service delivery excellence for people with disabilities in the One-Stop Career Center 

system. The approved policies and strategies will be translated into a work plan. 

The GAO issued its February 2005 report, Employers Are Aware of, Using, and Satisfied with One-Stop Services, but 

More Data Could Help Labor Better Address Employers’ Needs (Study 3 in Appendix 2). Prior to the issuance of 

this report, DOL proposed a comprehensive, streamlined reporting system for 12 different programs – EMILE (ETA 

Management Information and Longitudinal Evaluation), and is currently conducting a feasibility study. Also, DOL 

revised its planning guidance to require States to describe how they will actively engage businesses and inform

demand-driven service delivery approaches for all customers. 

A GAO report issued in May 2005, Labor Should Consider Alternative Approaches to Implement New Performance 

and Reporting Requirements (Study 4 in Appendix 2), examined EMILE. Pending completion of the aforementioned 

study, DOL revised reporting requirements, effective July 1, 2005, to facilitate common performance measures 

reporting across DOL’s employment and training programs. 

A June 2005 GAO report, Substantial Funds Are Used for Training, but Little Is Known Nationally about Training 

Outcomes (Study 1 in Appendix 2), raised concern about how WIA funds are being used and how much is being 

spent on training. In response, DOL is standardizing the definition of ‘participant exit’ for purposes of assessing 

program performance. States began implementing these changes on July 1, 2005. Through the newly revised 

Workforce Investment Act Standardized Record Data system, DOL will be able to capture information on all 

participants who receive training in each program year. 

48 United States Department of Labor 
Outcome Goal 1.1 

Improve Employment Outcomes for One-Stop System Users 

Performance Goal 04-1.1B (ETA) – PY 2004 

Improve outcomes for job seekers and employers who receive One-Stop employment and workforce information 

services. 

Indicators, Targets and Results PY 2003 

Result 

PY 2004 

Target 

PY 2004 

Result 

Target 

Reached*

Percent of job seekers registered for employment services who 

enter employment with a new employer by the end of the second 

quarter following registration 

61% 58% 64% Y

Percent of job seekers who continue to be employed two quarters 

after initial entry to employment with a new employer 

80% 72% 81% Y

Average cost per participant N/A $52 $62 N 

PY 2004 Costs $725 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Not Achieved

Program Perspective 

A fundamental underpinning of the nation’s One-Stop Career Centers is the delivery of employment and workforce 

information services to a universal population of both businesses and job seekers. Funded principally through WIA, 

the Wagner-Peyser Act, and the Jobs for Veterans Act administered by the Veterans’ Employment and Training 

Service (VETS), One-Stop employment and workforce information services are designed to help workers (employed

and unemployed) obtain jobs and give employers access to the skilled workers they need to compete in the global 

economy. Providing effective services responsive to unique local/regional labor market conditions and the needs of 

workers is key to achieving successful outcomes for both workers and employers. Such services are provided in 

collaboration with a wide array of One-Stop partners and are fully integrated for seamless service delivery to 

customers. One-Stop employment and workforce information services are a continuum of core, intensive, and 

training services available through One-Stop Centers. Core services include skill assessment, job counseling, and 

labor market information and are available to everyone. Intensive services have a limited eligibility, based on need, 

and include employability skills and case management. Training services are available to those needing more than 

core and intensive services. 

One-Stop employment services are provided universally to customers at no charge, with special emphasis on services 

for Unemployment Insurance (UI) claimants, migrant and seasonal farmworkers, veterans17, and businesses. 

Services include a wide array of workforce and labor market information, career guidance products and tools, 

assessments, job matching and referral, reemployment services for UI claimants, targeted services for veterans and 

more. 

DOL uses three key indicators to evaluate the success and effectiveness of One-Stop employment and workforce 

information services: entered employment, employment retention, and average cost per participant. A high entered 

employment rate indicates that participants have improved financial security. A high retention rate indicates stability

of participants’ new positions. With the implementation of common performance measures for Federal job trainings 

in PY 2005, DOL will add earnings change, which indicates the impact of services on post-program participation 

earnings potential. 

To stimulate full integration of workforce information services into planning, decision making, and service delivery

programs for adults, including employment services, DOL is collecting and reporting data for PY 2005 on the impact 

 

17 For specific information about the outcomes achieved by veterans who receive One-Stop employment and workforce 

information services, please refer to Performance Goal 04-1.1D.

FY 2005 Performance and Accountability Report 49
Performance Section 

of workforce information on participant employment outcomes. (See performance goal 04-4.1A Electronic Tools for 

further detail about the Workforce Information System.) 

Analysis and Future Plans 

Both the entered employment rate and the employment retention rates exceeded targets and increased from PY 2003. 

The cost per participant (efficiency) measure was new in PY 2004; results fell short of the target. Consequently, the 

overall performance goal was not achieved. 

In PY 2005, ETA will implement Federal job training program common measures. States will be required to report 

on One-Stop customers who receive workforce information services and their outcomes, and their two-year strategic 

plans will include a discussion of workforce information as a tool in serving job seekers and employers. 

To continually improve performance, DOL has aggressively expanded high growth industries and employers through 

its Business Relations Group (BRG). In partnership with States, the BRG has collaborated with large multi-state 

employers as well as industry associations to broker their connection to the one-stop delivery system. This 

partnership has helped match job seekers with employers. In addition to working toward integrating the WagnerPeyser funded One-Stop employment services and WIA services, DOL has strengthened its focus on the role of 

workforce information in the design and delivery of core, intensive and training services. 

The Employment Connection in Ohio demonstrates how

the workforce system and employers can work together 

to meet their needs. In February 2005, the Employment 

Connection coordinated with Home Depot to conduct a 

mass recruitment session in 20 different locations. Approximately 350 applicants attended and more than 70

applicants were hired through the recruitment session. 

Stan, a 54 year old veteran who served in the U.S. Navy

during the Vietnam era, was one of the applicants who 

was hired at the session. After his service in the Navy, h

worked on computer repairs for 25 years. However, after

losing his job due to an economic downturn, Stan

accessed services through Employment Connection. 

“The Employment Connection is a very good

organization and supports unemployed people in the a

They have a lot to offer and provide a very supportive 

environment,” he said. 

e

rea. 

Photo Credit: Michael Longo, Anthony Schweppe, 

Stanley Stewart 

Management Issues

Separate funding streams that fund One-Stop employment services, particularly the WIA Adult and Dislocated 

Worker funding and the Wagner-Peyser Act funding, continue to present challenges to program performance. DOL 

took steps to consolidate the reporting on all programs and is conducting a feasibility study for consolidated reporting 

in several State agencies. With WIA Reauthorization, DOL proposes to combine these funding streams and WIA 

Youth into one consolidated program to minimize duplication of services and administrative support funds. 

Entered Employment

50%

55%

60%

65%

70%

2002 2003 2004

Program Year

Result Target

Employment Retention

65%

70%

75%

80%

85%

2003 2004

Program Year

Result Target

50 United States Department of Labor 
Outcome Goal 1.1 

In PY 2004, ETA actively participated in a pilot study with VETS to research statistical models for goal setting 

purposes (Study 11 in Appendix 2). The efficiency component of the study has focused on how to determine unit 

costs for the general population of job seekers and veterans who receive One-Stop employment and workforce 

information services. The study pointed to several variables that will impact program cost per participant including 

the unemployment rate, cost of labor and facilities, population density, relative number of job seekers and veterans, 

and unexpected major corporate layoffs, among others. The earnings gain component of the study relied on a small 

sample of state data (three states) so the results may not be statistically relevant across all states. Nevertheless, 

average earnings gains among participating states equaled zero for all job seekers, and generally greater than zero for 

veterans. 

As part of an on-going response to concerns raised by the Office of Inspector General regarding the accuracy of data 

reported by States for performance, DOL developed and implemented a data validation methodology for WIA 

programs, including One-Stop employment services. State workforce agencies used handbooks, user guides, and 

software (developed by DOL) to validate outcomes reported in PY 2003 and PY 2004. In PY 2005, SWAs will 

implement common performance measures (for Federal job training programs). DOL will revise the data validation 

materials and software to support accurate and reliable data reporting. 

In 2004, One-Stop employment and workforce information services were assessed through the PART. The program

was rated Adequate. The PART assessment found that accountability for performance results by grantees was 

insufficient given the delay in implementing long term performance measures. In response, DOL fully implemented 

the common measures for job training programs on July 1, 2005. ETA will collect baseline data on these measures 

during PY 2005 and grantees will negotiate levels of performance in PY 2006. 

FY 2005 Performance and Accountability Report 51
Performance Section 

Assist Dislocated Workers

Performance Goal 04-1.1C (ETA) – PY 2004 

Increase the employment, retention, and earnings replacement of individuals registered under the Workforce 

Investment Act Dislocated Worker Program. 

Indicators, Targets and Results PY 2003 

Result 

PY 2004 

Target 

PY 2004 

Result 

Target 

Reached*

Percent of participants employed in the first quarter after program

exit 82% 82% 84% Y

Percent of those employed in the first quarter after program exit 

still employed in the third quarter after program exit 90% 91% 91% Y

Average earnings replacement rate for those who are employed in 

the first quarter after program exit and still employed in the third 

quarter after program exit 

91% 91% 93% Y

Average cost per participant N/A $3195 $3318** N

PY 2004 Costs $1455 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) 

** Estimated based on quarterly reports

Goal Not Achieved

Program Perspective 

The Workforce Investment Act (WIA) Dislocated Worker program aims to quickly reemploy laid off workers and 

preferably to enhance their employability and earnings by increasing occupational skills. The Department allocates 

80 percent of the WIA Dislocated Worker funds by formula to the States. The Secretary may use the remaining 20

percent for discretionary activities specified in the Workforce Investment Act, including assistance to localities that 

suffer plant closings, mass layoffs or job losses due to natural disasters and military base realignment and closures. 

The Dislocated Worker program is part of a continuum of seamlessly-integrated services (including services under 

the Wagner-Peyser Act and the WIA Adult program) which reflect comprehensive assistance to workers and 

employers. States also use the WIA Dislocated Worker program to leverage additional, non-Federal resources in 

order to increase the quality and variety of assistance they are able to offer. 

Eileen appreciates those who helped her on her journey, and 

now makes a difference in others’ lives. She began her job 

search at Missouri Career Center after her job was

eliminated from a financial investment firm. At first, she 

was discouraged to begin a new career because of her age. 

After her enrollment in the WIA Dislocated Worker

program, however, Eileen attended the Adult Education and

Literacy Workplace Readiness Workshops and pursued a

degree in Psychology. With a strong determination, two

part-time jobs, and a continuance of supportive services by 

Dislocated Worker staff, Eileen received her Bachelor’s

degree in Psychology with honors. Currently, she is 

working as a career manager for Lakes Country Resource 

Center and plans to look for opportunities to help others 

achieve their dreams. 

Photo Credit: Della Hamlin 

Four key indicators are used to assess the program’s success. The entered employment rate indicates how quickly

participants’ incomes (hence family security) are restored and whether they maintain continuous attachment to the 

labor force with minimal disruption. The retention rate and earnings replacement indicators demonstrate the 

program’s effectiveness at matching and/or enhancing participants’ skills and abilities to maximize their 

52 United States Department of Labor 
Outcome Goal 1.1 

opportunities. The average cost per participant measure gauges program efficiency. Successful leveraging of nonFederal funds lowers the unit cost by allowing the program to increase the number of people served. 

Analysis and Future Plans

The Department did not achieve its performance goal for the WIA Dislocated Worker program. Although entered 

employment, employment retention and earnings replacement rates all reached or exceeded targets, efficiency (cost 

per participant) was off target because PY 2004 was the first year of measurement for this indicator. 

Entered Employment

65%

70%

75%

80%

85%

2000 2001 2002 2003 2004

Program Year

Result Target

Broad economic indicators were positive over the past 12 

months and provided a boost to outcomes. During this

period, the economy added about 2.2 million jobs, 

unemployment fell from 5.4 percent to 4.9 percent, and 

interest rates remained low. Productivity was up and 

average weekly earnings increased by 2.7 percent as 

reported by the Bureau of Labor Statistics for the 

reporting period. 

In PY 2005, the Department continues implementing 

demand-driven workforce investment strategies that 

promote the successful transition of dislocated workers to 

good jobs and new careers. In addition, the Department 

is pro-actively developing transition strategies to position 

workers in declining industries (thus likely to be dislocated) to obtain the skills they need to transition more quickly. 

Management Issues

As part of an on-going response to concerns raised by the Office of Inspector General regarding accuracy of data 

reported by States for WIA performance, in PY 2004 DOL developed and implemented a data validation 

methodology for WIA programs. State Workforce Agencies (SWAs) used handbooks, user guides, and software 

(developed by DOL) to validate outcomes reported in PY 2003 and PY 2004. In PY 2005, SWAs will implement 

common performance measures (for Federal job training programs). DOL will revise the data validation materials 

and software to support accurate and reliable data reporting. 

Separate funding streams for the Wagner-Peyser Act funded employment services and the WIA Adult and Dislocated 

Worker programs continue to present challenges to program performance as services are duplicated and additional 

funds are spent on administrative support. DOL took steps to consolidate the reporting on all programs and is 

conducting a feasibility study in several State agencies. With WIA Reauthorization, DOL proposes to combine these 

funding streams into one consolidated program. 

The Government Accountability Office (GAO) issued its February 2005 report, Employers Are Aware of, Using, and 

Satisfied with One-Stop Services, but More Data Could Help Labor Better Address Employers’ Needs (Study 3 in 

Appendix 2). Prior to the issuance of this report, DOL proposed a comprehensive, streamlined reporting system for 

12 different programs – EMILE (ETA Management Information and Longitudinal Evaluation), and is currently 

Employment Retention

75%

80%

85%

90%

95%

2000 2001 2002 2003 2004

Program Year

Result Target

Earnings Replacement

80%

85%

90%

95%

100%

105%

2000 2001 2002 2003 2004

Program Year

Result Target

FY 2005 Performance and Accountability Report 53
Performance Section 

conducting a feasibility study. Also, DOL revised its planning guidance to require States to describe how they will 

actively engage businesses and inform demand-driven service delivery approaches for all customers. 

A GAO report issued in May 2005, Labor Should Consider Alternative Approaches to Implement New Performance 

and Reporting Requirements (Study 4 in Appendix 2), examined EMILE. Pending completion of the aforementioned 

study, DOL revised reporting requirements, effective July 1, 2005, to facilitate the reporting of common performance 

measures across DOL’s employment and training programs. 

A June 2005 GAO report, Substantial Funds Are Used for Training, but Little Is Known Nationally about Training 

Outcomes (Study 1 in Appendix 2), raised concern about how WIA funds are being used and how much is being 

spent on training. In response, DOL is standardizing the definition of ‘participant exit’ for purposes of assessing 

program performance, and States began implementing these changes on July 1, 2005. Through the newly revised 

Workforce Investment Act Standardized Record Data, DOL will be able to capture information on all participants 

who receive training in each program year. 

The Department is currently conducting a study in which seven State workforce agencies are co-enrolling all of their 

Trade Adjustment Act (TAA) participants into the Dislocated Worker program to examine how co-enrollment affects 

the performance outcomes of both populations. Results are expected in 2008. 

In response to the PART review conducted in 2002 in which the program was rated Adequate, DOL implemented 

common performance measures for job training programs. DOL is also integrating its training programs to eliminate 

duplication of services and provide flexibility to States. 

54 United States Department of Labor 
Outcome Goal 1.1 

Help Veterans Get and Keep Jobs 

Performance Goal 04-1.1D (VETS) – PY 2004 

Improve employment outcomes for veterans who receive One-Stop and homeless veterans’ services. 

Indicators, Targets and Results PY 2003 

Result 

PY 2004 

Target 

PY 2004 

Result 

Target 

Reached*

Percent of veteran job seekers employed in the first or second 

quarter following registration 58% 58% 60% Y

Percent of veteran job seekers still employed two quarters after 

initial entry into employment with a new employer 

79% 80% 81% Y

Percent of disabled veteran job seekers employed in the first or 

second quarter following registration 53% 54% 56% Y

Percent of disabled veteran job seekers still employed two quarters 

after initial entry into employment with a new employer 

77% 78% 79% Y

Entered employment rate for homeless veterans participating in the 

Homeless Veterans’ Reintegration Program (HVRP) 61% 60% 65% Y

Employment retention rate after 6 months for homeless veteran 

HVRP participants N/A baseline 57%** Y

PY 2004 Costs $196 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) 

** Estimated using preliminary results through the second quarter

Goal Achieved

Program Perspective 

VETS delivers One-Stop employment and workforce information services to veterans through grants to State 

Workforce Agencies (SWAs), so that unemployed and underemployed veterans receive the assistance needed to 

obtain suitable employment. These grants fund positions for Disabled Veterans’ Outreach Program (DVOP)

specialists and Local Veterans’ Employment Representatives (LVER), who are assigned to One-Stop Career Centers 

nationwide and focus on veterans’ specific employment needs. 

Through the Homeless Veterans Reintegration Program (HVRP), VETS delivers targeted employment services to 

homeless veterans by making competitive grant awards, predominantly to community and faith-based organizations. 

HVRP grantees provide services such as career counseling and job search assistance, and establish collaborative 

linkages with local rehabilitation agencies for substance abuse treatment. These services often are provided in 

concert with local service providers funded by the Departments of Housing and Urban Development, Health and 

Human Services, and Veterans Affairs. 

As a component of One-Stop employment and workforce information services, the DVOP/LVER program enables 

SWAs to deploy veterans’ program specialists where the needs for intensive services to veterans and transitioning 

service members are greatest. A “two-tiered” approach to service delivery allows job-ready veterans to be served by 

other SWA staff, while veterans with employability barriers are served by DVOP/LVER staff. This strategy

leverages resources so that a maximum number of veterans are served even as resources are concentrated on those 

veterans with the greatest needs. 

VETS regards entry to employment and retention in employment as the key outcomes of its programs and is 

implementing Federal job training program common measures. Since these measures substantially revise the 

definitions for employment and retention, VETS will establish new baseline values for these measures during PY 

2005. Monitoring these outcomes will enhance the measurement of the program's impact and allow for comparisons 

across similar programs. 

FY 2005 Performance and Accountability Report 55
Performance Section 

The most recent special survey of the employment situation of veterans by the Bureau of Labor Statistics (July 2004) 

shows that veterans in general fare well compared to their non-veteran counterparts, with an average unemployment 

rate of 4.5 percent compared to 5.9 percent. However, major segments of the veteran labor force have decidedly

higher unemployment rates than non-veterans, particularly young, recently separated veterans, older veterans (45 to 

54), and disabled veterans. 

Analysis and Future Plans 

This goal was achieved. Targets for Entered Employment Rate and Employment Retention were reached, as 60 

percent of veteran job seekers were employed in the first or second quarter following registration and 81 percent of 

veteran job seekers continue to be employed after initial entry into employment with a new employer (retained in 

employment). For disabled veterans the corresponding achievements were 56 percent Entered Employment Rate and 

79 percent being retained in employment. Homeless veterans achieved a 65 percent Entered Employment Rate. 

Broad national economic indicators for unemployment, interest rates and productivity were positive over the past 

twelve months and provided a boost to the performance outcomes for the veterans program. Positive results are also 

attributed in part to continued efforts by VETS to facilitate communication between VETS State offices and State 

Workforce Agencies on strategies to maximize services to veterans. Several of these strategies are: 1) emphasis on 

DVOP and LVER staff serving as the critical link for services to veterans with employment barriers, as well as 

serving as a focal point for transition assistance and homeless veteran reintegration, while other SWA staff provide 

service to job-ready veterans; 2) SWAs’ use of new flexibilities in the development of plans of service for veterans; 

3) VETS guidance and technical assistance to SWAs on skill quality, credentials, job development, employer 

relations and intensive services as a means of ensuring retention and progress for veterans placed in jobs. For HVRP, 

sharing of best practices among grantees has paid dividends. 

While performance targets have been reached, other trends cause concern and require close monitoring by VETS and 

SWAs. Registrations of veterans seeking services have declined in the past year. The percentage of veterans 

receiving staff assisted services (an indicator of veterans with employment barriers) has also showed a recent trend 

downward. VETS will collaborate with its SWA partners in the analysis of this information in order to come to a 

clearer understanding of the factors responsible for these shifts in order to determine if new strategies need to be 

developed. 

Based on data for the first two quarters of the performance period, the retention rate for HVRP participants is 57 

percent. These results reflect the outcomes experienced by about 62 percent of those enrolled during the four 

quarters of the performance period. This preliminary retention rate indicates that members of the homeless veteran 

target group continue to struggle somewhat in their efforts to maintain stable attachment to the workforce following 

receipt of HVRP services. VETS, with its grantee network, is actively examining approaches for improving grantee 

tracking procedures, grantee follow-up services, and homeless veteran retention rates. 

In spite of a promising start, Michael’s life changed 

drastically a few years after completing his Air Force 

service. With increasing family challenges, Michael 

began to drink heavily and use drugs. He gave up his

hobbies and sold his belongings to support an ill 

relative. He changed jobs frequently, his marriage

failed, and he lost his truck and apartment. He had

nowhere to live and didn’t care about anyone or

anything. Through a program at the West Haven VA

Hospital, he completed detox and was recommended 

for transitional living at Homes for the Brave, a 

residential program for homeless veterans. The 

Vocational Specialists on staff helped him conduct a 

job search. Through programs at CTWorks, he learned

basic computer skills and applied for WIA funding to

help him get back into driving rigs. He was offered a 

better paying truck-driver position, and was able to

save money and eventually moved on. 

Photo Credit: Homes for the Brave 

56 United States Department of Labor 
Outcome Goal 1.1 

Management Issues

During FY 2005, SRA International assisted VETS and the Employment and Training Administration with research 

on developing baseline data for efficiency and earnings change measures for veteran jobseekers. These veteran job 

seekers receive One-Stop employment and workforce information services. The project, Developing Efficiency and 

Earnings Gain Measures (Study 11 in Appendix 2) found that there were many factors that influenced a State’s costs 

of service delivery, such as its unemployment rate, cost of labor and facilities, population density, relative number of 

veterans, and unexpected major corporate layoffs. Analysis also indicated slight earnings gain by participants in 

three States; this result contrasted with the findings from a prior study, which reflected a decline in earnings. VETS 

is considering additional efficiency measures such as cost per veterans who receive staff-assisted services that reflect 

the diversity of local conditions. The information helps to refine how earnings data are best applied and serves to 

reinforce VETS’ caution in establishing earnings targets. 

The Government Accountability Office (GAO) report Preliminary Observations on Changes to Veterans’ 

Employment Programs, issued in May 2005, found that more work needs to be done to implement a minimum

standard for veterans entering employment that all States will be expected to meet (see Study 8 in Appendix 2). 

VETS will conduct a nationwide study of its DVOP/LVER programs to develop initiatives for better integration into

one-stop career centers. 

GAO also issued Job Retention Goal Under Development for DOL’s Homeless Veterans’ Reintegration Program in 

May 2005 (see Study 9 in Appendix 2). The report recommended that DOL develop a realistic performance goal for 

employment retention of homeless veterans in order to better assess the success of HVRP. DOL is currently 

collecting retention data and will establish a baseline for setting and measuring performance targets. 

A third May 2005 GAO report, Enhanced Services Could Improve Transition Assistance for Reserves and National 

Guard, recommended that DOL and the Departments of Defense (DOD)and Veterans Affairs determine what 

demobilizing Reserve and National Guard members need to make a smooth transition and explore options on ways to 

enhance their participation (see Study 10 in Appendix 2). DOL is actively participating in a DOD led effort to 

determine needs, and the best ways to provide them. 

Feasibility Assessment of a Web-Based Career Guidance Tool for Transitioning Military Service Members,

completed in June 2005, determined that no existing web-based tool meets the needs of transitioning service 

members and veterans (see Study 7 in Appendix 2). Contingent upon the availability of funding, DOL plans to 

develop with the DOD a customized tool that will include career tips, a search function and details on civilian 

occupations. 

FY 2005 Performance and Accountability Report 57
Performance Section 

Satisfy High-Growth Industry Labor Needs via Apprenticeships 

Performance Goal 05-1.1A (ETA) – FY 2005 

Strengthen the registered apprenticeship system to meet the training needs of business and workers in the 21st

Century. 

Program Perspective 

The National Apprenticeship Act of 1937 established the foundation for developing and expanding the nation’s

skilled workforce through apprenticeship programs and establishing standards for safeguarding the welfare of 

apprentices. The National Registered Apprenticeship System is responsible for the accreditation, registration, 

certification, and is the nationally recognized credentialing system for skilled, craft, and technical trade training 

programs throughout the U.S. Voluntary cooperation with State agencies, businesses, program sponsors, industry

leaders, employers, employer associations and educational institutions support the Apprenticeship System. The top 

priority is to provide opportunities for jobseekers to find jobs with career paths, earn competitive wages, and offer the 

opportunity to obtain nationally-recognized industry credentials. 

As the Department continues to support the President’s High Growth Job Training Initiative (HGJTI), the 

Apprenticeship System strives to expand its system by targeting the identified high-growth industries: health care, 

information technology, biotechnology, geospatial technology, automotive, retail, advanced manufacturing 

(including aerospace), transportation, hospitality, financial services, and energy. The Apprenticeship System plays a 

vital role in the HGJTI by providing apprentices with industry-recognized credentials that are sanctioned by DOL, 

thereby helping to supply U.S. employers with the skilled workers they need to stay competitive and keep the 

economy growing. During FY 2005, there were 541 programs and 8130 apprentices registered with more than 6100 

active programs and more than 24,300 active apprentices in high-growth industries. 

Analysis and Future Plans 

Fiscal Year 2005 was a transitional year for evaluating performance in the Apprenticeship program. To tell a broader 

story of employment outcomes for registered apprentices, the Apprenticeship program moved toward common 

performance measures, by collecting baseline information on employment retention rate, earnings gain and efficiency

measures. These common measures reflect individual apprentice outcomes and allow comparison with other ETA 

programs. 

The established baseline results of the common measures show that during the first quarter of FY 2005, 78 percent of 

over 18,000 newly registered apprentices were still employed nine months after the month of registration, and their 

average hourly wage gain was $1.26 (from $11.92 to $13.18). An important strategy of the apprenticeship program

is targeting high-growth industry demand-driven career training. Apprentices are compensated for improved skills 

through wage increases that also lead to a higher employment retention rate. During FY 2005, the average cost per 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Percent of those employed in the month after registration still 

employed nine months later N/A baseline 78% Y

Average wage gain for tracked entrants18 employed in the first 

quarter after registration and still employed nine months later N/A baseline $1.26 Y

Average cost per registered apprentice N/A baseline $109 Y

FY 2005 Costs $23 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Achieved

 

18 Twenty-three States are federally-registered apprenticeship programs and enter data on individuals into the Registered

Apprenticeship Information System (RAIS). A group of “tracked entrants” is defined as the cohort of apprentices registered 

and entered into RAIS during a given reporting period.

58 United States Department of Labor 
Outcome Goal 1.1 

registered apprentice was $109, efficient for Federal employment programs. By leveraging large investment from the 

private sector, Apprenticeship demonstrates a low cost, market driven approach to training America’s workers. 

The apprenticeship model functions as a self-sustaining system, with employers covering most training expenses 

such as wages, classroom training, supervision, and mentoring for the duration of the program, which can be several 

years. The apprenticeship system graduated 119,363 apprentices in the last four years, all of whom were employed, 

earned credentials verifying technical competencies, and increased their earnings in the process. 

The Women in the Trades Construction Apprenticeship

Preparation Program was developed and piloted in

Fairbanks, Alaska, in 2004. The four-week curriculu

includes physical conditioning, health and safety 

training, construction math, job readiness skills, gu

speakers, and skills training at seven different 

apprenticeship schools. Participants received hands-o

experience in the sheet metal, electrical, plumbing

pipefitting, ironworker, carpenter, and pile driver

trades. This preparation program is designed to expo

the women to different trades, to understand the 

commitments and requirements of the constructio

industry, and to prepare them for successful entran

into various apprenticeship programs. Gwendolyn

program participant, said, “To have a marketable s

is an incredible privilege. We have chosen to devo

ourselves to perfecting our trade.” 

Photo Credit: John Hakala and G

m

est 

n

and

se 

n

ce 

, a 

kill 

te 

wendolyn 

Beecher 

Management Issues

ship Information System (RAIS) collects program and apprenticeship information and is a 

t

t

ging. 

pprenticeship has been expanding its electronic registration project in RAIS. It allows program sponsors to register 

August 2005, the Government Accountability Office (GAO) issued a report, Registered Apprenticeship Programs: 

Registered Apprentice

unique data system that operates independent of States’ workforce information systems. Efforts are underway to 

determine whether and how Unemployment Insurance wage records may be used to capture information consisten

with the common measures. Access to and disclosure of State unemployment insurance wage records is being sough

in consultation with the National Association of State Workforce Agencies and efforts are continuing to allow DOL 

to pilot the common measures using State UI wage records. In addition, the State Apprenticeship Councils’

participation in the RAIS is voluntary, and the collection of retention and earnings data continue to be challen

 

A

apprentices electronically, provides the source data for documenting pay rates, general employer workforce and 

demographics information, and completion credentials. Moreover, RAIS has reduced the application processing

time, made the system more cost-effective, and improved the program’s ability to track data. 

In

Labor Can Better Use Data to Target Oversight, that identified several areas for improvement (Study 5 in Appendix

2). DOL will follow up on GAO’s recommendations by better utilizing information in the existing data sources and 

data mining tool; encouraging State Apprenticeship Agency (SAA) States to participate in RAIS; and providing 

technical assistance on issues identified in final reports of the 14 SAA reviews conducted in FY 2005. 

FY 2005 Performance and Accountability Report 59
Performance Section 

Increase Employment Opportunities for Youth and Adults with Disabilities

Performance Goal 05-1.1B (ODEP) – FY 2005 

Provide national leadership to increase access and employment opportunities for youth and adults with disabilities 

receiving employment, training, and employment support services by developing, testing, and disseminating effective 

practices. 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Number of people with disabilities served through ODEP projects 6151 6718 9768 Y

Entered employment rate at pilot sites. 19.0% 24% 24.1% Y

The 3-month and 6-month retention rates for people with 

disabilities served by the pilots 

12.3%

6.9%

22%

17%

46.7% 

39.0% 

Y 

Y 

Effective practices identified through pilot projects and other 

research-related initiatives 10 11 19 Y

FY 2005 Costs $52 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Achieved

Program Perspective 

The Office of Disability Employment Policy (ODEP) provides national leadership on disability employment policy

to the Department of Labor and other Federal agencies. ODEP develops and influences the implementation of 

evidence-based disability employment policies and practices throughout the workforce development system, 

including employers. The implementation of these effective policies and practices will result in an increase in 

employment opportunities, and the recruitment, retention and promotion of people with disabilities. ODEP also 

supports the implementation of the employment-related goals of President Bush's New Freedom Initiative. 

ODEP’s response to low employment rates among people with disabilities is comprehensive and aggressive, and 

includes securing the active involvement and cooperation among a number of Federal, State, and local agencies as 

well as private sector organizations. ODEP strategically invests in policy development and research activities that 

identify policy options and validate evidence-based practices. The results of these activities are reflected in the 

indicators and targets used to measure ODEP’s performance. 

Major external factors that influence performance outcomes include several workforce trends. These trends include 

projected workforce shortages, turn-over and retirement, and the trend of working beyond the traditional retirement 

age. Many of these workers may experience disabling conditions, increasing pressure on the employer to keep 

workers on the job and to have employees who are temporarily disabled return to work quickly. Finally, small 

businesses will continue to be the backbone of the U.S. economy. They employ half of all private sector employees 

and have generated 60 to 80 percent of new jobs annually over the last decade. Small employers face unique 

challenges in hiring and retaining disabled workers. 

ODEP develops policies and practices that empower employers to rethink their strategies for employee recruitment, 

development and transition with the goal of retaining long-term, high-quality, high-contributing employees. 

Additionally, ODEP develops policies and practices that enhance coordination of the support needed to keep workers 

on the job and return employees to work quickly following an injury or illness. This support includes access to 

healthcare, housing, and reliable transportation. 

Analysis and Future Plans 

ODEP achieved its goal. In FY 2005, ODEP continued collecting data from pilot projects and research activities: the 

number served; entered employment rate; retention rates (at three and six months); and the number of effective 

practices identified. Based on available data through the end of the third quarter of FY 2005, 9768 people with 

disabilities received employment related services, exceeding the target of 6718. The entered employment rate is 24.1 

60 United States Department of Labor 
Outcome Goal 1.1 

percent, 0.1 percent above the target of 24 percent. The three-month and six-month retention rates are 46.7 percent 

and 39.0 percent, exceeding the targets of 22 percent and 17 percent, respectively. Nineteen effective practices were 

identified through pilot projects and research initiatives, again exceeding the set target of eleven by eight. 

In FY 2006, ODEP will continue its performance improvement efforts by aligning its strategies and activities to 

reflect a stronger reliance on its own internal staff to concentrate on policy development, analysis and applied 

research initiatives as opposed to using externally-funded public and private organizations. Activities will focus on 

ODEP's core mission to develop and influence the implementation of policies and practices that will increase 

employment opportunities, recruitment, retention, and promotion of adults and youth with disabilities. Accordingly, 

in FY 2006, ODEP’s Performance Goal will be modified to ensure its activities are measured in terms of their impact 

on the workforce development system and its partners. 

Joey is a 21 year old student with a disability who

recently left the Montgomery County, Maryland P

School system without any job prospects. Under a

Office of Disability Employment Policy grant, the 

Montgomery Local Workforce Investment Board was

able to get Joey the customized employmen

he needed to become successfully employed

local grant staff worked with Joey, his family, the 

school, and related community employment se

providers to coordinate Joey's customized empl

plan. The grant staff met with a variety of businesses 

near Joey's home. After meeting with a local retail 

clothing store, the grant staff discussed Joey's skills 

and interests while explaining the concept of

customized employment. The store’s manag

the idea and said that she needed to create a new 

position as a “markdown attendant”; which exactl

matched Joey’s interests and skills. Joey got the job.

According to the employer, this task was always just a

"fill-in" responsibility by other staff whose job it is to attend to customer needs. This new job creation allows other staff to focus

on customer-service, while Joey fulfills another essential business need. Joey works 25 hours per week, and earns $7.00 per 

hour. He takes public transportation to and from work. 

ublic

n

t services

. The 

rvice 

oyment

er loved 

y

Management Issues

ODEP conducts pilot projects to determine the effectiveness of disability employment strategies for dissemination 

throughout the workforce development system and partners. Pilot project data is collected and assessed internally

and externally. Oversight includes quarterly project reports, staff visits to project sites and regular conference calls

with project staff. ODEP also contracts with an external evaluator to independently verify data collected in pilot

project reports, review project documents and activities, and visit project sites. 

ODEP’s multi-year external evaluation of pilot projects assesses the nature and extent of systems change to 

determine the effectiveness of strategies employed for increasing the capacity of the workforce development system

to respond to the needs of people with disabilities. Findings continue to demonstrate: 1) the capacity of the 

workforce development system has expanded and is strengthened to better serve people with disabilities; 2) people 

with disabilities are moving from low-skill, minimum wage work to higher-paid jobs in technical or other new career 

fields; 3) attitudes at One-Stop Centers regarding the provision of services to people with disabilities are changing; 

and 4) governmental agencies are now working together to share information and leverage resources to better serve 

people with disabilities. 

DOL is conducting a follow-up case study of 12 Workforce Investment Act (WIA)-assisted sites to provide

information that will enable practice to inform policy and improve performance results of WIA-assisted programs 

that serve people with disabilities (see Case Study Research: How People with Disabilities are Served through the 

Workforce Development System – Study 6 in Appendix 2). Since States' initial implementation of WIA, One-Stop 

Career Centers and youth services have been addressing the challenges of serving all customers, including those with 

disabilities. The case study focuses on assessing impact and customer satisfaction. 

FY 2005 Performance and Accountability Report 61
Performance Section 

Outcome Goal 1.2 – Increase Opportunities for Youth Employment 

Even though the median age of the workforce is rising, the percentage of workers between the ages of 16 and 24 is 

expected to grow more rapidly than the overall labor force for the first time in 25 years. The majority of jobs will 

continue to require workers who have acquired knowledge and skills via two-year colleges, vocational training, 

moderate to long-term on-the-job training and real work experience. High school drop-outs are three to four times 

more likely to be unemployed than college graduates. These statistics help to explain why an important part of 

DOL’s mission is to help disadvantaged youth prepare for competition in a 21st century work environment. 

DOL administers two programs designed specifically to serve youth: the WIA Youth formula grant program, which 

provides comprehensive services through local workforce investment areas, and Job Corps, an intensive, largely 

residential academic and employment training program. Services to in-school youth help them remain in and 

complete secondary school, move into post-secondary education or advanced training, and ultimately transition into

successful careers. Out-of-school youth receive services that provide them with the necessary skills to attain 

educational credentials (i.e., high school diploma or general equivalency diploma), participate in vocational and postsecondary training opportunities, and transition into gainful employment or a career. Through these programs, our 

Nation makes the type of meaningful investment in at-risk teenagers and young adults that is necessary to help them

become productive and self-sufficient members of the nation’s workforce. 

Two performance goals measure DOL’s progress in helping youth prepare for entry to the workforce. Both are 

administered by the Employment and Training Administration (ETA) under the Workforce Investment Act of 1998 

(WIA). Funding and reporting for both programs are for Program Year (PY) 2004 (July 2004 - June 2005).

Performance Summary 

Diploma 

attainment

Literacy & 

numeracy 

Entry to 

employment*

Employment

retention Efficiency

PY 2004

Costs 

(millions) 

Result 65% – 72% 82% $2822

Target 53% – 68% 79% $2663

WIA Youth (04-1.2A) 

Increase placements and 

educational attainments for youth 

served through the WIA youth 

program. 

Goal not achieved. Three targets 

reached, one not reached.

PY03 63% – 71% 81% –

$987

Result 64% 47% 84% – $24,809

Target 64% 45% 85% – $22,503

Job Corps (04-1.2B)

Improve educational

achievements of Job Corps 

students, and increase

participation of Job Corps 

graduates in employment and 

education. 

Goal not achieved. Two targets 

reached, two not reached.

PY03 – – – – –

1313

*For WIA Youth, 19-21 year olds only; for Job Corps, measure includes enrollment in education or training. 

Results Summary 

Neither of the goals was achieved because – as with several adult employment and training programs in Outcome 

Goal 1.1 – efficiency measure (cost per participant) targets were overly ambitious in this (baseline) year. Outcomes, 

however, were positive. Educational attainment reached or exceeded targets for both programs. Job Corps 

participants’ literacy and numeracy gains exceeded targets. The WIA Youth program exceeded its placement target, 

but Job Corps fell just short of its graduates’ placement target. WIA Youth also reached its retention target. For the 

WIA Youth program, this year’s performance continues an upward trend in all three outcome indicators stretching 

back several years. For Job Corps, this year was the first for which new Federal youth job training program common 

measures data were collected, so comparison to prior years is not possible. 

Although national economic conditions improved in this reporting period versus preceding “recovery” years, the 

boost this provided to performance was offset by increasing the WIA Youth program’s focus on out-of-school youth. 

62 United States Department of Labor 
Outcome Goal 1.2 

Out-of-school youth are traditionally harder to serve. Continued improvement in overall performance was achieved 

by providing State Workforce Agencies with technical assistance, especially on collaboration with other social 

service organizations, and by strategic use of incentives for targeting at-risk youth and promising occupations. Job 

Corps’ education efforts (diploma and literacy/numeracy) appear to be paying off. This is encouraging because 

academic and career success are highly correlated and expected to become even more so as the knowledge economy

further evolves. 

Students with the Chinese American Service 

League, a comprehensive social service agency 

dedicated to serving the needs of the Chinese 

community in Chicago, participated in 

Cardiopulmonary Resuscitation (CPR) training a

part of the Women’s Bureau Group E-Me

in Nursing (GEM-Nursing) project. The two 

CPR training sessions included hands-on skills

training to teach students how to respond to

breathing and cardiac emergencies. The GEMNursing project is an innovative on-line program

designed to encourage young people to expl

career opportunities in nursing. Students 

communicate on-line with nurses around the 

country who represent a wide range of nursing

careers. Participants also attend events and 

training to broaden their exposure to nursing and

healthcare-related careers. 

s

ntoring

ore 

Photo credit: DOL/WB staff 

Net Cost of Programs 

FY 2005 program costs of $2.455 billion supported ETA programs providing employment and training assistance to 

youth through formula grants to States, and Job Corps. Decreased costs resulted from reductions in the WIA Youth 

program and from the phase-out of Youth Opportunity Grants and the School-to-Work initiative. 

Outcome Goal 1.2

Net Costs ($Billions)

2.5 2.3

2.7 2.8 2.9 2.7 2.5

0

1

2

3

4

1999 2000 2001 2002 2003 2004 2005

Fiscal Year

Future Challenges 

For the WIA Youth program, continued emphasis on serving youth who have left school will make it difficult to 

improve measured overall education and employment performance. So far, existing strategies appear to be working 

well. In addition, implementation of a new data reporting system has been difficult and may require a new approach. 

Job Corps’ large operation, though fundamentally sound, poses many management challenges. In fact, Job Corps 

controls roughly 95 percent of the DOL real property portfolio that is not leased through GSA. To that end, in 

keeping with the principles of Executive Order 13327, Federal Real Property Asset Management, which President 

Bush issued in February 2004 “to promote the efficient and economical use of America's real property assets ... ", 

Deputy Secretary Steven J. Law established a Departmental workgroup designed to address the management 

challenges related to real property – while working to more fully implement this key President’s Management 

Agenda initiative. In addition, the Inspector General’s Top Management Challenges addressed in this report also 

highlights the need to improve management of real property assets. In the near future, the Job Corps program is

implementing new data validation procedures and is continuing to look closely at whether its physical assets (the 

residential training centers) are being utilized as efficiently as possible. 

FY 2005 Performance and Accountability Report 63
Performance Section 

Assist Youth in Making a Successful Transition to Work 

Performance Goal 04-1.2A (ETA) – PY 2004 

Increase placements and educational attainments of youth. 

Indicators, Targets and Results PY 2003 

Result 

PY 2004 

Target 

PY 2004 

Result 

Target 

Reached*

Percent of 14-18 year-old youth who enter the program without a 

diploma or equivalent who attain a secondary school diploma or 

equivalent by the first quarter after exit 

63% 53% 65% Y

Percent of 19-21 year-old youth employed in the first quarter after 

program exit 71% 68% 72% Y

Percent of 19-21 year-old youth employed in the first quarter after 

exit still employed in the third quarter after program exit. 81% 79% 82% Y

Average cost per participant N/A $2663 $2822** N

PY 2004 Costs lions) $987 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) 

**Estimated based on quarterly reports

Goal Not Achieved

Program Perspective 

The WIA youth program is an important component of an integrated workforce system. WIA authorizes services to 

low-income youth (ages 14-21) with barriers to employment. Eligible youth are deficient in basic skills or are 

homeless, are a runaway, are pregnant or parenting, are offenders, school dropouts, or foster children. The program

serves both in- and out-of-school youth, including youth with disabilities and other youth who may require 

specialized assistance to complete an educational program or to secure and hold employment. Service providers 

prepare youth for employment and post-secondary education by stressing linkages between academic and 

occupational learning. They also assist youth by providing tutoring, alternative schools, summer employment, 

occupational training, work experience, supportive services, leadership development, mentoring, counseling, and 

follow-up services. 

In July of 2004, DOL published guidance outlining its new strategic vision for the delivery of youth services under 

WIA. This vision emphasizes that “out-of-school youth and those most at risk of dropping out are an important part 

of the new workforce ’supply pipeline’ needed by businesses to fill job vacancies in the knowledge economy. WIAfunded youth programs will provide leadership by serving as a catalyst to connect these youth with quality secondary

and post-secondary educational opportunities and high-growth and other employment opportunities.” Efforts are 

now focused on four major areas: alternative education, demand-driven strategies for providing youth with the skills 

businesses need, serving the neediest youth, and improving performance. 

PY 2004, progress was tracked against four performance indicators. For the older youth population, entrance into 

and retention in employment are the most appropriate indicators of success because the program’s services are 

focused on preparation for and success in the workforce. For the younger youth population, where services are 

geared toward academic achievement as a means of career preparation, achievement of a diploma or its equivalent is 

the most meaningful indicator of future success in the workforce. The cost per participant measure gauges the 

efficient use of Federal dollars. 

In recent years, the program has made steady progress by all measures (see chart). Cost for participants, a new 

indicator as of PY 2004, is expected to increase, at least in the short term, due to targeting a harder to serve out-ofschool youth population as well as general increases observed for the cost of education and training programs 

nationwide. 

64 United States Department of Labor 
Outcome Goal 1.2 

Analysis and Future Plans 

Results for PY 2004 continue an upward trend that began with WIA implementation in 1998. All three outcome

indicators increased from PY 2003 and exceeded performance targets. Most important is the continued increase in 

high school diploma attainment, given the strong statistical correlation between educational attainment and success in 

the labor market. 

Average cost per participant was slightly higher than 

expected – $2822 vs. a target of $2663. However, 

consistent with ETA’s vision for youth services, the 

program has served a higher proportion of out-of-school 

youth. Out-of-school youth are a more expensive 

population to serve, with a cost of $3724 per participant, 

therefore the overall cost per participant increased over 

prior years. At the time the cost per participant target was 

estimated, DOL did not anticipate the full extent of 

increased expenditures on out-of-school youth. 

During PY 2004, DOL held a series of Regional Forums that convened State education agencies along with 

workforce development, juvenile justice and child welfare agencies from 45 States to identify opportunities for 

improving programs across agency lines. DOL has provided States with a Federal/State benchmarking tool to 

provide States with broad principles to assist them in gauging the effectiveness of their collaborative efforts. 

Two years ago, when Mathias arrived at Eastman Youth Development Campus, a 

youth detention center in Georgia, the seventeen-year-old was without any personal or

career goals. While he was on the campus, Mathias enrolled in the WIA Youth 

program. During the program, Mathias earned his General Equivalency Diploma and a

Certified Construction Worker Certificate. He also demonstrated his good work ethi

After his release in January of 2005, Mathias found employment and enrolled in a local 

technical college to obtain a Document Processing Assistant Certificate. Recently

Mathias was accepted into a university. Now, his personal goal is to obtain a Bachelor

of Science Degree in Computer Engineering! 

c.

,

Photo Credit: Robert Dixon and Betty Johnson 

In the fall of 2004, DOL awarded Foster Youth Demonstration grants to five 

States aimed at assisting foster youth who have or will be transitioning out of 

foster care to access employment and training opportunities. In the summer of 

2005, DOL awarded 16 demonstration grants to State and local agencies and 

community-based organizations to help prepare youth offenders to enter high 

growth and high demand industries. 

For PY 2005, targets will increase to 69 percent for the entered employment 

rate, 80 percent for the employment retention rate and remain at 53 percent for the diploma attainment rate. The 

target is not increasing for the diploma attainment rate due to an increased emphasis on services to the neediest 

youth, especially out-of-school youth, who traditionally have low rates of diploma attainment. 

Management Issues

Performance data for the WIA youth program are both complete and reliable. DOL continues to implement the 

recommendations made in a February 2004 Government Accountability Office (GAO) report entitled Labor Actions 

Can Help States Improve Quality of Performance Outcome Data and Delivery of Youth Services that recommended 

coordination with the U.S. Department of Education to connect school dropouts to local WIA youth programs and to 

establish standard monitoring procedures. 

GAO issued a report in May 2005 entitled Labor Should Consider Alternative Approaches to New Performance and 

Reporting Requirements (Study 4 in Appendix 2). The report recommended that DOL consider alternative 

approaches to implementing its new reporting system, including ongoing consultation with stakeholders, phased 

implementation, and pilot testing. DOL will continue to consult with representatives of the State and local workforce 

system. In addition, DOL is conducting a feasibility study in three States and two local areas to examine the changes 

WIA Youth

20%

40%

60%

80%

100%

PY 2000 PY 2001 PY 2002 PY 2003 PY 2004

Diploma Attainment

Entered Employment

Employment Retention

FY 2005 Performance and Accountability Report 65
Performance Section 

needed at the State and local levels to meet the proposed data collection requirements as originally proposed in the 

July 2004 Federal Register. 

The WIA Youth program received a rating of Ineffective in the PART review conducted in FY 2002. Since that time 

the program has made significant progress in addressing recommendations to adopt common performance measures 

for Federal job training programs and conduct an impact evaluation of the WIA Youth program. States will begin 

reporting on the new measures in their first quarterly report due in November 2005. The impact evaluation will be 

commissioned upon WIA reauthorization, as knowledge of the program’s new direction will be critical to the design 

of any meaningful study. 

66 United States Department of Labor 
Outcome Goal 1.2 

Increase Placements and Educational Attainments of Youth 

Performance Goal 04-1.2B (ETA) – PY 2004 

Improve educational achievements of Job Corps students and increase participation of Job Corps graduates in 

employment and education.

Indicators, Targets and Results PY 2003 

Result 

PY 2004 

Target 

PY 2004 

Result 

Target 

Reached*

Percent of Job Corps graduates (within 1 year of program exit) and 

former enrollees (within 90 days of program exit) who enter 

employment or enroll in post-secondary education or 

advanced/occupational skills training 

N/A 85% 84% N

Percent of students earning a high school diploma, General 

Equivalency Diploma (GED) or certificate while enrolled in a Job

Corps program

N/A 64% 64% Y

Percent of students who will achieve literacy or numeracy gains of 

one Adult Basic Education (ABE) level (one ABE level is 

approximately equivalent to two grade levels) 

N/A 45% 47% Y

Average cost per participant N/A $22,503 $24,809 N

PY 2004 Costs lions $1313 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Not Achieved

Program Perspective 

Job Corps is an intensive academic and vocational training program (primarily residential) for economically

disadvantaged youth ages 16 through 24 who often face multiple barriers to gainful employment. This program

provides occupational skills, academic training, social education, and other support services, such as housing, 

transportation and family support resources, to more than 60,000 individuals at 122 centers nationwide. Job Corps 

centers, ranging in size from 200 to 2,000 students, are located in both urban and rural communities. Most Job Corps 

centers are operated by large and small companies under performance-based contracts. Other Job Corps centers are 

operated by Federal departments. 

Job Corps centers provide services tailored to each student’s needs to help them achieve the skills and credentials 

required to be successful, productive citizens and to obtain work opportunities that lead to long-term employment. In 

PY 2004, DOL began reporting Job Corps performance according to the job training common measures for youth 

programs: placement in employment or education, attainment of a degree or certificate, literacy and numeracy gains, 

and average cost per participant. The first three measures are indicators of student achievement in terms of 

placement in employment and in enhancing their employability; the efficiency measure assists program management 

in controlling costs. 

As with other employment and training programs, Job Corps’ performance can be impacted by external factors such 

as local labor market conditions and national economic trends. In recent years, an increasingly knowledge-based 

labor market has challenged Job Corps to redirect both academic and technical career training approaches. In 

addition, adjustment to federally standardized job training program common measures has provided program

management challenges. 

Analysis and Future Plans

During PY 2004, Job Corps continued to improve educational achievements of its students, as indicated by meeting 

the target of 64 percent of students earning a high school diploma, GED or vocational certificate while enrolled in 

Job Corps. In addition, in the first year of measuring literacy and numeracy gains, Job Corps exceeded the target by

improving these outcomes for 47 percent of all students who were basic skills deficient at entry. Attainment of these 

FY 2005 Performance and Accountability Report 67
Performance Section 

two measures indicates that Job Corps’ focus on academics – through partnerships with local school districts, 

innovative teaching approaches, and integration with skill training – has helped prepare students academically, as 

well as vocationally, for success in the labor market. 

The entered employment/education measure, which until this year included program graduates only, now includes 

former enrollees and will ultimately include all students. While placement of graduates increased from 90 percent to 

91 percent, former enrollees’ results had more impact than expected; the overall rate just missed the target of 85 

percent. This does indicate that the target was ambitious, and Job Corps will focus on reaching that placement rate in 

PY 2005 by encouraging Career Transition Services (CTS) providers to focus their energies and services on recent 

graduates. 

Job Corps utilizes performance-based contracting for center operators and CTS providers; center operators’ and 

contractors’ revenues are linked to performance on specific measures of student success. Such provisions, 

particularly incentive fees for contractors, have led to improved student outcomes. Regional offices conduct 

assessments and annual contract reviews of outreach and admissions contractors, center operators and CTS providers 

that include compliance measures for operations and performance measures related to student outcomes. In addition 

to improving student outcomes, Job Corps maintains safe and healthy environments at all Job Corps centers by

cooperatively working with other DOL agencies to conduct safety and health inspections annually. 

Collbran Job Corps Civilian Conservation Center 

celebrated their Eagle Corps team’s second place 

finish in the Colorado regional For Inspiration and

Recognition of Science and Technology Robotics 

competition that is sponsored by NASA. This year, 38

teams participated and had six weeks to build their 

robot for the competition. Volunteer mentors from

local engineering firms, as well as a retired m

engineer, assisted the 22-member Eagle Corps team in

programming, engineering and electronic wirin

robot’s construction. While preparing for the 

competition, the team not only designed and built

robot, but also created a competition Web site

(www.eaglecorps.ws), researched the partneri

companies, produced a button to trade with other 

teams, and designed a team jersey. The drawing of the

team’s robot was created by a participant who taught 

herself the AutoCAD program. “Robotics is a once

a-lifetime experience,” said Tim, a 17-year-o

member. 

echanical

g for its

the 

ng

-inld team

Photo Credit: Johnathon Noe, Elijah Davis, Tim Lawrence, Tim Silburn, Darrell Martin, Deak Chamberlain, and Maria 

Temiquel 

Management Issues

Job Corps is committed to maintaining a comprehensive data collection and reporting system that meets the highest 

integrity expectations, and has established multiple methods to continuously assess the validity of the system. Given 

the scope of operations, however, there have been challenges to maintaining uniform quality. Recently, the Office of 

Inspector General (OIG) identified several areas of concern related to Job Corps’ data validation procedures in Job 

Corps Performance Measurement Outcomes Report (Study 13 in Appendix 2) and Performance Audit of Job Corps 

Center Operating Costs (Study 12 in Appendix 2). To ensure system-wide data integrity, Job Corps is implementing 

requirements for regional offices to review individual student data using a stringent targeted sampling methodology, 

and is taking steps to recover overpayments if irregularities are identified. 

Job Corps controls roughly 95 percent of the DOL real property portfolio that is not leased through the General 

Services Administration. In keeping with the principles of Executive Order 13327, Federal Real Property Asset 

Management, which President Bush issued in February 2004 “to promote the efficient and economical use of 

America's real property assets," Deputy Secretary Law established a Departmental workgroup designed to address 

the management challenges related to real property – while working to more fully implement this key President’s 

Management Agenda initiative. In addition, the Inspector General’s Top Management Challenges addressed in this 

68 United States Department of Labor 
Outcome Goal 1.2 

report also highlights the need to improve management of real property assets. Job Corps is investigating whether its 

physical assets (the residential training centers) are being utilized as efficiently as possible. 

In 2004, the Job Corps program was assessed through the PART, and was rated as Moderately Effective. In response 

to findings identified in the PART, DOL has: 

• Created a strategic plan to improve services to Hispanic/Latino and Limited English Proficient students to 

improve the employment and earnings outcomes of their population;

• Developed an Asset Management Plan and Capital Asset Plan to complement the FY 2007 budget 

submission; 

• Developed a decision-making process for capital investments in real property, based on alignment with a 

business case presented to support instructional programs which target high growth economies;

• Assembled a cost effectiveness workgroup to improve program efficiency; and 

• Piloted a project to utilize Unemployment Insurance wage records in an aggregate format in order to proceed 

with full implementation of common measures by PY 2006. 

FY 2005 Performance and Accountability Report 69
Performance Section 

Outcome Goal 1.3 – Improve the Effectiveness of Information and Analysis On The 

U.S. Economy 

Maintaining competitiveness in the 21st Century requires Americans to be knowledgeable about trends in the global, 

national, and local economies. Private citizens, business owners, and public officials need to have access to up-todate, high-quality information and statistics to assist them in making better informed decisions. The Department’s

Bureau of Labor Statistics (BLS), which produces some of the Nation’s most sensitive and important economic 

indicators, looks for opportunities for innovation to improve the usefulness of its products and services to our 

customers. For example, in FY 2005, the Quarterly Census of Employment and Wages (QCEW) program released a 

new on-line tool for labor market analysis. The Location Quotient Calculator is designed to aid economic 

development professionals in accurately identifying industries that attract jobs and income, and sell goods and 

services outside their community. This innovative use of the QCEW data allows the customer to conduct a focused, 

detailed industry study at the desired geographic level. 

Goal (Agency) and Statement Performance Summary 

FY 2005 Costs 

(millions)

05-1.3A (BLS) 

Improve information available to decision-makers on labor 

market conditions, and price and productivity changes.

Goal substantially achieved. Six of eight

targets were reached, one was substantially 

reached and one was not reached. 

$536

Results Summary 

DOL reports performance for this goal using such indicators as timeliness, accuracy, relevancy, efficiency, and 

customer satisfaction with statistical products and services because these represent critical aspects of a statistical 

program's performance. The results presented here reflect continuous efforts to improve statistical products and 

services available to decision makers. Some FY 2005 achievements include: 

• BLS improved the Diary – a collection instrument used to obtain information for the Consumer Expenditure 

Survey – to make it more user-friendly. For example, the respondent now uses check boxes instead of 

writing out responses when providing information on meals away from home. 

• BLS improved the timeliness of the Census of Fatal Occupational Injuries (CFOI) annual data release. Data 

were made available in August – one month earlier than in recent years. 

• The Current Employment Statistics (CES) program began in March publishing Metropolitan Statistical Areas 

(MSAs) using the new OMB definitions. Concurrent with this release, CES also expanded its coverage to 

include all MSAs for the first time ever; previously, about three-quarters of the MSAs had been published.

Following several decades of 

population decline and job losses, 

Philadelphia has worked relentlessly 

to bolster economic growth and 

improve its competitiveness 

nationally, with notable success in

recent years. Mr. Stephen CampLandis, City of Philadelphia Budget 

Office analyst, cites BLS employment 

and wage data as useful to fo

public policy decisions and addressin

citizen needs. According to Mr

Camp-Landis, the City uses CES and

QCEW data to help project tax

revenues. The resulting improvem

in the quality of those projections have

allowed Philadelphia to effectively

manage an annual wage and business

tax reduction program for eleven 

years. CES and QCEW data can be 

found at http://www.bls.gov/sae/home.htm and http://www.bls.gov/cew/home.htm, respectively. 

rmulating 

g

.

ents 

Photo credit: Rick McMullin 

70 United States Department of Labor 
Outcome Goal 1.3 

Net Cost of Programs 

FY 2005 program costs of $536 million support BLS programs to produce and disseminate timely, accurate, and 

relevant information on the economy. The Bureau's budget and costs trended upward from 1999 to 2005. This trend 

is attributed primarily to mandatory cost increases; the creation of new programs, such as the American Time Use 

Survey; and important improvements to survey programs, such as the Consumer Price Index, Producer Price Index, 

and Employment Cost Index. 

Outcome Goal 1.3

Net Costs ($Millions)

400 420

463

509 533 539 536

0

100

200

300

400

500

600

1999 2000 2001 2002 2003 2004 2005

Fiscal Year

Future Challenges 

To respond to the changing economy, maintaining sufficient response levels, and evolving technology, DOL will use 

various strategies, including the following: 

To respond to the changing economy:

In FY 2006, BLS will begin publishing a new data series that will allow workers and employers to compare 

wages and salaries among metropolitan areas. In an increasingly mobile society, workers need data to help them

evaluate job offers from firms located in a variety of locations, and employers need data to compare labor costs 

when deciding where to establish or expand operations. Produced by the National Compensation Survey, the 

inter-area pay relatives will present this information in an easy-to-use format free from the effect of differences 

in survey timing, occupational staffing patterns, and industry mix. 

To maintain a high level of response for its voluntary surveys: 

In FY 2005, BLS started a multi-year effort to improve informational materials included in data collection 

efforts. BLS systematically collected information on how respondents view BLS and its programs from

interviewers who regularly interact with respondents. Based on the information learned, in FY 2006, BLS plans 

to conduct a test of the impact of including an informational brochure in the survey packages of the Occupational 

Employment Statistics program. 

To meet the challenges of evolving technology: 

In FY 2006, BLS will improve users’ ability to find information through the release of a new search engine for 

the Web site. This technology will improve the search engine results to coincide with user expectations, identify 

common misspellings and provide alternative choices, and display links to related materials. 

FY 2005 Performance and Accountability Report 71
Performance Section

Timely, Accurate, and Relevant Economic Information 

Performance Goal 05-1.3A (BLS) – FY 2005 

Improve information available to decision-makers on labor market conditions, and price and productivity changes. 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Number of series (e.g., Current Employment Statistics, 

Employment Cost Index, etc.) converted to the North American 

Industry Classification System (12 series in total) 

8 9 9 Y

Percent of domestic output of in-scope services included in the 

Producer Price Index (PPI) 59.2% 75.7% 76.3% Y

Percent of in-scope industries in the labor productivity measures 58.0% 58.3% 59.2% Y

Percent of the components of the new repricing system completed 17% 40% 37% N

Cost per transaction of the Internet Data Collection Facility $6.13 $3.32 $2.44 Y

Customer satisfaction with BLS products and services (e.g. the 

American Customer Satisfaction Index) 82% 75% 74% S**

Percent of scheduled releases issued on time (108 scheduled 

releases) 96% 100% 100% Y

Percent of accuracy measures met (e.g., revision, coverage, etc. - 

17 accuracy measures in total) 83% 100% 100% Y

FY 2005 Costs $536 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) 

**ForeSee Results has stated that one percentage point is not statistically significant for 

this indicator. 

Goal Substantially Achieved 

Program Perspective 

BLS reports performance for this goal by producing timely and accurate data that meet customer needs. 

Improvements to the data are measured through increases in the relevancy, coverage, and response rates. The 

indicators presented here represent the various dimensions of BLS products and services that are important to our 

customers. The targets chosen balance respondent burden and data user needs, while supporting continuous

improvement of our programs and products. 

To continue improving its products and services, BLS analyzes and evaluates new economic and statistical 

methodologies, new technologies, and new survey design, collection, and dissemination approaches. Keeping 

abreast of improvements and using these improvements to deliver data in a more timely and useful manner, while 

still maintaining cost effectiveness, are essential ingredients to meeting our goals and providing the quality of service 

our customers expect. For example, after a multi-year improvement project, the Local Area Unemployment Statistics 

program began using in FY 2005 redesigned estimating models for States. Focusing resources on improving these 

estimates, which are a key component of labor market analysis, will lead to an improvement in local area information 

available to decision-makers, a reduction in the annual revision in monthly State estimates by approximately 20 

percent, and the achievement of the BLS data accuracy target. 

Analysis and Future Plans 

The goal was substantially achieved. Targets were exceeded, reached, or substantially reached for seven of the eight 

performance indicators. 

 

72 United States Department of Labor 
Outcome Goal 1.3 

BLS reached its target for converting one data series from the Standard Industrial Classification (SIC) system to the 

North American Industry Classification System (NAICS) in FY 2005. The Survey of Occupational Injuries and 

Illnesses data were converted to NAICS in December 2004 as planned. 

Targets were exceeded for improving data coverage in the PPI and in labor productivity measures as BLS continued 

to improve the accuracy of its data. While the PPI measures average changes in selling prices received by domestic

producers for their output, labor productivity is the ratio of the output of goods and services to the labor hours 

devoted to the production of that output. BLS improved data coverage for calculating the PPI by increasing the 

percent of service industries from 38.8 percent (1997 baseline) to 76.3 percent in FY 2005. BLS increased data 

coverage in labor productivity measures to 59.2 percent, up from 58 percent in FY 2004 (baseline). 

BLS did not reach its target, 40 percent, for completing components of the new PPI repricing system as only 37 

percent of the components were completed. As part of the continuing effort to modernize the computing system for 

monthly processing of the PPI, this new system will be based on a more secure, stable, and expandable computing 

platform. 

The BLS Occupational Outlook Handbook (OOH) Web site is the Bureau’s nationally recognized source of career 

information. Using the American Customer Satisfaction Index survey, the OOH Web site substantially reached its 

target, a score of 75, in the third quarter of 2005. The BLS score was 74; the aggregated Federal government score 

for this time period was 73.5. 

BLS exceeded its target for decreasing the cost per transaction of its Internet Data Collection Facility, which is used 

by survey respondents to report data. Providing a single, manageable, and secure architecture for Bureau surveys to 

use in collecting information over the Internet, the cost per transaction in FY 2005 was $2.44. The cost per 

transaction decreased significantly from $6.13 in FY 2004, and surpassed the stretch target of $3.32. The 2005 result 

will be lower than outyear targets because, due to periodic replacement cycles, fewer costs were incurred. 

BLS met the timeliness indicator for all of its 108 scheduled releases. Additionally, BLS met the established 

accuracy target for all 17 of its statistical program measures. 

To further integrate budget and performance, one of the President Management Agenda priorities, BLS will revise its 

FY 2006 performance goal framework to more closely link costs and results at the performance indicator level. 

 

Teuila, a high school senior, has always liked animals 

and thought about becoming a veterinarian. Her 

guidance counselor at Kahuku High and Intermediate 

School, Mr. Matthew Mumma, suggested that she look 

up veterinarian in the Occupational Outlook H

(OOH) on the BLS Web site. The OOH describes th

nature of the work, working conditions, training and

education needed, earnings, and expected job prospects

for seven out of every eight jobs found in the U.S. 

Upon learning about the number of advanced scie

courses involved, Teuila realized that her academic 

strengths laid elsewhere. She reviewed the 

requirements for a veterinary technician, but found that

occupation may not provide the salary she desired. 

After further research, Teuila has decided to pursue a 

career in elementary education. Teuila cites the 

information found on the OOH Web site as being

instrumental in helping her to make a good career 

choice. The OOH can be found on the BLS Web sit

at http://www.bls.gov/oco/home.htm.

andbook 

e 

nce 

e

Management Issues

BLS is confident that the performance data collected and reported are complete, accurate, and reliable. BLS 

programs are evaluated both internally and externally to ensure that they provide taxpayer value. As required by

OMB Statistical Policy Directive #3, the seven statistical series designated as Principal Federal Economic Indicators 

FY 2005 Performance and Accountability Report 73
Performance Section 

are evaluated on a three-year schedule. In FY 2005, BLS completed performance evaluations for the Producer Price 

Indexes, Current Employment Statistics Survey, Real Earnings, Employment Cost Index, and Productivity and Costs. 

During FY 2005, BLS responded to the Office of Inspector General (OIG) Federal Information Security Management 

Act Audit of the Consumer Price Index (CPI) System. Of the 18 security control areas evaluated, 17 areas were 

adequately established, implemented, and operating effectively in compliance with FISMA. The one area needing 

improvement was related to the CPI contingency planning control area, where BLS has since made progress by

purchasing and placing the necessary equipment to support the plan in the recovery facility. Also, the CPI Continuity

of Operation Plan testing under their current technical testing plan has been completed. The review is described in an 

OIG’s report, Federal Information Security Management Act Audit of the Consumer Price Index System (Study 14 in 

Appendix 2). Additionally, the OIG is conducting a review of the Employment Cost Index, which will be completed 

in FY 2006. The OIG also plans to start a review of the Producer Price Indexes in FY 2006. 

Using the Program Assessment Rating Tool in FY 2005, OMB rated BLS as Effective, the highest rating category. 

In its findings, OMB recommended that BLS maintain program-monitoring and operational successes; complete 

efforts to show aspects of program performance more clearly to the general user; and complete efficiency measures 

to cover more of the Bureau’s programs. In response, BLS has improved the precision of some of our performance 

targets and revised measures to focus more on outcome. In FY 2006, BLS will continue to work collaboratively with 

the Department to explore ways to increase transparency of its performance goals and indicators. 

74 United States Department of Labor 
Strategic Goal 2: A Secure Workforce 

Promote the Economic Security of Workers and Families

Enforcing legal standards for workers’ wages and working conditions, providing unemployment compensation and 

other benefits when workers are unable to work, and protecting retirement and health benefit security are central to 

the DOL mission. Agencies supporting this strategic goal are the Employment and Training Administration (ETA), 

the Employment Standards Administration (ESA), the Employee Benefits Security Administration (EBSA), and the 

Pension Benefits Guaranty Corporation (PBGC). 

Outcome goals 2.1 and 2.2 contain six performance goals, of which two were achieved, three were substantially

achieved and one not achieved in FY 2005. The Department continued to improve worker protection and security, as 

measured by union compliance, employee benefit plan enforcement and administration of unemployment benefit and 

workers’ compensation programs. 

Outcome Goal 2.1 − Increase Compliance With Worker Protection Laws 

One performance goal achieved and one substantially achieved

FY 2005 Costs 

(millions)

ESA Wage and Hour Division (05-2.1A) Goal achieved. Five targets reached. $214

ESA Office of Labor Management

Standards (05-2.1B) 

Goal substantially achieved. One target reached and one 

substantially reached. 63

Outcome Goal 2.2 – Protect Worker Benefits 

One performance goal achieved, two substantially achieved & one not achieved

ETA Unemployment Insurance (05-2.2A) Goal substantially achieved. Three targets reached, one not 

reached. $34,243

ESA Office of Worker Compensation 

Programs (05-2.2B)

Goal substantially achieved. Seven targets reached, one not 

reached. 6131

EBSA Pension and Health Benefit Security 

(05-2.2C) Goal achieved. Four targets reached. 160

PBGC Pension Plan customer satisfaction 

(05-2.2D)

 19 Goal not achieved. One target reached and one not reached. −

The following charts illustrate DOL’s strategic goal net costs in FY 2005, with A Secure Workforce shares set apart. 

The first allocates total Departmental costs of $49.912 billion; the second allocates an adjusted net cost of $12.222 

billion that excludes major non-discretionary items associated with this goal.20 Net costs of this goal in FY 2004 

(less Income Maintenance) were $1.383 billion. 

 

19 Costs for this goal are not included because the corporation’s financial statements are separate from those of the Department

and are not included in this document. 20 The excluded costs are referred to as Income Maintenance – unemployment benefit payments to individuals who are laid off or

out of work and seeking employment ($31.488 billion) plus disability benefit payments to individuals who suffered injury or

illness on the job ($5.936 billion). 

FY 2005 Performance and Accountability Report 75
Performance Section 

FY 2005 Strategic Goal 2 - $3.121 billion

Percent of Net Cost excluding Income 

Maintenance

2-Secure

26%

4-Competitive

9%

1-Prepared

56%

3-Quality

9%

FY 2005 Strategic Goal 2 - $40.811 billion

Percent of Net Cost

2-Secure

82%

4-Competitive

2% 1-Prepared

14%

3-Quality

2%

The outcome goals and programs listed above, along with their results, costs, and future challenges are discussed in 

more detail on the following pages. 

76 United States Department of Labor 
Outcome Goal 2.1 

Outcome Goal 2.1 – Increase Compliance with Worker Protection Laws 

The Employment Standard Administration’s (ESA) primary challenge is to ensure that protections for workers keep 

pace with the changes occurring in the American workforce, such as virtual workplaces, demographic shifts, 

immigration, organized labor, the growth of small businesses, and the shift from manufacturing to services. Under 

the Fair Labor Standards Act (FLSA), the Migrant and Seasonal Agricultural Worker Protection Act, the Family and 

Medical Leave Act, the Davis-Bacon Act (DBA) and the Service Contract Act, ESA’s Wage and Hour Division 

(WHD) administers standards for wages and working conditions such as the minimum wage and overtime; child 

labor protections; field sanitation standards in the agriculture industry; and prevailing wage requirements on 

government contracts. The key to ensuring worker protections is to focus on industries and employers with the most 

persistent and serious violations; to quickly resolve employee complaints; and to ensure accuracy in established wage 

rates. ESA's Office of Labor-Management Standards (OLMS) ensures union transparency, financial integrity, and 

democracy by administering and enforcing the Labor-Management Reporting and Disclosure Act (LMRDA). OLMS 

responsibilities under the Act include compliance assistance; civil and criminal investigations and enforcement; 

union compliance audits; and reports/public disclosure administration. OLMS strategies are aimed at improving 

timeliness and quality of union reports filed for public disclosure and strengthening LMRDA compliance through 

union audits and outreach efforts. 

Goal (Agency) and Statement Performance Summary 

FY 2005 Costs 

(millions) 

05-2.1A (ESA) 

American workplaces legally employ and compensate workers. Goal achieved. All five targets reached. $214

05-2.1B (ESA) 

Ensure union financial integrity, democracy and transparency. 

Goal substantially achieved. One target 

reached, one substantially reached. 63

 

Results Summary 

WHD decreased the average number of days to conclude a violation complaint and increased compliance of FLSA 

prior violators. The DBA wage determination program improved wage determination processing efficiency but 

experienced a slip from the FY 2004 level of performance with respect to survey-based determinations. DOL did, 

however, reach its target of issuing 81 percent of survey-based determinations within 60 days. OLMS established a 

baseline efficiency of union dollars protected per staff day and the percentage of union reports meeting standards of 

acceptability increased to 94 percent. Better union public disclosure reports resulted from agency compliance 

assistance efforts and increasing use of electronic reporting formats.

The Wage and Hour Division’s PIECE Plan initiative 

in Kansas City (Protecting Immigrant Employees with

Compliance and Education) provides immigrant 

workers who work as day laborers with information 

about their rights under Federal labor standards laws. 

A key component of this low-wage initiative is active 

community participation. One such organization is t

Westside Community Action Network (CAN), a 

community policing and neighborhood organization 

that provides a drop-in center for day laborers. Each

month, an investigator from the Wage and Hour

Kansas City district office visits the Westside CAN to 

provide day laborers with basic information on wage 

and hour protections. Between 20 to 40 day laborers a

each visit learn how to maintain records of the hou

they work and how much they were paid. The worker

also learn how to identify their employer so that 

appropriate remedies can be pursued when empl

fail to pay. This initiative has resulted in over 30

investigations of construction companies, restaurants, and other low-wage industries. Back wages of over $250,000 have bee

collected for 200 low-wage workers.

he 

t

rs

s

oyers 

n

Photo Credit: DOL ESA 

FY 2005 Performance and Accountability Report 77
Performance Section 

Net Cost of Programs 

FY 2005 program costs of $277 million supported ESA's WHD and OLMS programs. As indicated by the chart, net 

costs for these programs have been stable for the last few years. The drop from FY 2002 to FY 2003 occurred 

because the Employee Benefits Security Administration’s performance goal was moved to Outcome Goal 2.2. 

Outcome Goal 2.1

Net Costs ($Millions)

260 290 299 273 296 277

350

0

100

200

300

400

1999 2000 2001 2002 2003 2004 2005

Fiscal Year

Future Challenges 

For Wage and Hour programs, the global economy ensures rapid change in ways that make enforcement more 

difficult. Effective targeting of investigative resources requires close monitoring of growth patterns. Increased 

immigration means greater potential for violations because that population is most vulnerable. Finally, competitive 

pressures limit employers’ ability to cover the costs of compliance because they have little influence on market 

prices. OLMS’ continuing concern is securing timely filed reports for unions’ public disclosure. To address this 

challenge, DOL supports amendment to the LMRDA to authorize civil monetary penalties for late filing.

78 United States Department of Labor 
Outcome Goal 2.1 

Protect Workers’ Wages 

Performance Goal 05-2.1A (ESA) – FY 2005 

American workplaces legally employ and compensate workers. 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Average number of days to conclude a violation complaint. 189 187 178 Y

Percent of prior violators who achieved and maintained FLSA 

compliance following a full FLSA investigation. 71% 72% 72% Y

Percent of low-wage workers across identified low-wage industries 

paid and employed in compliance with FLSA and MSPA. 

(Garment manufacturing) N/A Establish baseline 

So. CA 

54% 

NYC 

76% 

Y 

Number of wage determination data submission forms processed 

per 1000 hours 

1491 1506 1667 Y

Percent of survey-based DBA wage determinations issued within 

60 days of receipt of the underlying survey data. 87% 81% 84% Y

FY 2005 Costs $214 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Achieved

Program Perspective 

ESA’s Wage and Hour Division (WHD) enforces laws establishing minimum standards for wages and working 

conditions. These include the minimum wage, overtime, youth employment provisions of the Fair Labor Standards 

Act; the Migrant and Seasonal Agricultural Worker Protection Act; and the Family and Medical Leave Act. WHD is 

also responsible for enforcing field sanitation standards in agriculture and the government contracts prevailing wage 

statutes, and administering the wage determination provisions of the Davis-Bacon Act and the McNamara-O’Hara 

Service Contract Act. 

WHD’s allocation of resources and performance indicators reflect the keys to ensuring worker protections – focusing 

on industries and employers with the most persistent and serious violations; resolving employee complaints 

expeditiously and effectively; and ensuring that established wage rates are accurate. By directing resources to 

compliance efforts in low-wage industries, such as agriculture, construction and garment manufacturing, WHD seeks 

to protect those low-wage workers most likely to be paid less than legally required or to be employed in unsafe, 

illegal situations. WHD’s efforts in this regard have led to demonstrated successes over the years with increasing 

compliance rates in industries like health care, garment manufacturing and quick service restaurants. By reducing 

repeat violations, WHD can achieve lasting compliance on behalf of many employees. WHD ensures responsiveness 

by reducing the time it takes to resolve employee complaints and ensuring that the resolution of violations promotes 

future compliance. Timely and accurate prevailing wage determinations encourage efficiency and help ensure 

government contract workers receive the wages to which they are entitled. 

A number of external factors influence WHD’s program outcomes. As the supply of and demand for vulnerable 

immigrant workers increases, the potential for violations increases. Compliance levels in many low-wage industries 

are also heavily influenced by competitive pressures and by subcontracting arrangements in which smaller companies 

have little opportunity to influence market prices. 

Analysis and Future Plans 

WHD established a FY 2005 target to reduce the number of days to resolve a violation complaint and was successful 

in meeting that target. WHD will continue to follow streamlined procedures to ensure early contact with 

complainants and development of case facts to promote timely resolution of investigations.

FY 2005 Performance and Accountability Report 79
Performance Section 

In FY 2005, WHD completed its third statistically valid investigation-based compliance survey of prior FLSA 

violators finding 72 percent of prior violators in compliance. The results improve on the FY 2004 measure of 71 

percent. WHD is seeing the impact of recently employed strategies such as investigation accountability standards, 

strategic use of penalties, and effective publicity.

WHD’s traditional measurements of compliance in low-wage industries have been in garment manufacturing, health 

care and agriculture. In FY 2005, WHD saw the percent of New York City garment workers employed in

compliance increase from 62 to 76 percent. In Southern California, the percent of garment workers employed in 

compliance fell from 63 to 54 percent. The balance of three strategies – compliance assistance; partnerships and 

collaborative efforts; and enforcement promote long-term compliance in these low-wage industries. 

In FY 2006, WHD will undertake its first investigation-based compliance survey in a broad cross section of lowwage industries. The survey will provide WHD with a baseline measure of the percent of low-wage workers 

employed in compliance with the FLSA. Future performance targets and measures of improvements in the percent of 

low-wage employees employed in compliance will be determined from the survey results. The results will lead to 

strategies for addressing “off-the-clock” violations and will enhance WHD’s Overtime Security Enforcement Task 

Force efforts. WHD continues to work on upgrades in information technology to see performance success in the 

wage determination program. 

Management Issues

Data used to report performance against goals are derived largely from the WHD Investigative Support and 

Reporting Database (WHISARD). A FY2004 independent analysis by the University of Tennessee found 90 percent 

or greater consistency between WHISARD data and case file information on 25 of 33 data elements used for 

performance reporting. Another source of performance data is Wage Hour’s statistically valid and independently

reviewed investigation-based compliance surveys. Wage determination measures are derived from Automated 

Survey Data and Wage Determination Generation Systems, manually and through the www.dol.gov Web site. 

WHD is monitoring legislative proposals that would expand the use of compensatory time to the private sector and 

create a new temporary worker program. If successful, both will impact WHD’s employee complaint and low-wage 

compliance goals. 

WHD completed three program evaluations in FY 2005 focusing on the agency’s budget and performance integration 

and its compliance assistance efforts. The first, Findings from Employers Pocket Guide on Youth Employment: 

YouthRules! Telephone Survey, conducted by the private research firm Westat (Study 15 in Appendix 2), found that 

while the publication was deemed useful by readers, it was not relevant to many of the employers in the census, as 

they do not employ young workers. In response, DOL is encouraging WHD field offices to target employers with 

young workers. A second evaluation, The Fair Labor Standards Act: Executive, Administrative, and Professional 

Exemptions Seminar Evaluation, also conducted by Westat (Study 16 in Appendix 2), found the seminar to be both 

informative and prompted attendees to perform additional research on overtime security laws. Budget and 

Performance Integration Model Evaluation, conducted by the private research firm ICF Consulting (Study 17 in 

Appendix 2), found that WHD is well on its way to successfully integrating budget and performance. The evaluation 

also recommended that the integration will improve upon further use of spreadsheet technology and all currently

available data. WHD continues to evaluate performance measures in low-wage industries, focusing on developing 

models for common compliance strategies across low-wage industries. A second evaluation of the agency’s

compliance assistance web information is ongoing. 

In 2003 a Program Assessment Rating Tool assessment of WHD’s Davis Bacon wage determination program found 

it did not demonstrate results and recommended that WHD launch an external review; convene a work group to

develop indicators and targets; modify the wage survey or outreach strategies; and work with stakeholders to identify

appropriate regulatory, administrative, or statutory reforms. In response, WHD developed goals and specific numeric

targets to ensure program performance improvements and contracted with a contractor to evaluate the Davis-Bacon 

wage determination process. 

80 United States Department of Labor 
Outcome Goal 2.1 

Union Financial Integrity and Transparency 

Performance Goal 05-2.1B (ESA) – FY 2005 

Ensure union financial integrity, democracy, and transparency 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Union dollars protected per staff day N/A baseline $136,617 Y 

Percent of union reports meeting OLMS standards of acceptability

for public disclosure 92% 95% 94% S

FY 2005 Costs $63 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Substantially Achieved

Program Perspective 

OLMS ensures union transparency, financial integrity, and democracy by administering and enforcing the LaborManagement Reporting and Disclosure Act (LMRDA). The Act requires public disclosure reporting by unions and 

others; establishes standards for union officer elections; and imposes criminal sanctions for embezzlement of union 

funds. To implement the LMRDA protections, OLMS conducts criminal and civil investigations, audits unions, and 

administers the Act’s reporting and public disclosure program. 

Union transparency underpins the union democracy and financial integrity objectives of the LMRDA and is a critical 

component of the OLMS program. Therefore, a primary performance objective is to secure complete and accurate 

union financial reports for public disclosure. Approximately 25 percent of OLMS resources support the agency’s

Internet public disclosure system and a wide range of compliance assistance, liaison, enforcement, and regulatory

activities to increase union transparency and LMRDA reporting compliance. 

Enforcement of LMRDA union financial integrity protections is another critical OLMS responsibility. A primary

performance objective is to reduce union fraud. Union audits and embezzlement investigations are key strategies 

aligned with that effort. OLMS dedicates more than 50 percent of appropriated resources annually to support a 

program of audits and criminal investigations to protect the millions of dollars in dues paid by labor union members. 

OLMS seeks efficiency and program impact in using audit resources to protect union financial integrity. Therefore, 

the goal to increase union receipts protected relative to staff resources expended on audits supplements the broader 

union financial integrity goal to reduce union fraud. 

Analysis and Future Plans 

Union Financial Integrity 

OLMS met its target to establish an efficiency measure baseline. Union audits are an essential tool in discovering 

criminal, as well as civil, violations of the LMRDA, and OLMS is dedicating resources to support the conduct of an 

effective audit program. At the same time, OLMS seeks efficiency in the use of union audit resources. In FY 2005, 

OLMS established a baseline measurement of union receipts protected per staff day dedicated to union audits: 

$136,617. In the future, OLMS will seek to increase the union receipts protected per staff day to ensure effective use 

of resources and program impact. OLMS also seeks to reduce the percentage of unions with indicators of fraud to 

7.5 percent in FY 2006. A visible union audit presence and a strong criminal enforcement program are principal 

strategies in reducing union fraud. An audit study to re-measure the union fraud level is planned for FY 2006. For 

the study, an audit finding of a criminal LMRDA violation, predominantly union funds embezzlement, will count as 

an indicator of fraud. 

Union Transparency

OLMS substantially reached its union transparency target. Union transparency is critical to promoting union 

democracy and financial integrity. Union reports meeting standards of acceptability increased to 94 percent in FY 

2005. This resulted from the agency’s continuing compliance assistance efforts and its increasing use of electronic 

reporting formats, which include error checks and report validation to help filers prepare complete and accurate 

FY 2005 Performance and Accountability Report 81
Performance Section 

reports. In FY 2006, OLMS will seek to increase the compliance rate to 96 percent by continuing outreach and 

compliance assistance efforts. Increased use of electronic reporting 

formats is expected to continue. 

OLMS routinely responds to telephone and written inquiries from union officers, 

employees, and members as well as the general public about the rights of

unionized American workers. But OLMS also makes staff members available for 

in-person discussions. On May 17, 2005, the United Food and Commercial

Workers Union (UFCW) Local 555 sponsored an informational meeting in

Tigard, Oregon about compliance assistance. The program included 

presentations and discussions about OLMS and the LMRDA, union officer 

elections, financial recordkeeping, and locating compliance assistance 

publications on the OLMS Web site. Twenty-eight members from 13 local

unions attended the sessions. The session demonstrated ESA’s commitment to a

dynamic compliance assistance program. OLMS will continue its outreach to 

help ensure basic standards of democracy and fiscal responsibility within 

American labor organizations. In this photo, UFCW member Sandy (left)

discusses a compliance assistance handout with OLMS representative Daphne. 

Photo Credit: DOL ESA 

Management Issues

Performance information for this goal is derived from two agency data systems. The Case Data System includes 

comprehensive information about OLMS investigations, audits, findings, and subsequent enforcement actions. The 

labor organization report system (e.LORS) includes information about the timeliness and sufficiency of union reports 

filed under the LMRDA. 

To report performance against DOL’s union financial integrity goal, OLMS measures indicators of union fraud. A 

baseline study in FY 2004 indicated a 9 percent incidence of fraud in unions. Although the level of fraud was not remeasured in FY 2005, annual performance targets are in place and measurement is again planned for FY 2006-2009. 

Maintaining effective union outreach, a visible audit presence, and a strong criminal enforcement program are 

essential to increasing union financial integrity. Timely, accurate union financial reports are also essential. The 

completeness and accuracy of union reports are markedly increasing as a result of compliance assistance efforts and 

the increasing use of electronic report formats. Additionally, beginning in September 2005 the largest reporting 

unions will begin to submit the required LMRDA annual financial report on the recently revised LM-2 report form. 

The new LM-2 form will significantly increase union transparency and promote union financial integrity and 

democracy. In spite of comprehensive program efforts, securing timely filed reports for public disclosure remains a 

continuing challenge. To address this challenge, DOL supports amending the LMRDA to authorize civil monetary

penalties for late LMRDA filing. 

82 United States Department of Labor 
Outcome Goal 2.2 

Outcome Goal 2.2 – Protect Worker Benefits 

DOL increases the economic security of America's working families by protecting the benefits earned and promised 

to workers. Three DOL agencies and one government corporation chaired by the Secretary of Labor – the 

Employment and Training Administration (ETA), the Employment Standards Administration (ESA), the Employee 

Benefits Security Administration (EBSA), and the Pension Benefit Guaranty Corporation (PBGC) – administer 

payment of temporary benefits for the unemployed; protect Federal workers from the economic effects of workrelated injuries and illness; protect employee benefits plans against fraud and abuse; and insure pension payments. 

 

ETA temporarily replaces the wages of the unemployed through the Unemployment Insurance (UI) program, which 

provides grants to State-operated programs and manages the Unemployment Trust Fund. ETA ensures that States’ 

programs are administered efficiently according to Federal standards and requirements, and manages the trust fund to

provide a buffer to volatile cycles in tax revenues and benefit claims. 

ESA protects Federal and certain other workers from the economic effects of work-related injuries and illnesses 

through the Office of Workers’ Compensation Programs’ (OWCP) four disability compensation programs. OWCP 

provides wage replacement and cash benefits, medical treatment, vocational rehabilitation, and other benefits to 

covered workers, their dependents and survivors. 

EBSA protects private employee pension plans, health plans and other benefits plans against fraud and abuse by 

enforcing Title I of the Employee Retirement Income Security Act of 1974, as amended (ERISA); through 

compliance assistance, and through education. Where there has been malfeasance, EBSA restores benefits and assets 

by bringing civil and criminal cases. 

 

PBGC protects the pension benefits of participants in defined benefit plans that have been terminated, usually due to

the sponsoring employer’s bankruptcy, by serving as both insurer and administrator. As an insurer, PBGC collects 

insurance premiums from employers that sponsor insured pension plans. As an administrator, PBGC pays monthly

retirement benefits to the participants in terminated plans. 

Goal (Agency) and Statement Performance Summary 

FY 2005

Costs 

(millions) 

05-2.2A (ETA) 

Make timely and accurate benefit payments to unemployed workers, 

facilitate the reemployment of Unemployment Insurance claimants, 

and set up Unemployment tax accounts promptly for new employers. 

Goal substantially achieved. Three 

targets reached, one substantially 

reached. 

$34,243

05-2.2B (ESA) 

Minimize the impact of work-related injuries. 

Goal substantially achieved. Nine 

targets reached, one not reached. 6131

05-2.2C (EBSA)

Enhance pension and health benefit security. Goal achieved. All four targets reached. 160

05-2.2D (PBGC)21

Improve service to pension plan customers. 

Goal not achieved. One target reached

and one not reached. −

 

Results Summary 

FY 2005 results were very good; 16 of 18 targets in this outcome goal were reached or substantially reached. 

Generally, measured results were close to targets, with a few exceptions: 

• ESA/OWCP’s Energy Program Part B Final Decisions processing timeliness was 96 percent vs. a target of 

80 percent. 

• EBSA’s civil corrected to closed case ratio was 76 percent vs. a 66 percent target. 

• EBSA received 10,325 applications for its Voluntary Compliance programs against a target of 8340. 

• PBGC’s customer service score for practitioner callers was 68, compared to a target of 72. 

 

21 PBGC is not included in the Consolidated Statement of Net Costs, hence the costs of its programs are not reflected here. 

FY 2005 Performance and Accountability Report 83
Performance Section 

While the PBGC practitioner score is one point lower than in FY 2004 and four points below the target, it is worth 

noting that PBGC scored higher than other Federal agencies that collect 

payments. PBGC is considering whether to adjust the target in future 

years. 

When Lera of Flatwoods, Kentucky, was presented a $125,000 check in

recognition of her husband’s contribution to our country’s security, she became

the first recipient of compensation under the new Part E program of the Energy

Employees Occupational Illness Compensation Program Act, which was

amended in October 2004. The amendment pays compensation and medical

benefits to Department of Energy contractor and subcontractor employees (or 

eligible survivors) who were harmed by exposure to toxic substances at certain

Department of Energy facilities. Lera’s husband worked at the Paducah 

Gaseous Diffusion Plant between 1952 -77 and died in 1986 of a lung disease. 

His widow, Lera is among hundreds of beneficiaries who have been

compensated under the new program, administered by OWCP. Kentucky

Senator Jim Bunning presented Lera with her check in December 2004, 

accompanied by OWCP Cleveland District Director Annette Prindle, Lera’s 

son, James, his wife Kay and Sandra (left to right). 

Photo Credit: DOL ESA

Net Cost of Programs 

FY 2005 program costs of $40.534 billion supported ETA's unemployment insurance programs, ESA programs to 

reduce the consequences of work-related injuries and EBSA efforts to ensure that individuals receive promised 

benefits. PBGC is not included in the Consolidated Statement of Net Costs, hence the cost of its programs is not 

reflected here. 

FY 2005 program costs decreased by approximately $6 billion, or 13 percent, from FY 2004. Unemployment 

Insurance program costs, which account for $34.243 billion (84 percent) of FY 2005 costs for this outcome goal, 

dropped due to a decrease in benefits paid – from $41.424 billion in FY 2004 to an estimated $31.761 billion in FY 

2005. UI Program costs are largely driven by average weekly insured unemployment (AWIU) − the average number 

of people filing claims for continuing UI benefits each week. The AWIU figure decreased from 3.167 million in FY 

2004 to an estimated 2.722 million in FY 2005. 

Workers’ compensation costs, which account for most of the remaining costs of this goal ($6.131 billion, or 15 

percent), rose from FY 2004 because DOL assumed Part E of the Energy Employees Occupational Illness 

Compensation program from the Department of Energy in FY 2005. With this responsibility came a one-time 

increase in actuarial liability of $3.5 billion.

Outcome Goal 2.2

Net Costs ($Billions)

25 25

34

55 58

47

41

0

10

20

30

40

50

60

70

1999 2000 2001 2002 2003 2004 2005

Fiscal Year

Future Challenges 

To improve financial integrity of the (very large) UI system, DOL is concentrating resources on reduction of 

overpayments and reemployment of claimants via additional Reemployment and Eligibility Assessments (REA) 

grants to assess UI beneficiaries’ need for reemployment services and their continued eligibility for benefits, and to 

assure that beneficiaries understand that they must stop claiming benefits upon their return to work. ESA’s OWCP 

has just taken over Department of Energy contract employees’ claims processing; the agency is hiring staff and 

84 United States Department of Labor 
Outcome Goal 2.2 

creating systems and procedures to expedite assessment and payment of a backlog of 25,000 claims. PBGC is 

concerned about adequate funding of existing pension plans, and DOL included in the President’s FY 2006 Budget to 

Congress a proposal to strengthen plan funding rules, improve transparency, and reform the premium structure for 

defined benefit plans. 

FY 2005 Performance and Accountability Report 85
Performance Section 

Pay Unemployment Insurance Claims Accurately and Promptly 

Performance Goal 05-2.2A (ETA) – FY 2005 

Make timely and accurate benefit payments to unemployed workers, facilitate the reemployment of Unemployment 

Insurance (UI) claimants, and set up unemployment tax accounts promptly for new employers. 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Percent of all intrastate first payments made within 21 days 88.7% 89.9% 90%** Y

Percent of the amount of estimated detectable/recoverable 

overpayments that the States establish for recovery 57.4% 59.5% 59%** S

Percent of new employer liability determinations made within 90 

days of the end of the first quarter in which liability occurred 83.6% 82.4% 83%** Y

Efficiency: Quality-weighted base initial claims per $1,000 of 

inflation-adjusted base grant funds N/A 8.55 8.60** Y

FY 2005 Costs $34,243 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) 

** Estimated. Goal Substantially Achieved 

Program Perspective 

The Federal-State Unemployment Insurance (UI) system ameliorates personal financial hardship due to 

unemployment by temporarily replacing part of lost wages. UI also stabilizes the economy during economic 

downturns. For both workers and employers, the program’s success depends upon: timely payment of benefits, 

prevention or prompt detection of erroneous payments, quickly establishing new employers’ tax accounts to ensure 

workers’ wages are reported and tax payments to fund benefits are made, and promoting and facilitating benefit 

recipients’ return to suitable work. States operate their own programs under State laws which must conform to 

Federal law. As the Federal partner, DOL provides program leadership, allocates administrative funds, provides 

technical assistance, exercises performance oversight, and ensures that States meet requirements of Federal UI laws 

and regulations. Measuring efficiency and effectiveness of States’ administrative operations is an important aspect of 

program management. 

Economic conditions and the resulting program workloads affect many aspects of UI performance. For example, 

when unemployment rises, more claims are filed; UI payment timeliness generally declines; and efficiency tends to 

decrease. On the other hand, slower creation 

of new businesses reduces the number of new 

employer tax accounts, and the timeliness of 

tax liability determinations generally goes up. 

In addition, external factors such as natural 

disasters could have a negative affect on UI 

performance. Performance targets are based 

on the Administration’s current economic 

assumptions. 

UI Indicators and Total Unemployment Rate

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

1999 2000 2001 2002 2003 2004 2005

Fiscal Year

UI Indicators

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

7.5%

Unemploy

ment Rate

Payment Timeliness

Liability Determinations

Detect Overpayments

Total Unemployment Rate

Analysis and Future Plans 

The UI system performed extremely well, 

aided by improving economic conditions. 

Over the year, the number of beneficiaries 

declined by about 10 percent to 7.9 million. 

States improved first payment timeliness to 

the targeted level, maintained new employer 

status determinations timeliness at above the 

86 United States Department of Labor 
Outcome Goal 2.2 

targeted level, and improved detection of overpayments. The effects of the Florida hurricanes in early FY 2004 are 

estimated to have reduced aggregate first payment timeliness by 0.2 percentage points. 

DOL continues to improve UI payment integrity by providing funds for States to implement data exchanges with the 

Social Security Administration (SSA) to identify false and stolen numbers; access data from other State agencies to 

verify personally identifying information; and gain access to the National Directory of New Hires, an additional tool 

for swiftly detecting and preventing payments to claimants who have returned to work. For FY 2006, targets for all 

indicators will be raised. The UI Program continues to demonstrate improved efficiency as evidenced by the result 

exceeding the FY 2005 target. The Department promoted efficiency through competitive grants for automation and 

remote systems (e.g., telephone and Internet claims-taking). To date, lack of data has precluded measuring the extent 

that the UI system is meeting the goal of facilitating UI claimants’ reemployment. In 2006, States will begin 

gathering data for a UI reemployment indicator and a performance target will be set. 

Texas Workforce Commission (TWC) toughened work

verification of its Unemployment Insurance (UI) claimants. 

Texas is a national leader in UI work search requirements, 

insisting on a minimum of three work search contacts per

week. Since February 2004, TWC has required 1,000

randomly selected claimants per week to submit their work

search logs for the commission's verification. UI-funded 

employees throughout the agency, including the TWC

Executive Director, make weekly calls to employers to

verify claimants' work search activity. In addition, TWC's 

Division of Program Integrity conducts investigations and 

provides local law enforcement agencies with information

to prosecute fraudulent claims. TWC also works with the 

Texas Office of Attorney General comparing data from its 

New Hire Cross-match system to identify claimants who

have returned to work. These initiatives have significantly 

reduced UI overpayments in Texas. 

Photo Credit: Larry Temple, Brooks Myers and James 

Johnson 

Management Issues

The Office of Inspector General (OIG) expressed concern that the UI overpayment data collected by the Benefit 

Accuracy Measurement (BAM) unit reflected little improvement in the UI overpayment rates over the past several 

years. In FY 2004, the OIG listed reducing improper payments and improving the integrity and solvency of the UI 

program among DOL’s top management challenges. In addition to funding identity theft prevention activities and 

New Hires crossmatches, the Department has promulgated a State-level detection of overpayments core measure with 

a performance criterion, giving States an added incentive to prevent and detect overpayments. One roadblock to the 

effectiveness of these tools is the lack of trained State staff to investigate all potential overpayments. The 2006 

budget contains a legislative proposal – the Integrity Act – designed to give States the means to obtain funding for 

integrity activities, including staff, to enhance recovery and prevent overpayments. 

To reduce overpayments and facilitate reemployment, DOL awarded Reemployment and Eligibility Assessments 

(REA) grants to 21 States during FY 2005. The grants have been used to conduct in-person claimant interviews in 

One-Stop Career Centers to assess UI beneficiaries’ need for reemployment services and their continued eligibility 

for benefits, and to ensure that beneficiaries understand that they must stop claiming benefits upon their return to 

work. The FY 2006 budget request includes funding to continue this effort and to combat identity theft. 

In recent years, UI trust fund solvency has been another major management challenge. Borrowing from the UI trust 

fund by States has declined since last year, and significant portions of previously borrowed amounts have been 

repaid. Due in part to improved economic conditions, most States’ trust fund accounts had a positive cash flow over 

the last 12 months, and overall, the funds are more solvent than last year. DOL requested that the OIG review

Internal Revenue Service administration charges because of past overcharges. 

 

FY 2005 Performance and Accountability Report 87
Performance Section 

The Government Accountability Office (GAO) released Better Data Needed to Assess Reemployment Services to 

Claimants in June 2005 (Study 18 in Appendix 2). The report recommended that DOL collect more comprehensive 

information on reemployment services used by UI claimants and their outcomes. DOL will be collecting additional 

data that, combined with currently collected data, provide adequate information to guide policies promoting the 

reemployment of UI beneficiaries. 

The GAO issued another report, Unemployment Insurance Information on Benefit Receipt (Study 19 in Appendix 2), 

in March 2005. GAO analyzed the data and information on UI benefits and UI recipients in the past two decades, but 

offered no recommendations. 

The Program Assessment Rating Tool review of the UI program rated it Moderately Effective. Recommendations, 

which included simplifying performance measures, funding New Hire crossmatch and focusing resources on 

reemployment through REA’s, have been implemented. 

88 United States Department of Labor 
Outcome Goal 2.2 

Reduce the Consequences of Work-Related Injuries 

Performance Goal 05-2.2B (ESA) – FY 2005 

Minimize impact of work-related injuries 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Lost production days rate (LPD per 100 employees) for Federal 

Employees’ Compensation Act (FECA) cases of the United States

Postal Service 

147.2 148 135 Y

Lost production days rate (LPD per 100 employees) for FECA 

cases of All Other Government Agencies

61.9 61 56 Y

Produce compensation benefit savings in the FECA program

through the use of Periodic Roll Management 

$24.4 

million 

$17 

million 

$21 

million Y 

The rate of change in the indexed cost per case of FECA cases 

receiving medical treatment remains below the nationwide health 

care cost trend 

+2.4% 

vs +8.8%

Trend 

+8.1% +2.8% Y

Targets for five communications performance areas 4 targets 3 targets 3 targets Y 

Average time required to resolve disputed issues in Longshore and

Harbor Worker’s Compensation Program contested cases 

247 245 254 N

Average percent of Black Lung benefit claims for which, following

an eligibility decision by the district director, there are no requests 

for further action pending one year after the claim is filed 

82.2% 76.5% 80.6% Y

Percent of initial claims for benefits in the Part B Energy Program

processed within standard timeframes 

92% 80% 80% Y

Percent of Final Decisions in the Part B Energy Program processed

within standard timeframes 99% 80% 94.7% Y

Pay compensation benefits to 1200 claimants under Part E by the 

end of the Fiscal Year 

N/A 1200 1525 Y

FY 2005 Costs $6131 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Substantially Achieved

Program Perspective 

DOL protects Federal and certain other workers, their dependents and survivors from the economic effects of workrelated injuries and illnesses by providing wage replacement and cash benefits, medical treatment, vocational 

rehabilitation and other benefits through four disability compensation programs: 

• Federal Employees’ Compensation for civilian Federal workers; 

• Longshore and Harbor Workers’ Compensation for private-sector maritime workers; 

• Black Lung Benefits program for coal miners; 

• Energy Employees Occupational Illness Compensation (EEOIC) for nuclear weapons employees of the 

Department of Energy or its contractors. 

The Office of Workers’ Compensation Programs (OWCP) adjudicates claims; mediates disputes; makes benefit 

payments; helps with injury recovery and return to work; controls costs; and offers technical and customer services. 

Program results are influenced by how effectively resources are deployed to these activities. Ten indicators reflect 

the outcome objectives of OWCP’s key mission strategies. Quality Case Management success in FECA is measured 

FY 2005 Performance and Accountability Report 89
Performance Section 

as reductions in lost production days (LPD) rates. Communications goals seek to improve customer access to 

program information and raise service responsiveness and quality levels. Ensuring claims processing efficiency is 

central to the objectives of the EEOIC program. Effective mediation of disputes and improved decision quality are 

measured in the Black Lung and Longshore programs. Financial integrity of the FECA Compensation Fund is the 

objective of beneficiary roll reviews and medical benefit cost control.

OWCP program goals are impacted by several external factors. FECA and EEOIC are continually challenged by

large numbers of cases. Economic and workplace trends change the nature of new injuries and job availability for 

workers ready to return to duty. For the Longshore program, the potential for greater security threats on American 

facilities and an increasing volume of War Hazard Act claims require additional planning and resource investment. 

Medical costs continue to push higher as technology expands and the use of medicines and treatment procedures 

increase. While business practices become increasingly automated and customer demands for information and 

assistance grow more sophisticated and accelerated, OWCP capabilities remain limited, and communications are 

costly. 

Analysis and Future Plans 

Fulfilling DOL’s commitment to injured workers is measured by the ten indicators. The results discussion is 

organized into three categories: Return-to-Work, Reducing Program Expenses and Customer Service. 

Returning Injured Employees to Work 

Return-to-work outcomes are expressed as reductions in average Lost Production Days. The FY 2005 results for the 

USPS and All Other Government LPD rates show significant reductions due primarily to fewer FECA wage-loss 

disability days paid this year. Overall new FECA cases created were down by nearly 8 percent, which is consistent 

with a reduction in wage-loss paid. However, the results may also reflect the implementation of FECA’s new 

automated claims system (beginning January 2005) that temporarily slowed receipt and processing of wage-loss 

claims and may have depressed the number of lost production days counted for these measures. A major strategy

supporting DOL’s LPD goals continued to be Quality Case Management in the FECA program which has saved 

approximately $50,000,000 in compensation costs annually. DOL also continued its leadership of the OWCP/OSHA 

Safety, Health and Return-to-Employment (SHARE) initiative, in its second of three years in FY 2005. Under 

SHARE, Federal agencies have set individual goals to reduce on-the-job injury rates, speed notification of injuries to 

DOL, and reduce lost production day rates. The initiative challenges DOL to assist the agencies in those efforts. 

 

Reducing Program Expenses 

DOL workers’ compensation outcomes can also be measured in financial terms, as these outcomes reflect the 

efficiency and quality of our benefit payment activities, the impact of case management and benefit services, and the 

utilization of administrative resources to produce those outcomes. 

Periodic Roll Management (PRM) 

generates benefit cost savings through 

careful review of cases to determine if 

continued disability status is warranted, 

and to determine the reemployment 

potential of those currently receiving 

compensation. Through PRM, DOL has 

saved over $1 billion since FY 1999, and 

DOL intends to continue this goal into the 

future. DOL reached its target by

producing $21 million in savings in FY 

2005. 

DOL also reached its target of keeping the 

inflation of Federal Employees’

Compensation Act (FECA) medical costs 

below the national rate of health care inflation, as measured by the Milliman USA Health Cost Index. In the past 

year, the rate of increase in average FECA medical benefit payments rose by only 2.8 percent − well below the 

national average as reported by Milliman for this year and all recent years. This success results from several

Periodic Roll Management Savings

(Cumulative Savings in Millions)

$34

$72

$103

$129

$154

$178 $199

$0

$50

$100

$150

$200

$250

1999 2000 2001 2002 2003 2004 2005

Target Result

90 United States Department of Labor 
Outcome Goal 2.2 

administrative steps DOL has taken in recent years (centralized bill processing, strengthened review of treatment 

authorization requests, fee schedules and stronger automated edits and other controls). In the long term, the rate of 

growth in average FECA medical case costs has consistently remained below the growth rate in nationwide costs as 

measured by the Milliman USA, Health Cost Index. Against that index, FECA has saved nearly $40 million 

annually in medical treatment costs since FY 2000. 

Customer Service 

OWCP met its Communications goal by reaching three of the five sub-targets, including increased use of electronic 

services, reducing average caller wait times, and meeting call handling quality standards. OWCP did not reach its 

target to reduce the time required to resolve disputed issues in Longshore and Harbor Workers’ Program contested 

cases. Disputed issues were resolved, on average, in 254 days against a target of 245 days. There are several reasons 

for this. First, a higher proportion of disputed cases required referral to the Office of Administrative Law Judges for 

formal hearings, which increases overall processing time. Second, a correction of coding inconsistencies in some 

district offices resulted in a slight increase in the average days to resolve disputes at the district office level. In FY 

2006, DOL will re-baseline this indicator, add two new disputed case categories (attorney fees and successive 

employer liability), and revise the target level, while continuing to emphasize swift resolution of Longshore case 

disputes. 

OWCP reached its target to reduce requests for further action following Black Lung benefit eligibility decisions (for 

claims subject to revised regulations). Performance for this indicator was 80.6 percent, against a target 76.5 percent. 

The revised regulations for Black Lung benefit claims were designed to produce faster and fairer final benefit 

determinations without changing eligibility requirements. The result has been an increase in the number of

stakeholders who accept the district director’s initial decision and decide not to pursue the claim further. Out-year

workload projections for the next ten years are also being reviewed in a program evaluation recommended during 

Black Lung’s PART assessment. In addition, the Program is completing a two-year review of all Part B Claims; the 

first systematic review these claims have received since initial approval by Social Security Administration. 

DOL reached its targets for processing timeliness in the Energy Part B program. This program processed 80 percent 

of initial claims and 94.7 percent of final decisions within standard time frames, against targets of 80 percent for both 

indicators. DOL also exceeded its target to make 1,200 payments under the new Part E program during FY 2005. In 

FY 2006, DOL plans to incorporate the processing of new Part E claims in the timeliness indicators and to add a new 

indicator to significantly reduce the unadjudicated inventory of claims transferred from the DOE under Part E. 

Roxann’s career as a correctional officer for a 

Colorado Federal prison came to a violent end in 1999

when she was attacked by an inmate. But her working 

life didn’t end there. With the help of an Office of 

Worker Compensation Programs’ rehabilitation

counselor, regular contacts with a rehabilitation

specialist and the oversight of a claims examiner, 

Roxann eventually earned an associate’s degree in 

graphic design and a 3.9 grade point to go with it. She

even won a competition sponsored by the Pueblo

Colorado Housing Authority, which adopted her 

graphic design as its official logo. OWCP next helped

Roxann identify potential employers and coached her 

on interview skills. Their teamwork paid off. T

an OWCP reemployment initiative which reimburse

new employers 50 percent of rehabilitated workers’ 

initial wages, Roxann found a place to hang her 

diploma at an area sign shop, where she continues

working today.

hrough

s

Photo Credit: Elsie Sandoval 

Management Issues

Performance data are extracted from OWCP’s automated case management and benefit payment systems, internal 

managerial audits or other reviews. OWCP maintains strict oversight of data entry, with regular on-site review by 

district directors and periodic reviews that assess data quality. The OIG has identified the Black Lung Disability Trust

FY 2005 Performance and Accountability Report 91
Performance Section 

Fund indebtedness as a major management challenge for the Department, and DOL is seeking Congressional sponsorship

of a legislative proposal to eliminate the debt. In addition, DOL has developed a legislative proposal which would 

build return-to-work incentives into the Federal Employees’ Compensation Act. 

OWCP and OSHA are in the second year of the SHARE initiative, directed at improving Federal agency

performance in returning their injured employees to work. SHARE has generated intense interest among the 

agencies and their progress is being noted in SHARE reports. 

In October 2004 Congress transferred benefit coverage to DOL from the Department of Energy for DOE contract 

employees who became ill from exposure to toxic substances. This component of the program is referred to as “Part 

E.” DOL has moved quickly to hire new staff and process more than 25,000 DOE claims. 

Participation with audits of the Department’s Office of Inspector General and other outside auditing agencies is a 

significant activity for OWCP. These studies generally examine OWCP compliance with legal and administrative 

requirements; impact of new program mandates; management effectiveness; program performance and results; data 

integrity and systems compliance; legislative and Governmental administrative impacts; and comparison to and 

OWCP impact on other programs. 

Two GAO audits were completed in FY 2005: Limited Information is Available on the Number of Civilians Exposed 

in Vietnam and Their Workers’ Compensation Claims; and Defense Base Act Insurance: Review Needed of Cost and 

Implementation Issues (see Studies 20 and 21 in Appendix 2). 

The FECA and Black Lung Programs have received PART ratings of Moderately Effective and both continue to 

implement PART recommendations. 

92 United States Department of Labor 
Outcome Goal 2.2 

Provide for Secure Pension and Health Plans 

Performance Goal 05-2.2C(EBSA) – FY 2005 

Enhance Pension and Health Benefit Security 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Ratio of closed civil cases with corrected violations to civil cases 

closed 69% 66% 76% Y

Ratio of criminal cases referred for prosecution to total criminal 

cases 

45% 37.7% 45% Y

Customer Satisfaction Index for participants and beneficiaries who 

have contacted EBSA for assistance

62 63 67 Y

Voluntary Compliance Programs (Applications) NA 8,340 14,082 Y

FY 2005 Costs $160 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Achieved

Program Perspective 

EBSA is responsible for enforcing the Employee Retirement Income Security Act (ERISA), and the main challenge 

is to maintain trust and confidence in the employee benefits system. By achieving successful civil and criminal case 

closure and referral rates, DOL shows its success in targeting wrongdoers. DOL also combines an aggressive 

outreach and education program with a highly motivated and trained staff of customer assistance experts in the field 

of pension and health laws. By directly assisting plan participants and beneficiaries in understanding their rights and 

protecting their benefits, we help workers monitor their own benefit rights. 

EBSA oversees benefit security for nearly seven million plans, 150 million participants and beneficiaries, and in 

excess of $4.5 trillion in assets with a relatively modest budget of $131 million dollars and approximately 880 FTE to

achieve its performance goal of enhancing pension and health benefit security. Externalities, such as the economy

and tax policy, have a significant impact on whether employers opt to offer benefits, and whether employees choose 

to participate and to what extent. 

An Edison, New Jersey company filed for bankruptcy protection and terminated approximately 950 employees. As a result, the 

company began liquidating its assets. However, after months of waiting, the workers never received their 401(k) plan

distributions. The Department investigated a complaint and the company admitted it had not distributed the benefits. After the 

Department’s intervention, the company began distributing benefits which ultimately totaled in excess of $3.7 million.

Analysis and Future Plans 

DOL achieved its goal to Enhance Pension and Health 

Benefit Security. In addition to meeting its criminal c

civil case, customer service and voluntary compliance

targets, DOL obtained monetary results of over $1.6 

billion – the second highest in agency history. Monetary

results are a product of EBSA’s investigative and 

participant assistance activities. DOL investigated a 

number of high profile, resource intensive cases with far 

reaching effects on the participant benefits community. 

Benefit Advisors responded to over 99 percent of all 

written inquiries within 30 days of receipt and responded 

to over 99 percent of telephone inquiries by the close of

the next business day. 

Customer Satisfaction

62 63 67

FY 2004 Result FY 2005 Target FY 2005 Result

ase, 

FY 2005 Performance and Accountability Report 93
Performance Section 

Criminal Ratio - cases referred for prosecution

45%

45%

38%

FY 2004 Result FY 2005 Target FY 2005 Result

Civil Ratio - cases with corrected violations

76%

69% 66%

FY 2004 Result FY 2005 Target FY 2005 Result

In addition to long-term targets for civil and criminal 

ratios, we have added annual targets to reflect success

with respect to national enforcement initiatives, which 

may change from year-to-year based on strategic 

priorities. EBSA worked with The Gallup Organization 

(Gallup) to refine the long-term target for their customer 

service satisfaction index consistent with other industry

standards and experience. EBSA also added an internal 

compliance assistance measure that will demonstrate 

success in voluntary compliance programs such as the 

Voluntary Fiduciary Correction Program and their 

Delinquent Filer Voluntary Compliance Program. 

Over a four-year period, an employee of an Atlanta-area investment adviser, entrusted with safeguarding the investment and 

management of employee benefit plans, is alleged to have stolen in excess of $5.4 million from numerous employee benefit 

plans. The stolen funds were allegedly used to take personal vacations, acquire vacation real estate, and to purchase extensive 

collections of wine, art, jewelry and other expensive home furnishings. To c

olen from one plan to temporarily fund another plan and then prepared and

onceal her alleged theft, she occasionally used assets 

 distributed false account information to plan 

ney 

st

trustees and participants. As a result of an EBSA investigation, the employee was indicted with various wire fraud, theft, mo

laundering and embezzlement charges.

Management Issues

EBSA’s Enforcement Management System (EMS) provides the data used to measure the enforcement ratios. EMS

and EBSA continually receive high marks for data integrity and quality. EBSA’s quality assurance processes require 

that individuals not directly involved with the investigation at hand approve all case openings. Cases with monetary

sults receive several levels of scrutiny including national office oversight and review. Additionally, EBSA uses a 

conduct quality assurance reviews on randomly selected closed cases. In the participant 

tomer

gram. 

ion

re

peer review method to

assistance area, Gallup performed the evaluation and provided the customer satisfaction score. The voluntary

correction program data is maintained in the EMS and the Delinquent Filer Voluntary Compliance tracking system. 

EBSA has acted on recommendations from its PART assessments in FY 2004 and FY 2005 by conducting 

evaluations and regulatory reviews. DOL contracted with Gallup to evaluate EBSA’s participant assistance program

(Study 22 in Appendix 2). EBSA was provided detailed performance information that helped improve their cus

satisfaction score. In addition, with Gallup’s assistance, EBSA conducted targeted training to address employee 

weaknesses and share best practices. Finally, field offices developed plans to continue improving their customer 

satisfaction scores. In FY 2006, Gallup will perform a follow-up study of EBSA’s participant assistance pro

As noted in Appendix 2, GAO published a report in June 2005, Government Actions Could Improve the Timeliness 

and Content of Form 5500 Pension Information (Study 24 in Appendix 2). EBSA and PBGC are working with IRS 

to collect pension plan information more efficiently through electronic filing. EBSA has established a regulatory

review program that sets forth a process for identifying initiatives for review; provides for cost and benefit evaluat

of identified regulations and exemptions; and explores modifying or eliminating those rules for which costs and 

administrative burdens outweigh benefits. In EBSA Should Mandate Electronic Filing Of the Form 5500 to Improve

Data Accuracy (Study 23 in Appendix 2), the Office of Inspector General (OIG) recommends that mandating 

electronic filing will improve the collection of employee benefit plan information. EBSA concurs with OIG’s 

recommendation and has issued a Notice of Proposed Regulation in the Federal Register to require electronic filing. 

Compliance Assistance - Voluntary Compliance

Program applications 14,802

7943 8340

FY 2001-03 Baseline FY 2005 Target FY 2005 Result

94 United States Department of Labor 
Outcome Goal 2.2 

Provide Timely and Responsive Services to Customers

Performance Goal 05-2.2D (PBGC) – FY 2005 

Improve service to pension plan customers. 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Customer Satisfaction score for practitioner callers 69 72 68 N 

Customer Satisfaction score for responding to trusteed plan 

participants' inquiries 78 78 79 Y 

FY 2005 Costs

22 −

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Not Achieved

Program Perspective 

The Secretary of Labor chairs the Pension Benefit Guaranty Corporation’s Board of Directors, and PBGC protects 

the retirement incomes of 44.4 million American workers in 31,200 defined benefit pension plans. As insurer, PBGC 

monitors the financial health of defined benefit plans, minimizing risk of loss to the insurance program, to pension 

plans and to participants. When underfunded plans terminate, PBGC must trustee them and assume responsibility for

paying benefits. PBGC is currently monitoring some 4,152 active plans with underfunding approaching $74.3 

billion. 

PBGC is now the trustee of nearly 3,500 defined benefit plans that have failed since 1974, and provides timely and 

uninterrupted payment of pension benefits to over 600,000 participants. In 2005, PBGC assumed responsibility for 

an additional 270,000 plan participants, increasing the total number of participants for which PBGC is responsible for 

current and future pension benefits to over 1.5 million. A large influx of customers with service demands puts a 

strain on their ability to handle the workload and improve service. Providing exceptional service is an important part 

of PBGC’s mission. 

PBGC’s efforts are measured by the American Customer Satisfaction Index (ACSI), from which PBGC receives 

useful information about its customers’ expectations and needs. PBGC improves processes and adjusts performance 

targets to achieve or exceed benchmark results and meet growing customer expectations. 

As a customer-focused agency, PBGC allocates resources to provide exceptional service to customers and 

stakeholders. Approximately seventy-eight percent of funds are allocated to serving participants, while twenty-two

percent are used to provide services to plan sponsors and pension practitioners. PBGC chose the practitioner and 

participant performance indicators to help identify areas for improving quality of service provided to customers. To 

assess its effectiveness, PBGC uses the ACSI survey methodology, which provides comparisons to both private 

businesses and the federal government. 

Analysis and Future Plans 

Practitioner Performance Indicator 

PBGC did not achieve the target for practitioner callers. PBGC has made substantial improvements in services to 

this customer group that should be reflected in higher customer service figures. For example, PBGC now offers 

online filing of premium payments through its self-service system called My Plan Administration Account (My

PAA), which enables improved data accuracy and easier filing preparation. In addition, practitioners can now file 

financial information electronically through PBGC’s e-4010 application. PBGC has also released a redesigned Web 

site in 2005, www.pbgc.gov, which significantly improved site navigation enabling pension practitioners and the 

media to quickly find information and guidance. While the overall rating for practitioners dropped one point to 68, it 

remains higher than other Federal agencies with similar financial collection responsibilities. Notable customer 

service improvements include increased scores in both ease of reaching the right person and making premium

 

22 PBGC is not included in the Consolidated Statement of Net Costs, hence the costs of its programs are not reflected here. 

FY 2005 Performance and Accountability Report 95
Performance Section 

ACSI for Participants

8 78 79

80 74 77 77 7

100

0

20

Sc

40

o

60 re

FY 2003 FY 2004 FY 2005

Target Result

refunds timely and accurate. PBGC continues to examine ways to impr

fforts are already underway to overhaul the premium accounting syste

ove customer service and increase efficiency. 

m, further empowering customers to interact 

PBGC achieved an ACSI score of 79 for participants in 

trusteed plans, exceeding the target of 78. This is one 

point hig e

higher tha 04 n AC fo

government. By using t CSI, P can ide y the 

service elem act on customer 

ction. examp BGC ex ienced a 

significant increase in acc in 2

over the previous three years, due to a continued focus 

on resolving customers’ concerns quickly and accurately. 

2005, PBGC expanded online business transactions for participants. In addition to making address changes and 

nds deposit, participants who access their benefit accounts electronically through the Webto develop a comprehensive pension reform proposal. The proposal focuses on strengthening plan funding 

d its organization to focus more on managing risks and minimizing losses for the 

technology will 

a 

E

electronically with the PBGC. 

Participant Performance Indicator 

her than its 2004 score of 78 and s ven points 

n the 20 ational SI of 72 r the Federal 

he A

a greater i

BGC

mp

ntif

ents that have 

satisfa For le, P

uracy of resolution

per

005

In

requesting electronic fu

based My Pension Benefit Account (My PBA) can now apply for benefits, designate a beneficiary and submit a 

request for a benefit estimate. 

Management Issues

PBGC achieved a score of 79 and was evaluated as Moderately Effective through the PART. To respond to PART

recommendations, PBGC doubled its efforts to work closely with DOL, Treasury and other executive branch 

agencies

rules, improving transparency, and reforming the premium structure for defined benefit plans. Pension reform was 

included in the President’s FY 2006 Budget to Congress. As noted in Appendix 2, GAO published a report in June 

2005, Government Actions Could Improve the Timeliness and Content of Form 5500 Pension Information (Study 24 

in Appendix 2). PBGC and EBSA are working with IRS to collect pension plan information more efficiently through 

electronic filing. 

In 2005, PBGC restructure

insurance program. Newly created offices will increase PBGC’s effectiveness in identifying troubled plans and 

assisting their sponsors in complying with funding requirements. A steady workload increase resulting from newly

terminated plans with large numbers of participants continues to present PBGC with challenges. Despite that, 

providing exceptional service to customers remains a key goal at PBGC. Constant upgrades to 

enable PBGC to provide better and faster service to participants. For example, PBGC began implementing

customer relationship management system to track customer interactions from the telephone, e-mail, fax, incoming 

and outgoing correspondence, and Web-based transactions. All these efforts are expected to yield positive results 

over the next cycles of improvement and evaluation.

96 United States Department of Labor 
FY 2005 Performance and Accountability Report 97

thy, and fair workplace environments. The Department has committed to 

made in these areas. However, rapid technological 

anged the nature of work, leading to new challenges for our 

ent opportunity by enforcing regulations that deal with 

of veterans. In recognition of the global nature of labor 

ministration (OSHA), the Mine Safety and Health 

ministration (ESA), the Veterans’ Employment and Training 

Affairs (ILAB). 

 is determined by accomplishments organized at the 

easured at the performance goal level. Three broad objectives – Outcome Goals 3.1, 3.2 

 data, the United States mining industry set its best safety record since such 

piled in 1910. MSHA did not meet its target to establish three additional mining safety and 

Strategic Goal 3: Quality Workplaces 

Foster Quality Workplaces that are Safe, Healthy and Fair

All workers are entitled to safe, heal

achieving this goal by promoting practices that minimize

for workers. In recent history, significant progress has been 

advances and dynamic workplace environments have ch

safety and health mission. DOL promotes equal employm

Federal contracting practices and the reemployment rights

markets, DOL also promotes respect for internationally recognized core labor standards. Agencies with programs 

supporting this goal are the Occupational Safety and Health Ad

Administration (MSHA), the Employment Standards Ad

Service (VETS), and the Bureau of International Labor

The Department’s performance in achieving Quality Workplaces

utcome goal level and m

safety and health hazards and provide equal opportunities 

o

and 3.3 – support Strategic Goal 3, and they contain six performance goals (see table below). In FY 2005, the 

Department achieved two of these goals, substantially achieved one and did not achieve three. Results, though 

clearly not meeting expectations in all cases, were more positive than negative. Fatalities occurred slightly more

frequently than in the prior year, but overall injury and illness incidence rates continued to fall. For the fourth 

straight year, based on preliminary

statistics were first com

health measures – two for noise exposure and one for silica exposure. These baselines will be established in 

December 2005, using FY 2005 data. Illegal discrimination by contractors remained very rare, and veterans’ cases

were resolved timely despite increased volume and complexity of complaints due to reserve mobilizations connected

with the war in Iraq. DOL-funded international labor programs continued to demonstrate success by, for example, 

removing thousands of children from exploitation and improving work conditions for the vast majority of those 

targeted for assistance. 

Outcome Goal 3.1 − Reduce Workplace Injuries, Illnesses, and Fatalities 

Two performance goals not achieved

 FY 2005 Costs 

(millions)

OSHA/MSHA fatality reduction (05-3.1A) Goal not achieved. MSHA target reached and 

OSHA target not reached. $823

OSHA/MSHA injury and illness reduction (05-3.1B) Goal not achieved. OSHA target reached and 

five MSHA targets not reached. 115

Outcome Goal 3.2 – Foster Equal Opportunity Workplaces 

One performance goal achieved & one not achieved

ESA Federal contractors’ compliance with equal 

opportunity laws (05-3.2A) Goal achieved. Two targets reached. $99

VETS reduce service members’ reemployment issues

(05-3.2B) 

Goal not achieved. One target reached and two 

not reached. 16

Outcome Goal 3.3 – Reduce Exploitation of Child Labor, Protect the Basic Rights of Workers, and Strengthen Labor 

Markets 

One performance goal achieved & one substantially achieved

ILAB eliminate worst forms of child labor internationally 

(05-3.3A) 

Goal substantially achieved. Four targets 

reached, one not reached. $74

ILAB improve work conditions internationally (05-3.3B) Goal achieved. Five targets reached. 43

Other (other ILAB programs) 7

The following charts illustrate DOL’s strategic goal net costs in FY 2005, with Quality Workplaces shares set apart. 

The first allocates total Departmental costs of $49.912 billion; the second allocates an adjusted net cost of $12.222 
Performance Section 

billion that excludes major non-discretionary items associated with Strategic Goal 2.23 Net costs of this goal in FY 

2004 were $1.021 billion. 

FY 2005 Strategic Goal 3 - $1.062 billion

Percent of Net Costs

2-Secure

82%

4-Competitive

2%

1-Prepared

14%

3-Quality

2%

FY 2005 Strategic Goal 3

Percent of Net Cost excluding Income

Maintenance

2-Secure

26%

4-Competitive

9%

1-Prepared

56%

3-Quality

9%

The outcome goals and programs listed above, along with their results, costs, and future challenges are discussed in 

more detail on the following pages.

 

23 The excluded costs are referred to as Income Maintenance – unemployment benefit payments to individuals who are laid off or

out of work and seeking employment ($31.488 billion) plus disability benefit payments to individuals who suffered injury or

illness on the job ($5.936 billion). 

98 United States Department of Labor 
Outcome Goal 3.1 

Outcom talities

s

s, and establish goals and performance

ees, 

tions experiencing noise compliance challenges. 

The performan kplace injuries

fatalities, across general industrie

e Goal 3.1 – Reduce Workplace Injuries, Illnesses, and Fa

The Department’s two occupational safety and health agencies – the Occupational Safety and Health Administration

(OSHA) and the Mine Safety and Health Administration (MSHA) – are doing more than ever to create opportunities

for employers to work with them in partnerships and other cooperative relationships. In these innovative 

relationships, the Department is helping more workplaces become safer and more productive. 

For example, OSHA’s Strategic Partnership Program, OSHA and its partners agree to work cooperatively to addres

critical safety and health issues. This innovative approach is proving to be an effective tool for reducing fatalities, 

injuries, and illnesses in the workplace. Working together, OSHA, employers, and employees identify the most 

crucial safety and health problems to address and craft a Partnership agreement that may be national, regional or local 

in scope. Partners agree upon individual responsibilities, identify strategie

measures to verify results. Other interested parties, including unions, trade associations, local/state governments, 

OSHA’s free on-site consultation projects, and insurance companies, are often brought into a Partnership to

contribute expertise and resources. The Partnership program, like all of OSHA’s cooperative programs, makes 

efficient use of taxpayer dollars by leveraging non-OSHA resources to accomplish tasks such as training employ

mentoring, creating compliance materials and developing site-appropriate safety and health management systems.

MSHA also has achieved success through developing strategic partnerships with unions, associations, and State

governments. These partnerships foster the sharing of expertise and best practices between MSHA, States, safety

professionals, and mine operators. In addition MSHA works cooperatively with the mining industry, labor, and the 

States to encourage innovation. For example, MSHA is working to prevent hearing loss by working collaboratively

with the National Institute for Occupational Safety and Health and the Coal Noise Partnership. Together, they are 

developing noise control solutions for the coal mining industry’s most pervasive noise problems and promoting the 

identification and investigation of promising noise control technologies. MSHA is also developing mechanisms and 

opportunities to promote innovations in noise control engineering and distributing outreach materials to transfer 

knowledge to mine opera

ce goals related to this outcome goal directly measure reductions in wor , illnesses and

s and specifically within mining. 

Goal (Agency) and Statement FY 2005 Costs Performance Summary (millions) 

05-3.1A (OSHA/MSHA) Goal

Reduce work-related fatalities. 

not achieved. MSHA target reached and OSHA

target not reached. 

05-3.1B (OSHA/MSHA) and five MSHA 

targets not reached. 

$82324

Reduce work-related injuries and illnesses. 

Goal not achieved. OSHA target reached

Results Summary 

I cupa orkplace 

f rage rate rose slightly to 1.71 per 100,000 empl g the target rate of 1.52. Preliminary third 

qu

incidents per 200,

illness rates fell again this yea rs against a target of 1.7. 

The prelim gh a record and lower 

t .4 posure of miners

coal dust reversed a positive three-year trend with a slight i t samples, missing the targeted 

r ge g safety and health 

indicators, which m lica dust and noise. These baselines will be established using FY 2005 data 

a the President’s FY 2007 budget. 

n FY 2005, for industry sectors covered by the Oc tional Safety and Health Act, the three-year w

atality ave oyees, missin

arter FY 2005 data indicate that the mine industry fatality incidence rate injuries also rose slightly – to .018 

000 work hours. This rate was lower, however, than the target of .0215. Occupational injury and 

r, to an estimated 1.5 days away from work per 100 worke

inary FY 2005 data for the mining industry all-in

han in FY 2004, did not reach the FY 2005 target of 3

jury rate of 3.82 per 200,000, thou

8. Coal mine health as measured by ex

ncrease in non-complian

to

eduction by 10.1 percent. MSHA did not meet its tar t to establish three additional minin

easure exposure to si

nd will be incorporated into

 

24 As the same activities contribute to reductions in both injuries and fatalities, costs are not separable between the fatality 

reduction performance goal (3.1A) and the injury/illness reduction performance goal (3.1B). 

FY 2005 Performance and Accountability Report 99
Performance Section 

Both agencies employ strategies that aim to reduce all injuries and illnesses, especially those that are life-threatening, 

and focus compliance assistance and enforcement efforts on the most hazardous industries and practices. OSHA 

credits its success in reducing injury and illness rates in part to its Voluntary Protection Programs – joint efforts of 

OSHA, employers and employees – and to Site-Specific Targeting, a key enforcement strategy that identifies 

individual employers with the highest injury and illness rates. MSHA has made significant contributions toward 

continued reduction of mine industry injuries and fatalities by implementing strategies that alter employer and worker 

behaviors to create safer, healthier work conditions. 

"Stay Out–Stay Alive" (SOSA) is a national public awareness 

campaign aimed at warning children and adults about the 

dangers of exploring and playing on active and abandoned 

mine sites. Every year, dozens of people are injured or killed

in recreational accidents on mine property. MSHA launched 

SOSA in 1999 to educate the public about the existing

hazards. MSHA’s Mine Safety & Health Inspector, from

Metal and Nonmetal’s Southeastern District conducted a

SOSA meeting at a Jonesboro, Tennessee elementary school in

April 2005. The elementary school is located approximately

the approximately 150 students. Students were instructed not

to play, swim, or ride four-wheelers on abandoned or active 

mine sites. Madison, an eleven-year-old fifth grade student 

sent a letter to the MSHA inspector, thanking him for keeping 

dads safe. Madison’s father and grandfather are 

superintendents at two of the mines in Tennessee.

Photo credit: Donald Starr 

eight miles from mining operations. MSHA handouts such as 

stickers, posters and other reading material were distributed to

Net Cost of Programs 

FY 2005 program costs of $823 million, which supported OSHA and MSHA programs to reduce worker fatalities, 

injuries, and illnesses, is 1.4 percent higher than FY 2004 costs of $812 million. Cost containment efforts, including 

operating and administrative efficiencies, have kept safety and health compliance assistance and enforcement costs 

relatively flat for the last couple of years. 

Outcome Goal 3.1

Net Costs ($Millions)

636 710 723 781 815 812 823

0

200

400

600

800

1,000

1999 2000 2001 2002 2003 2004 2005

Fiscal Year

Future Challenges 

OSHA and MSHA continue to face challenges in establishing performance measurement systems. This major 

management challenge is covered in the management discussion and analysis section of this report. 

OSHA, in response to the Program Assessment Rating Tool review in FY 2002, continues to review its regulatory

process in an attempt to make it as efficient as possible. Also, OSHA is exploring tools that will enable rapid 

response and more accurate targeting of investigation and enforcement activities. 

For FY 2006, MSHA’s initiatives, programs and strategies will continue to focus on prevention. The general 

challenge for mine safety is that coal production and perhaps mining of aggregates will continue to grow and lead to 

an increased number of inexperienced operators and miners who will need assistance understanding and learning how 

to mitigate safety and health risks. 

100 United States Department of Labor 
Outcome Goal 3.1 

Reduce Occupational Fatalities 

Performance Goal 05-3.1A (OSHA/MSHA) – FY 2005 

Reduce work-related fatalities 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Rate of workplace fatalities (for sectors covered by the 

Occupational Safety and Health Act) 1 (OSHA) 1.67 1.52 1.71** N

Mine industry fatal injury incidence rate (MSHA) .017 .0215 .018** Y

FY 2005 Costs

2 $823 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) 

**Estimated Goal Not Achieved

Program Perspective 

The Department’s mission to assure the safety and health of the Nation’s workers and miners is carried out by OSHA 

and MSHA. OSHA and MSHA track fatality rates because the incidence of fatalities relative to the number of 

workers exposed is more meaningful than the numbers of fatalities alone. OSHA tracks the rate of fatalities per 

100,000 workers. MSHA uses the fatal incidence rate (number of mining fatalities per 200,000 hours worked) to 

measure its impact on mine fatalities. 

The nature of the work environment is continually changing as our nation’s thriving economy creates demand for 

workers in new sectors of the economy. A booming construction sector and expanding use of cell phones and High 

Definition Television (HDTV) and wireless communications are trends that influence the potential for fatal 

workplace falls. With increased demand for coal and aggregates, new mines are being opened and existing ones 

expanded. Mines continue to be inherently hazardous workplaces. Unseen geologic instabilities, constantly 

changing terrain, and the prevalence of large and complex haulage and mining equipment are only a few of the 

factors that make maintaining mine safety challenging. 

The oil and gas industry employs hundreds of thousands of people in the U.S. and is a vital 

component of the national and global economy. However, there were sixty nine fatalities 

and hundreds of injuries in the industry in 2004. Recognizing the potential for catastrophic 

accidents, OSHA has designated oil and gas field services as a target area of emphasis in i

Strategic Plan. The Agency is working to provide employers and oil and gas workers with

information and assistance in complying with OSHA and industry standards while stayin

as safe as possible. An OSHA eTool identifies common hazards and possible solutions

oil and gas field services, enabling employers and employees to reduce incidents tha

lead to fatalities. Regions have initiated local emphasis programs for the industry, a twopronged approach consisting of outreach and inspection. OSHA also has united in an

Alliance with the American Petroleum Institute and the National Fire Protection

Association to provide workers in the industry with training, knowledge and guidance. 

ts

g 

in 

t could 

OSHA’s and MSHA’s resource outlays correlate with their missions and they

s to

 

adjust strategies and emphases as the circumstances change. OSHA contribute

reducing on-the-job deaths by intervening at workplaces where it has evidence that 

fatalities are most likely to occur and by responding to reports of potentially lifethreatening workplace hazards. MSHA’s enabling legislation requires that the 

agency inspect underground mines four times per year and surface mines two times a year. Both OSHA and MSHA

1

 For this goal the baseline is the average fatality rate for July 1999 – June 2002 (July 1999-June 2000, July 2000–June 2001, and

July 2001–June 2002, respectively) and the result is the average fatality rate for 2003-2005 (July 2002– June 2003, July 2003– 

June 2004, July 2004– June 2005, respectively). 2

 As the same activities contribute to reductions in both injuries and fatalities, costs are not separable between the fatality 

reduction performance goal (3.1A) and the injury/illness reduction performance goal (3.1B). 

FY 2005 Performance and Accountability Report 101
Performance Section 

analyze fatalities to identify emerging fatality patterns and to determine where best to conduct interventions. Even 

tly exceeded its performance target, OSHA did not achieve its 

rgeted rate of workplace fatality reduction. DOL uniformly maintains that even one workplace fatality is one too 

w

in workplace fatality rates. OSHA will continue to take eve

Refinements to fatality data collection methods are ongoing.

against its strategic goals and remains committed to reducin

provision of outreach, education and compliance assistance,

The table below shows annual deaths, employment, and fata ate

industry covered by OSHA, and illustrate use of a three-year

fluctuations. 

 

though fatality rates have been declining over the long term, we must drive them even lower. OSHA’s and MSHA’s 

aggressive long-term targeted fatality rate reductions reflect their commitment to send workers and miners home 

healthy and safe every day. 

Analysis and Future Plans 

DOL did not meet its combined OSHA and MSHA fatality reduction goal, as the reduction in workplace fatalities 

rate target was not reached. While MSHA significan

ta

, DOL is concerned that 2004 data show a small increase

ry step necessary to ensure the safety of workers. 

DOL conducts quarterly reviews of performance 

g fatalities through strong and fair enforcement, the 

and the promotion of cooperative programs. 

lity rates for the construction industry and for all priv

moving average of fatality rates to smooth year-to-year

many. Even though fatal injury rates remain historically lo

Estimating Year 

(July-June) 

Construction

Fatalities 

Construction 

Employment 

(thousands) 

Construction 

Fatality Rates 

Total 

Fatalities 

Total 

Employment 

(thousands) 

Total 

Fatality Rates

2000 736 6704 10.98 1729 109,989 1.57

2001 749 6823 10.98 1846 111,368 1.66

2002 744 6774 10.98 1773 109,524 1.62 

2003 741 6692 11.07 1827 108,519 1.68 

2004 784 6809 11.51 1849 108,786 1.70

2005 808 7100 11.38 1940 110,874 1.75

2000-2002 

BASELINE 743 6767 10.98 1783 110,294 1.62 

2002-2004 

AVERAGE 756 6758 11.19 1816 108,943 1.67 

2003-2005 

AVERAGE 778 6867 11.32 1872 109,393 1.71 

Data sources are the OSHA Integrated Management Information System (IMIS) for the number of fatalities and Bureau of

Labor Statistics (BLS) Current Employment Statistics (CES) for the employment data. 

ce fatalities often directly correlate to its injury and illness reduction objectives. Decreasing 

izing 

y and

oach led

s

effort in 2001. The initiative provides training and local outreach, disseminates Spanish-language publications and 

DOL’s efforts to redu

exposures to occupational hazards through direct intervention, promoting a safety and health culture, and maxim

effectiveness and efficiency are all goals that guide OSHA’s tactical plan. OSHA analyzes trend data to identif

target new areas of emphasis which increases the impact of its direct intervention activities. This appr

OSHA to target its resources strategically on five national emphasis programs and over 140 local emphasis program

that address the safety and health issues that present the greatest current threats to safety. Based on extensive 

analysis, OSHA has also selected seven priority industries for special focus, both in terms of enforcement and 

compliance assistance. 

The U.S. workforce includes 19.9 million Hispanics and that number is growing. Workplace fatalities among 

Hispanics increased every year from 1995 to 2001. To address this trend, OSHA initiated its Hispanic Outreach 

102 United States Department of Labor 
Outcome Goal 3.1 

electronic tools, and works through its cooperative programs to significantly expand outreach to Hispanic workers 

and businesses. Fatalities dropped each of the first three years of OSHA’s Hispanic Outreach undertaking, but 

increased again in 2004. OSHA continues to pursue its outreach efforts and will identify new approaches for 

reducing deaths and injuries among Hispanic workers. 

Preliminary data for the third quarter of FY 2005 indicates that MSHA exceeded its target for reducing the fatality

injury incidence rate among miners. Accidents in the Nation’s mines claimed the lives of 40 workers – 16 coal 

miners and 24 metal/nonmetal miners. For the fourth straight year, the United States mining industry set its best 

safety records for both fatal and non-fatal injury incidence since statistics were first compiled in 1910. This 

tremendous progress is a direct result of the diligence and commitment of miners, mine operators, and the employees 

of the Mine Safety and Health Administration, who together ensure that mines are increasingly safe places to work. 

While we are proud of the progress the industry has made, MSHA is constantly examining its strategies and looking 

at outcomes to determine how we can help the mining industry drive fatality, injury and illness rates down to zero. 

For FY 2006, MSHA will continue to gear its initiatives, programs and strategies aimed specifically at fostering a 

culture of prevention, instilling safety as a core value, and making safety part of every task in the mining workplace. 

This includes strategies targeted at changing the behaviors and working conditions which contribute to injuries and 

fatalities. MSHA’s highly effective blend of enforcement, compliance assistance, technical support, education and 

training constitute a balanced approach to mine safety and health. 

MSHA’s collaborative approach of building strategic alliances with trade associations, labor unions, professional 

societies and other like-minded organizations leverages the advantages of working together, rather than separately, to 

reach our common health and safety goals for the mining industry. These stakeholder groups have joined with 

MSHA in the agency’s Strategic Alliance program to combine resources and experiences to achieve a safer and 

healthier mining industry. The National Stone, Sand and Gravel Association (NSSGA); the Industrial Minerals 

Association—North America (IMA-NA); the National Safety Council (NSC); the International Union of Operating 

Engineers (IUOE); the International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers 

(Ironworkers); the Bituminous Coal Operators Association (BCOA) and the National Mining Association (NMA) 

have all demonstrated their commitment to fostering worker health and safety in the mining industry by signing

alliance agreements. MSHA will continue to work with State governments in partnerships such as the Substance 

Abuse Summit, in which the States of Kentucky, Virginia, and West Virginia held a free one-day substance abuse 

summit for individuals involved with coal mining operations and activities in the Southern Appalachian region. This 

kick-off meeting brought together a coalition of government, mining industry, labor, miners, and public health 

experts to share information, expertise and experiences in dealing with substance abuse in mines and the community. 

One of the ways that MSHA works to prevent mining 

accidents is by providing information on “best 

practices” for mine safety. For example, pushing coal 

on a surge pile can be a dangerous job because of the 

potential for hidden voids to develop as coal is

withdrawn from underneath the pile. Nineteen miners 

lost their lives in surge pile accidents between 1980

and 1999. Following a fatal accident in 1999, MSHA 

worked with the mining industry to develop a set of

“best practices” to prevent this type of accident. 

Information packets were distributed to the industry 

with preventative engineering measures and training 

materials. Since this initiative, no fatal surge-pile 

accidents have occurred due to hidden voids and at 

least four miners have been rescued unharmed from

potentially dangerous situations. 

Photo credit: Pittsburgh Technical Support, 

MSHA 

Management Issues

MSHA evaluated its efforts to deliver services and support to miners working for independent contractors. This 

evaluation was driven by MSHA’s desire to improve the health and safety of independent contract mine workers who 

FY 2005 Performance and Accountability Report 103
Performance Section 

represent an increasingly greater proporti

asibility, utility, and benefits of collecting m

on of mining fatalities. This evaluation provided information regarding the 

ore detailed information about independent contractors working on 

for technical and scientific data used to support new significant regulatory

ent in response to the agency’s FY 2002 review under the Program Assessment Rating Tool. 

the Regulatory Flexibility Act and Section 5 o e 66

standards, taking into consideration public comments abo th d

undant or conflicting regulations. 

ide standard was completed, with a determination that it should 

d (see Study 27 in Appendix 2 her mpleted in FY 

2005, Evaluation of OSHA’s Voluntary Protection Programs (Study 28 in Appendix 2), concluded that VPP sites 

aging effect in their dissemination of safety and health information to other establish

s Safety in the Meat and Poultry Industry, While Improving, Could Be Further Strengthened

2) and DOL OIG’s OSHA Correctly Denied ED&D’s Incomplete NRTL Application (Study

fety and Health Administration’s Efforts to Deliver Services and Support to 

iners Working for Independent Contractors (Study 29 in Appendix 2) concluded that mine operator use of 

d

n IMIS

OSHA jurisdiction. OSHA continues to evaluate its programs and measurements in furtherance of meeting the 

fe

mine property. 

OSHA has begun peer reviews

developm

OSHA, pursuant to Section 610 of

conduct lookback studies on OSHA

f Executiv Order 128 , must 

ut rules, e continue

need for them, their impacts, complexity, and whether there are red

In FY 2005, a lookback review of the Ethylene Ox

remain in effect with new guidance materials create ). Anot study co

may have a lever ments in like 

industries both within their own corporations and outside. 

Two evaluations, GAO’

(Study 25 in Appendix

26 in Appendix 2) were completed in FY 2005. As a result of these studies, OSHA is examining expansion of 

criteria for site-specific targeting and improving its oversight and evaluation procedures for national testing 

laboratories. 

The FY 2005 Evaluation of the Mine Sa

M

contractors to lower their costs and liability is increasing and that data on the contractor accidents and hours worke

are under-reported. 

OSHA estimates progress towards its fatality-reduction goal using Integrated Management Information System

(IMIS) data from July of the previous fiscal year through June of the current fiscal year. The Agency relies o

fatality data rather than Bureau of Labor Statistics (BLS) data because of a one-year lag in BLS Census of Fatal

Occupational Injuries data availability and because IMIS data provide a better measure of workplace deaths under 

fatality reduction goal and to pursue methods of collecting data more quickly. 

104 United States Department of Labor 
Outcome Goal 3.1 

Reduce Workplace Injuries and Illnesses 

Performance Goal 05-3.1B (OSHA/MSHA) – FY 2005 

Reduce work-related injuries and illnesses 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Rate of workplace injuries and illness (OSHA) 1.6** 1.7 1.5** Y

Mine industry all-injury incidence rate (MSHA) 4.07 3.48 3.82** N

Percent of respirable coal mine dust samples exceeding the 

applicable standards for designated occupations (MSHA) 10.2 10.1 10.7 N

Percent of silica dust samples with a C/E ratio1

 of at least 0.5 

(MSHA) N/A Establish 

baseline 

To be 

established N 

Percent of noise samples in metal and non-metal mines with a 

C/E ratio of at least 0.5 (MSHA) N/A Establish baseline 

To be 

established N 

Percent of noise samples above the citation level in coal mines 

(MSHA) N/A Establish baseline 

To be 

established N 

FY 2005 Costs

2 $823 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) 

**Estimated Goal Not Achieved

Program Perspective 

The Department’s occupational safety and health agencies, OSHA and MSHA, are committed to working with 

employers to reduce injuries and illnesses. OSHA’s strategies for reducing injuries and illnesses include the use of 

strong, fair and effective enforcement, outreach, education, compliance assistance, free and confidential consultation 

services, partnerships and cooperative programs. MSHA, through safety and health enforcement and compliance 

assistance, and in partnership with the mining community, works to reduce occupational injuries and illnesses and 

health hazards among our Nation’s miners. MSHA’s primary indicator for this goal is an all-injury incidence rate, 

which is a calculation of all mining injuries and fatalities, per 200,000 mining hours worked. 

Both OSHA and MSHA are committed to expanding outreach, education and compliance assistance. OSHA uses its 

Web site for compliance assistance, and continually strives to make it more accessible – such as a recently added 

Spanish Compliance Assistance page. DOL estimates that 60 million web visitors used MSHA’s Web site in FY 

2005, representing a 10 percent increase over last year. OSHA also uses electronic resources for outreach and 

compliance assistance. There are now more than 57,000 subscribers to OSHA’s bi-weekly electronic newsletter 

QuickTakes, and the agency projects that more than 335,000 will receive training in 2005 through OSHA-sponsored 

programs, including the Outreach Training Program, the OSHA Training Institute, the Education Centers and the 

training grants program. 

 

Small mines have historically had acute safety challenges. To assist small mines in their safety efforts, MSHA 

created a Small Mines Office. The Small Mines Office helps smaller operations that might not otherwise have the 

resources to have a full-fledged safety program. Since its inception, the Small Mines Office has helped over 3800 

mine operators develop written safety and health plans that are tailored to fit their mining operations. As a result, the 

small mine operators assisted by the Small Mines office have fatality rates of four times less that those not assisted 

by the program. MSHA, in cooperation with the National Mining Association, recognizes companies with

outstanding safety performance every year with the Sentinels of Safety award program that is designed to help

 

1

 C=concentration result; E=enforceable level 2

 As the same activities contribute to reductions in both injuries and fatalities, costs are not separable between the fatality 

reduction performance goal (3.1A) and the injury/illness reduction performance goal (3.1B). 

FY 2005 Performance and Accountability Report 105
Performance Section 

MSHA and the mine operators reach a shared vision of no lives lost and no injuries sustained. MSHA showcases 

Stakeholder Best Practices on its Web site. These best practices were assembled by teams of industry represent

who won a Sentinels of Safety award or were runners-up in their categories. 

atives

SHA is also tracking a goal to reduce the percent of respirable coal dust samples exceeding the applicable 

spections in conjunction with the letters. An evaluation of the Site-Specific Targeting initiative found that

st two years, participation in the Voluntary

rotection Programs (VPP) has increased by over 34 percent. To facilitate further growth in the program, OSHA 

PP

s of

M

standards for designated occupations. This goal addresses reducing the incidence of black lung disease. See 

Management Issues for a discussion of the goals for which baselines were established in FY 2005. 

Analysis and Future Plans 

OSHA reached its injury and illness reduction target. OSHA continues its Site-Specific Targeting, a key

enforcement strategy that identifies individual employers with the highest injury and illness rates. Targeted

employers receive letters from OSHA informing them of their high rates. The letters are accompanied by suggested 

methods for reducing injuries and illnesses and an offer of free safety consultation services. Some sites receive 

in

companies receiving only the letter, with no inspection, reduced injuries and illnesses by approximately 5 percent 

over the three years following receipt of the letter. Sites that were actually inspected in addition to the letter had 

injury and illness declines ranging from 12 to 13.8 percent over the three years following the inspection. 

OSHA also continues to expand its cooperative programs. In the la

P

launched OSHA Challenge and VPP Corporate in 2004 and plans to introduce VPP for Construction in 2006. The

results VPP sites achieve are consistently impressive, including avoidance of over 8500 Total Recordable Cases in 

2004. For example, Dow Company’s VPP sites have a 33-percent lower injury and illness rate than their non-V

sites and the United State Postal Service’s VPP sites have a 21-percent lower rate than their non-VPP sites. The

growth in all of OSHA’s cooperative programs means more employers and employees are being reached. OSHA

partnerships, joint efforts of OSHA, employers and employees, now cover over 4800 employers with over 566,000 

employees and OSHA also has 69 national and 367 local Alliances.

OSHA’s Consultation Program, celebrating 30 year

service in 2005, delivers free and confidential 

occupational safety and health analysis to small 

businesses that request their services. Consultants help

employers identify and correct hazards and assist

companies in developing and maintaining effective 

safety and health management systems. They also 

of

gram.

s 

e

re-certified each year since. To date, the company boasts a Total Recorda

Away, Restricted, and/or Transfer (DART) Rate of 0.0. Also newsworthy

significantly and their already low Experience Modifier Rate (<1.00) is ex

Photo credit: OSHA 

fer on-site and off-site training. More than 28,000

Consultation visits will be performed in 2005. 

Companies that participate in the Consultation Program

and achieve a high degree of safety and health 

performance are eligible for SHARP, Consultation’s 

Safety and Health Achievement Recognition Pro

De Bourgh Manufacturing Company of La Junta,

Colorado, a custom athletic, corridor, and industrial 

wardrobe locker manufacturer employing 110 workers,

had been targeted for OSHA compliance inspections 

due to their high injury rates. De Bourgh had upward

of 30 recordable incidents in 1997. They began 

company first achieved SHARP in 2000 and has been

ble Case (TRC) Rate of less than 1.0 and a Days 

, De Bourgh's insurance costs have dropped 

pected to drop even lower this year.

participating in OSHA’s Consultation Program in Colorado in 1999. Th

DOL’s all-injury incidence rate for the mining industry was reduced by the FY 2004 rate, according 

5 third quarter data, although the target of 3.48 was not met. Through the third quarter of FY 

6 percent from

to preliminary FY 200

2005, there were 3552 injuries in coal mines as compared to 3723 injuries through the third quarter of FY 2004. 

Injuries in metal/nonmetal mines were 4954 compared to 5000 in FY 2004. 

106 United States Department of Labor 
Outcome Goal 3.1 

MSHA’s indicators for reducing respirable coal dust, silica dust, and noise exposures greatly exceeded MSHA’s 

targets over the last two years for coal and silica dust, and over the last three years for noise. Subsequently, for FY

2005, MSHA established a more aggressive target for coal dust, and also established new baselines for silica dust and 

oise. The target was not reached for respirable coal mine dust exposures. Factors which most likely influenced this 

dynamic 

any miners 

elines for the 

ree additional health indicators, which measure exposures to silica dust and noise in both metal and non-metal 

n

performance include competitive pressures to increase production while containing costs. This competitive

leads to increased use of technically complex mining equipment; expanded mining operations leading m

to work longer shifts and experience greater fatigue. Additionally, the high costs and limited supplies of oil and 

natural gas make coal mining more profitable. In turn, higher coal prices and increased profit margins push operators

to open new mines, expand existing mines or resume mining operations at previously closed sites. Bas

th

mines and coal mines, were not established in time for this report. They will be incorporated into the President’s FY

2007 budget.

Efforts to improve safety and health for the 

nation’s miners include not only mine

inspections, but a variety of MSHA initiatives and

ions, fires, flooding, and 

e and recovery efforts. The 

SHA robot has already proved to be a valuable 

 explosive environments. The new

version was used to explore a mine fire in which the mine was sealed for several weeks. The MSHA robot explored the mine 

slope entry and in the fire area providing valuable video information and gas readings before mine rescue teams were sent in to

recover the mine; thus improving the overall safety of the recovery operation.

programs. For example, during mine rescue or

recovery operations, mine rescue teams are 

presented with many challenges that affect their 

ability to respond effectively without 

unnecessarily jeopardizing their own safety and 

health. Explos

accumulations of methane and other toxic gas all 

present significant risk when exploring a mine. 

The lack of knowledge regarding the geological

integrity and environmental conditions of the 

mine also hinder rescu

M

resource to aid rescue teams in search and rescue 

activities. It was deployed to Arlington, VA with

the MSHA rescue teams following the terrorist 

strikes on 9-11. It was also used in the

exploration of a gold mine, where hazardous

conditions caused the death of two miners. The 

robot now has been equipped with gas measuring instrumentation for use in potentially

Management Issues

OSHA uses BLS data to estimate the results for this goal. BLS data used are the latest available, but nonetheless, are 

from 2003. In FY 2005 OSHA began a contracted project aimed at developing a framework for a predictive model to 

enhance its data capabilities. The predictive model would collect and use a variety of data sources to forecast illness 

and injury rates by industry sector so that OSHA can apply its resources in a timely manner to reduce illness and 

injury incidence. The anticipated outcome of this project is a management tool providing guidance to strategic 

planners for maximizing the results of Agency programs given varying levels of resources. OSHA plans to begin 

developing the model on a limited basis in FY 2006 and then to further expand its capabilities and scope in the out 

years. OSHA’s intent is to enhance the effectiveness of its use of available data, with improved targeting serving as 

the most reasonable, cost-effective means of reducing injuries and illnesses. 

 

To achieve the ambitious goal of reducing the days away from work case rate by 20 percent, OSHA targets resources 

toward areas where these injuries and illnesses are occurring at a high number and rate. The OSHA Data Initiative 

gathers and compiles occupational injury and illness information from establishments in high-hazard industries, 

providing OSHA the ability to identify workplaces with elevated rates. OSHA then uses this information to direct 

both outreach and enforcement resources to places where intervention activities can have the greatest impact on 

reducing injury and illness rates. 

FY 2005 Performance and Accountability Report 107
Performance Section 

MSHA’s revision of its silica dust measure for metal 

tablished baseline in FY 2005. The new indicator w

and non-metal mines in FY 2006 will be based on a newly

ill measure MSHA’s progress in identifying and controlling 

with MSHA’s new silica performance measure, the 

ifying and controlling miners’ overexposure to noise 

mpliance specialists conduct dust and n e w she

ses assure accuracy and reliabili rm . d e

challenges on the horizon include dealing with ever-changing mining me are r or

anced equipment. M ortan ever, xpected

 an increased num

 and health program their indu terpart hese

iners who are vulnerable to safety and health risks, who 

xperience, ho m speak h as the

tools provided in the Mine Act – enforcement, education 

ance a ce ue and cur t

as well as achieve our goal of zero injuries, illnesses and fa in e 21

lture of prev e a as strengthened

ing tha A

Man nt Issues section in the fatality goal 

05-3.1A) and are listed in Appendix 2. 

es

excessive silica exposures that adversely affect miner health. As

new noise indicator will measure MSHA’s effectiveness in ident

in coal and metal and non-metal mines. 

MSHA safety and health co oise sampl

ty o

s following

ta

ell establi

A e

d

performanc

e and more

procedures. Quality control proces of perf

environ

ance da

nts that

nticipat

elying m

on larger, more mechanized and technically adv ore imp t, how is the e ,

continued increase in coal production that will result in

experience and generally less sophisticated safety

ber of smaller operat

s than

ors with less 

larger stry coun s. T

new operators will likely employ many new and untrained m

often lack the necessary skills obtained from training and e

primary language. MSHA recognizes the need to use all the 

and w ay not Englis ir

and training, and technical support, all of which include compli

successes

ssistan

talities

– to contin and exp

industry of th

ren st the mining

century. MSHA is undergoing a profound culture change – to a cu

compliance assistance and incorporated this concept in everyth

ention. Th

d

gency h

t MSH oes.

FY 2005 evaluations that pertain to this goal are discussed under

narrative (

ageme

108 United States Department of Labor 
Outcome Goal 3.2 

Outcome Goal 3.2 – Foster Equal Opportunity Workplaces 

The Department is committed to fostering workplaces that provide equal opportunities to all working Americans. 

e

overnment.

(VETS) administers the Uniformed Services Employment and 

med 

ers 

DOL pursues this commitment through two performance goals addressing equality in the workplace. The 

Employment Standards Administration’s (ESA's) Office of Federal Contract Compliance Programs (OFCCP)

protects the employment rights of thousands of American workers by enforcing laws and providing complianc

assistance regarding equal employment opportunity in companies that do business with the Federal g

DOL’s Veterans’ Employment and Training Service 

Reemployment Rights Act (USERRA), which protects the employment and reemployment rights of unifor

service members who encounter barriers in civilian employment related to their service. VETS educates employ

and service members about rights established by the law and it investigates complaints filed by veterans who believe

their rights have been violated. 

Goal (Agency) and Statement Performance Summary 

FY 2005

Costs 

(millions)

05-3.2A (ESA) Goal achieved. Both indicator $99 Federal contractors achieve equal opportunity workplaces. targets reached. 

05-3.2B (VETS)

Reduce employer-employee employment issues originating from service 

members’ military obligations conflicting with their civilian employment. 

Goal not achieved. One target 

reached and two not reached. 16

 

Results Summary 

As indicated in the table above, DOL achieved one performance goal under Outcome Goal 3.2 and did not achieve 

the other. In FY 2005, the incidence of discrimination among Federal contractors was well below the target. 

Likewise, compliance among Federal contractors in all other aspects

e

of equal employment opportunity easily

xceeded the target. However, both rates are slightly

ntractors. VETS fell short of 90 and 120-day case resolution 

nd and increased Reserve claimants involved in our nation’s war effort. 

 reaching the one year timeliness target. 

worse than those observed for FY 2004. OFCCP believes this 

may reflect improved targeting of non-compliant co

targets as a result of greater case work dema

Fortunately, these delays did not prevent VETS from

The Office of Federal Contract Compliance 

Programs (OFCCP) presents annual awards to 

recognize workplaces with exceptional equal 

opportunity environments. The awards give

the Department an avenue to develop

partnerships with Federal contractors and

encourage equal opportunity environments. 

The Secretary of Labor’s Opportunity Award 

was given in March 2005 to the Cinergy

Corporation of Cincinnati, OH for a 

proliferation of Internet-based 

communication tools used in day-to-day

business operations. Exemplary Voluntary 

Efforts (EVE) awards were presented to 

Entergy Corporation of New Orleans and 

Ivey Mechanical Company of Kosciusko, 

MS. Pride Industries, Roseville, CA, was 

recognized for being the nation’s largest 

private sector employer of individuals with

disabilities. Non-profit Exemplary Public Interest Contributions (EPIC) awards recipients included The Alaska Works 

Partnership, Inc., which helps rural Alaskans, Alaskan Natives, and women find jobs in the construction trade industry. Other

EPIC recipients were Brooklyn, NY’s Black Veterans for Social Justice, Inc.’s Homeless Veterans Reintegration Program; The 

Greater Sacramento Urban League; and Life’s Work of Western Pennsylvania, Pittsburgh. 

Photo Credit: DOL ESA 

FY 2005 Performance and Accountability Report 109
Performance Section 

Net Cost of Programs 

FY 2005 program costs of $115 million supported programs to assure that Federal tax dollars are not used to 

discriminate in the workplace or in the availability of program services. Costs associated with this goal have been 

virtually constant for several years.

Outcome Goal 3.2

Net Costs ($Millions)

105 100 108

117 118 112 115

60

80

100

120

140

0

20

40

1999 2000 2001 2002 2003

Fiscal Year

Future Challenges 

OFCCP’s enforcement strategy continues to focus on systemic discrimin l case 

litigation requires lengthy, intensive studies and analyses of large databa

other case-related information. Identification of likely violations is ther

program. DOL obtained the assistance of a research firm to evaluate the

Survey as an instrument for identifying contractors engaged in systemic

were made for improved procedures; options are being reviewed. Anoth d 

of this calendar year focuses on refining the OFCCP discrimination pred

unnecessary regulatory burdens on compliant contractors, OFCCP propo d

Standards new guidelines for self-evaluation of compensation practices,

VETS expects further increases in USERRA claims from Guard/Reserv m. 

In anticipation of increasing workload, beginning in FY 2006 VETS wil

and demobilization figures from the Department of Defense in a new Pr

2004 2005

ation in the workplace. Successfu

ses; formal depositions; and investigation of

efore a priority for the contractor compliance 

effectiveness of the Equal Opportunity

discrimination. Several recommendations 

er study expected to be completed by the en

iction model. Finally, in order to reduce 

sed and published in a Notice of Propose

which are pending review. 

e utilization related to the War on Terroris

l monitor Guard and Reserve mobilization 

ogress Index. The Progress Index is a

comprehensive set of compliance assistance performance indicators that prioritizes the relative impact of each 

indicator. The index will be focused primarily on the two key USERRA responsibilities: reemployment and 

discrimination. Also, to improve USERRA guidance for all stakeholders, VETS is publishing regulations early in 

FY 2006 to clarify many key aspects of USERRA. 

110 United States Department of Labor 
Outcome Goal 3.2 

Foster Equal Opportunity Workplaces 

Performance Goal 05-3.2A (ESA) – FY 2005 

Federal contractors achieve equal opportunity workplaces 

rget

Y

f race, color, religion, gender, 

ational origin, disability, and protected veterans' status. Executive Order 11246, as amended; Section 503 of the 

nce

rs take steps to ensure equal employment opportunities. 

ased on the principle that employment opportunities generated by Federal dollars should be equally available to all 

Americans, these legal authorities are an integral part of nearly all Federal contracts, subcontracts, federally assisted 

construction contracts, and the Federal procurement process. By monitoring and evaluating equal opportunity 

compliance in Federal contractors’ workforces, DOL protects the employment rights of thousands of able American 

workers who may be otherwise unfairly excluded from the workplace. 

OFCCP strategically directs resources toward identifying and removing protected workers’ barriers. OFCCP’s 

budgetary resources are allocated to both enforcement and compliance assistance. The indicators of discrimination 

incidence and compliance among targeted contractors portray the extent to which Federal contractors achieve equal 

opportunity workplaces, which is OFCCP’s performance goal. OFCCP has developed a logic model to draw better 

connections between its budgetary resources and the achievement of its performance indicators and goal. Further, 

OFCCP has calculated unit costs for program outputs on a national, regional and individual compliance officer basis. 

Analysis and Future Plans 

DOL typically monitors between four to six percent of the known Federal contractor universe each year and focuses 

its enforcement activities on finding and resolving systemic discrimination. DOL adopts this strategy to prioritize 

enforcement resources for the worst offenders; encourage employers to self-audit their employment practices; and 

achieve maximum leverage of resources. In FY 2005 DOL completed 2730 compliance evaluations. These 

evaluations focused on large contractors to identify and resolve systemic discrimination violations. While DOL is 

responsible for enforcing nondiscrimination and equal opportunity requirements, the protection of civil rights is not 

dependent solely on finding violations. DOL’s compliance emphasis and the assistance it provides encourages 

contractors to examine their own employment practices. 

DOL has modified the contractor selection system, incorporating recommendations from a 2003 study on

effectiveness. DOL will gather performance results from completed FY 2005 compliance evaluations and use these 

results to evaluate the efficacy of the study’s recommendations. DOL achieved its target of reducing the incidence of 

discrimination among Federal contractors to 7 percent; however, DOL notes that FY 2005 results are slightly higher 

than those for FY 2004. DOL believes this increase may be attributed to a modification of the contractor selection 

system used in FY 2005 that may have better targeted non-compliant contractors. The 86 percent rate for compliance 

among Federal contractors in all other aspects of Equal Employment Opportunity standards exceeds the FY 2005 

target of 62 percent; nonetheless, the five percentage point difference between the FY 2004 result of 91 percent and 

the FY 2005 result may also be attributed to the modified selection system. DOL exceeded its performance goal 

during FY 2003-FY 2005 as indicated in the accompanying chart.

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Ta

Reached*

Incidence of discrimination among Federal contractors 1% 7% 2% Y

Compliance among Federal contractors in all other aspects of 

equal opportunity workplace standards 91% 62% 86%

FY 2005 Costs $99 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Achieved

Program Perspective 

ESA's Office of Federal Contract Compliance Programs (OFCCP) administers and enforces three equal employment 

opportunity laws which prohibit Federal contractors from discriminating on the basis o

n

Rehabilitation Act of 1973, as amended; and 38 U.S.C. 4212 of the Vietnam Era Veterans' Readjustment Assista

Act of 1974, as amended, require Federal contracto

B

FY 2005 Performance and Accountability Report 111
Performance Section 

addition, DOL is considering a new “contracts first” in y to verify

al

these

Management Issue

OFCCP’s performance dat ned in its case ste P

plans systems upgrades by: 1) enhancing automated compliance evaluation and class complaint investigati

collection and information management, including historical contracto isdiction

ed, statistical ance officers and managers; and 

3) centralizing nationwide ccounting data collection and reporting capability. OFCCP’s 

C FCCP has 

s manual that

ovides guidance to field staff on entering case completions data, a requirement that completed case data be certified 

ross-referencing preliminary discrimination case closures to ensure complete accuracy, and 

engaged in systemic discrimination (Study 30 in Appendix 2). The study pr

for data analysis which are now under review. DOL hired the Eastern Rese

2) to help develop a web-based information system for collecting informatio

a prototype system is being evaluated. Another study that is underway focu

discrimination prediction model; conclusions are expected by December 31

DOL continually seeks to simplify regulations and reduce regulatory burden

regulation change eliminates the requirement for on-site visits to Federal co

contractors the option to submit their data to OFCCP for inspection. DOL a otice of

Proposed Standards new guidelines for evaluating systemic compensation discrimination under Executive Order 

11246 and new guidelines for self-evaluation of compensation practices. B

and the public comments are being reviewed by ESA and OFCCP executive

OFCCP was initially assessed through the PART in FY 2002 and was rated Results Not Demonstrated. The PART 

found that OFCCP could not quantify the impact of its civil rights enforcem

PART recommendations, which included developing the measures for this p

discrimination and level of compliance. Based on its new measures and its

In itiative for centralizing the agency’s responsibilit

contractor jurisdiction before a compliance evaluation can be conducted. This initiative will further streamline the

contractor selection process and allow more resources to be directed toward compliance. This initiative uses Feder

databases with information on awarded Federal contracts as the primary source for determining the universe of

Federal contractors subject to the laws enforced by the OFCCP and to potential compliance evaluations. Use of

data will significantly reduce the amount of field staff enforcement hours used to research contract coverage for 

jurisdiction purposes. 

OFCCP’s program-related strategies to ensure that Federal contractors achieve equal employment workplaces are 

shaped by external factors and trends such as the total number of Federal contractors; company acquisitions and 

mergers; and turnover in the Federal contractor community and the need to determine contractor jurisdiction 

efficiently. 

s

a are based on information contai management information sy m. OFCC

on data 

r database and centralized jur

determinations; 2) developing and delivering standardiz tools for compli

managerial cost a

performance data are based on actual accomplishment reported in its

implemented internal controls to ensure the accuracy of its data. The

ase Management System (CMS). O

e controls include an on-line

pr

by field managers, c

verification of case findings. 

OFCCP’s enforcement strategy continues to focus on finding and remedying systemic discrimination in the 

workplace. The methods for litigating cases of systemic discrimination require the Federal government to meet a 

high burden of proof. The costs are substantial. For example, expert witnesses are necessary to support the litigation

of complex systemic discrimination cases. Successful case litigation requires lengthy and intensive studies and 

analysis of large databases; formal depositions; and investigation of other case-related information. 

DOL evaluated the effectiveness of the Equal Opportunity Survey as an instrument for identifying contractors 

ovided OFCCP with some suggestions 

arch Group (ERG) (Study 31 in Appendix

n on Federal construction contracts, and 

ses on refining the OFCCP

, 2005.

on Federal contractors. The most recent 

ntractors in compliance checks, giving

lso proposed and published in a N

oth are pending approval. The proposal

staff.

ent efforts. OFCCP implemented the 

erformance goal: incidence of 

improved performance, OFCCP was 

reassessed through the PART in FY 2004. Its current rating is Adequate.

112 United States Department of Labor 
Outcome Goal 3.2 

Assist Veterans’ Return to Jobs After Military Obligations

Reduce employer-employee employment issues originating from service members’ military obligations conflicting 

with their civilian employment. 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Percent of USERRA cases resolved within 90 days of filing 84.2% 85% 80.4% N 

Percent of USERRA cases resolved within 120 days of filing 91.9% 92% 88.4% N 

Percent of USERRA cases resolved within one year of filing 99.5% 99% 99.8% Y 

FY 2005 Costs $16 Million

Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Not Achieved

ct

f

ated indicators 

cus on resolving filed claims. Most violations and meritless complaints could be avoided with greater knowledge 

y and 

oyment. While the economy remains steady, the U.S. war effort 

continues to increase Guard and Reserve active duty by significant numbers. This trend will likely increase VETS 

USERRA activity. 

Analysis and Future Plans 

This goal was not achieved. VETS attributes falling short of the 90 and 120-day targets to its increased emphasis on 

the highest possible quality in customer service. On occasion, highly effective case work demanded more time than 

the targeted 90 or 120 days. This was especially the case when working with Reserve claimants involved in our 

nation’s war effort. These Reservists and Guard members were not always readily available to consult with VETS on 

case-related matters due to their war-related duties, locations, and movements. Ultimately, VETS did demonstrate 

progress in FY 2005 toward the overall goal by exceeding the one year timeliness target. 

Tracking the percentage of cases resolved in a timely manner addresses just one dimension of challenges under 

USERRA. VETS plans a more specific goal statement and more useful indicators for FY 2006 which will better 

reflect its USERRA responsibilities. The new goal statement is "Reduce USERRA violations in reemployment, 

discrimination, and other areas, and reduce meritless complaints by protected individuals, originating from service 

members’ military obligations conflicting with their civilian employment." VETS has developed a comprehensive 

“USERRA Progress Index” to sharpen how it measures reduction of violations and meritless complaints. The 

Progress Index will use rigorously documented indicators and targets that measure cases and assistance (non-caserelated contacts). These indicators will be consolidated and weighted in a manner that prioritizes the relative impact 

of each indicator, yielding an indexed measure of demonstrated progress against violations and meritless complaints. 

Performance Goal 05-3.2B (VETS) – FY 2005 

*

Program Perspective 

VETS protects the employment and reemployment rights of persons who are current or past members of the 

uniformed services, and who encounter barriers in civilian employment related to their service. Legislative authority 

for protection of these rights is established by the Uniformed Services Employment and Reemployment Rights A

(USERRA). 

VETS provides compliance assistance to employers and protected individuals, and investigates individuals’

complaints alleging their rights have been violated. VETS seeks to reduce both employer violations and the filing o

meritless complaints by protected individuals. The FY 2005 USERRA Performance Goal and associ

fo

of the rights and protections established by USERRA. For this reason VETS has an active compliance assistance 

program directed to employers and members of National Guard and Reserve units to increase knowledge and 

understanding of USERRA’s significant provisions.

The two external factors having the greatest impact on VETS’ achievement of USERRA goals are the econom

increases in military active duty periods. Both of these factors cause more service members to face difficulties 

associated with their civilian employment or reempl

FY 2005 Performance and Accountability Report 113
Performance Section 

The new Progress Index is focused on the predom

mponents. Since FY 1997, claims from the Guard/Reser

inant sector of USERRA activity: National Guard and Reserve 

ve comprised 81 percent of all USERRA claims; in FY 

expects this trend to continue and possibly increase due to 

to the ongoing War on Terrorism. To account for the

assistance, Guard and Reserve mobilization and 

be used i re

ERRA violations ritl lai ye e

r Support of the Guard and Reserve (ESGR) and the U.S. 

SERRA demonstration. As such, the Progress Index will 

external entity. 

Nebraska Director for Vetera nt

co

2004, 87 percent were Guard/Reserve claims. VETS

Guard/Reserve mobilizations/demobilizations relating

increasing demand for USERRA compliance and USERRA

demobilization figures from the Department of Defense will n the Prog ss Index.

Other entities engaged in USERRA support affect US and me ess comp nts, and t are outsid

the scope of VETS' efforts. These include the Employe

Office of Special Counsel (OSC) in its ongoing Federal U

not measure the USERRA impact of ESGR, OSC, or any other

ns’ Employme

and Training Service (VETS) 

the annual Employer Sup

Reserve (ESGR) meeting. Each year, 

Nebraska VETS and ESGR team together and 

to

towards improving an already successful 

employers to sign a “Statement of Support” 

orting

e

.

participates in

port for Guard and

provide basic USERRA technical assistance, 

briefings and presentations at military 

mobilizations and demobilizations. These

informative sessions range from entire units

individual service members. This team shares

a common mission to work continuously 

approach to assisting service members in 

Nebraska. This approach was evident during

the 2005 annual meeting. A highlight of the 

meeting was introducing the “Five Star 

Employer” program. The program invites 

which defines their commitment to supp

service members while in uniform. The program recognizes the employer’s actions with certificates and news releases to th

public. The Nebraska program capped off its successful year by adding 16 new Ombudsman to increase its total to 67 members

Management Issues

To improve USERRA guidance for all stakeholders and thereby facilitate progress in all performance indicators, 

VETS is initiating USERRA regulations for the first time. These new regulations (to be published in the Code of 

Federal Regulations) will help to clarify 

VETS role with respect to inte

many key aspects of USERRA, including: specific USERRA protections; 

o

ms 

ers do encounter problems. Based on the findings, VETS 

rested individuals and organizations; and procedures necessary to implement the Act’s 

protections. As a result of its FY 2005 efforts compiling and analyzing comments received in the Notice of Proposed

Rulemaking process, VETS anticipates finalizing its new USERRA regulations early in FY 2006. 

A study of 19,000 Guard and Reservists released in October 2004, Survey of USERRA Issues for Returning Military

Members, found that USERRA provides valuable protections to employees in the civilian workforce who also 

perform military duties (see Study 32 in Appendix 2). Over 80 percent of National Guard and Reserve members wh

have completed active duty return to work with their previous employers, and a majority report having no proble

with this return. However, some Guard and Reserve memb

changed the way USERRA information is provided to both the employer community and the men and women who 

are protected by the law. 

114 United States Department of Labor 
Outcome Goal 3.3 

Outcome Goal 3.3 – Reduce Exploitation of Child Labor, Protect the Basic Rights of 

s

l Labor Affairs (ILAB) strives to increase economic well-being around the world. 

s

to

cken countries; increase compliance with labor laws; reduce the impact of HIV/AIDS on workers; and 

s role in negotiating international trade agreements. 

Workers, and Strengthen Labor Markets 

Today’s global economy is having an undeniable impact on the 21st Century American workforce. The well-being of

American workers is increasingly tied to international stability, which is in part a function of broad-based economic 

prosperity. Through its complementary missions of supporting the expansion of free and fair trade and providing

technical assistance grants to eliminate exploitive child labor and promote basic rights of workers, the Department’

Bureau of Internationa

ILAB-supported international technical assistance programs are unique in that they focus on raising living standard

through labor and workplace-related interventions. In FY 2005, these programs focused on supporting initiatives

combat the trafficking and commercial sexual exploitation of children; promote education in developing and 

tsunami-stri

fulfill the Department’

Goal (Agency) and Statement Performance Summary 

FY 2005

Costs 

(millions) 

05-3.3A (ILAB)

Contribute to the elimination of the worst forms of child labor internationally. 

Goal substantially achieved. 

Four targets reached, one not 

reached. 

$74

05-3.3B (ILAB) 

Improve living standards and conditions of work internationally. 

Goal achieved. All five targets 

reached. 43

Other (other ILAB programs) 7

Results Summary 

FY 2005 was another successful year for ILAB, as all but one of ten performance indicator targets were reached. 

Accomplishments include: 

• Removal or prevention, through education and training, of an estimated 150,708 children from exploitive

OL believes 

s. Another indicator, retention of 

work as a result of DOL-funded International Labor Organization projects 

• Enrollment of 98,394 children in education programs supported by DOL's Child Labor Education Initiative

• Credit to DOL-funded projects for improving working conditions for 83 percent of targeted workers 

• Improved economic situation for over half of individuals targeted by DOL for assistance 

In each of these cases, performance was remarkably better than in FY 2004. For most other indicators, FY 2005 was 

the baseline year (first year of data). The indicator not reached was for children completing programs. D

this is due to many enrollees not having an opportunity to finish multi-year program

children in these same programs, supports this analysis; the 

FY 2005 result was 80 percent vs. a target of 65 percent. 

As part of the Department of Labor-funded project, Communitybased Innovations to Reduce Child Labor through Education 

(CIRCLE) implemented by Winrock International, Dos 

Generaciones, a local Non-Governmental Organization, is helping 

children get out of hazardous work in the municipal garbage dump

in Managua, Nicaragua and into classrooms. A project survey 

revealed that most of the children working in the garbage dumps 

are between the ages of seven and twelve; and three out of every 

five are girls. In order to keep children from working in the 

garbage dump, Dos Generaciones is collaborating with children, 

p

aware

arents, teachers, and other community leaders to increase public

ness about the hazards of child labor and the importance of

education.

Photo credit: Winrock International and Dos Generaciones 

 

FY 2005 Performance and Accountability Report 115
Performance Section 

Net Cost of Programs 

FY 2005 program costs of $124 million supported ILAB’s efforts to reduce the worst forms of exploitive child labor 

tandards issues. These program costs represent a $27 million 

n. This year’s increase follows a large jump from FY 2003-

ly

to 3 years after grants are obligated. 

internationally and to address core international labor s

(28 percent) increase from FY 2004 costs of $97 millio

2004. The recent growth in spending is attributable to the wave of increased budget authority and obligations from

FY 2001-2003 that are just now being expended through ILAB’s grants to foreign entities. ILAB grants traditional

have their highest expenditures 2

Outcome Goal 3.3

Net Costs ($Millions)

25 40

60

50 45 51 80

100

58

7

0

20

003 2004 2005

ograms complement or compare to other government-funded international assistance programs. 

9

124

120

140

1999 2000 2001 2002 2

Fiscal Year

Future Challenges 

ILAB’s technical assistance programs were assessed as Adequate in the FY 2006 PART cycle. The principal finding 

of the PART was the need for more data to assess the impact of ILAB’s programs. ILAB has received funding from

OASAM for an evaluation of the overall impact of ILAB’s programs. This evaluation will include an assessment of

how ILAB pr

116 United States Department of Labor 
Outcome Goal 3.3 

Reduce Child Labor in Developing Countries 

Performance Goal 05-3.3A (ILAB) – FY 2005 

Contribute to the elimination of the worst forms of child labor internationally 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Number of children prevented or withdrawn from child labor and 

provided education or training opportunities as a result of DOLfunded International Labor Organization projects 90,200 116,000 150,708 Y

Number of countries with increased capacities to address child 

labor as a result of DOL-funded International Labor Organization 

projects 

26 20 39 Y

Number of target children enrolled in education programs as a 

result of ILAB's Child Labor Education Initiative N/A 50,000 98,394 Y

Percent of children retained in education programs as a result of 

ILAB's Child Labor Education Initiative 

N/A 65% 80%1 Y 

Percent of children completing education programs as a result of 

ILAB's Child Labor Education Initiative 

N/A 50% 38%2 N 

FY 2005 Costs $74 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Substantially Achieved 

Program Perspective 

ILAB has worked to reduce exploitive child labor worldwide since 1993, funding and overseeing projects that 

combat exploitive child labor in more than 70 countries. ILAB’s activities include research and reporting on various 

aspects of international child labor, increasing public awareness and understanding of the problem, and supporting 

international projects to eliminate exploitive child labor and increase access to quality basic education. ILAB’s

international child labor technical assistance programs are implemented through two major initiatives. First, ILAB 

provides support to the International Program on the Elimination of Child Labor (IPEC), a worldwide technical 

assistance program of the International Labor Organization (ILO), to progressively eliminate exploitive child labor. 

Second, ILAB’s Child Labor Education Initiative (EI), originating in 2001, provides funds for international projects 

focusing specifically on access to and quality of basic education as a means of reducing exploitive child labor. A 

wide variety of organizations implement EI projects. In recent years, ILAB has increasingly focused its assistance on 

large-scale national programs to eliminate the worst forms of child labor within a specific timeframe. This approach 

integrates child labor issues into national poverty and education plans and policies. 

ILAB measures the progress of its ILO-IPEC projects on two levels: community-based direct interventions benefiting 

individual children and families; and country-level activities to build institutional capacity and strength. EI 

indicators focus on the educational enrollment of children who have been withdrawn or prevented from exploitive 

child labor, and their retention and completion of ILAB-funded educational programs. ILAB establishes its annual 

targets for its indicators through close consultations with grantees and analysis of baseline information, individual 

project targets, past performance and external factors. 

Various external factors influence ILAB’s targeted outcomes, such as the implementing environment of developing 

countries. ILAB-funded projects work in countries with diverse political, social, and economic environments. Civil 

unrest, natural disasters, economic shocks, frequent changes in governments and poor infrastructure may also impact 

the progress of project implementation. 

 

1

 Includes all children enrolled in Education Initiative projects in FY 2001 and FY 2002. Children who have completed the EI 

project are not included. 2

 Reflects children who were enrolled in FY 2001 Education Initiative projects prior to FY 2005. 

FY 2005 Performance and Accountability Report 117
Performance Section 

Thanks to a U.S. Department of Labor grant to

Creative Associates Intern

participating in a comm

ational, this boy is 

unity education center, which

Casa Esperanza 

provides tutoring, nutritional supplements, and

recreation for children at risk of working in sugar cane 

and melon harvesting. The education center is run by

Casa Esperanza, a Panamanian non-governmental

organization. 

Photo credit: Creative Associates International and 

Analysis and Future Plans 

The goal was substantially achieved; ILAB

reached four of five indicator targets. In 2005, 

ILAB funded a total of 26 projects to combat 

child labor world wide and to increase access to 

basic education with a special focus on

exploited in the worst forms of child labor. These 

projects support the Administration’s foreign policy objectives and fulfilled the U.S. Government’s respon

under international trade agreements. 

ducation o

training opportunities in ongoing ILO-I 116,000 children. An 

additional 98,394 children were withdrawn or prevented from entering the d enrolled in 

Education In by DOL,

exceeding the target of 50,000 children. Since 2001, USDOL-funded ILO-IPEC and Child Labor Education 

ved or prevented approximately 600,000 children from exploitive work and given them

eaningful alternatives to child labor.

Incr si of 

chil

assi

form o

children

sibilities

In 2005, 150,708 children were removed or prevented from exploitive wo

PEC programs funded by DOL, exceeding the target of

rk through the provision of e r

worst forms of child labor an

educational or training opportunities by ongoing Child Labor itiative (EI) programs funded

Initiative projects have remo

m

Preventing and withdrawing children from the worst forms of child labor in the long-term depends on a country’s 

willingness and ability to address the issue and sustain the efforts even after projects end. In FY 2005, DOL-funded 

ILO-IPEC programs increased the capacity of 39 countries to address child labor, exceeding its target of 20. 

ea ng capacity to address child labor is defined by a country’s legal framework, public policy and monitoring 

d labor. One example of a country that increased its capacity to address child labor is Morocco, where with 

stance from ILO-IPEC, its government established and published new labor code bylaws that identify hazardous

s f work for children.

DOL, through a cooperative agreement with a 

Zambian non-governmental organization that

assists Zambia’s most vulnerable children

(including child laborers and children

orphaned by AIDS), is implementing a 

project, “Combating Child Labor through

te

d

Education,” to withdraw children from

hazardous child labor, rehabilitate them in 

transitional school settings, and reintegra

the children into government education 

programs. The project also provides parents 

with literacy and income-generating skills to

enable them to support their children’s 

educational needs, and prepares communities 

to take responsibility for the problem of chil

labor. In the photograph, students in a

transitional classroom in Chiparamba acquire

the basic skills they will need in order to be

placed in a government school. 

Photo credit: Rebecca Macina 

118 United States Department of Labor 
Outcome Goal 3.3 

In addition to measuring the number of children withdrawn or prevented from entering the worst forms of child labor 

Management Issues

ILAB grantees are required to submit semiannual project-level progress reports including data for each ILAB 

indicator. ILAB also requires grantees to develop Performance Monitoring Plans specifying sources of data, method 

and frequency of data collection, responsible personnel, and costs for monitoring project indicators. ILAB 

corroborates grantee reporting through monitoring visits, project evaluations, and project audits. 

During FY 2005, ILAB commissioned a study to synthesize evaluation findings and recommendations of projects 

supported by the Department’s technical assistance program with ILO-IPEC. The study (Study 33 in Appendix) 

highlighted trends in evaluation observations, findings, and recommendations. 

Fiscal Years 2002 and 2003, the Office of Inspector General (OIG) identified the lack of project level coverage for 

gle Audits (OMB Circular A-133) as a major management challenge faced by DOL grantor 

and

ILAB’s technical assistance programs (child labor and core labor standards) were assessed as adequate in the 

FY2006 PART cycle. The principal finding of the PART was the need for more data to assess the impact of ILAB’s

programs. ILAB has received funding from DOL to evaluate ILAB’s programs, including an assessment of how 

ILAB programs complement or compare to other government-funded international assistance programs. 

and enrolled in educational or training opportunities, EI projects also measure the retention and completion rates of 

the children enrolled. In 2005, the retention of children enrolled in FY 2001 and FY 2002 EI projects was 80 

percent, exceeding the target of 65 percent. In 2005, 38 percent of children enrolled in FY 2001 projects completed

an EI project, below the target of 50 percent. Because this is the first time ILAB has reported on this indicator, no 

baseline data existed for establishing this target. In addition, since EI projects are typically four-year projects, many

children enrolled have not yet completed their programs. 

In

DOL programs in Sin

agencies. In September 2004, ILAB began working, in consultation with the OIG, with an accounting firm to 

conduct independent reviews of its child labor technical assistance projects. These studies examined grantees’

compliance with Federal and DOL grant rules and regulations, and verify the accuracy of project-level GPRA 

performance data. ILAB scheduled nine reviews in FY 2005, and will produce a report summarizing findings

lessons learned from each. An additional 20 reviews are scheduled for FY 2006. 

FY 2005 Performance and Accountability Report 119
Performance Section 

Improving Life for Workers Around the Globe

Performance Goal 05-3.3B (ILAB) – FY 2005 

Improve living standards and conditions of work internationally. 

Indicators, Targets and Results FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target 

Reached*

Percent of beneficiaries who consider a USDOL-funded project to 

have improved their conditions of work 62% 83% 83% Y

Compliance with national labor laws, measured through an 

increase in the number of workers benefiting from improved labor 

inspections 

N/A Baseline

3.78 

million Y 

Percent of targeted individuals whose economic situation has 

benefited from USDOL project assistance 

39% 43% 60% Y

Increase in the number of targeted workers reporting a reduction in 

HIV/AIDS risk behaviors N/A Baseline 19,500 Y 

Increase in the number of workplaces adopting policies and 

procedures to reduce the level of employment related 

discrimination against persons living with HIV/AIDS 

N/A Baseline 270 Y

FY 2005 Costs $ 43 Million

*Indicator target reached (Y), substantially reached (S) or not reached (N) Goal Achieved

Program Perspective 

The Department seeks to ensure that the greatest possible number of workers benefit from a more open world 

economy. Expanding trade and investment and improving working conditions are mutually reinforcing objectives. 

Increased trade helps foster economic growth and improves living standards while promoting employment in the 

U.S. DOL believes more open, stable economies that increase employment and standards of living for people will 

lead to increased political stability and security. 

The indicators for this goal are divided into two categories. The first three indicators, which support the President’s 

International Trade Agenda, measure the extent of labor law compliance through 

increased labor inspections, improved economic conditions, and reported 

improvements to working conditions. The last two indicators gauge DOL’s 

success in promoting HIV/AIDS workplace education. These five indicators 

represent the long term objectives of the Department’s current portfolio of 

international technical assistance projects not focused on child labor issues. 

The US Department of Labor is funding job skills and micro-enterprise development 

projects in Afghanistan, the Northwest Frontier Province of Pakistan, and the Mindanao 

region of the Philippines – three regions that continue to endure a great deal of political a

military conflict. In all three areas, the Department offers a comprehensive training

package that identifies and assesses local economic opportunities. It also provides posttraining services, including micro-grants for capital start-up or access to micro-credit. A 

high percentage of graduates of the Department’s projects are finding employment, or are

self-employed (in Afghanistan 70 percent, Pakistan 89 percent, and in the Philippines 80

percent). Equally important, project beneficiaries are gaining self-esteem and respect for 

their communities. These projects are increasing the communities’ hope for a more 

prosperous and peaceful future. 

nd 

120 United States Department of Labor 
Outcome Goal 3.3 

Analysis and Future Plans 

In FY 2005, the Department focused its technical

projects that include HIV/AIDS initiatives.

to develop a toolkit for the start up of new projects

education in the workplace projects funded by the

necessary. 

a

DOL contributed $1.25 million to the International Labor Organization 

based on the lessons learned from their previous HIV/AIDS 

Department and to complete and close out existing projects as 

y, more than half of targeted individuals feel their economic 

DOL Office of Foreign Relations project assistance. In addition, over three quarters of 

s with improving their conditions of work. DOL met its target to establish a 

l labor laws. Compliance is defined by an increase in the number of 

ions.

hnical assistance programs in FY2005. It cost the Department $3.52 

OL

ssistance program on providing monitoring and oversight of 

DOL reached all of the targets for this goal. Notabl

situation has benefited from

targeted workers credit DOL program

baseline measure of compliance with nationa

workers benefiting from improved labor inspect

DOL demonstrated great cost efficiency in its tec

per worker to improve workplace HIV/AIDS 

policies and programs. On average, DOL placed 

workers in employment opportunities for $66.92 

per worker in project countries, including in the 

Republic of Iraq. These costs include D

administrative as well as project expenditures. 

At the May 2004 workshop for the US-China Labor 

Law Cooperation Project, Chinese and U.S. 

Department of Labor participants reviewed and

proposed modifications to draft regulations for Labor

and Social Security Inspections. Premier Wen Jiabao 

signed this legislation into law in November 2004. 

This marked the first time in Chinese history that a 

major regulation was assisted by a DOL-sponsored 

bilateral cooperation project during the commenting

and deliberation stage, a process that is usually 

conducted internally and often in secrecy. 

Management Issues

ILAB collects GPRA performance data directly from its contractors and grantees, the implementing partners, through 

.

ecify sources of data, method and frequency of data collection, responsible 

project indicators. Program staff review progress reports and follow up with the 

consistencies appear. When feasible, ILAB uses other methods to corroborate 

ng, such as monitoring visits, mid-term and final project evaluations, and project audits. 

s for the first time this year to assess program performance. The Cost 

 the Department’s Office of the Chief Financial Officer, and implementers’ 

ancial information for the cost efficiency measurements. 

conducted twelve final evaluations and ten mid-term

idated project objectives and provided recommendations to improve 

inability. Each final evaluation examined good practices and lessons learned 

am areas. 

ld labor and core labor standards) were assessed as Adequate in the FY 

of the PART was the need for more data in order to assess the impact of 

mitted a proposal and received funding from the Department for a 

pact of ILAB’s programs The evaluation, which is scheduled to begin by

l include an assessment of how ILAB’s activities complement or compare to other 

al assistance programs.

project-specific quarterly progress reports

Performance Monitoring Plans, which sp

personnel, and costs for monitoring

implementing partners when data in

contractor and grantee reporti

ILAB used cost efficiency measurement

Analysis Manager, a tool designed by

financial status reports supply the fin

During FY2005, the Office of Foreign Relations (OFR) 

evaluations. Each mid-term evaluation val

project performance and long-term susta

at the project level in OFR’s three progr

ILAB’s technical assistance programs (chi

2006 PART cycle. The principal finding

ILAB’s programs. In response, ILAB sub

program-wide evaluation of the overall im

The Department requires its contractors and grantees to develop 

the end of fiscal year 2005, wil

government-funded internation

FY 2005 Performance and Accountability Report 121

Strategic Goal 4: A Competitive Workforce 

st Century Economy

ve in a global economy by helping workers acquire 

industries and by reducing unnecessary burdens of 

bor laws and regulations. To facilitate continued economic growth, DOL promotes demand-driven workforce 

l – local, State and Federal – and to n s m

yers, industry associations, commun eges e pu k . 

cture or application of existing law, and

the gregi blems and expanding use 

min d b loy d Trai g

on (ETA) support Outcome Goal 4.1 by supplying timely and relevant workforce tion, helping

ployment assistance for workers 

vative str s for making workforce system ore 

s and occupations. The Office of 

prove the cost-effectiveness of labor market 

or exceeded expectations. Foreign Labor Certification 

ved results, despi sin gets. DOL regulatory

ther rules are current and minimize burdens on compliant 

ficant revisions were proposed or published in the areas of child labor and pension plans. 

Maintain Competitiveness in the 21

The Department strives to keep our country’s workforce competiti

the skills they need for the new jobs being created in high-growth

la

investment strategies at every leve

strategic partners, including emplo

embrace ew method of engage ent with

ity coll , and th blic wor force system

Regulatory reviews consider whether changes are needed in the stru

enforcement strategies emphasize compliance assistance, targeting

of electronic reporting. 

most e ous pro

 

Two outcome goals support A Competitive Workforce. Programs ad

Administrati

istere y the Emp ment an

informa

nin

employers fill gaps in the labor market with foreign workers, providing reem

displaced by shifts in international trade and encouraging inno

demand-driven, i.e., focused on high-growth industrie

ategie s m

the Assistant Secretary for 

Policy (OASP) conducts oversight of Department wide efforts to im

regulations in connection with the second outcome goal. 

In FY 2005, Workforce Information outcomes generally met 

and Trade Adjustment Assistance demonstrated impro

programs made progress in conducting reviews of whe

te mis g some tar

employers; signi

Outcome Goal 4.1 − Build a Demand-Driven Workforce System to Address Worker Shortages and 

Equip Workers to Adapt to the Competitive Challenges the 21st of Century 

One performance goal substantially achieved & two goals not achieved 

FY 05/PY 04

Costs 

(millions)

ETA Workforce Information (04-4.1A) Goal substantially achieved. Five targets 

reached, one not reached. $106

ETA Foreign Labor Certification (05-4.1A) Goal not achieved. Three targets reached, one 

not reached. 60

ETA Trade Adjustment Assistance (05-4.1B) Goal not achieved. Two targets reached, two not 846 reached. 

Other (Pilots, Demonstrations, Research and Evaluations, and H-1B Technical Skills Training) 151

Outcome Goal 4.2 – Promote Workplace Flexibility and Minimize Regulatory Burden 

One performance goal achieved

OASP Flexible Regulations and Workplaces (05-

4.2A)

31 Goal achieved. Four targets reached. −

 

31 The costs of achieving DOL’s results in maximizing regulatory flexibility are distributed throughout the department’s 

regulatory agencies, as it is part of their costs of operations.

FY 2005 Performance and Accountability Report 123
Performance Section 

The following charts illustrate DOL’s strategic goal net costs in FY 2005, with A Competitive Workforce shares set 

apart. The first allocates total Departmental costs of $49.912 billion; the second allocates an adjusted net cost of 

$12.222 billion that excludes major non-discretionary items associated with Strategic Goal 2.32 Net costs of this goal 

in FY 2004 were $6 million.

FY 2005 Strategic Goal 4 - $1.163 billion

Percent of Net Costs

2-Secure

82%

4-Competitive

2%

1-Prepared

14%

3-Quality

2%

FY 2005 Strategic Goal 4

Percent of Net Cost excluding Income

Maintenance

3-Quality

9% 1-Prepared

56%

4-Competitive

9%

2-Secure

26%

The outcome goals and programs listed above, along with their results, costs, and future challenges are discussed in 

more detail on the following pages

 

32 The excluded costs are referred to as Income Maintenance – unemployment benefit payments to individuals who are laid off or

out of work and seeking employment ($31.488 billion) plus disability benefit payments to individuals who suffered injury or

illness on the job ($5.936 billion). 

124 United States Department of Labor 
Outcome Goal 4.1 

Outcome Goal 4. ddress Worker

Shortages and ges of the 21st

Century 

f the

is outcome goal includes three performance goals and other initiatives administered by the Employment and 

o

’s

gy, construction, energy, financial services, geospatial 

chnology, health care, hospitality, information technology, retail, and transportation. In addition, the Career 

1 – Build a Demand-Driven Workforce System to A

Equip Workers to Adapt to the Competitive Challen

To succeed in today’s rapidly changing global economy, employers need access to workers with the right skills at the 

right time, and workers need access to flexible, efficient training that helps them upgrade existing skills or attain 

those skills to obtain quality jobs. To support those needs, it is imperative that the workforce investment system

support activities that are driven by local employer demand, and that it prepares workers to take advantage of new 

and increasing job opportunities in high-growth/high-demand and economically vital industries and sectors o

American economy.

Th

Training Administration (ETA). Programs that correspond to the performance goals listed in the table below 

disseminate information to employers and job seekers on opportunities, expedite visa applications for employers wh

need to hire foreign workers, and assist workers who lose their jobs due to foreign competition. The President

High Growth Job Training Initiative (HGJTI) uses partnerships with employers, public workforce agencies, 

education and training providers, and economic development organizations to model the demand-driven approach to

workforce development via demonstration of new and innovative workforce strategies. It has targeted industries

such as advanced manufacturing, automotive, biotechnolo

te

Voyages Web Site informs young adults, their families, career advisors, and career changers about the in-demand 

occupations within high growth, emerging and vital industries.

Goal (Agency) and Statement Performance Summary

FY 05/PY 04

Costs 

(millions) 

04-4.1A (ETA) Goal

achieve Build a demand-driven workforce system by increasing ac

tially 

d. Five targets 

t

hed. 

cess to workforce $106 reached, one no

reac

information.

substan

05-4.1A (ETA) 

Assist employers in meeting their workforce needs by providi

expeditious determinations on their applications to hire foreign workers. 

Three targets reached, 

one not reached. 

ng them with

Goal not achieved. 

60

05-4.1B (ETA) Goal not achieved. Two 

Increase the employment, retention and earnings replacement of workers dislocated d, two not 

in important part because of trade who receive trade adjustment assistance benefits.

targets reache

reached. 

846

Other (Pilots, Demonstrations, Research and Evaluation, and H-1B Technical Skills Training). 151

R

 one of three performance goals was substantially achieved, significant progress was made in this 

eriod, as evidenced by results at the indicator level (ten of 14 targets reached). Workforce Information job listings, 

resume searches and O*NET resource quality and traffic all posted impressive increases. O*NET is DOL's 

Occupational Information Network. Job searches fell; this may be a desirable outcome since it could be due to an 

improving economy. Foreign Labor Certification (FLC) improved over FY 2004 on both of its processing indicators 

but missed one of the targets due to an unanticipated increase in demand. Trade Adjustment Assistance (TAA) 

continued to improve participants’ employment, retention and earnings, but two of these indicators fell short of 

targets. The program exceeded its efficiency (cost per participant) target by a significant margin, however. 

A significant number of the projects funded under HGJTI are in their first year of performance; hence DOL has 

limited outcome data at this time. Grantees will be reporting on elements such as number of participants successfully

completing training, job placements, retention, wage increase and earnings, and impact of capacity building activities 

(e.g., products developed and individuals impacted). The Department plans to evaluate all HGJTI grants, including

those awarded in Program Year (PY) 2004. 

esults Summary 

Although just

p

FY 2005 Performance and Accountability Report 125
Performance Section 

The President’s High Growth Job Training Initiative is playing a crucial role in the Gulf region’s response to

Hurricane Katrina. In an immediate response to the hurricane, DOL’s Employment and Training Administration 

awarded $12 million in grants under the President’s HGJTI to Alabama, Louisiana, Mississippi, and Texas. These 

grants will be used to train workers in industries that are critical to the economic recovery of the Gulf region, 

including construction, energy, health care, transportation and safety-security. Additionally, DOL created a Katrinaspecific job web site for employers to post available jobs. Within days after the Hurricane struck, 

http://www.jobsearch.org/katrinajobs listed over 95,000 jobs. DOL also worked with private sector staffing 

companies and outplacement firms to identify potential partnerships with the public workforce system in support of 

hurricane recovery. 

Renee triumphed in setting her new career through the 

TAA program. For 15 years, Renee worked in 

production before she was laid off because her job was 

moved to Mexico. After she enrolled in the TAA

program, Renee entered the nursing program in June 

2003. Despite the loss of her two closest family

members, and financial difficulty during school years, 

Renee successfully completed her program with 

guidance and assistance by the TAA program and its

staff. When she graduated in May 2005 with her

Registered Nurse (RN) degree, Renee immediately 

currently taking a telemetry class to expand her skill 

and knowledge base. She is now earning $21.50 per

hour compared to $14 at her production job! Also, she 

feels great satisfaction from helping others. 

Photo credit: Artine Jones and Renee Thompson

started working as an RN at the hospital. She is 

Net Cost of Programs 

Although only one of the performance goals is new33, this is the first year costs have been allocated to this outcome 

goal. Most of the net costs of $1.163 billion are associated with the Trade Adjustment Assistance program ($846 

million). 

Future Challenges 

In PY 2005, Workforce Information efforts will focus on fully integrating services into State and local planning, 

decision-making and service delivery to businesses and job seekers in programs funded by the Workforce Investment 

Act and the Wagner-Peyser/VETS-funded employment services. FLC continues implementation of fraud 

detection/prevention measures and development of new procedures to eliminate backlogs. TAA, in order to improve 

data quality, will assist States with use of the Wage Record Interchange System. 

To ensure that all ETA programs are effectively equipping today’s workers to succeed in the 21st century, the 

Department is integrating its demand-driven approach across many program areas through targeted competitive 

grants. In PY 2005, DOL expects to report outcomes for the following initiatives: 

• Youth Offender Grants – targeting solutions that prepare at-risk youth for high-growth jobs; 

• Community-Based Job Training Grants – building the capacity of our nation’s community college system to

provide training in locally identified high growth/high demand industries; and 

• Hispanic and Limited English Proficiency Grants – providing training in high growth occupations. 

 

33 Workforce Information was previously part of the One-Stop system employment services performance goal in Outcome Goal

1.1. Foreign Labor Certification has been added to the list of goals reported on in this report due to its strategic significance. 

Trade Adjustment Assistance was in Outcome Goal 1.1 in FY 2004. 

126 United States Department of Labor 
Outcome Goal 4.1 

B

Performance Goal 04-4.1A (ETA) – PY 2004 

e Agencies and America’s Job Bank) million million million Y 

million million million Y 

PY 2004 Costs $

*Indicator target reached ( ot reached (N) ly A

Program Perspective 

T l of a d ce by facilitating 

efficient and effective functioning of labor markets in y. creating and 

broadly disseminating current, local information on high growth industries and occupations. This information is 

critical for planning and delivering demand-driven workforce services. Custo yers, job seekers, 

a his serv , education,

e rce inform nsists of:

 roles, and 

c

• State workforce agency core products and services – State and local labor market dynamics, e.g., 

• CareerOneStop (COS) national electronic tools – allow universal distribution and self-service access to 

formation, including data on wages, occupations in demand, skills held and needed, and growth

ngly

he data collection effort. 

etter Decision-making Through Workforce Information 

Build a demand-driven workforce investment system by increasing accessibility to workforce information 

Indicators, Targets and Results PY 2003 

Result 

PY 2004 

Target 

PY 2004 

Result 

Target 

Reached*

The number of job openings listed with the public labor exchange

with State Workforc

12.8 12.994 14.675 

(

The number of job searches conducted by job seekers in America’s 

Job Bank 

169 

million 

170.788 

million 

138.567 

million N

The number of resume searches conducted by employers in 

America’s Job Bank 8 million 8.090 million 

9.249 

million Y 

Percent of new requirements ratings for O*NET-SOC occupations 15% 15% 22% Y

Percent of O*NET-SOC occupations for which updated data are 

released 15% 15% 22% Y

Web site visits to O*NET 2.7 2.77 3.91 

106 Million

Y), substantially reached (S) or n Goal Substantial chieved

he State and National workforce information system supports the goa

 a competitive econom

emand-driven workfor

 DOL contributes by

mers include emplo

ice useful for business

ation system co

nd State and Local Workforce Investment Boards (WIBs), who find t

conomic development and individual career decisions. The workfo

• Occupational Information Network (O*NET) – a database of compete

occupations (tasks, knowledge, skills, abilities and other characteristi

ncy requirements, work

s);

employment, wages, and skills in demand by industry and occupation; 

workforce in

industries; and 

• America’s Job Bank (AJB) – an Internet job market, with services provided through State workforce 

agencies’ One-Stop Career Centers. 

Resources supporting this goal are used for technical assistance and emerging occupation research, to operate the 

web sites and to keep the databases current. The AJB utilization indicators show how well it is operating as a forum

for connecting labor demand with supply. O*NET performance indicators gauge effectiveness in keeping the 

database of occupational competency ratings current with dynamic occupations and industries. 

The state of the economy and national labor market conditions – the number of jobs and workers available – stro

influence performance levels for the AJB indicators. For example, during PY 2003, the job openings indicator 

exceeded its target significantly as the economic expansion picked up steam and the nation’s unemployment rate 

dropped from 6.2 percent to 5.6 percent, whereas the same target was missed in PY 2002, when the economic 

expansion was just beginning. External factors that could affect O*NET performance are changes in public demand 

for O*NET information or in public participation in t

FY 2005 Performance and Accountability Report 127
Performance Section 

Analysis and Future Plans

r each 

han

ted by the fact that 

month 

ing for work. There also appears to be an inverse relationship between the job search and 

sume search indicators; as the number of job searches declined, the number of resume searches increased, with the 

o

businesses become more proactive in searching for individuals as t

CareerPoin

The Department substantially achieved its performance goal for the workforce information system. Results fo

of the indicators under this goal reached or exceeded the targets, with the exception of the America’s Job Bank job

searches indicator. The job and resume search indicators and baselines were established in PY 2003. With the 

benefit of another year’s data, these indicators appear to be more strongly influenced by economic conditions t

originally believed. It now appears that an artificially high baseline was set for the job searches indicator, as the 

unemployment rate and hence the job search activity was higher during that period. This is suppor

the lowest monthly count for job searches in the baseline year (PY 2003) is still higher than the count for any

in PY 2004. As the economic climate improved throughout PY 2004, it is logical to expect a decline in the number 

of individuals search

re

nsistent with a relatively stronger economy, as 

he labor market tightens. 

t, the One-Stop Career Center in Holyoke, MA, 

resume search target being exceeded by 1.2 million. This is also c

delivers ou

barriers, pa

and Sarah e

workstation

and assistiv

specialist a

Persons wit

addition to

members o

developing

Photo Cre

tstanding services to job seekers with significant 

rticularly those with disabilities. At the center, Paul

xplore America’s Job Bank at the adjustable-height 

 equipped with large screen monitor, trackball mouse 

e software. Paul has also met with the benefits 

nd job developer, and has attended the Job Club for

h Disabilities, which was offered by the center. In 

standard job seeker services and assistive technology, 

f CareerPoint’s Disability Team are currently 

 a model for serving persons with severe disabilities. 

dit: Sarah Etelman, Paul Acosta, Leslie Dehey 

In response to these findings, the target for the job searches 

indicator will be adjusted for PY 2005, to a 1 percent 

increase over the PY 2004 result. The target for the O*NET 

e

data collection nears completion and more rare or hard-to-locate occupations make up a larger share of 

. Adjustments to targets are expected to make improved performance challenging, but 

for

r this integration, ETA will begin 

the O*NET indicators are

ath ed pleted 

last

cou o

The Are

Aware of, Using, and Satisfied with One-Stop Services, but More Data Could Help Labor Better Address Employers’ 

Needs (Study 3 in Appendix 2). The report examined employers’ awareness and use of One-Stop services, including 

AJB. While AJB was discussed in the report, the GAO did not make any recommendations that addressed AJB. 

The workforce information system was included in the FY 2004 PART assessment of the Wagner-Peyser 

employment services, and was rated Adequate. None of the PART findings and recommendations addressed 

workforce information, the COS or O*NET. 

site visits indicator adjusted upwards to 3.87 million becaus

demand for this information has exceeded initial estimates.

While the targets for updating and releasing new O*NET data were both exceeded this year, these rates will not be

adjusted as

the remaining sample

achievable, while further discussion is held on whether or not these are the appropriate indicators of performance

this activity in future. 

In PY 2006, DOL’s challenge will be fully integrating workforce information services into State and local planning, 

decision-making and service delivery to businesses and job seekers in programs funded by the Workforce Investment 

Act (WIA) and the Wagner-Peyser/VETS-funded employment services. To furthe

collecting and reporting data on the impact of workforce information on participant employment outcomes. 

 

Management Issues

Performance data for these indicators are considered complete and reliable. Data for

g er and validated by internal management information systems and a data warehousing project was com

program year at the America’s Job Bank Service Center against which queries are now run to provide accurate 

nts f the number of job openings received and job and resume searches conducted on America’s Job Bank. 

Government Accountability Office (GAO) released a report on the WIA in February 2005: Employers

128 United States Department of Labor 
Outcome Goal 4.1 

Address Worker Shortages 

Performance Goal 05-4.1A (ETA) – FY 2005 

Assist employers in meeting their workforce needs by providing them with expeditious determinations on their

pplications to hire foreign workers. 

Indicators, Targets and Results R T R Reached*

f the

employer applications for labor certification under the 

ing

b Y

rocessing a new PERM application b Y

7 9 85%** N 

Costs $60 Mi n

substantially reached (S) or not reached (N) 

arters of data

Achi d

employers to h

mporary or permanent basis when no American workers are available, able, willing or qualified. Employers file 

partment on behalf of workers they seek to employ on a temporary basis through the H-1B, 

Ana si

As i ic

Spe lt s part of 

an ongo

Pro m

proc s

applicat

rece

in F 2

now i red

a

FY 2004

esult

99%

FY 2005

arget

100%

FY 2005 

esult

100% Y 

Target 

Percent of H-1B applications processed within seven days o

filing date for which no prevailing wage issues are identified 

Percent of

streamlined system that are resolved within six months of fil

The average cost for p

N/A aseline 57%

N/A aseline $523

Percent of the H-2B applications processed within 60 days of 

receipt 

FY 2005

0% 0%

llio

*Indicator target reached (Y),

**Estimated based on three qu

Goal Not eve

Program Perspective 

The Department’s Foreign Labor Certification programs permit U.S. ire foreign workers on a 

te

applications with the De

H-1B1, E-3, H-2B, H-2A and D-1 programs. In addition, through the Permanent Employment Certification (PERM) 

program, employers can secure permanent residence in the U.S. for a foreign worker based on the employer’s 

permanent need for specific job skills. Employers are increasingly using visa programs to meet their needs. 

Recently, demand has exceeded capacity to properly certify applications. Consequently, DOL has made it a priority

to improve efficiency while maintaining a high standard of program integrity. Thus, H-1B, H-2B and PERM 

application processing indicators measure improvement in timeliness and cost-effectiveness. 

ly s and Future Plans

nd ated in the table above, the goal was not achieved, but three of the four targets were reached. The H-1B 

cia y (Professional) Workers Program’s application process was automated in Fiscal Year (FY) 2002 a

ing effort to streamline foreign labor programs. Automated application has significantly improved the H-1B 

gra ’s overall performance – application 

es ing increased from a low of 56 percent of 

ions being processed within seven days of 

ipt in FY 2001 to 100 percent of applications 

Y 005 (see chart to the right). The program

is n compliance with the statutorily requi

seven-day timeframe, and meets employer 

expectations for timely processing of H-1B 

applications. Furthermore, virtually all Labor 

Condition Applications (LCAs) filed using the 

Department’s web-based online system are 

processed within a few hours of their receipt, and 

the average processing time for LCAs filed using 

the H-1B fax system is 23 hours. 

The Department continues to make improving the 

overall performance of the PERM program a 

Percentage of H-1B Labor Condition Applications

Processed within Seven Days of Receipt

50%

60%

1999 2000 2001 2002 2003 2004 2005

Pe

70%

100%

Fiscal Year

r

80%

90%

centage

Target Result

FY 2005 Performance and Accountability Report 129
Performance Section 

major priority. A key accomplishment during FY 2005 was launching the online PERM system. This new system, 

RM

hed

which reduces application processing times by automation, went into effect in March 2005. The results of two 

indicators related to the new PERM system – the percentage of applications resolved and an average cost per

processing a new PERM application – will serve as baselines and determine targets for FY 2006. The online PE

system is dramatically transforming the program from a labor intensive application processing approach, relying on

State and Federal staff; to a streamlined processing model that utilizes electronic filing technology. DOL establis

two national processing centers in FY 2005 to provide the infrastructure needed to improve overall application 

processing efficiency. 

In March of 2005, the Permanent Labor 

Certification Program successfully launched its 

new system, known as the Program Electronic

Review Management System (PERM). 

Employers are no longer filing the applications

riod to

ew 

lp

in a paper format or waiting for a long pe

hear the result of their applications. This n

system provides an online application which is 

accessible at any time and anywhere. 

Processing time has been significantly reduced

by eliminating the State role in processing

applications. To ease the transition period, he

desk support for the PERM system is also

available. 

Photo Credit: Courtney Chung and Steve 

Beeson 

u

the State and Federal levels, they have not kept pace with

employers seeking to hire H-2B foreign workers continu

the Department of Labor deployed a new Oracle-based H

’s top management challenges. Fraud prevention continued to be top ETA priorities in FY 

ty of an employer and to maintain the integrity of the application process. 

visa

ltural H-2B applications have significantly decreased at both

 employer demand for H-2B workers. As a result, a few 

e to experience delays. To address this concern in FY 2005

-2B tracking system and consolidated the Federal 

processing role at our two centralized national processing centers located in Atlanta and Chicago. These changes 

should streamline and improve overall DOL administration and accountability of the H-2B program.

Management Issues

In its FY 2004 report, the Office of Inspector General (OIG) listed integrity of the Foreign Labor Certification 

rograms among DOL

Although the processing times for temporary non-agric

p

2005. Fraud cases involve applications filed on behalf of fictitious companies, the fraudulent use of legitimate 

companies without their knowledge, and the collection of fees from fraudulent applications filed on behalf of foreign 

workers. As in previous years, DOL continuously takes steps to improve overall program integrity and employer 

compliance by developing a fraud detection/prevention system that uses a database of public records to validate

applicant information and identify signs of risk or fraud. DOL is also considering the use of other safeguards to 

authenticate the identi

In 2004, the H-1B and Permanent programs were assessed under the PART. The Permanent program was rated 

Adequate and the H-1B program was rated Moderately Effective. For the H-1B program, the assessment 

recommended that DOL strengthen the Labor Condition Applications process with anti-fraud protections and 

implement new security standards, as appropriate. The Department is collaborating with the Departments of

Homeland Security and State in a multi-agency data sharing effort to identify, address and deter H-1B and other

fraud. The key findings and recommendations for the PERM program PART included developing new procedures to 

eliminate the application backlog, streamlining the certification process, detecting and preventing fraud, developing 

appropriate performance measures, and redirecting funds. To eliminate a backlog of more than 340,000 permanent

applications, DOL developed a new data entry and application processing system and dedicated two new facilities to 

this task as mentioned in the Analysis and Future Plans section above. 

130 United States Department of Labor 
Outcome Goal 4.1 

Help Trade-Affected Workers Find New Jobs

of

nt assistance benefits.

F

R

F

Ta

F

R

T

t 65%** N 

are 89% 89% 91%** Y 

75%** N 

services, job search and relocation allowances, and $1 $

 (S) or not reached (N) Goal Not Achieved

nt

es, occupational, onng, and remedial education, income support, and the Health Coverage Tax Credit, as 

a

hether participants who quickly obtain jobs are able to sustain 

racks the program’s success at returning participants to 

o layoff. The average cost per training participant helps the 

ntinuing to achieve results. Successful integration lowers this 

results reflect 

ll

Performance Goal 05-4.1B (ETA) – FY 2005 

Increase the employment, retention, and earnings replacement of workers dislocated in important part because

trade and who receive trade adjustme

Indicators, Targets and Results Y 2004

esult

Y 2005

rget

Y 2005

esult

arget

Reached*

Percent of participants employed in first quarter after program exi

Percent of participants employed in first quarter after exit who

63% 70%

still employed in the third quarter after exit 

Average percent of pre-separation earnings for those employed in

the third quarter after program exit 74% 80%

The average cost per training participant in FY 2005 (including

training

income support)

N/A 6,000 13,358** Y 

FY 2005 Costs $846 Million

*Indicator ta

*

rget reached (Y), substantially reached

*Estimated

Program Perspective 

DOL’s Trade Adjustment Assistance (TAA) program provides reemployment services to workers who lose their jobs

due to increased imports or shifts in production to foreign countries. TAA’s goal is to return workers to suitable 

employment as quickly as possible. The TAA program’s success is measured by the extent to which it helps 

individuals to regain economic self-sufficiency by quickly securing and maintaining employment. 

The TAA program is one component of seamlessly-integrated products and services, including those funded under 

the WIA Adult and Dislocated Worker programs and the Wagner-Peyser Act. The comprehensive readjustme

services and benefits offered by the TAA program include job search and relocation allowanc

the-job, and customized traini

well as wage insurance for qualifying workers under Alternative Trade Adjustment Assistance. The One-Stop 

system provides employment counseling, assessment, and placement services to TAA participants. 

 

The four key indicators used to measure the TAA program’s success are the common performance measures for job 

training programs. The entered employment indic

to employment. The retention measure indicates w

employment. The earnings replacement indicator t

employment at wages close to those earned prior t

program manage towards lower cost levels while co

cost and increases the number of people served. 

Analysis and Future Plans 

In FY 2005, the TAA program achieved modest

improvements in all three outcomes measured, 

exceeding the target for employment retention but

falling short of targets for entered employment 

and earnings replacement. The average cost 

arget was also reached. Improved

tor tracks the program’s progress in quickly returning participants 

Entered Employment

50%

60%

70%

80%

90%

2001 2002 2003 2004 2005

Fiscal Year

Result Target

t

the Department’s efforts to integrate services to 

meet the needs of all trade-affected dislocated 

workers, ensure that they have access to the fu

FY 2005 Performance and Accountability Report 131
Performance Section 

range of reemployment services offered through the One-Stop system, and manage funds to reach more customers. 

Improvements may also have been discovered via efforts to more accurately capture program outcomes (see

discussion of data in the Management Issues section below). 

 

During FY 2006, the Department will continue to

implement common performance measures for all 

job training programs. The common performance

measures will eliminate barriers to seamless 

integration caused by separate reporting 

t

progra

additio

will pr

Depart

reliabl

Depart

co-enr

system

perform

Manag

Althou ance data being reported are the 

best av

Depart tinues to find evidence that all

States are not fully cooperating with our efforts to 

collect quality data. This has the effect of 

understating outcomes, particularly for entered 

idance is 

on, 

mon performance measures for job training programs will reduce the reporting confusion 

ta.

36 

Appendix 2). The OIG found that the date of exit for the TAA program could not be substantiated with source 

ied

mprove financial management practices 

ith respect to TAA training expenditures.

defini ions and measures under different 

ms. New reporting instructions and 

nal training on the new reporting system

ovide another opportunity for the 

ment to emphasize the importance of 

e performance data. In addition, the 

ment has undertaken a multi-state study on

ollment to more accurately inform the 

 of the effects of co-enrollment on 

ance. 

ement Issues

gh perform

ailable and comparable to prior years, the

ment con

employment. DOL has taken several actions to 

further improve the quality of performance reporting. In May 2005, DOL established ten TAA performance 

principles designed to raise awareness of the importance of performance in the TAA program, and to help States 

focus on an integrated service strategy that will lead to strong performance achievement. The Department also issued

an advisory to States that provided guidance on using the Wage Record Interchange System, capturing employment 

data through supplemental data sources, and using the correct exit date for TAA participants. This gu

xpected to lead to improvements in the accuracy and reliability of reported outcomes in FY 2006. In additi

Employment Retention

70%

80%

90%

100%

2001 2002 2003 2004 2005

Fiscal Year

Result Target

Earnings Replacement

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005

Fiscal Year

Result Target

e

implementing the com

caused by definitions that differ between programs, and thereby increase the accuracy and reliability of TAA da

 

The Government Accountability Office (GAO) report Reforms Have Accelerated Training Enrollment, but 

Implementation Challenges Remain, issued in September 2004, recommended that DOL monitor the implementation 

of certain provisions of the TAA Reform Act and propose legislative changes if necessary (Study 35 in Appendix 2). 

DOL has taken steps to assess the challenge of implementing the new legislation and to formulate new strategies.

The Office of Inspector General (OIG) recently conducted a data validation review of TAA program data (Study

in

documentation, and recommended that ETA take steps to ensure accurate recording of exit dates. ETA has clarif

definitions and added requirements consistent with the new common measures, and has conducted three national

training sessions on these issues. 

In 2004, DOL contracted for a five-year net-impact study of the TAA program in order to obtain a more 

comprehensive understanding of the effects of the TAA program on trade-affected workers’ employment outcomes. 

During 2003, the TAA program was assessed under the PART, and was rated Ineffective. In response to the 

review’s PART recommendations, the Department drafted the revised TAA regulations; conducted six leadership 

forums on the integration of assistance for dislocated workers between the TAA program and the WIA Dislocated 

Worker program; and developed and implemented a new funding formula to i

w

132 United States Department of Labor 
Outcome Goal 4.2 

3 

exibility and Minimize Regulatory Burden 

atory structure with benefits that exceed their costs. Many

mployment laws and regulations were written long ago; the applicable context for them has changed considerably, 

o

OL is conducting reviews pursuant to the Regulatory

lexibility Act of 1980 to determine if regulations have or will have a significant economic impact on a substantial 

number of small entities. These reviews also examine the effect on e

s, both large and small, are reduc

mo petitive econom nmen

modern workplace. Comprehensive 

erning labor sta , pe alth care, and 

ess. Wherever possible, DOL will follow up with changes to reduce 

ile s u

dy made strides in modernizing its regulatory a ch b igorating and 

programs designed to prevent 

st egregious proble

Outcome Goal 4.2 – Promote Workplace Fl

A competitive economic environment features a regul

e

yet the rules themselves have not. DOL is systematically reviewing the regulations it is responsible for enforcing, t

ensure they do not unnecessarily pose barriers. In addition, D

F

employers' complianc costs and whether the

regulatory burdens of all employer ed.

Outcome Goal 4.2 indicators measure DOL’s success in creating a re com ic enviro t through 

promotion and development of a regulatory structure that is congruent with the 

reviews are under way or planned for key laws and regulations gov

worker safety to determine their appropriaten

ndards nsions, he

regulatory burden to improve productivity and competitiveness, wh

benefits, and safety. DOL has alrea

imultaneo sly protecting worker rights, 

pproa y 1) reinv

emphasizing compliance assistance through outreach, education, and innovative 

violations; 2) targeting our enforcement efforts to address the mo

options for employers to meet their reporting obligations. 

ms; and 3) expanding electronic 

Goal (Agency) and Statement Performance Summary 

FY 2005 Costs

(millions) 

05-4.2A (OASP) 

Maximize regulatory flexibility and benefits and promote flexible 

s

Goal achieved. Four targets reached. Programs below

See Net Cost of 

workplace program

Results Summary 

In FY 2005, DOL reached targets associated with regulatory flexibility, flexible workplaces and cost-effective 

practices. DOL did not have an opportunity to pursue its goal of increasing access to health care benefit plans.

ect

sh

A

ing regulatory flexibility are distributed throughout the department’s 

operations.

DOL published milestones for 19 regulatory initiatives that address Goal 4.2 purposes during FY 2005. Highlights 

include: 

• ESA’s Wage and Hour Division published a final rule to clarify and update child labor regulations and refl

changes in the workplace and recent amendments to the law which will eliminate confusion for employers,

youths and their parents; 

• ESA’s Office of Federal Contract Compliance published final rules that eliminate requirements to visit 

employers when conducting compliance checks; 

• ETA proposed changes to regulations that will greatly streamline procedures for applying for H-1B Visas in 

Specialty Occupations; and 

• OSHA is currently conducting reviews on standards regulating excavations, methylene chloride, and 

occupational exposure to lead in the construction industry. 

OASP developed a plan that will be used to identify DOL regulatory practices that are not cost effective and establi

a baseline unit cost measure for DOL program agencies. The first part of this plan is a literature review of external

studies of the cost of DOL regulatory programs. n initial assessment of several of these studies has been made. 

Net Cost of Programs 

The costs of achieving DOL’s results in maximiz

regulatory agencies, as it is part of their costs of

FY 2005 Performance and Accountability Report 13
Performance Section 

Promote Flexible Workplace Programs 

Performance Goal 05-4.2A (ASP) – FY 2005

Maximize regulatory flexibility and benefits and promote flexible w

Indicators, Targets and Results hed*

Develop plan to review significant regulations for maximum

flexibility

Establish criteria and timeline for regulatory reviews 

Identify and publicize best practices for, and models of, flexible 

workplace practices

Y Y 

Increase the percent of small employers with access to health care 

benefit plans34

FY 2005 Costs

35

*Indicator target reached (Y), substantially reached (S) or not reached (N)

tant

notices of 

d

t an increasing number of small employers are able to provide their employees with 

factors. 

orkplace programs

FY 2004 

Result 

FY 2005 

Target 

FY 2005 

Result 

Target

Reac

N Develop 

plan Y Y

N/A 

Establish 

criteria 

and 

timeline 

Y Y

N/A Develop 

plan

Y Y Baseline unit cost. Develop plan to identify practices that are not 

cost-effective 

N/A Develop 

Studies

N/A N/A N/A N/A

−

Goal Achieved

Program Perspective 

The Office of the Assistant Secretary for Policy (OASP) coordinates and tracks DOL’s achievement of this goal in

part through its role in directing the compilation and publication of the Department’s Annual Regulatory Plan and 

Semi-Annual Regulatory Agenda. With OASP’s assistance, DOL regulatory agencies have established plans and 

procedures they use to prioritize their regulatory initiatives to ensure they support this strategic goal. It is impor

to note, however, that most of the items on the Agenda are either not discretionary (i.e., they are required to 

implement new statutory requirements or court decisions) or implement policy and program priorities related to the 

Department’s other strategic goals. During the reporting period, the Department had 22 items on its regulatory

agenda that were relevant for goal 4.2 purposes and took action on 19 of them. Actions included publishing 

proposed rulemaking, final rules, interim final rules, etc. In each case, DOL agencies ensured that these actions 

maximized net benefits, promoted regulatory flexibility, and replaced obsolete provisions with ones that reflect 

current technology and market conditions and address current business practices.

Each indicator for this performance goal measures DOL’s progress in promoting flexibility in ways that are crucial to 

a competitive workforce: regulatory flexibility and workplace flexibility. The regulatory flexibility indicators ensure

that DOL’s regulation review plan emphasizes flexibility, is based on meaningful criteria that, where feasible, reflect

public input, and corrects current regulatory practices that are duplicative, obsolete or not cost-effective. The 

workplace flexibility indicators ensure that DOL highlights and publicizes best practices of flexible workplaces an

model flexibility practices and tha

access to health care benefits plans. Regulatory flexibility indicators are not typically impacted by external 

Performance of the workplace flexibility indicator of small employer access to affordable health care plans is 

dependent upon passage of Association Health Plan legislation. 

 

34 This target did not come into play, as its measurement was contingent upon passage of Association Health Plan legislation, 

which did not occur. 35 The costs of achieving DOL’s results in maximizing regulatory flexibility are distributed throughout the department’s 

regulatory agencies, as it is part of their costs of operations. 

134 United States Department of Labor 
Outcome Goal 4.2 

Analysis and Future Plans

DOL agencies continue to apply their regulatory review methodologies to make progress on their regulatory 

Agendas. Their review processes allow opportunities for public input, where appropriate, on both the selection of 

regulations for review and the outcomes of reviews. In the course of promulgating revised regulations, agencies 

conduct cost benefit analyses to help assure that the regulations maximize net benefits. DOL published milestones 

for 19 regulatory initiatives during the fiscal year that address Goal 4.2 purposes. What follows are four examples o

these regulatory projects. OSHA is continuing its long-term effort to update standards that either reference or inclu

language from outdated standards developed by industry or professional consensus groups. By eliminating this 

utdated language, DOL clarifies employer obligations and reduces adm

f

de

inistrative burdens for both employers and 

measure for DOL regulatory agencies. An initial 

cused on studies done between 1978 and 2005 that examine the cost of OSHA regulatio

Analysts are exam in the studies to facilita of a m

can be applied to all DOL agencies. Plans are to develop a prototype methodology by the second quarter of FY 2006. 

T B

e corporate executives, and business owners to mentor other employers in the development of 

exible workplace practices. At the conclusion of FY 2005, this project had met 100 percent of its intermediate and 

he data used for this performance goal are qualitative. These data are accurate and reliable and are collected as part 

ations Act, the Office of Management and Budget (OMB) publishes an annual Report to Congress on the 

Cos n

nomina

response to OMB’s solicitation for nominations for regulatory reform. DOL has considered the public’s nominations 

and s he

manufa eave Act regulations and OSHA’s Flammable Liquids 

stan rd

and schedules for taking action on the re

the nom

on t D

o

OSHA. EBSA is engaged in reviews of the relative benefits and burdens of existing regulations that govern 

application and evaluation procedures associated with its granting of prohibited transaction exemptions. Also, EBSA

issued a proposed rule that would establish a procedure to allow financial institutions to distribute the assets of 

abandoned individual account plans to participants and beneficiaries. ESA’s WHD published final rules that 

implement an interactive web based system for disseminating wage rates applicable for work done on contracts 

covered by the Service Contract and Davis-Bacon Acts. 

In the fourth quarter, OASP initiated a regulatory review and clean-up project that will update references in the Code

of Federal Regulations. Also in the fourth quarter, OASP began reviewing external studies of the cost of DOL 

regulations in order to help its analysts develop a baseline unit cost 

review has fo ns in particular.

ining the methodology used te OASP’s development ethodology that

he Women’s Bureau’s (WB) Flex-Options for Women demons

mployers, including

tration project is designed for the W to partner with

fl

outcome measures. 

Management Issues

T

of OASP’s regular management processes. In accordance with the FY 2000 Treasury and General Government 

Appropri

ts a d Benefits of Federal Regulations. For the last several years, the reports have included lists of regulations 

ted by the public for reform. DOL obtained public input on how to prioritize its regulatory initiatives in 

ha identified those items upon which it will act. Examples of nominated regulations in the 2005 report on t

cturing sector include ESA’s Family and Medical L

da . DOL has completed action on one nomination (Permanent Labor Certification) and has established plans 

maining nominations. The OMB report includes each agency’s response to 

inations and the Assistant Secretary for Policy testified before House subcommittees twice during FY 2005 

he epartment’s progress in responding to the nominations and action plans. 

FY 2005 Performance and Accountability Report 135 

Financial Section 
Financial Section 

Chief Financial Officer’s Letter

Creating a more efficient and effective government is a continuous 

endeavor. Unlike a race with a finish line, this is a journey where 

achievements and successes result from sustained day-to-day efforts to 

improve how we deliver services to the public and to produce measurable 

results. Our overall goal must reach beyond accurate and timely

information. In the past, Federal financial management has resembled the 

bystander in the story of the lost hot air balloonist. The bystander 

accurately tells the balloonist how high he is, but provides nothing useful 

to help the balloonist find his way. A similar affliction affects the 

proverbial frog at the bottom of the well, who provides in-depth 

information but of such narrow scope that it is irrelevant. These stories 

highlight the need for information that is timely, accurate, and relevant

with a clear and definable perspective. 

Four pillars support much of the Department’s success in improving financial management and realizing 

success on this journey: leadership, ownership, value, and effectiveness. These are not passive ideals that 

can be taken for granted. Even one weak pillar can cause a vital initiative to collapse, impeding the 

Department’s mission to create a prepared, secure, and competitive workforce and quality workplaces. 

Leadership. Implementing and sustaining necessary institutional initiatives requires the support of senior 

management. The leadership of Secretary Elaine L. Chao, her senior management team, each Departmental 

agency head, and every manager is instrumental to the effective stewardship of all DOL programs. Secretary

Chao has led and supported our efforts to make sound financial management a priority at the Department—

from improving internal controls to forging an environment where integrated financial and performance 

information correlates with improving program results. 

Ownership. For an initiative to be sustainable, managers must make a personal investment in the endeavor

and do so because they recognize the positive day-to-day impact on their programs. Without embedding 

ownership, a new initiative often becomes another well-intentioned, but unsustainable, management fix. 

Ownership also creates an environment where the leader is dedicated to the eventual success of the program. 

Ownership means management has adopted the initiative as a tool that not only works, but is something with 

which they want to work. 

Value. Financial managers must be able to identify the relative value of every management tool. As 

fiduciary agents of the Federal government, managers’ time must be spent in the most efficient and effective 

manner possible. Finding new tools and processes to make day-to-day operations more efficient is extremely 

important. 

Effectiveness. With each initiative, we must evaluate whether the results justify the costs incurred to obtain 

them. Maximizing each dollar’s impact on programs and services is one of our key goals. With finite 

resources, effectiveness and efficiency become ever more critical to obtaining results. 

This past year, our journey has passed several milestones that indicate that we are headed in the right 

direction. Some highlights include: 

• As a Department, we became the first Federal agency to obtain an overall “green” rating for each of 

the initial five areas of the President’s Management Agenda (PMA). 

• By the close of FY 2005 we had achieved a sixth “green” rating for our efforts to eliminate improper 

payments. Our Unemployment Insurance (UI) and Federal Employees Compensation Act (FECA) 

programs saw a combined reduction of over half a billion dollars in FY 2005, exceeding our targeted 

goals. 

• We received our ninth consecutive clean audit opinion on our consolidated financial statements and 

our fifth consecutive Certificate of Excellence from the Association of Government Accountants 

(AGA). 

138 United States Department of Labor 
Chief Financial Officer’s Letter 

• The Department successfully transferred its payroll operations to the National Finance Center as part 

of the Government-wide e-Payroll initiative to consolidate and standardize Federal civilian payroll 

services. 

• DOL became the first Federal agency to pilot an end-to-end eTravel system, and intends to deploy

the full system by the end of FY 2006. 

These pillars also are evident in the significant strides we have made to implement managerial cost 

accounting to determine the “true cost” of provided services. By integrating financial and performance 

information, program managers and senior executives can evaluate operations more quickly with better 

information than ever before. Stakeholders recognize the value of this resource in making more informed 

decisions, and their support of this initiative has contributed to its great success and recognition as a model 

for other Federal agencies to follow. The use of integrated financial and performance information in day-today operational decisions is a true paradigm shift towards greater accountability and responsibility for 

resource stewardship. Managerial cost accounting supports the production of this Performance and 

Accountability Report by enabling the Department to report the full costs of our strategic, outcome, and 

performance goals for the first time. 

The four pillars provide essential support for effective internal control. Identifying risks, implementing 

compensating controls, and monitoring the effectiveness of those controls are essential for ensuring that we

use resources effectively to achieve desired results. Every employee of the Department must recognize his or 

her responsibility to promote internal controls and improve the accountability and transparency of our 

programs and missions. We have taken this responsibility to heart. I am pleased to report that as I celebrate 

my fourth year in office, once again the Secretary has assured the President and the Congress that the 

Department complies with the Federal Managers’ Financial Integrity Act (FMFIA). Our continuing 

challenge is the transformation of internal control into an integral part of the Department’s entire cycle of 

planning, budgeting, management, accounting, and auditing. 

As our journey continues, we face new challenges such as responding to the critical national needs that have 

arisen in the aftermath of recent natural disasters. Our fiduciary responsibilities become ever more crucial as 

diverse programs require funding from finite resources, meaning that we must continue to extract improved 

results from shrinking funds. How well we succeed will depend largely on our ability to build upon the 

positive results we have attained to this point. 

The success of each initiative undertaken at the Department of Labor ultimately must be judged by whether 

the initiative is sustained over time and has become a part of the management culture. There are no shortcuts 

on our journey to improve financial management and enhance fiscal integrity. A lasting legacy and reaching 

our goals come only through strong leadership, managerial ownership, programmatic value, and resultsdriven effectiveness. 

Samuel T. Mok 

Chief Financial Officer 

November 15, 2005 

FY 2005 Performance and Accountability Report 139
Financial Section 

Independent Auditor’s Report 

To the Honorable Elaine L. Chao Secretary of Labor 

The Chief Financial Officers Act of 1990 (CFO Act) requires agencies to report annually to Congress on their 

financial status and any other information needed to fairly present the agencies’ financial position and results 

of operations. To meet the CFO Act reporting requirements, the United States Department of Labor (DOL), 

a Department of the United States Government, prepares annual financial statements, which are subjected to 

audit. 

The objectives of the audit are to express an opinion on the fair presentation of DOL’s principal financial 

statements. Additionally, the objectives include expressing an opinion on DOL’s compliance with 

requirements of the Federal Financial Management Improvement Act of 1996, based on an examination. 

We have audited the consolidated balance sheets of DOL as of September 30, 2005 and 2004, and the related 

consolidated statements of net cost, changes in net position, financing, and custodial activity and the 

combined statements of budgetary resources for the years then ended. These financial statements are the 

responsibility of DOL’s management. Our responsibility is to express an opinion on these financial 

statements based on our audits. 

We conducted our audits in accordance with auditing standards generally accepted in the United States of 

America; the standards applicable to financial audits contained in Government Auditing Standards, issued by 

the Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin No. 

01-02, Audit Requirements for Federal Financial Statements. These standards require that we plan and 

perform the audit to obtain reasonable assurance about whether the financial statements are free of material

misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and 

disclosures in the financial statements. An audit also includes assessing the accounting principles used and 

significant estimates made by management, as well as evaluating the overall financial statement presentation. 

We believe that our audits provide a reasonable basis for our opinion. 

Relationship to the Single Audit Act 

The financial statements for the years ended September 30, 2005 and 2004, include: 

• costs for grants, subsidies, and contributions primarily with various state and local governments and 

nonprofit organizations in the amounts of $9.4 billion and $10.1 billion, respectively; 

• costs for unemployment benefits incurred by state employment security agencies in the amounts of $32.3 

billion and $41.7 billion, respectively;

• state employer tax revenue of $33.1 billion and $30.1 billion, respectively;

• net receivables for state unemployment taxes, reimbursable benefits, and benefit overpayments of $.9 

billion and $1.0 billion, respectively; and 

• reimbursements from state, local, and nonprofit reimbursable employers for unemployment benefits paid 

on their behalf, in the amounts of $1.9 billion and $2.4 billion, respectively.

Our audits included testing these costs, financing sources, and balances at the Federal level only. Pursuant to 

a mandate by Congress, the examination of these transactions below the Federal level is primarily performed

140 United States Department of Labor 
Independent Auditor’s Report 

by various auditors in accordance with the Single Audit Act of 1984, as amended, and OMB Circular A-133, 

Audits of States, Local Governments, and Non-Profit Organizations. The results of those audits are reported 

to Federal agencies that provide direct grants, and each Federal agency is responsible for resolving findings 

for its awards. 

Opinion on Financial Statements 

In our opinion the aforementioned financial statements present fairly, in all material respects, the assets, 

liabilities, and net position of the DOL as of September 30, 2005 and 2004; and the net cost, changes in net 

position, budgetary resources, reconciliation of net cost to budgetary resources, and custodial activity for the 

years then ended in conformity with accounting principles generally accepted in the United States of 

America. 

Other Accompanying Information 

Our audits were conducted for the purpose of forming an opinion on the consolidated and combined financial 

statements of DOL taken as a whole. The accompanying information discussed below is not a required part 

of the principal financial statements. 

The supplementary information included in the Management’s Discussion and Analysis, Required 

Supplementary Stewardship Information, and Required Supplementary Information sections of the 

Performance and Accountability Report are required by the Federal Accounting Standards Advisory Board 

and OMB Circular A-136, Financial Reporting Requirements. We have applied limited procedures, 

performed at the Federal level only, which consisted principally of inquiries of management regarding the 

methods of measurement and presentation of the information. However, we did not audit the information 

and express no opinion on it. 

The information included in the Secretary’s Message, Performance Section, Chief Financial Officer’s Letter,

2005 Top Management Challenges Facing the Department of Labor Identified by the Office of Inspector 

General and the report appendices are presented for purposes of additional analysis. Such information has 

not been subjected to the auditing procedures applied in the audit of the consolidated and combined financial 

statements and, accordingly, we express no opinion on it. 

Report on Internal Control 

In planning and performing our audit, we considered DOL’s internal control over financial reporting by

obtaining an understanding of the Department’s internal control, determined whether internal controls had 

been placed in operation, assessed control risk, and performed tests of controls in order to determine our 

auditing procedures for the purpose of expressing our opinion on the financial statements. We limited our 

internal control testing to those controls necessary to achieve the objectives described in OMB Bulletin No. 

01-02. We did not test all internal controls relevant to operating objectives as broadly defined by the Federal 

Managers’ Financial Integrity Act of 1982, such as those controls relevant to ensuring efficient operations. 

The objective of our audit was not to provide assurance on internal control. Consequently, we do not provide 

an opinion on internal control. 

Our consideration of the internal control over financial reporting would not necessarily disclose all matters in 

the internal control over financial reporting that might be reportable conditions. Under standards issued by

the American Institute of Certified Public Accountants, reportable conditions are matters coming to our 

attention relating to significant deficiencies in the design or operation of the internal control that, in our 

judgment, could adversely affect the agency’s ability to record, process, summarize, and report financial data 

consistent with the assertions by management in the financial statements. Material weaknesses are reportable 

conditions in which the design or operation of one or more of the internal control components does not 

reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be 

material in relation to the financial statements being audited may occur and not be detected within a timely

period by employees in the normal course of performing their assigned functions. Because of inherent 

limitations in internal controls, misstatements, losses, or noncompliance may, nevertheless, occur and not be 

FY 2005 Performance and Accountability Report 141
Financial Section 

detected. We noted certain matters, discussed in the following paragraphs, involving the internal control and 

its operations that we consider to be reportable conditions. However, none of the reportable conditions are 

believed to be a material weakness. 

In addition, we considered DOL’s internal control over Required Supplementary Stewardship Information by 

obtaining an understanding of the agency’s internal controls, determining whether they had been placed in 

operation, assessing control risk, and performing tests of controls as required by OMB Bulletin No. 01-02. 

The objective of our audit was not to provide assurance on these internal controls. Accordingly, we do not 

provide an opinion on such controls. 

Finally, with respect to internal control relating to performance measures included in the Performance 

Section, we obtained an understanding of the design of significant internal controls relating to the existence 

and completeness assertions as required by OMB Bulletin No. 01-02. Our procedures were not designed to 

provide assurance on internal control over reported performance measures, and, accordingly, we do not 

provide an opinion on such controls. 

Reportable Conditions 

Incomplete Capitalization of Internal Use Software Costs 

Statement of Federal Financial Accounting Standard (SFFAS) No. 10 requires agencies to capitalize costs 

related to the development of internal use software, such as direct salary and fringe benefits of federal 

employees involved and related indirect costs such as overhead, rent, and travel. Our FY 2005 audit 

identified more than $53 million of internally-developed software costs that were not appropriately

capitalized in accordance with generally accepted accounting principles (GAAP) and DOL policy. 

Specifically, DOL agencies did not capitalize software development costs, such as the direct salary and 

fringe benefit costs associated with Federal employees involved with software development, and the related 

indirect costs such as overhead, rent, and travel. Three of the agencies involved were unaware of the 

capitalization requirements, and we concluded that the OCFO was not sufficiently monitoring agencies in 

this regard. Accordingly, we recommended that the Chief Financial Officer (CFO) monitor agency

compliance with Federal and departmental accounting requirements for internal use software. Management 

recorded appropriate adjustments to the year-end financial statements, and agreed to monitor agency

compliance and reissue the guidance for capitalizing costs of internally-developed software. 

Software License Fees Inappropriately Capitalized 

Our FY 2005 audit disclosed that DOL agencies inappropriately capitalized $6.7 million of software licenses 

acquired in FY 2005, and $2.4 million acquired in prior years. The costs of these licenses did not meet the 

criteria for capitalization established in GAAP, and, accordingly, the costs should have been expensed in the 

year acquired. We found that DOL’s policy manual, the Department of Labor Manual Series (DLMS), did 

not provide guidance or requirements as to how DOL agencies should account for software license fees, and 

that the OCFO was not monitoring agencies in this regard. We recommended that the CFO issue relevant 

written guidance, monitor agency compliance over accounting for software licenses, and record appropriate 

adjustments in the general ledger. Management agreed with the recommendations and expensed 

approximately $4.9 million of license fees in FY 2005 and will research the remaining amounts and make the 

appropriate adjustments in FY 2006. Management also agreed to issue relevant guidance and monitor 

agency compliance over accounting for software license costs. 

Internal Control Weaknesses Noted for Job Corps Real Property 

DOL owns a significant amount of real property, which is capitalized and depreciated in the Department’s 

accounting records, and is reported in the Department’s financial statements. In the FY 2003 audit, we 

reported errors in amounts reported for Job Corps real property, and concluded that ETA did not establish 

sufficient controls to ensure that capitalized real property was safeguarded and accurately reported in the 

Capitalized Assets Tracking and Reporting System (CATARS) and the Department of Labor Accounting and 

Related Systems (DOLAR$) general ledger. We recommended that management record property

transactions timely and make other improvements over accounting for real property. During the FY 2005 

142 United States Department of Labor 
Independent Auditor’s Report 

audit, our review of the construction in progress (CIP) account disclosed that the account inappropriately 

contains completed construction projects. We identified 18 CIP contracts that were completed and should 

have been transferred from CIP to the buildings or leasehold improvements accounts. The value of these 

completed projects was $55.5 million. We identified three additional contracts, valued at $2.8 million, that 

were inappropriately recorded in the CIP account (these items were not for construction projects), and six 

items recorded in the property accounts that had been disposed and should have been written off. The net 

book value of the disposed items was $.4 million. 

Management responded that they performed a complete review of items in CIP, and moved over 100 old 

items out of CIP during the year. Additionally, they made changes to their procedures to ensure that newly 

finished structures entered into CATARS were in accordance with the newly reorganized asset designation 

and identification system. The documentation of the remaining completed projects was not available until 

near year-end, and could not be properly entered into CATARS. Management made an adjustment for the 

value of the completed projects so as to properly present the effect of completing these construction projects. 

Work for all the remaining projects will be completed by December 31, 2005. 

Weaknesses Noted Over ESA Benefit Program Accounting 

The Employment Standards Administration’s (ESA) Office of Management, Administration, and Planning

(OMAP) performs the accounting for ESA’s benefit programs, including Federal Employees’ Compensation 

Act (FECA), Energy Employees Occupational Illness Compensation Program Act (EEOICPA), Longshore 

and Harbor Workers’ Compensation Act (LHWCA), and District of Columbia Compensation Act (DCCA). 

These accounting procedures include entering transactions in the DOLAR$ general ledger, reconciling 

accounts, and working with employing agencies to ensure receivables are paid. Many of these transactions 

are entered in DOLAR$ as monthly summary journal entries from various subsidiary records. In FY 2005, 

we noted several instances when the accounting for these activities was not performed timely, completely, or 

accurately. OMB Circular A-127 requires agency financial systems to provide reliable and timely

information. 

In addition, we found that ESA did not maintain its subsidiary system for tracking the balance of Intragovernmental Accounts Receivable for the FECA program. Although the OCFO has maintained other 

receivable records, ESA was not following up with employing agencies or managing the receivable balances. 

Without an adequate subsidiary system, ESA cannot properly manage its receivables or accurately report the 

employing agency balances. 

Additionally, ESA did not have a formal process to reconcile its various benefit payment subsidiary systems 

(FECA, EEOICPA, and LHWCA/DCCA) with amounts reported to Treasury and recorded in the DOLAR$

general ledger. Although the OCFO performs Funds with Treasury reconciliations, the reconciliations are 

based on amounts recorded in the general ledger and do not include the detailed payment history databases 

included in the subsidiary systems. Without a complete and formal reconciliation process, management 

cannot ensure that its payment subsidiary systems are in agreement with the actual payments reported and 

reconciled to Treasury. 

These accounting and reconciliation problems arose because there was a significant employee turnover in 

OMAP, and ESA did not have sufficiently detailed or comprehensive written procedures to enable new staff 

to perform the required activities in an accurate and timely manner. In FY 2005, these weaknesses 

jeopardized the timely and accurate issuance of the accountability report. 

 

We recommend that the Chief Financial Officer and the Assistant Secretary for Employment Standards: 

ensure that OMAP develops adequate detailed written procedures that address all significant aspects of its 

accounting and financial management; ensure that OMAP implements a human resource 

transition/succession plan which includes a description of key positions and detailed written procedures for 

the duties assigned to the position; ensure that OMAP and OWCP develops and implements reconciliation 

procedures for the benefit payment histories and the SF-224, FMS 6653 and the DOLAR$ general ledger; 

and ensure that OMAP maintains a current Intragovernmental Receivable subsidiary ledger and establishes 

FY 2005 Performance and Accountability Report 143
Financial Section 

written procedures for collecting the receivables. Management generally concurs and has begun taking steps 

to address these recommendations. 

Errors in FECA Medical Bill Processing 

Our FY 2004 audit disclosed errors in the processing of FECA medical bills, which were attributed to the 

fact that management did not have a quality assurance and internal audit plan in place prior to 

implementation of a new medical bill payment system. Both prior to and in response to this finding, 

management took steps to correct some of the weaknesses identified in the audit. We recommended that 

management move forward with full implementation of the proposed corrective actions, and adjust the 

accounting records accordingly. In response, management implemented certain corrective actions to 

improve processing of medical bills. However, our FY 2005 audit identified that medical bills paid during 

the year were not consistently priced in accordance with the appropriate fee schedules. We identified that 

management needs to take additional actions to reduce these errors, including: modify the duplicate pay edit; 

ensure that version changes to Grouper/Pricer are controlled and documented; improve controls over the fee 

schedule changes, so that the effective date is not before the implementation date; and strengthen the controls 

over the manual override function. Management partially concurred with our recommendations, and 

indicated that corrective actions had already been implemented to resolve these audit findings. 

Lack of System to Track FECA Medical Bill Receivables 

Our FY 2004 audit disclosed that ESA did not have a system to track and record medical bill overpayments 

(receivables), and, accordingly, these receivables were not recorded in the general ledger. Without an 

effective system, receivables cannot be adequately monitored and managed, and we estimate that the 

Department’s accounts receivable are understated by approximately $2 million to $4 million, annually. 

In the FY 2004 report, we recommended that ESA develop and implement a system to identify and record 

receivables resulting from overpayment of medical bills. In response, management indicated that the case 

management system, inclusive of the receivable system, would be deployed in FY 2005. However, our FY 

2005 audit found that the system implementation was postponed to March, 2006. 

Lack of Current Medical Evidence to Support FECA Compensation Payments 

We previously reported that ESA’s Office of Workers’ Compensation Programs (OWCP) did not have 

adequate controls to ensure that current medical evidence is maintained in the case files to support the 

continuing eligibility of claimants, which increases the risk of improper payments. This was a result of 

OWCP not properly following its procedures. We recommended that management implement automated 

procedures to ensure medical evidence is obtained and reviewed. In our FY 2005 audit, we continued to note

a high error rate where case files did not contain current medical evidence. Management developed a 

corrective action plan that calls for the completion in March 2006 of an automated system to track the status 

of medical evidence in the case files. 

Lack of Strong Application Controls Over Financial Information 

In the FY 2004 audit, we reported that DOL lacked strong application controls over the access to and 

protection of financial information. Our FY 2005 application controls testing noted the continued presence 

of numerous weaknesses in the information protection controls over applications. Specifically, we noted 

consistent weaknesses across the applications tested in the following application control areas:

• Identification and documentation of supporting environments, such as process flow documentation and 

mapping; 

• Application password settings, such as passwords that do not adhere to complexity requirements; 

• User access, such as incomplete access request and termination forms; 

• Lack of application segregation of duties policies or enforcement of segregation of duties policies; 

• User recertification, including lack of user recertification, or incomplete recertification documentation; 

• Audit trails, such as lack of monitoring of sensitive application functions and incomplete audit logs; and 

144 United States Department of Labor 
Independent Auditor’s Report 

• Controls over output to other applications, including reconciliation of control totals and record counts. 

These findings are a result of a breakdown in the implementation and monitoring of Departmental processes 

and procedures for application controls. These application control weaknesses could lead to users with 

inappropriate access to financial systems, inefficient processes, lack of completeness, accuracy, or integrity 

of financial data, or the lack of detection of unusual activity within financial systems. 

In FY 2004, we recommended that the CIO ensure that the individual agencies correct the specific 

application control weaknesses identified during the audits, and coordinate efforts with the OCFO to develop 

and/or enforce procedures and controls to address consistent or systemic application control weaknesses on 

current and future financial management systems. 

The OCIO generally concurred with the recommendations, and devised detailed plans to addresses the 

vulnerabilities associated with application and logical security control weaknesses systematically and 

consistently. In addition, the OCIO indicated that monthly meetings will be held with the effected agencies 

to ensure that security weaknesses identified in the audit are corrected in accordance with the agencies’

respective plans of action and milestones.

Lack of Strong Logical Security Controls 

In prior years, the OIG reported that DOL lacked strong logical security controls to secure the Department’s

networks and information. The FY 2005 audit identified continuing weaknesses, as follows: 

• Technical security standards and policies need to be updated and implemented to include stronger logical 

security controls. Specifically, patches need to be applied to systems in a timely manner; unnecessary

services need to be disabled; and access to sensitive files and directories needs to be restricted.

• Background check policies and procedures need to be created for contract staff and need to be enforced 

for federal staff to ensure that adequate levels of clearance are maintained for applicable staff. 

• Segregation of duties policies need to be created and enforced for general support systems of financial 

applications. 

These findings are a result of a breakdown in the implementation and monitoring of Departmental processes 

and procedures for logical security controls. These logical security control weaknesses could lead users to 

gain unauthorized access to the agency applications and data, or potential modification or disclosure of 

agency data. 

In prior years, the OIG recommended that the CIO ensure the specific security weaknesses identified during 

the audits and reported in various agency reports are addressed by the individual agencies, and enhance the 

Department’s security program to include testing of the noted weaknesses as part of the CIO’s new testing 

process. 

The OCIO generally concurred with the recommendations, and devised detailed plans to addresses the 

vulnerabilities associated with application and logical security control weaknesses systematically and 

consistently. In addition, the OCIO indicated that monthly meetings will be held with the effected agencies 

to ensure that security weaknesses identified in the audit are corrected in accordance with the agencies’

respective plans of action and milestones.

Errors Reported by States on ETA 2112 Not Corrected by ETA 

On a monthly basis, states are required to submit form ETA 2112, UI Financial Transaction Summary

Unemployment Fund, which provides a summary of transactions for the state unemployment fund. Our audit 

of UI activity recorded in FY 2005 identified that the state reporting entities did not consistently report 

certain UI transactions, and that ETA did not effectively review the monthly reports in order to detect and 

FY 2005 Performance and Accountability Report 145
Financial Section 

correct these errors on a timely basis. As a result, the financial statements of the Department were misstated. 

Specifically, we noted the following: 

• One state reported a $149 million withdrawal from their unemployment fund as a negative deposit, 

which effectively overstated the amount recorded in DOLAR$ as UI benefit payment expense. 

• One state inappropriately reported private loan proceeds as employer tax revenue, overstating the 

revenue by $230 million. 

• Other states incorrectly reported Trade Readjustment Assistance, NAFTA and/or TRA funds as UI 

deposits. 

We also noted that the aggregate ending cash balance in the states’ benefit payment accounts as reported on 

the ETA 2112 did not agree to the corresponding advance or accounts payable balances recorded in 

DOLAR$. Research into these differences disclosed an estimated $222 million understatement of benefit 

payment expense. 

We concluded that ETA was not sufficiently monitoring information reported by States on the ETA 2112 

reports, and had not provided adequate instructions or training on reporting UI Trust Fund activity. 

Accordingly, we recommend that additional instructions be provided to the UI reporting entities, procedures 

be implemented to review data reported on the ETA 2112, and that differences in ending cash balances be 

reconciled and adjusted as necessary. Management concurred with these findings, and has indicated that 

various edit checks and reconciliation procedures will be implemented in FY 2006. 

OASAM’s Procurement Files Lack Sufficient Documentation 

In the FY 2004 audit, we reported that OASAM’s procurement files lacked sufficient documentation and 

were poorly organized. Based on the condition of the files and the lack of critical procurement 

documentation, it was clear that files were not being maintained in accordance with existing procurement 

policies and procedures. As a result, management was not able to demonstrate compliance with the sections 

of the FAR pertaining to contract competition for three contracts. We recommended that management 

improve record maintenance, establish consistent practices, and develop a monitoring process to ensure 

compliance with applicable procurement requirements. 

In response, OASAM implemented a series of policy and procedural changes designed to improve record 

maintenance, ensure consistent and compliant procurement practices, and raise awareness and proficiency in 

the procurement award process. Files were reorganized, and our review of a sample of 10 FY 2005 

procurement actions identified a significant improvement in that regard. However, the Office of 

Procurement Services’ (OPS) assessment of FY 2005 procurement activities identified that contract renewal 

actions were not processed by October 1, 2004 in full compliance with the FAR. For this reason, OPS 

requested a class sole source and ratification authority for FY 2005 continuing service procurement actions. 

The request was approved and a Justification for Other Than Full and Open Competition (JOTFOC) was 

executed retroactive to October 1, 2004.

Because the majority of procurement actions made by OPS in FY 2005 were for continuing services subject 

to the JOTFOC and/or ratification, we were unable to conclude as to whether or not OPS would be able to 

produce fully documented and compliant contract awards under routine operating procedures, pursuant to

applicable procurement laws and regulations. In addition, the authorizing ratification document indicated 

that approval was contingent on the receipt of the monthly reports detailing individual contract actions 

awarded under the authority, along with the planned or actual procurement strategies to assure full FAR 

compliance next year. We found that OPS did not comply with this provision. 

 

Management believes that the procedural changes made in FY 2005 have resolved the original audit findings,

and has stated that the report required by the JOTFOC will be completed by the end of the first quarter of FY 

2006. However, we remain unable to conclude whether or not OPS’ revised operating procedures would 

146 United States Department of Labor 
Independent Auditor’s Report 

produce fully documented compliance with applicable procurement requirements since the majority of 

procurement actions made in FY 2005 were subject to a one-time sole source process. 

Inaccurate Grant Accounting

The OIG previously reported that significant errors were made in amounts recorded for ETA’s grants and 

contracts. These errors were attributed to a lack of sufficient internal control procedures to identify and 

correct errors on a timely basis. The OIG recommended that management establish procedures to identify 

and correct accounting errors on a timely basis, including implementation of review procedures and 

exception reports. ETA management concurred, and implemented various improvements designed to detect 

potential accounting errors. However, our FY 2005 audit continued to note accounting errors in grants 

selected for testing, and identified differences in the total costs reported by grantees in ETA’s grant cost 

subsidiary and the corresponding amounts recorded in the general ledger. ETA management concurs with 

our conclusions, and plans to implement additional procedures to address these audit findings. 

Deficiencies in Controls Over Unemployment Insurance (UI) Benefit Overpayments

The OIG’s FY 2001 audit disclosed certain deficiencies in the internal controls over Unemployment 

Insurance (UI) benefit payments. Specifically, the OIG identified that UI overpayment data collected by the 

Benefit Accuracy Measurement (BAM) unit reflect significantly higher overpayments than those established 

as accounts receivable by the states’ Benefit Payment Control (BPC) system. The OIG also found that there 

had been little change in the rate of overpayments (about 8.5 percent) since 1989. The OIG recommended 

that management develop a plan to use the BAM data as the impetus for improving internal controls over the 

benefit payment process, and include procedures to identify statistically valid improvements, or lack thereof, 

in overpayment rates. In response, management implemented corrective actions, including a Government 

Performance and Results Act (GPRA) goal, which they believed would result in a significant reduction in the 

detectable, recoverable overpayment rate. However, we found that recent UI data does not reflect 

improvements in the rate of overpayments or in the rate measured with the GPRA goal. The published UIbenefit overpayment rates for calendar years (CY) 2004, 2003 and 2002 were 9.9 percent, 9.3 percent, and 

9.1 percent, respectively, each year reflecting an increase rather than a decrease in the rate of overpayments. 

Management believes that the corrective actions taken in response to this finding have resulted in a 

significant reduction in the detectable, recoverable overpayment rate, and that the fiscal year data presented 

in this Performance and Accountability Report (PAR) reflects a decline in the overpayment rate from 9.7 

percent in FY 2004 to 9.46 percent for FY 2005. These rates are based on data obtained through June 30, 

2005, whereas the data obtained for our audit evaluation was based on annual published data for the years 

ended December 31, 2004, 2003 and 2002. We conclude that six additional months of data is not sufficient 

evidence to substantiate a permanent downward trend in the UI overpayment rate, and that the overpayment 

rate reported by management for FY 2005 (9.46 percent) reflects an increase from the rate reported in 2001 

with the original audit finding (8.2 percent). 

Implementation of Managerial Cost Accounting 

In the FY 2002 audit, the OIG reported that DOL was not in compliance with the requirements for 

managerial cost accounting (MCA) contained in Statement of Federal Financial Accounting Standards 

(SFFAS) No. 4. Specifically, DOL had not defined outputs for its operating programs nor developed the 

capability to routinely report the cost of outputs at the operating program and activity levels. Further, DOL 

did not adequately link cost information to performance measures at the operating program level for use in 

managing program operations on a routine basis or use managerial cost information for purposes of 

performance measurement, planning, budgeting or forecasting. 

Management concurred with this finding, and developed a comprehensive plan to implement a Departmentwide MCA system that complies with the requirements of SFFAS No. 4. Cost models were developed for

substantially all of DOL’s agencies and their major programs, the MCA system was certified for processing, 

and the cost accounting software was installed throughout each of the program agencies. 

FY 2005 Performance and Accountability Report 147
Financial Section 

However, while the department has made significant progress in implementing managerial cost-accounting 

capabilities, current cost information is not yet being widely used for decision making on a day-to-day basis. 

Management concurs, and has indicated that the Department’s focus during FY 2006 will shift to expanding 

the use of cost information by managers at all levels for decision making on a day-to-day basis. 

Other Matters 

We noted other matters involving the internal control and its operations that will be reported to the 

management of DOL in a separate letter. 

Report on Compliance With Laws and Regulations Exclusive of the Federal Financial Management 

Improvement Act of 1996 (FFMIA)

The management of the DOL is responsible for complying with laws and regulations applicable to the 

Department. As part of obtaining reasonable assurance about whether the Department’s financial statements

are free of material misstatement, we performed tests of its compliance with certain provisions of laws and 

regulations, noncompliance with which could have a direct and material effect on the determination of 

financial statement amounts and certain laws and regulations specified in OMB Bulletin No. 01-02, including 

the requirements referred to in the FFMIA. We limited our tests of compliance to those provisions and we 

did not test compliance with all laws and regulations applicable to the DOL. Providing an opinion on 

compliance with those provisions was not an objective of our audit and, accordingly, we do not express such

an opinion. 

The results of our tests of compliance with the laws and regulations described in the preceding paragraph 

disclosed no instances of noncompliance with laws and regulations that are required to be reported under 

Government Auditing Standards and OMB Bulletin 01-02. 

Report on Compliance With FFMIA

We have examined DOL's compliance with the requirements of FFMIA as of September 30, 2005. These 

include implementing and maintaining financial management systems that substantially comply with: (1) 

financial management systems requirements, (2) applicable Federal accounting standards, and (3) the United 

States Government Standard General Ledger (SGL) at the transaction level. Management is responsible for 

DOL's compliance with these requirements. Our responsibility is to express an opinion on DOL's 

compliance based on our examination. 

Our examination was conducted in accordance with the attestation standards established by the American 

Institute of Certified Public Accountants; Government Auditing Standards, issued by the Comptroller 

General of the United States; and OMB Bulletin No. 01-02, Audit Requirements for Federal Financial 

Statements. These standards include examining on a test basis, evidence about DOL's compliance with those 

requirements and performing such other procedures as we considered necessary in the circumstances. We 

believe that our examination provides a reasonable basis for our opinion. Our examination does not provide

a legal determination of DOL's compliance with specified requirements. 

In our opinion, as of September 30, 2005, DOL substantially complied with the requirements of FFMIA. 

This report is intended solely for the information and use of the management of the U.S. Department of 

Labor, the Office of Management and Budget, and Congress, and is not intended to be and should not be 

used by anyone other than these specified parties. 

November 10, 2005

148 United States Department of Labor 
Top Management Challenges

2005 Top Management Challenges Facing the Department of Labor

Identified by the Office of Inspector General 

Following are the areas the Office of Inspector General (OIG) considers to be the most serious management

and performance challenges facing the Department of Labor. They involve compliance, accountability and 

delivery of services and benefits. 

• Improving the Integrity of the Procurement System

• Reducing Improper Payments 

• Safeguarding Unemployment Insurance 

• Maintaining the Integrity of Foreign Labor Certification Programs

• Improving Financial and Performance Accountability 

• Improving Systems Planning and Development 

• Ensuring Security of Employee Benefit Plan Assets 

• Improving Management of Real Property Assets 

• Pursuing Reauthorization of the Workforce Investment Act 

Improving Integrity of the Procurement System 

Ensuring controls are in place to properly award and manage procurements is a challenge to the Department. 

The current organizational structure lacks separation of duties between procurement and program functions, 

which facilitates noncompliance with procurement requirements and may result in procurement decisions 

that are not in the best operating or financial interests of DOL. In addition, our audits have demonstrated that 

file documentation has not been adequate to support the validity and rationale of procurement decisions and 

actions. The OIG believes that, until procurement and programmatic responsibilities are properly separated 

and effective controls put in place, DOL continues to be at risk for wasteful and abusive procurement 

practices. 

The OIG recently completed two audits involving procurement at two DOL agencies, which were conducted 

as a result of hotline complaints. These audits have shown that problems arise when the procurement 

function is not independent of program functions. This scenario may result in program officials, instead of 

contracting experts, driving procurement policy and decisions as our audits identified. 

An audit of a contract for encryption software disclosed that the award to a sole-source contractor was not 

adequately justified. Furthermore, the contract included two additional products that were added without the 

Department’s Procurement Review Board’s review and approval. These unapproved modifications 

significantly changed the contract’s scope and cost. The Department ultimately did not use $3.8 million 

worth of purchases of encryption products and could not justify its reasons for abandoning the investment. 

In another audit, we found that one specific agency’s procurement procedures exhibited a pattern of 

disregard for acquisition requirements and did not adhere to the principle of full and open competition. By

operating in such an environment, management was unable to ensure that contracts were in the best interest

of the Government, and that all eligible contractors were given the opportunity to compete for the agency’s 

contracts. 

Several audits involving procurement by the Department also have demonstrated that procurement files did 

not contain adequate documentation to support the validity or rationale of procurement decisions and actions. 

Also, cognizant officials with oversight responsibility for both the program and procurement functions could 

not demonstrate that their decisions were sound. 

The Service Acquisition Reform Act of 2003 addresses a number of issues aimed at improving procurement 

management, including the requirement for each Federal agency head to establish a Chief Acquisition 

Officer (CAO) position, to be filled by a non-career employee whose primary responsibility is acquisition 

management. The Department is taking steps to address the lack of separation of duties in its procurement 

FY 2005 Performance and Accountability Report 149
Financial Section 

function with a recent draft Secretary’s Order establishing the position of CAO. To adequately address the 

OIG’s recommendations regarding separation of duties, day-to-day procurement duties should be under the 

direction of the new CAO, with acquisition being the CAO’s primary responsibility. 

Reducing Improper Payments 

Reducing improper payments in DOL-administered programs, such as Unemployment Insurance (UI) and the 

Federal Employee Compensation Act (FECA), remains an ongoing challenge for the Department. Improper 

payments include those made in the wrong amount, to an ineligible recipient, or improperly used by the 

recipient. The need for Federal agencies to take action to eliminate overpayments is recognized by the 

President’s Management Agenda (PMA) and the Improper Payments Information Act of 2002. Calendar 

year (CY) 2004 UI overpayments by the states are projected by the Department at $3.4 billion. The 

Department estimates FECA overpayments in FY 2004 at $6.4 million. 

 

Unemployment Insurance and the Use of New Hire Data 

The UI program, a Federal-state partnership, is DOL’s largest income maintenance program with outlays

almost doubling in the past 6 years: from $24.9 billion in FY 1999 to $48.9 billion in FY 2004. Benefits for 

individuals are dependent on state law and administered by State Workforce Agencies, but the program

framework is determined by Federal law. In recent years, the OIG has raised concerns about the magnitude 

and consistency of the overpayment rate in the UI program.

A 2004 OIG audit determined that, although implementing a state new hire directory cross-match was more 

effective in identifying overpayments than cross-matching against employer wage records, 12 states were not 

using new hire data at the time. According to ETA, 8 of the 12 states still have not connected to their 

respective state’s new hire database; however, 4 states are expected to implement in the near future. We 

continue to recommend that the Department provide technical assistance and resources to state UI programs 

currently not using new hire detection to quickly initiate and/or complete plans for implementation. 

The OIG had also recommended that DOL encourage state UI agencies to access the National Directory of 

New Hires. Access to this database provides states with additional data not available in state directories of 

new hires, such as new hire information from multi-state employers who report to a single state and new hire 

information from the Federal government. Last year’s passage of the SUTA Dumping Prevention Act 

enabled states to access the National Directory. 

The Department is currently working closely with the Department of Health and Human Services, the Social

Security Administration, and the states to determine technical and operational aspects of access to the 

National Directory. DOL is currently performing a 3-state pilot study to determine if the benefits of using 

the National Directory to reduce overpayments would exceed the cost of implementation. The Department 

plans to have the study completed and issue a final report to all 50 states in the fall of 2005. 

The OIG urges the Department to continue to offer assistance to the states on the use of both the state and 

National Directories. 

Federal Employees’ Compensation Act Program Controls 

The OIG considers the risk of FECA overpayments a Departmental challenge. The DOL-administered 

FECA program impacts the employees and budgets of all Federal agencies. FECA provides income and 

medical cost protection to covered Federal civilian employees injured on the job, employees who have 

incurred work-related occupational diseases, and beneficiaries of employees whose deaths are attributable to 

job-related injuries or occupational diseases. 

In previous years, the OIG reported that the Department needs to obtain and review medical evidence on a 

periodic basis in order to justify continued eligibility for FECA compensation payments. This was due to the 

fact that the Office of Workers’ Compensation Programs did not establish effective controls to ensure that 

current medical evidence was requested and received in a timely manner, increasing the risk of improper 

payments. In March 2005, DOL completed the roll-out of its new benefit payment system, iFECS 

150 United States Department of Labor 
Top Management Challenges

(Integrated Federal Employee Compensation System). This system automatically tracks the due dates of 

medical evaluations. Management expects to have an enhanced iFECS system fully operational by March 

2006. 

Safeguarding Unemployment Insurance 

Improving the integrity of the UI program to provide income maintenance to qualified individuals again 

remains a challenge for the Department. In FY 2004, the UI program paid $35 billion in temporary income

support. Recurring issues faced by the UI program are the adequacy of Unemployment Trust Fund (UTF) 

resources and identity theft and organized crime activity in the UI program. 

Unemployment Trust Fund Resources 

Overcharging for UTF administration by the Internal Revenue Service (IRS) poses a major challenge for the 

Department. Earlier OIG audits demonstrated the UTF was being improperly charged for hundreds of 

millions of dollars over several years in administrative expenses. The OIG previously recommended that the 

ETA work with the IRS to adopt an alternative method to allocate costs and seek reimbursement for 

overcharges. The IRS subsequently reduced the amount of UTF FY 2002 administrative charges. 

In FY 2003, the Treasury Inspector General for Tax Administration (TIGTA) reported that the IRS needed to 

establish an effective process for determining UTF administrative expenses. Based on TIGTA’s 

recommendation, the IRS implemented a new cost methodology in October 2004. Even with this change, the 

administrative charges for UTF exceeded $75 million for the first 3 quarters of FY 2005, and at the current 

rate, the OIG estimates charges will exceed $100 million for FY 2005. ETA has expressed concern about the 

complexity of the IRS’s new methodology and the magnitude of the administrative charges. The OIG 

recently requested that TIGTA audit the new methodology’s adequacy for charging UTF administrative 

expenses. We understand that TIGTA is planning an audit in FY 2006. 

 

Identity Theft and Organized Crime Activity in Unemployment Insurance Program 

OIG investigations have found increasingly complex, costly and pervasive UI fraud schemes resulting in 

program losses in the millions of dollars. Many of these schemes include both identity theft and the 

involvement of multinational non-traditional organized crime groups. For example, a significant OIG 

investigation revealed the crime group had controlled more than 4,000 check-mailing addresses and used 

more than 15,000 identities in several states. The defendants were ordered to pay $59 million for their role in

the scheme. In a recent case, several members of a California family were sentenced for various crimes. In

this case, one defendant was ordered to pay more than $7.5 million in restitution for her role in the UI 

identity theft scheme. 

Maintaining the Integrity of Foreign Labor Certification Programs 

Reducing the susceptibility of DOL Foreign Labor Certification (FLC) programs to abuse remains a 

challenge for the Department. These programs permit U.S. employers to hire foreign workers when their 

admission does not adversely impact the job opportunities, wages, and working conditions of citizens and 

legal residents. In FY 2004, DOL received approximately 466,000 foreign worker applications for the FLC 

programs from employers. Abuse of the FLC programs may cause unlawful admission of foreign nationals

and incur economic hardship for American workers. 

Problems with the Labor Certification Process 

The responsibility for approving employers’ labor certification applications falls under the jurisdiction of 

ETA, which is the initial step in the process by which foreign nationals obtain work visas. Unfortunately, a 

recurring concern of the OIG is the integrity of the foreign labor certification process. 

 

New regulations, which were effective March 2005, provide for the electronic submission of new permanent 

applications to Federal Processing Centers located in Atlanta and Chicago. The OIG cautions that an 

FY 2005 Performance and Accountability Report 151
Financial Section 

electronic approval, rather than human review of applications by State Workforce Agencies, could 

potentially increase fraud. 

In 2004, the OIG also expressed concerns over both the high volume of backlogged applications and the 

associated risk of approving questionable applications. Unprocessed applications submitted before March 

28, 2005, to ETA regional offices or State Workforce Agencies have been transferred to the ETA Backlog 

Elimination Centers located in Philadelphia and Dallas. As of August 2005, the Backlog Elimination Centers 

had 312,438 applications pending. ETA expects to eliminate the backlog by CY 2007. The OIG continues 

to recommend the Department ensure the processing of backlogged applications does not result in the 

certification of unqualified applications. 

Labor Certification Fraud 

Labor certification fraud remains a major OIG concern. Recent OIG investigations have revealed corrupt 

employers, labor brokers, and lawyers who file fraudulent applications. The prevalence of these cases 

consistently demonstrates the susceptibility of the program to fraud. For example, one such broker recently

submitted more than 900 labor certifications on behalf of Chinese nationals seeking entry into the United 

States. In this instance, the labor broker had charged foreign workers up to $90,000 per labor certification. 

Improving Financial and Performance Accountability 

In order to manage DOL programs for results and fully integrate budget and performance, the Department 

needs timely financial data, a managerial cost accounting system that matches cost information with program

outcomes, quality performance data, and useful information from single audits, which cover 90% of its 

expenditures. 

Managerial Cost Accounting

A cooperative effort between the Department’s Office of the Chief Financial Officer (OCFO) and the 

program agencies resulted in the successful development of cost models for most of DOL’s major agencies 

and programs during the latter part of FY 2004. These cost models provide capabilities to integrate program

activities, outputs, costs, and non-financial data to provide the basis for reporting useful managerial cost 

accounting information. Additionally, OCFO, the Office of the Assistant Secretary for Administration and 

Management (OASAM), and the program agencies are continuing to improve the cost models and related 

capabilities for integration of cost and performance information. 

The Department received high marks on the PMA the past few years for its financial management. To fully 

realize the benefits of cost accounting, the Department now needs to turn attention to refining its cost models 

and their related capabilities for integration of financial and programmatic data, and successfully 

institutionalizing the use of cost accounting information to improve program operations and routinely report

program results. 

Quality Performance Data 

Three recent OIG reviews of the validity of DOL program data identified the need for improvement in the 

way DOL ensures completeness and reliability of program results data. Also, much of the program results 

data required by DOL to measure attainment of its strategic plan goals are generated by states and other 

sources below the Federal level. This presents challenges for ensuring data quality and evaluating program

effectiveness. Past OIG audit work has disclosed high error rates in grantee-reported performance data and 

raised concerns about the use of that data for decision making. ETA has developed a data validation program

to improve the reliability of program data. The OIG plans to audit ETA’s data validation system in FY 2006. 

Single Audit 

The Department relies on audits conducted under the Single Audit Act to provide oversight of more than 

90% of its expenditures. The OIG is concerned about the adequacy of information DOL receives from these 

audits, which are conducted by public accountants or state auditors and procured with DOL grant funds. 

OIG quality control reviews since 2002 have revealed serious deficiencies in single audits, including 

inadequate sampling, which would make the audits unreliable. The OIG is currently participating in the 

152 United States Department of Labor 
Top Management Challenges

National Single Audit Sampling Project. This project is designed to: determine the quality of Single Audits 

by providing a statistically reliable estimate of the extent that Single Audits conform to applicable 

requirements and standards; and make recommendations to address any noted audit quality issues. 

Management Controls

In FY 2005, Office of Management and Budget (OMB) Circular A-123 was amended to provide updated 

internal control standards applicable to all Federal agencies. The amendment also included new specific 

requirements for conducting agency management’s assessment of the effectiveness of internal controls over 

financial reporting. Appendix A of A-123 requires that documentation be maintained, not only of the 

controls in place, but also of the assessment process and methodology that management used to support its

assertion as to the effectiveness of the internal control over financial reporting. In addition, Federal agencies 

will be required to perform monitoring activities that include direct testing of the controls as part of the 

assessment process. With implementation set at the end of FY 2006, all Federal agencies, including DOL, 

will be challenged to establish procedures and mechanisms to assess, test, document, and certify that their 

internal controls are in place and operating effectively. 

Improving Systems Planning and Development 

Developing efficient and effective systems to perform daily activities remains a significant challenge for the 

Department. OIG audits have identified that DOL Information Technology (IT) system development lifecycle activities need strengthening in the areas of planning, project management, and decision making. 

Current system development plans should be structured to include timely reviews of initiatives progress in 

relation to planned project activities, and significant milestones, especially at key decision points. Project 

plans should be strengthened to include budget and cost tracking, project timelines, and resources 

monitoring. Taking these steps would improve DOL’s management of IT systems. 

The Department’s Chief Information Officer needs to take a stronger role to ensure that the agencies 

adequately plan for system development activities and are providing adequate project management. The 

Department’s agencies should assess their progress in having sufficient numbers of IT and business line 

personnel obtain certification in the field of project management. These resources will help to assure the 

future success of DOL IT initiatives and can be leveraged throughout DOL, as warranted, given the 

importance, size, and complexity of an initiative. 

Department of Labor Core Financial System Replacement 

The New Core Financial Management System (NCFMS) is an enterprise-wide initiative that will enhance the 

Department’s ability to integrate financial and performance information. By replacing DOL’s legacy

mainframe based core accounting system (DOLAR$) with a commercial-off-the-shelf financial management 

information system, program managers and decision makers throughout the Department will receive more 

timely, accurate, and useful information to improve results delivered by the programs they administer. DOL 

will be challenged to develop a system that meets PMA and OMB Requirements. In addition, the NCFMS 

project will affect all organizations in the Department that currently utilize DOLAR$, or have systems that 

interface into DOLAR$. 

Emerging Technologies

DOL is reviewing new technologies to better manage and provide services to the public. In doing so, it is 

likely to experience new security threats and other events as these new technologies’ vulnerabilities are 

exploited. The Department is currently embracing the new technologies of wireless local-area networks and 

personal electronic devices, and has started using wireless technology to better serve the needs of the 

organization. To meet the new challenges that these technologies bring, the Department should have 

acquisition and implementation plans consistent with protecting informational assets and confidential and 

sensitive information, while providing the highest level of quality of service and access to needed 

information. These new technologies will require updated policies and procedures to maintain a high level of 

operational effectiveness. Close monitoring will be key to ensuring that the promised benefits of these 

technologies are achieved. 

FY 2005 Performance and Accountability Report 153
Financial Section 

Homeland Security Presidential Directive (HSPD) -12

The Department, as well as all other Federal agencies, must implement a standard system for identifying 

Federal employees and contractors. This system must implement a secure and reliable method of 

identification, which has the capability to coordinate access with other Federal agencies and sites. The 

HSPD-12 has an aggressive implementation date of September 2006. Under this system, agencies will need

to provide employees identification cards that will be used to validate and monitor Federal employees and 

contractors. The General Services Administration is responsible for reviewing and approving third partysolutions available for agencies to procure. However, the HSPD-12 allows agencies to develop or procure 

non-approved services, which will challenge DOL to implement the new Personal Identity Verification cards 

(i.e., Smart Cards) that are: secure and reliable forms of identification; issued based on sound and recognized 

criteria; rapidly authenticated; and strongly resistant to identity fraud, tampering, counterfeiting, and terrorist 

exploitation. In addition to the challenge of providing this new technology, DOL will also be challenged in 

managing the implementation, distribution, and maintenance of the Smart Cards.

Implementation of Public Key Infrastructure (PKI) 

Despite working the last several years on implementing a PKI solution to secure and authenticate electronic 

documents within the Department, DOL has yet to identify a PKI solution. During the same period, DOL 

has twice procured encryption products that need PKI to achieve maximum benefit from these products. 

Because the use of keys to encrypt, decrypt, and authenticate documents is a complex process, agencies and 

public organizations may experience difficulties implementing an integrated and effective PKI program. 

DOL has been challenged to implement a Department-wide PKI system and manage the underlying 

infrastructure, and is currently exploring other avenues to find the best fit for the Department’s needs and 

environment. 

Ensuring Security of Employee Benefit Plan Assets 

A major challenge confronting the Department is protecting the benefits of American workers, which 

includes pensions and health care. The Employment Benefits Security Administration (EBSA) oversees the 

administration and enforcement of the fiduciary, reporting, and disclosure provisions of Title I of the 

Employee Retirement Income Security Act (ERISA). Under ERISA, the Secretary of Labor is responsible 

for the rights and financial security of participants in approximately 730,000 private pension plans and 6 

million health and welfare plans covered by ERISA. These pension plans hold over $4.5 trillion in assets 

and cover more than 150 million American workers. Recent failures in corporate financial management and 

reporting, as well as in the auditing and oversight of these activities, show the need to enhance worker 

pension and healthcare security by expanding safeguards and improving benefit plan regulatory enforcement. 

Safeguards to Protect Pension Assets 

Improving the process through which employee benefit plans are audited is a serious challenge faced by

DOL. As a result of an earlier OIG audit, and on its own initiative, the Department made several 

improvements to its processes for identifying and correcting deficient employee benefit plan audits. EBSA 

now reviews the audit quality processes of those firms performing the greatest number of employee benefit 

plan audits. In addition, it will continue to review individual audits of smaller firms on a sample basis, 

allowing for more coverage. For those deficiencies identified, the Department has agreed to obtain more 

corrective action. As for the smaller firms where EBSA will review individual plan audits, the Department 

implemented procedures ensuring review of the most current work available. 

For the audits that the OIG found to be deficient, EBSA has begun a process of reviewing more current audit 

work of these firms. If the Department finds current work to be deficient, EBSA has agreed to obtain greater 

documentation of corrective actions from the firms involved.

Pension Plan Fraud 

Ensuring the security of employee benefit plan assets, which are attractive targets to organized-crime groups, 

remains a challenge for the Department. Recent OIG labor racketeering investigations and the increased 

activity of EBSA’s criminal enforcement program consistently identify the vulnerability of pension assets. 

The OIG has continued to monitor the integrity of Taft-Hartley plans, which are jointly administered by labor 

154 United States Department of Labor 
Top Management Challenges

union and management representatives and have been previously identified as at risk. A typical labormanagement case often evolves from the collaboration of management representatives and corrupt union 

officials. One such case recently led to the 53-count indictment of 32 members and associates of a wellknown organized-crime family. Defendants included both a president and a trustee of a local union. 

Cash Balance Pension Plans 

A 2002 OIG audit found that some cash balance pension plan participants, who had collected the lump sum 

payments before normal retirement age, were being underpaid benefits. The OIG again raises the issue 

regarding the methodology used to calculate the benefits. The OIG continues to recommend that EBSA 

increase the Department’s oversight of cash balance pension plans. However, the first step in this direction 

requires the guidance of the IRS regarding the calculation of participant-accrued benefits on this matter. 

Disparate interpretations of how accrued benefits are calculated will result in some plan participants 

continuing to be paid incorrectly. The OIG urges the Department to press the IRS for the necessary guidance 

to ensure cash balance pension plan recipients receive the benefits they are owed. 

Corrupt Multiple Employer Welfare Arrangements (MEWAs)

MEWAs are typically marketed to small businesses as a means of obtaining inexpensive health coverage for 

their employees. Fraudulent MEWAs, which default on their benefit obligations, are often misrepresented by

plan promoters as being maintained under a bona-fide collective bargaining agreement. The OIG continues 

to recommend EBSA investigate unscrupulous health insurers who are burdening Americans with an 

increasing number of unpaid medical claims. Therefore, the OIG recommends that the Department continue 

its efforts to decrease the number of fraudulent MEWAs, in particular by seeking legislative changes to 

increase its authority to obtain reliable plan information and assess penalties. 

Improving Management of Real Property Assets 

Improving the accountability for and management of real property is an ongoing challenge for the 

Department. A Government Accountability Office (GAO) report released in June 2005 noted that the 

Department has taken actions in response to last year’s Executive Order 13327 which addresses the Federal 

Asset Management initiative to the PMA. A senior real property officer has been designated to, among other 

things, monitor the real property assets of the Department. However, the GAO report raises the governmentwide issue of the lack of reliable and useful property data that are needed for strategic decision making. 

Job Corps Real Property 

In our FY 2004 report on the Department’s internal controls over financial reporting, the OIG noted that 

ETA did not sufficiently utilize DOL’s property reporting and tracking system and did not establish 

sufficient controls to ensure that Job Corps real property was safeguarded and accurately reported in DOL’s

tracking system and general ledger systems. In FY 2004, Job Corps real property was valued at $770 

million. ETA is in the process of taking action to ensure the Job Corps real property is accurately reported 

and restructuring its existing processes to strengthen the property management system. 

State Workforce Agency Real Property 

In addition, an OIG audit of management controls over Federal equity in State Workforce Agency (SWA) 

real property found that ETA had not established adequate management controls over accounting for the 

Department's equity interest in SWAs’ real properties. Specifically, ETA's inventory of SWA property was 

neither accurate nor complete, and ETA did not ensure the states properly handled the proceeds from

disposing of SWA properties with DOL equity. We recommended the ETA make control and management 

of real property a higher priority. ETA has begun to review its existing processes and restructure them to 

strengthen the property management system. For example, ETA will no longer approve new grantee 

amortization plans, and will review and renegotiate existing plans on a case-by-case basis. 

FY 2005 Performance and Accountability Report 155
Financial Section 

Pursuing Reauthorization of the Workforce Investment Act (WIA) 

WIA authorization expired in 2003, and Congressional reauthorization is still pending. Both the revision and 

improvement of WIA programs by the Department via the reauthorization process will continue to be a 

challenge. OIG audits identified areas in which WIA could be improved through changes to increase training 

provider participation, improve dislocated worker program services and outcomes, better document youth 

program outcomes, and better assess states’ current WIA funding availability. DOL has agreed to our 

current recommendations, but it is waiting for reauthorization to implement them. 

Changes From Last Year 

In identifying the most critical Management Challenges faced by the Department each year, the OIG 

recognizes matters meriting the continued attention of the Department may be omitted from the list. Changes 

from the Top Management Challenges Facing the Department of Labor from FY 2004 are the addition of 

Improving the Integrity of the Procurement System and the inclusion of last year’s challenge of Information 

Technology Security Controls within the Challenge of Improving Systems Planning and Development. 

E-payroll conversion, one of last year’s concerns, was addressed when the Department transferred its payroll 

system to the National Finance Center in April 2005. The delay in the conversion due to issues raised by the 

OIG significantly contributed to the Department having only minor issues when the conversion was 

completed. 

One of last year’s issues regarding the solvency of Unemployment Trust Fund resources within the challenge 

of Safeguarding Unemployment Insurance has also been eliminated. When the OIG initially raised this 

issue, the Trust Fund balance was in steady decline and benefit payments were on the rise. The concern was 

that the balance could reach a point where Federal money would not be able to cover state shortfalls. But 

this is no longer the case, because, during the recent recession, the Trust Fund remained solvent and covered 

state shortfalls as needed. 

In the areas of grant accountability, ETA has undertaken a grants management initiative, the results of which 

the OIG is currently reviewing. While it is not included in this year’s Management Challenges, 

accountability over DOL-awarded grants will continue to merit diligent attention.

156 United States Department of Labor 
Annual Financial Statements 

Principal Financial Statements and Notes 
Financial Section 

PRINCIPAL FINANCIAL STATEMENTS

Principal Financial Statements Included in This Report 

The principal financial statements included in this report have been prepared in accordance with the 

requirements of the Chief Financial Officers Act of 1990 (P.L. 101-576), the Government Management 

Reform Act of 1994 and the Office of Management and Budget’s (OMB) Circular A-136, “Financial 

Reporting Requirements.” The responsibility for the integrity of the financial information included in these 

statements rests with management of the U.S. Department of Labor (DOL). The audit of DOL’s principal 

financial statements for FY 2005 and 2004 was performed by R. Navarro & Associates, Inc., Certified Public 

Accountants. The auditors’ report accompanies the principal statements.

The Department’s principal financial statements for fiscal years (FY) 2005 and 2004 consisted of the

following: 

• The Consolidated Balance Sheets, which present as of September 30, 2005 and 2004 those resources 

owned or managed by DOL which are available to provide future economic benefits (assets); amounts 

owed by DOL that will require payments from those resources or future resources (liabilities) and 

residual amounts retained by DOL, comprising the difference (net position). 

• The Consolidated Statements of Net Cost, which present the net cost of DOL operations for the years

ended September 30, 2005 and 2004. DOL’s net cost of operations includes the gross costs incurred by 

DOL less any exchange revenue earned from DOL activities. Due to the complexity of DOL’s

operations, the classification of gross cost and exchange revenues by major program and suborganization 

is presented in Note 14 to the consolidated financial statements. 

• The Consolidated Statements of Changes in Net Position, which present the change in DOL’s net 

position resulting from the net cost of DOL operations, budgetary financing sources other than exchange 

revenues and other financing sources for the years ended September 30, 2005 and 2004. 

• The Combined Statements of Budgetary Resources, which present the budgetary resources available 

to DOL during FY 2005 and 2004, the status of these resources at September 30, 2005 and 2004, and the 

outlay of budgetary resources for the years ended September 30, 2005 and 2004. 

• The Consolidated Statements of Financing, which reconcile the net cost of operations with the 

obligation of budgetary resources for the years ended September 30, 2005 and 2004. 

• The Consolidated Statements of Custodial Activity, which present the sources and disposition of nonexchange revenues collected or accrued by DOL on behalf of other recipient entities for the years ended

September 30, 2005 and 2004.

160 United States Department of Labor 
Annual Financial Statements 

The accompanying notes are an integral part of these statements. 

CONSOLIDATED BALANCE SHEETS 

As of September 30, 2005 and 2004 

(Dollars in Thousands) 

2005 2004

ASSETS

Intra-governmental

Funds with U.S. Treasury (Notes 1-C and 2) $ 9,219,660 $ 9,700,757

Investments (Notes 1-D and 3) 54,952,644 45,446,510

Interest receivable from investments 637,443 580,180

Accounts receivable (Notes 1-E and 4) 3,991,270 3,916,674

Advances (Notes 1-F and 5) 10,812 - 

Total intra-governmental 68,811,829 59,644,121

Accounts receivable, net of allowance (Notes 1-E and 4) 1,043,018 1,127,034

Advances (Notes 1-F and 5) 584,139 777,032

Property, plant and equipment, net

 of depreciation (Notes 1-G and 6) 1,0 876,26 23,422 9

Total assets $ 71,4 62,424,45 62,408 $ 6

LIABILITIES AND NET POSITION

Liabilities (Note 1-I)

Intra-governmental

Accounts payable $ 16,429 $ 22,207

Advances from U.S. Treasury (Notes 1-J and 8) 9,186,557 8,740,557

Other liabilities (Note 11) 194,42 206,101 7

Total intra-governmental 9,409,087 8,957,191

Accounts payable 1,111,031 1,008,450

Accrued leave (Note 1-K) 94,852 99,676

Accrued benefits (Notes 1-L and 9) 1,147,658 1,344,009

Future workers' compensation benefits (Notes 1-M and 10) 564,305 528,068

Energy employees occupational illness

 compensation benefits (Note 1-N) 7,436,243 2,793,823

Other liabilities (Note 11) 239,33 263,233 3

Total liabilities 20,0 14,970,55 26,409 0

Net position (Note 1-R)

Unexpended appropriations 8,115,461 8,299,897

Cumulative results of operations 39,154,00 43,320,538 9

Total net position 51,4 47,453,90 35,999 6

Total liabilities and net position $ 71,4 62,424,45 62,408 $ 6

 FY 2005 Performance and Accountability Report 161
Financial Section 

The accompanying notes are an integral part of these statements. 

CONSOLIDATED STATEMENTS OF NET COST 

For the Years Ended September 30, 2005 and 2004 

(Dollars in Thousands) 

2005 2004

NET COST OF OPERATIONS (Notes 1-S and 14)

CROSSCUTTING PROGRAMS

Income maintenance

Gross cost $ 45,380,694 $ 51,437,650

Less earned revenue (3,144,410) (3,274,386)

Net program cost 42,236,284 48,163,264

Employment and training

Gross cost 6,027,121 6,434,017

Less earned revenue ( (17,14 17,737) 0)

Net program cost 6,009,384 6,416,877

Labor, employment and pension standards

Gross cost 724,211 700,428

Less earned revenue ( (11,47 9,860) 5)

Net program cost 714,351 688,953

Worker safety and health

Gross cost 798,110 801,890

Less earned revenue ( (5,2 3,690) 07)

Net program cost 794,420 796,683

OTHER PROGRAMS

Statistics

Gross cost 531,675 538,105

Less earned revenue ( (5,5 6,664) 04)

Net program cost 525,011 532,601

Costs not assigned to programs 95,244 98,721

Less earned revenue not attributed to programs (10,800) (20,64 3)

Net cost not assigned to programs 78,0 84,444 78

Net cost of operations $ 50,363,894 $ 56,676,456

162 United States Department of Labor 
Annual Financial Statements 

The accompanying notes are an integral part of these statements. 

CONSOLIDATED STATEMENTS OF CHANGES IN NET POSITION 

For the Years Ended September 30, 2005 and 2004 

(Dollars in Thousands) 

Cumulative Cumulative

Results of Unexpended Results of Unexpended

Operations Appropriations Operations Appropriations

Beginning balances $ 39,154,009 $ 8,299,897 $ 42,260,590 $ 8,587,666

Budgetary financing

 sources (Note 1-T)

Appropriations received 11,100,600 11,510,488

Appropriations transferred (622,286) (646,727)

Appropriations not available - (326,001) - (153,632)

Appropriations used 10,336,749 (10,336,749) 10,997,898 (10,997,898)

Nonexchange revenue (Note 15)

Employer taxes 40,571,621 37,376,035

Interest 2,593,415 2,525,135

Assessments 145,315 145,564

Reimbursement of

 unemployment benefits 1,857,193 2,411,887

Total nonexchange revenue 45,167,544 42,458,621

Transfers without

 reimbursement (Note 16) 3,000 3,000

Other financing sources (Note 1-U)

Donations 41,760 - 

Imputed financing from costs

 absorbed by others 108,742 110,344

Transfers without

 reimbursement (Note 16) (1,127,372) 12 

Total financing sources 54,530,423 (184,436) 53,569,875 (287,769)

Net cost of operations (50,363,894) (56,676,456) 

Ending balances $ 43,320,538 $ 8,115,461 $ 39,154,009 8,299,897 $ 

2005 2004

 FY 2005 Performance and Accountability Report 163
Financial Section 

The accompanying notes are an integral part of these statements. 

COMBINED STATEMENTS OF BUDGETARY RESOURCES 

For the Years Ended September 30, 2005 and 2004 

(Dollars in Thousands) 

2005 2004

BUDGETARY RESOURCES

Budget authority

Appropriations received $ 57,248,865 $ 58,039,574

Borrowing authority 446,000 497,000

Net transfers (387,115) (516,879)

Unobligated balance

Beginning of period 3,577,791 3,173,996

Net transfers (215) (37,592)

Spending authority from offsetting collections

Earned

Collected 2,545,382 2,645,532

Receivable from Federal sources 57,700 (24,109)

Change in unfilled customer orders

Advance received 10,756 (5,534)

Transfers from trust funds 3,873,716 3,884,725

Total spending authority from offsetting collections 6,487,554 6,500,614

Recoveries of prior year obligations 408,672 463,631

Temporarily not available pursuant to public law (9,296,717) (22,661)

Permanently not available (496,197) (207,353)

Total budgetary resources $ 57,988,638 $ 67,890,330

STATUS OF BUDGETARY RESOURCES

Obligations incurred (Note 17)

Direct $ 51,333,636 $ 61,566,245

Reimbursable 2,782,927 2,746,299

Total obligations incurred 54,116,563 64,312,544

Unobligated balances available

Apportioned 2,093,925 2,344,404

Exempt from apportionment - (5)

Other available 175,310 212,708

Unobligated balances not available 1,602,840 1,020,679

Total status of budgetary resources $ 57,988,638 $ 67,890,330

RELATIONSHIP OF OBLIGATIONS TO OUTLAYS

Obligated balance, net, beginning $ 8,511,826 $ 9,364,834

Obligated balance, net, ending

Accounts receivable (1,473,474) (1,344,626)

Undelivered orders 5,879,080 6,227,548

Accounts payable 3,603,546 3,628,904

Outlays

Disbursements 54,081,511 64,693,879

Collections (6,358,706) (6,492,578)

Total outlays 47,722,805 58,201,301

Offsetting receipts (829,392) (1,549,472)

Net outlays $ 46,893,413 $ 56,651,829

164 United States Department of Labor 
Annual Financial Statements 

The accompanying notes are an integral part of these statements. 

CONSOLIDATED STATEMENTS OF FINANCING 

For the Years Ended September 30, 2005 and 2004 

(Dollars in Thousands) 

2005 2004

RESOURCES USED TO FINANCE ACTIVITIES

Budgetary resources obligated

Obligations incurred $ 54,116,563 $ 64,312,544

Recoveries of prior year obligations (408,672) (463,631)

Less spending authority from offsetting collections (6,4 (6,500,61 87,554) 4)

Obligations, net of offsetting collections and recoveries 47,220,337 57,348,299

Other resources

Imputed financing from costs absorbed by others 108,742 110,344

Transfers, net (1,124,372) 3,012

Exchange revenue not in budget (6,874) (71,873)

Trust fund exchange revenue (7 (823,31 83,657) 5)

Total resources used to finance activities 45,4 56,566,46 14,176 7

RESOURCES USED TO FINANCE ITEMS NOT PART

 OF THE NET COST OF OPERATIONS

Change in budgetary resources obligated for goods, services and

 benefits ordered but not yet received or provided 536,240 583,394

Resources that finance the acquisition of assets (167,252) (102,862)

Allocation transfers to other agencies (198,524) (77,215)

Other resources that do not affect net cost of operations 1,1 (800,76 28,086 0)

Total resources used to finance items not part of the

 net cost of operations 1,2 (397,44 98,550 3)

Total resources used to finance the net cost of operations 46,7 56,169,02 12,726 4

COMPONENTS OF THE NET COST OF OPERATIONS 

 THAT WILL NOT REQUIRE OR GENERATE RESOURCES

 IN THE CURRENT PERIOD

Components requiring or generating resources in future periods

Increase (decrease) in annual leave liability (4,823) 1,763

Increase in employee benefits and

 retirement liabilities 3,556,208 495,628

Other (28,27 26,183 3)

Total 3,5 469,11 77,568 8

Components not requiring or generating resources

Depreciation and amortization 54,645 50,106

Revaluation of assets and liabilities 403,376 678,954

Benefit overpayments (3 (690,74 84,421) 6)

Total 73,600 38,3 14

Total components of the net cost of operations that will not

 require or generate resources in the current period 3,6 507,43 51,168 2

Net cost of operations $ 50,3 56,676,45 63,894 $ 6

 FY 2005 Performance and Accountability Report 165
Financial Section 

The accompanying notes are an integral part of these statements. 

CONSOLIDATED STATEMENTS OF CUSTODIAL ACTIVITY 

For the Years Ended September 30, 2005 and 2004 

(Dollars in Thousands)

2005 2004

SOURCES OF CUSTODIAL REVENUE (Notes 1-V and 18)

Cash collection of fines, penalties, assessments

 and related interest $ 130,885 $ 131,639

Less refunds (214) (2,2 06)

Net cash collections 130,671 129,433

Increase (decrease) in amounts to be collected (1,9 10,951 64)

Total sources of custodial revenue 141,622 127,469

DISPOSITION OF CUSTODIAL REVENUE (Note 1-V)

Net transfers to U.S. Treasury general fund 130,671 129,433

Increase (decrease) in amounts to be transferred (1,9 10,951 64)

Total disposition of custodial revenue 141,622 127,469

Net custodial activity $ - $ - 

166 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

A. Reporting Entity 

The U.S. Department of Labor (DOL), a cabinet level agency of the Executive Branch of the United States 

Government, was established in 1913, to promote the welfare of the wage earners of the United States. 

Today the Department’s mission remains the same: to foster and promote the welfare of the job seekers,

wage earners and retirees of the United States by improving their working conditions, advancing their 

opportunities for profitable employment, protecting their retirement and health care benefits, helping

employers find workers, strengthening free collective bargaining, and tracking changes in employment, 

prices, and other economic measurements. 

DOL is organized into major program agencies, which administer the various statutes and programs for

which the Department is responsible. Through the execution of its congressionally approved budget, DOL

conducts operations in five major Federal program areas, under three major budget functions: education, 

training, employment and social services, health (occupational health and safety), and income security. 

DOL’s major program agencies, and the major programs in which they operate, are shown below. 

1. Major program agencies 

• Employment and Training Administration (ETA) 

• Employment Standards Administration (ESA) 

• Occupational Safety and Health Administration (OSHA) 

• Bureau of Labor Statistics (BLS) 

• Mine Safety and Health Administration (MSHA) 

• Employee Benefits Security Administration (EBSA) 

(Formerly Pension and Welfare Benefits Administration) 

• Veterans’ Employment and Training (VETS) 

• Other Departmental Programs

- Office of the Assistant Secretary for Administration and Management

- Office of the Solicitor

- Office of the Chief Financial Officer

- Office of the Inspector General

- Bureau of International Labor Affairs

- Women’s Bureau 

- Office of Disability Employment Policy

2. Major programs 

• Income maintenance 

• Employment and training

• Labor, employment, and pension standards 

• Worker safety and health

• Statistics

The Pension Benefit Guaranty Corporation (PBGC), a wholly owned Federal government corporation under 

the chairmanship of the Secretary of Labor, has been designated by the Office of Management and Budget 

(OMB) as a separate reporting entity for financial statement purposes and has been excluded from the DOL

reporting entity.

FY 2005 Performance and Accountability Report 167
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

A. Reporting Entity - Continued 

3. Fund accounting structure 

DOL’s financial activities are accounted for by Federal account symbol, utilizing individual funds

and fund accounts within distinct fund types, as discussed below. 

• Trust funds

The Unemployment Trust Fund was established under the authority of Section 904 of the Social 

Security Act of 1935, as amended, to receive, hold, invest, and disburse monies collected under the 

Federal Unemployment Tax Act, as well as state unemployment taxes collected by the states and 

transferred to the Fund, and unemployment taxes collected by the Railroad Retirement Board and 

transferred to the Fund. 

The Longshore and Harbor Workers’ Compensation Act Trust Fund, established under the authority

of the Longshore and Harbor Workers’ Compensation Act, provides medical benefits, compensation

for lost wages, and rehabilitation services for job related injuries and diseases or death to private 

sector workers in certain maritime and related employment. 

The District of Columbia Workmens’ Compensation Act Trust Fund, established under the authority 

District of Columbia Workmens’ Compensation Act provides compensation and medical payments to

District of Columbia employees for work related injuries or death which occurred prior to July 26, 

1982. 

The Black Lung Disability Trust Fund, established under the Black Lung Benefit Act, provides 

compensation and medical benefits to coal miners who suffer disability due to pneumoconiosis, and 

compensation benefits to their dependent survivors. 

Gifts and Bequests uses miscellaneous funds received by gift or bequest to support various activities 

of the Secretary of Labor. 

• General funds

Salaries and Expenses include appropriated funds which are used to carry out the missions and 

functions of the Department, except where specifically provided for from other Departmental funds. 

Training and Employment Services provides for a flexible, decentralized system of Federal and local

programs of training and other services for the economically disadvantaged designed to lead to

permanent gains in employment, through grants to states and Federal programs such as Job Corps, 

authorized by the Workforce Investment Act and the Job Training Partnership Act. 

Welfare to Work Jobs provides funding for the activities of the Welfare-to-Work Grants program 

established by the Balanced Budget Act of 1997. The program provides formula grants to States and

Federally administered competitive grants to other eligible entities to assist welfare recipients in 

securing lasting unsubsidized employment. 

168 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

A. Reporting Entity - Continued 

3. Fund accounting structure - continued 

• General funds - continued

State Unemployment Insurance and Employment Service Operations includes grants to states for

administering the Unemployment Compensation and Employment Service programs. 

Unemployment Compensation provides administrative grants to state agencies which pay

unemployment benefits to eligible workers and collect state unemployment taxes from employers. 

The Employment Service is a nationwide system providing no-fee employment services to 

individuals seeking employment and to employers seeking workers. Employment Service activities 

are financed by allotments to states distributed under a demographically based funding formula 

established under the Wagner-Peyser Act, as amended. 

Payments to the Unemployment Trust Fund was initiated as a result of amendments to the

Emergency Unemployment Compensation (EUC) law, which provided general fund financing to the 

Unemployment Trust Fund to pay emergency unemployment benefits and associated administrative 

costs. 

Advances to the Unemployment Trust Fund and Other Funds provides advances to other accounts 

within the Unemployment Trust Fund to pay unemployment compensation whenever the balances in

these accounts prove insufficient or whenever reimbursements to certain accounts, as allowed by 

law, are to be made. This account also provides repayable advances to the Black Lung Disability 

Trust Fund, to make disability payments whenever the fund balance proves insufficient. 

Federal Unemployment Benefits and Allowances provides for payment of benefits, training, job 

search, and relocation allowances as authorized by the Trade Act of 1974. 

Community Service Employment for Older Americans provides part time work experience in 

community service activities to unemployed, low income persons aged 55 and over. 

The Federal Employees’ Compensation Act Special Benefit Fund provides wage replacement 

benefits and payment for medical services to covered Federal civilian employees injured on the job, 

employees who have incurred a work related occupational disease and beneficiaries of employees

whose death is attributable to a job related injury. The Fund also provides for rehabilitation of

injured employees to facilitate their return to work. 

The Energy Employees Occupational Illness Compensation Fund was established to adjudicate,

administer, and pay claims for benefits under the Energy Employees Occupational Illness 

Compensation Program Act of 2000. The Act authorizes lump sum payments and the reimbursement

of medical expenses to employees of the Department of Energy (DOE) or of private companies 

under contract with DOE, who suffer from specified diseases as a result of their work in the nuclear

weapons industry. The Act also authorizes compensation to the survivors of these employees under

certain circumstances. The Act was amended by the Ronald Reagan National Defense Authorization 

Act of 2005 to provide coverage to additional claimants. 

 

FY 2005 Performance and Accountability Report 169
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

A. Reporting Entity - Continued 

3. Fund accounting structure - continued 

• General funds - continued

Special Benefits for Disabled Coal Miners was established under the Federal Mine Safety and Health

Act to pay benefits to coal miners disabled from pneumoconiosis and to their widows and certain

other dependents. Part B of the Act assigned processing of claims filed from the origination of the

program until June 30, 1973 to the Social Security Administration. Part B claims processing and 

payment operations were transferred to the Department of Labor effective October 1, 2003. 

• Revolving funds

The Working Capital Fund maintains and operates a program of centralized services in the national 

office and the field. The Fund is paid in advance by the agencies, bureaus, and offices for which 

centralized services are provided, at rates which return the full cost of operations. 

• Special funds

The Panama Canal Commission Compensation Fund was established to pay workers compensation 

obligations of the Panama Canal Commission under the Federal Employees’ Compensation Act from

funding provided by the Commission. 

H-1b Funded provides demonstration grants to regional and local entities to provide technical skills 

training to unemployed and incumbent workers. The fund is supported by fees paid by employers

applying for foreign workers under the H-1b temporary alien labor certification program authorized

by the American Competitiveness and Workforce Improvement Act of 1998. 

• Deposit funds

Deposit funds account for monies held temporarily by DOL until ownership is determined, or monies 

held by DOL as an agent for others. 

• Miscellaneous receipt and clearing accounts

Miscellaneous receipt accounts hold non-entity receipts and accounts receivable from DOL activities 

which by law, cannot be deposited into funds under DOL control. The U.S. Department of the 

Treasury automatically transfers all cash balances in these receipt accounts to the general fund of the

Treasury at the end of each fiscal year. 

Clearing accounts hold monies which belong to DOL, but for which a specific receipt account has 

not been determined. 

170 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

A. Reporting Entity - Continued 

4. Inter-departmental relationships 

DOL and the Department of the Treasury (Treasury) are jointly responsible for the operations of the 

Unemployment Trust Fund and the Black Lung Disability Trust Fund. DOL is responsible for the 

administrative oversight and policy direction of the programs financed by these trust funds. Treasury

acts as custodian over monies deposited into the funds and also invests amounts in excess of

disbursing requirements in Treasury securities on behalf of DOL. DOL consolidates the financial 

results of the Unemployment Trust Fund and the Black Lung Disability Trust Fund into these 

financial statements. 

B. Basis of Accounting and Presentation 

These consolidated financial statements present the financial position, net cost of operations, changes in net

position, budgetary resources, financing, and custodial activities of the U.S. Department of Labor, in 

accordance with accounting principles generally accepted in the United States of America and the form and

content requirements of OMB Circular A-136. They have been prepared from the books and records of 

DOL, and include the accounts of all funds under the control of the DOL reporting entity. All interfund 

balances and transactions have been eliminated, except in the Statement of Budgetary Resources. OMB 

Circular A-136 requires that the Statement of Budgetary Resources be presented on a combined basis. 

OMB Circular A-136 requires budget authority and other resources allocated to another agency to be 

reported by the transferor of the appropriation in its financial statements unless the allocation transfer is

material to the recipient’s financial statements. The activity relating to the allocation should be reported in

all of the recipient’s financial statements, except the Statement of Budgetary Resources, when the allocation 

transfer is material to the recipient’s financial statements. The transferor should continue to report the 

appropriation and the related budgetary activity in its Statement of Budgetary Resources. 

 

DOL has allocated appropriations to the Department of Agriculture and the Department of Interior in fiscal 

years 2005 and 2004. These Departments consider this activity material to their respective financial

statements, and therefore, DOL reports this activity only in the Combined Statement of Budgetary resources.

Appropriations have been allocated to DOL from the Environmental Protection Agency, the General Service 

Administration, and the Agency for International Development, which DOL considers to be immaterial. 

These amounts are not included in the DOL financial statements. 

Accounting principles generally accepted in the United States of America encompass both accrual and 

budgetary transactions. Under accrual accounting, revenues are recognized when earned, and expenses are 

recognized when a liability is incurred. Budgetary accounting facilitates compliance with legal constraints

on, and controls over, the use of federal funds. These consolidated financial statements are different from the 

financial reports, also prepared by DOL pursuant to OMB directives, used to monitor DOL’s use of 

budgetary resources. 

FY 2005 Performance and Accountability Report 171
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

C. Funds with U.S. Treasury 

DOL’s cash receipts and disbursements are processed by the U.S. Treasury. Funds with U.S. Treasury

represent obligated and unobligated balances available to finance allowable expenditures and restricted 

balances, including amounts related to expired authority and amounts not available for use by DOL. (See 

Note 2) 

D. Investments 

DOL trust fund balances not required to meet current expenditures are invested by Treasury in interest

bearing securities of the U.S. government. Balances held in the Unemployment Trust Fund are invested in 

non-marketable, special issue Treasury securities, available for purchase exclusively by Federal government 

agencies and trust funds. Special issues are purchased and redeemed at face value (cost), which is equivalent 

to their net carrying value on the Consolidated Balance Sheet. Interest rates and maturity dates vary. 

Balances held in the Longshore and Harbor Workers’ Trust Fund and the District of Columbia Trust Fund, as 

well as balances held in the Panama Canal Commission Compensation Fund, the Energy Employees 

Occupational Illness Compensation Fund and the Backwage Restitution Fund are invested in marketable 

Treasury securities. These investments are stated at amortized cost, which is equivalent to their net carrying 

value on the Consolidated Balance Sheet. Discounts and premiums are amortized using the effective interest 

method. Interest rates and maturity dates vary. 

Management expects to hold these marketable securities until maturity; therefore, no provision is made in the 

financial statements for unrealized gains or losses. (See Note 3) 

E. Accounts Receivable, Net of Allowance 

Accounts receivable consists of intra-governmental amounts due to DOL, as well as amounts due from the 

public. 

1. Intra-governmental accounts receivable 

The Federal Employees Compensation (FEC) account within the Unemployment Trust Fund

provides unemployment insurance to eligible Federal workers (UCFE) and ex-service members

(UCX). DOL recognizes as accounts receivable amounts due from other Federal agencies for

unreimbursed UCFE and UCX benefits. 

DOL’s Federal Employees’ Compensation Act Special Benefit Fund provides workers’ compensation

(FECA) benefits to eligible Federal workers on behalf of other Federal agencies. DOL recognizes as 

accounts receivable amounts due from other Federal agencies to the Special Benefit Fund for

unreimbursed FECA benefits. 

DOL also has receivables from other Federal agencies for work performed on their behalf under

various reimbursable agreements. 

172 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

E. Accounts Receivable, Net of Allowance - Continued 

2. Accounts receivable due from the public 

DOL recognizes as accounts receivable State unemployment taxes due from covered employers.

Also recognized as accounts receivable are benefit overpayments made by DOL to individuals not

entitled to receive the benefit. 

DOL recognizes as accounts receivable amounts due from the public for fines and penalties levied 

against employers by OSHA, MSHA, ESA, and EBSA; for amounts due for backwages assessed

against employers by ESA; and for amounts due from grantees and contractors for grant and contract

costs disallowed by ETA. 

3. Allowance for doubtful accounts 

Accounts receivable are stated net of an allowance for uncollectible accounts. The allowance is

estimated based on an aging of account balances, past collection experience, and an analysis of 

outstanding accounts at year-end. (See Note 4) 

F. Advances 

DOL advances consist primarily of payments made to State employment security agencies (SESAs), and to 

grantees and contractors to provide for future DOL program expenditures. These advance payments are

recorded by DOL as an asset, which is reduced when actual expenditures or the accrual of unreported 

expenditures are recorded by DOL. (See Note 5) 

G. Property, Plant and Equipment, Net of Depreciation 

The majority of DOL’s property, plant and equipment (PP&E) is general purpose PP&E held by Job Corps

centers owned and operated by DOL through a network of contractors. DOL maintains the Capital Asset

Tracking and Reporting System (CATARS) to account for Job Corp’s PP&E, as well as other general purpose 

PP&E used by the Department. Internal use software is considered general purpose PP&E. 

Real property purchases or improvements and leasehold improvements with a cost greater than $500,000 and 

a useful life of 2 or more years, internal use software with a cost greater than $300,000 and a useful life of 2 

or more years, and equipment with a cost of $50,000 or more and a useful life of 2 or more years are 

capitalized. PP&E acquisitions not meeting these criteria are charged to expense at the time of purchase. In

2001, PP&E (excluding internal use software) with a cost greater than $25,000 ($5,000 for the Working

Capital Fund) and a useful life of 2 or more years and internal use software with a cost greater than $300,000

and a useful life of 2 or more years were capitalized. Prior to 2001, internally developed software in the 

Working Capital Fund with a cost greater than $5,000 was capitalized, when the cost was intended to be

recovered through charges to other DOL users. Prior to 1996, PP&E with a cost greater than $5,000 and a 

useful life of 2 or more years were capitalized. PP&E acquisitions not meeting these criteria were charged to 

expense at the time of purchase. 

FY 2005 Performance and Accountability Report 173
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

G. Property, Plant and Equipment, Net of Depreciation - Continued 

Property, plant and equipment purchases and additions are stated at cost. Normal repairs and maintenance 

are charged to expense as incurred. Plant and equipment are depreciated over their estimated useful lives

using the straight-line method of depreciation. 

Job Corps center construction costs are capitalized as construction-in-progress until completed. Upon 

completion they are reclassified as structures or facilities and depreciated over their estimated useful life.

Leasehold improvements made at Job Corps centers and DOL facilities leased from the General Services 

Administration are recorded at cost and amortized over their useful lives, using the straight-line method of 

amortization. (DOL has no operating leases which extend for a period of more than one year.) 

Internal use software development costs are capitalized as software development in progress until the 

development stage has been completed and successfully tested. Upon completion and testing, software 

development-in-progress costs are reclassified as internal use software and amortized over their estimated 

useful life. 

The table below shows the major classes of DOL’s depreciable plant and equipment, and the depreciation

periods used for each major classification. (See Note 6) 

 Years 

Structures, facilities and improvements 20 - 50 

Furniture and equipment 2 - 36

ADP software 2 - 15 

DOL grantees have acquired real and tangible property with Federal grant funds in which DOL has a

reversionary interest when the property is disposed of or no longer used for its authorized purpose. DOL is 

entitled to a pro rata share of the proceeds from sale of the property or a pro rata share of the property’s fair 

market value, if the property is retained by the grantee but no longer used for DOL purposes. 

The value of DOL’s reversionary interest in real and tangible property acquired with Federal grant funds can 

not be determined until the grantee’s intention to sell or convert the property is known. 

H. Non-entity Assets 

Assets held by DOL which are not available to DOL for obligation are considered non-entity assets. DOL

holds non-entity assets for the Railroad Retirement Board and for transfer to the U.S. Treasury. (See Note 7)

174 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

I. Liabilities 

Liabilities represent probable amounts to be paid by DOL as a result of past transactions, and are recognized

when incurred, regardless of whether there are budgetary resources available to pay them. However, the 

liquidation of these liabilities will consume budgetary resources and cannot be made until available resources 

have been obligated. For financial reporting purposes, DOL’s liabilities are classified as covered or not 

covered by budgetary resources. Liabilities are classified as covered by budgetary resources if budgetary

resources are available for consumption, regardless of whether the available resources have been obligated.

Liabilities are classified as not covered by budgetary resources if budgetary resources are not available for 

consumption. These classifications differ from budgetary reporting, which categorizes liabilities as 

obligated, consuming budgetary resources, or unobligated, not consuming budgetary resources. Unobligated 

liabilities include those covered liabilities for which available budgetary resources have not been obligated,

as well as liabilities not covered for which budgetary resources are not available. (See Notes 11 and 12) 

J. Advances from U.S. Treasury 

The Benefits Revenue Act provides for repayable advances to DOL’s Black Lung Disability Trust Fund, in 

the event fund resources are not adequate to meet fund obligations. Spending authority is derived from the

Black Lung Disability Trust Fund’s indefinite authority to borrow. Repayable advances are provided through 

transfers from the Advances to the Unemployment Trust Fund and Other Funds appropriation, to the extent

of borrowings under the authority. Advances are repayable with interest at a rate determined by the Secretary 

of the Treasury to be equal to the current average market yield on outstanding marketable obligations of the 

United States with remaining periods to maturity comparable to the anticipated period during which the 

advance will be outstanding. Advances made prior to 1982 carried rates of interest equal to the average rate 

borne by all marketable interest-bearing obligations of the United States then forming a part of the public

debt. Outstanding advances bear interest rates ranging from 5.250% to 13.875% at September 30, 2005 and 

2004. Amounts in the trust fund shall be available, as provided by appropriation acts, for the payment of

interest on, and the repayment of these repayable advances. Interest and principal are paid to the general

fund of the Treasury when the Secretary of the Treasury determines that funds are available in the trust fund 

for such purposes. (See Note 8) 

K. Accrued Leave 

A liability for annual and compensatory leave is accrued as leave is earned and paid when leave is taken. 

The balance of leave earned but not taken will be paid from future funding sources. Sick leave and other

types of non-vested leave are expensed as taken. 

FY 2005 Performance and Accountability Report 175
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

L. Accrued Benefits 

The financial statements include a liability for unemployment, workers’ compensation and disability benefits 

payable from various DOL funds, as discussed below. (See Note 9) 

1. Unemployment benefits payable 

The Unemployment Trust Fund provides benefits to unemployed workers who meet State and

Federal eligibility requirements. Regular and extended unemployment benefits are paid from State 

accounts within the Unemployment Trust Fund, financed primarily by a State unemployment tax on 

employer payrolls. Fifty percent of the cost of extended unemployment benefits is paid from the 

Extended Unemployment Compensation Account (EUCA) within the Unemployment Trust Fund, 

financed by a Federal unemployment tax on employer payrolls. Temporary extended unemployment 

benefits, which began in 2002, are paid from the EUCA and are financed by Federal unemployment 

tax and general fund appropriations. New claims for this program ended in January 2004.

Unemployment benefits to unemployed Federal workers are paid from the Federal Employment

Compensation Account within the Unemployment Trust Fund. These benefit costs are reimbursed

by the responsible Federal agency. A liability is recognized for unpaid unemployment benefits 

applicable to the current period and for benefits paid by states that have not been reimbursed by the

fund. DOL also recognizes a liability for Federal employees’ unemployment benefits to the extent of

unpaid benefits for existing claims filed during the current period, payable in the subsequent period. 

2. Federal employees disability and 10(h) benefits payable 

The Federal Employees’ Compensation Act Special Benefit Fund provides income and medical cost

protection to covered Federal civilian employees injured on the job, employees who have incurred a 

work-related occupational disease and beneficiaries of employees whose death is attributable to a 

job-related injury or occupational disease. The fund is reimbursed by other Federal agencies for the 

FECA benefit payments made on behalf of their workers. The fund assumes the liability for 

unreimbursed (non-chargeable) FECA benefits. The fund also provides 50% of the annual cost-ofliving adjustments for pre-1972 compensation cases under the authority of Section 10(h) of the 

Longshore and Harbor Workers’ Compensation Act and the District of Columbia Workmen’s 

Compensation Act. 

A liability for FECA benefits payable by the Special Benefit Fund to the employees of other Federal

agencies and for 10(h) benefits is accrued to the extent of unpaid benefits applicable to the current 

period. 

3. Black lung disability benefits payable 

The Black Lung Disability Trust Fund and Special Benefits for Disabled Coal Miners provide

compensation and medical benefits for eligible coal miners who are disabled due to pneumoconiosis 

(black lung disease). DOL recognizes a liability for disability benefits to the extent of unpaid 

benefits applicable to the current period.

176 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

L. Accrued Benefits – Continued 

4. Energy employees occupational illness compensation benefits payable 

The Energy Employees Occupational Illness Compensation Fund provides benefits to eligible 

current or former employees of the Department of Energy (DOE) and its contractors suffering from

designated illnesses incurred as a result of their work with DOE. Benefits are also paid to certain

survivors of those employees and contractors, as well as to certain beneficiaries of the Radiation 

Exposure Compensation Act. DOL recognizes a liability for disability benefits to the extent of

unpaid benefits applicable to the current period.

5. Longshore and harbor workers’ and District of Columbia disability benefits payable

The Longshore and Harbor Workers’ Compensation Trust Fund and the District of Columbia 

Workmens’ Compensation Trust Fund provide compensation and medical benefits for work related 

injuries to workers in certain maritime employment and to employees of the District of Columbia, 

respectively. DOL recognizes a liability for disability benefits payable by these funds to the extent of 

unpaid benefits applicable to the current period. 

M. Future Workers’ Compensation Benefits 

The financial statements include a liability for future workers’ compensation benefits payable by DOL to its

employees, to employees of the Panama Canal Commission and to enrollees of the Job Corps, as well as

benefits not chargeable to other Federal agencies, which must be paid by DOL’s Federal Employees’

Compensation Act Special Benefit Fund. The liability includes the expected payments for death, disability,

medical, and miscellaneous costs for approved compensation cases, as well as a component for incurred but

not reported claims. The liability is determined using historical benefit payment patterns related to a specific 

incurred period to predict the ultimate payments related to that period. 

The methodology provides for the effects of inflation and adjusts historical payments to current year constant 

dollars by applying wage inflation factors (cost of living adjustments or COLAs) and medical inflation 

factors (consumer price index medical or CPIMs) to the calculation of projected benefits. The compensation 

COLAs and CPIMs used in the projections for 2005 and 2004 were as follows: 

 2005 2004 2005 2004

 FY COLA COLA CPIMCPIM

2005 2.20% 2.03% 4.33% 4.14% 

2006 3.33% 2.73% 4.09% 3.96% 

2007 2.93% 2.40% 4.01% 3.98% 

2008 2.40% 2.40% 4.01% 3.99%

2009 2.40% 2.40% 4.01% 4.02% 

2010+ 2.40% 2.40% 4.01% 4.02%

FY 2005 Performance and Accountability Report 177
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

M. Future Workers’ Compensation Benefits – Continued 

Projected annual payments were discounted to present value based on OMB’s interest rate assumptions for

ten year Treasury notes. For 2005, interest rate assumptions were 4.5% in year one and 5.0% in year two and 

thereafter. For 2004, interest rate assumptions were 4.9% in year one and 5.2% in year two and thereafter.

(See Note 10) 

N. Energy Employees Occupational Illness Compensation Benefits 

The Energy Employees Occupational Illness Compensation Fund, established under the authority of the 

Energy Employees Occupational Illness Compensation Program Act of 2000 (EEOICPA), provides benefits 

to eligible current or former employees of the Department of Energy (DOE) and its contractors, or to certain 

survivors of those employees and contractors, as well as benefits to certain beneficiaries of the Radiation 

Exposure Compensation Act. DOL is responsible for adjudicating and administering claims filed under the 

EEOICPA. Effective July 31, 2001, compensation of $150,000 and payment of medical expenses from the 

date a claim is filed are available to covered individuals suffering from designated illnesses incurred as a 

result of their work with DOE. Compensation of $50,000 and payment of medical expenses from the date a 

claim is filed are available to individuals eligible for compensation under of the Radiation Exposure 

Compensation Act. 

The Ronald Reagan National Defense Authorization Act of 2005 amended EEOICPA to include Subtitle E – 

Contractor Employee Compensation. This amendment replaces Part D of the EEOICPA, which provided

assistance from DOE in obtaining state workers’ compensation benefits. The new program grants worker’s

compensation benefits to covered employees and their families for illness and death arising from exposure to 

toxic substances at a DOE facility. The amendment also makes it possible for uranium workers as defined 

under Section 5 of the Radiation Exposure Compensation Act (RECA) to receive compensation under Part E

for illnesses due to toxic substance exposure at a uranium mine or mill covered under that Act. These claims 

were formerly administered and paid by the Department of Justice (DOJ). 

DOL has recognized a $7.4 billion and $2.8 billion liability for estimated future benefits payable by DOL at 

September 30, 2005 and 2004, respectively, to eligible individuals under the EEOICPA. For fiscal year

2005, the undiscounted liability is $10.7 billion discounted to a present value liability of $7.4 billion based

on an interest rate of 5.02% projected over a forty-eight year period. For fiscal year 2004, the undiscounted

liability is $4.4 billion discounted to a present value liability of $2.8 billion based on an interest rate 5.24% 

projected over a forty-eight year period. The amendments to the EEOICPA to include Subtitle E as 

described above accounted for approximately $4.5 billion of the increase in the liability. The estimated 

liability includes the expected lump sum and estimated medical payments for approved compensation cases 

and cases filed pending approval, as well as claims incurred but not yet filed. The actuarial projection 

methodology provided an estimate of the ultimate number of reported cases as a result of estimating future 

claims from the historical patterns of reported claims and subsequent claim approval rates. Medical

payments were derived by estimating an average benefit award per living employee claimant. 

178 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

O. Employee Health and Life Insurance Benefits 

DOL employees are eligible to participate in the contributory Federal Employees Health Benefit Program

(FEHBP) and the Federal Employees Group Life Insurance Program (FEGLIP). DOL matches the employee 

contributions to each program to pay for current benefits. During 2005, DOL’s contributions to the FEHBP

and FEGLIP were $73.9 and $1.9 million, respectively. During 2004, DOL’s contributions to the FEHBP and 

FEGLIP were $70.4 and $1.9 million, respectively. These contributions are recognized as current operating 

expenses. 

P. Other Retirement Benefits 

DOL employees eligible to participate in the FEHBP and the FEGLIP may continue to participate in these 

programs after their retirement. DOL recognizes a current operating expense for the future cost of these 

other retirement benefits (ORB) at the time the employee’s services are rendered. This ORB expense must 

be financed by OPM, and is offset by DOL through recognition of an imputed financing source. Using cost 

factors supplied by OPM, DOL recorded ORB expense and imputed financing sources of $64.8 million in 

2005 and $60.8 million in 2004.

Q. Employee Pension Benefits 

DOL employees participate in either the Civil Service Retirement System (CSRS) or the Federal Employees’

Retirement System (FERS). For employees participating in CSRS, 7.0% of their gross earnings is withheld 

and transferred to the Civil Service Retirement and Disability Fund. DOL contributes an additional 7.0% of

the employee gross earnings to the CSRS Retirement and Disability Fund. For employees participating in 

FERS, DOL withholds 0.8% of gross earnings, and matches the withholding with a 10.7% employer 

contribution. This total is transferred to the Federal Employees’ Retirement Fund. The CSRS and FERS

retirement funds are administered by the OPM. DOL contributions to the CSRS and FERS are recognized as 

current operating expenses. FERS participants are also covered under the Federal Insurance Contribution

Act (FICA) and are subject to FICA withholdings. DOL makes matching contributions to FICA, recognized 

as operating expenses. DOL’s matching FICA contributions were $61.0 million in 2005 and $58.7 million in 

2004. 

The Thrift Savings Plan (TSP) is a defined contribution retirement savings and investment plan for 

employees covered by either CSRS or FERS. CSRS participants may contribute up to 10% of their gross

pay to the TSP, but there is no departmental matching contribution. FERS participants may contribute up to 

15% of their gross pay to the TSP. For employees covered under FERS, DOL contributes 1% of the 

employees’ gross pay to the TSP. DOL also matches 100% of the next 4% contributed. DOL contributions 

to the TSP are recognized as current operating expenses. The maximum amount that either FERS or CSRS

employees may contribute to the TSP in a calendar year is $14,000. Employee and employer contributions to 

the TSP are transferred to the Federal Retirement Thrift Investment Board. 

DOL recognizes the full cost of providing future CSRS and FERS pension benefits to covered employees at 

the time the employees’ services are rendered. The pension expense recognized in the financial statements 

equals the service cost for covered DOL employees, less amounts contributed by these employees. Service 

cost represents the actuarial present value of benefits attributed to services rendered by covered employees

during the accounting period. 

FY 2005 Performance and Accountability Report 179
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

Q. Employee Pension Benefits - Continued 

The measurement of service cost requires the use of actuarial cost methods to determine the percentage of the 

employees’ basic compensation sufficient to fund their projected pension benefit. These percentages (cost

factors) are provided by OPM, and applied by DOL to the basic annual compensation of covered employees 

to arrive at the amount of total pension expense to be recognized in DOL’s financial statements. 

The excess of total pension expense over the amount contributed by the Department and by DOL’s

employees represents the amount of pension expense which must be financed directly by OPM. DOL

recognized as non-exchange revenue an imputed financing source equal to the excess amount. DOL does not

recognize in its financial statements FERS or CSRS assets, accumulated plan benefits or unfunded liabilities,

if any, applicable to its employees. (See Note 13) 

R. Net Position 

DOL’s net position consists of the following: 

1. Unexpended appropriations 

Unexpended appropriations include the unobligated balances and undelivered orders of DOL’s

appropriated funds. Unobligated balances associated with appropriations that expire at the end of the 

fiscal year remain available for obligation adjustments, but not new obligations, until that 

appropriation is closed, five years after the appropriations expire. Multi-year appropriations remain

available to DOL for obligation in future periods. 

2. Cumulative results of operations 

Cumulative results of operations includes the accumulated historical difference between expenses 

consuming budgetary resources and financing sources providing budgetary resources in DOL’s trust, 

revolving and special funds; liabilities not consuming budgetary resources net of assets not providing

budgetary resources; and DOL’s net investment in capitalized assets. 

S. Net Cost of Operations 

1. Operating costs 

Full operating costs are comprised of all direct costs consumed by the program and those indirect

costs which can be reasonably assigned or allocated to the program. Full costs are reduced by 

exchange (earned) revenues to arrive at the program’s net operating cost. The full and net operating 

costs of DOL’s major programs are presented in the Consolidated Statements of Net Cost, and are

also reported by suborganization in Note 14 to the financial statements. 

180 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

S. Net Cost of Operations - Continued 

2. Earned revenue 

Earned revenues arise from exchange transactions which occur through the provision of goods and

services for a price, and are deducted from the full cost of DOL’s major programs to arrive at net 

program cost. Earned revenues are recognized by DOL to the extent reimbursements are payable

from other Federal agencies and from the public, as a result of costs incurred or services performed

on their behalf. Major sources of DOL’s earned revenue include reimbursements due to the Federal

Employees’ Compensation Act Special Benefit Fund from Federal agencies for the costs of disability 

compensation and medical care provided to or accrued on behalf of their employees, and 

reimbursements due to the Unemployment Trust Fund from Federal agencies for the cost of 

unemployment benefits provided to or accrued on behalf of their employees. 

T. Budgetary Financing Sources 

Budgetary financing sources other than earned revenues provide funding for the Department’s net cost of

operations and are reported on the Consolidated Statement of Changes in Net Position. These financing 

sources include appropriations received, less appropriations transferred and not available, non-exchange 

revenue, and transfers without reimbursement, as discussed below:

1. Appropriations received, appropriations transferred and appropriations not available 

DOL receives financing sources through congressional appropriations to support its operations. A

financing source is recognized for these appropriated funds received, less appropriations transferred

or not available through rescission or cancellation. 

2. Non-exchange revenue 

Non-exchange revenues arise from the Federal government’s power to demand payments from and 

receive donations from the public. Non-exchange revenues are recognized by DOL on the

Consolidated Statement of Changes in Net Position for the transfer of employer and excise taxes

from the entities collecting these taxes and for interest from investments, as discussed below: (See 

Note 15) 

• Employer taxes

Employer tax revenues are recognized on a modified cash basis, to the extent of cash transferred by 

the collecting entity to DOL, plus the change in inter-entity balances between the collecting entity

and DOL. Inter-entity balances represent revenue received by the collecting entity, net amounts due

to the collecting entity and adjustments made to previous transactions by the collecting entity which 

have not been transferred to the receiving entity. 

FY 2005 Performance and Accountability Report 181
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

T. Budgetary Financing Sources - Continued 

2. Non-exchange revenue - continued 

• Employer taxes - continued

Federal and state unemployment taxes represent non-exchange revenues collected from employers

based on wages paid to employees in covered employment. Federal unemployment taxes are

collected by the Internal Revenue Service and transferred to designated accounts within the 

Unemployment Trust Fund. State unemployment taxes are collected by each State and deposited in 

separate State accounts within the Unemployment Trust Fund. Federal unemployment taxes are used

to pay the Federal share of extended unemployment benefits and to provide for Federal and State 

administrative expenses related to the operation of the unemployment insurance program. State

unemployment taxes are restricted in their use to the payment of unemployment benefits. 

• Interest

The Unemployment Trust Fund, Longshore and Harbor Workers’ Trust Fund, District of Columbia 

Trust Fund, the Panama Canal Commission Compensation Fund and the Energy Employees 

Occupational Illness Compensation Fund receive interest on fund investments. The Unemployment

Trust Fund receives interest from states that had accounts with loans payable to the Federal

unemployment account at the end of the prior fiscal year. Interest is also earned on Federal funds in 

the possession of non-Federal entities. Interest is recognized as non-exchange revenue when earned. 

• Assessments

The Longshore and Harbor Workers’ Trust Fund and District of Columbia Trust Fund receive nonexchange revenues from assessments levied on insurance companies and self-insured employers. 

Assessments are recognized as non-exchange revenues when due. 

• Reimbursement of unemployment benefits

The Unemployment Trust Fund receives reimbursements from state and local government entities

and non-profit organizations for the cost of unemployment benefits provided to their employees. 

These reimbursements are recognized as other non-exchange revenue when due. 

3. Transfers without reimbursement 

Other transfers recognized as financing sources by DOL include the transfer from various DOL

general fund unexpended appropriation accounts to the Working Capital Fund’s cumulative results of

operations. (See Note 16) 

182 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

U. Other Financing Sources 

Other financing sources include nonexchange revenue and other items that do not represent budgetary resources. 

1. Imputed financing 

A financing source is imputed by DOL to provide for pension and other retirement benefit expenses 

recognized by DOL but financed by OPM. (See Notes 1-P and Q)

2. Transfers without reimbursement 

Other transfers recognized as financing sources by DOL include the transfers of property from the General

Services Administration to the Employment and Training Administration (ETA) to be used in training

programs. 

Transfers without reimbursement also include the transfers of liabilities from the Department of Energy and

the Department of Justice to the Energy Employees Occupational Illness Compensation Fund. The liabilities 

were for programs established by the EEIOCPA and RECA. These programs were transferred to DOL by 

amendments to the EEIOCPA enacted in FY 2005, which expanded coverage for illness or death arising 

from exposure to toxic substances at the DOE facilities. (See Note 16) 

V. Custodial Activity 

DOL collects and transfers to the general fund of the U.S. Treasury custodial non-exchange revenues for penalties 

levied against employers by OSHA, MSHA, ESA, and EBSA for regulatory violations, for ETA disallowed grant 

costs assessed against canceled appropriations and for FECA administrative costs assessed against government

corporations in excess of amounts reserved to finance capital improvements in the Federal Employees’ 

Compensation Act Special Benefit Fund. These collections are not available to the agencies for obligation or

expenditure. Penalties and other assessments are recognized as custodial revenues when collected or subject to

collection. The source and disposition of these revenues are reported on the Consolidated Statements of Custodial 

Activity. (See Note 18) 

W. Use of Estimates 

The preparation of financial statements requires management to make certain estimates and assumptions that affect 

the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting 

period. Actual results could differ from those estimates. 

X. Reclassifications 

Certain reclassifications have been made to 2004 financial statements to conform to the 2005 presentation.

FY 2005 Performance and Accountability Report 183
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 2 - FUNDS WITH U.S. TREASURY

Funds with U.S. Treasury at September 30, 2005 consisted of the following: 

Unobligated Unobligated Obligated

Balance Balance Balance Not Total Non-entity

(Dollars in thousands) Available Unavailable Yet Disbursed Entity Assets Assets Total

Revolving funds $ 3,900 $ - $ 27,682 $ 31,582 $ - $ 31,582

Trust funds 107,154 16,921 (338,941) (214,866) (707) (215,573)

Appropriated funds 2,290,830 1,187,214 5,865,841 9,343,885 - 9,343,885

Other - - - - 59, 59 766 ,766

$ 1 2,401,884 $ ,204,135 $ 5,554,582 $ 9,160,601 $ 9, 59,059 $ 219,660

Entity Assets

Funds with U.S. Treasury at September 30, 2004 consisted of the following: 

Unobligated Unobligated Obligated

Balance Balance Balance Not Total Non-entity

(Dollars in thousands) Available Unavailable Yet Disbursed Entity Assets Assets Total

Revolving funds $ 3,900 $ - $ 24,280 $ 28,180 $ - $ 28,180

Trust funds 149,034 53 52,908 201,995 2 201,997

Appropriated funds 2,566,402 655,579 6,179,624 9,401,605 - 9,401,605

Other - - - - 68, 68 975 ,975

$ 6 2,719,336 $ 55,632 $ 6,256,812 $ 9,631,780 $ 9, 68,977 $ 700,757

Entity Assets

184 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 3 - INVESTMENTS 

Investments at September 30, 2005 consisted of the following: 

Face Premium Net Market

(Dollars in thousands) Value (Discount) Value Value

Unemployment Trust Fund

Non-marketable

U.S. Treasury Certificates of Indebtedness

4.625% maturing June 30, 2006 $ 2,285,274 $ - $ 2,285,274 $ 2,285,274

Special issue U.S. Treasury Bonds

4.625% maturing June 30, 2007 26,000,000 - 26,000,000 26,000,000

4.625% maturing June 30, 2008 19,299,158 - 19,299,158 19,299,158

5.500% maturing June 30, 2006 7,221,451 - 7, 7,221,451 221,451

 54,805,883 - 54 54,805,883 ,805,883

Panama Canal Commission

 Compensation Fund

Marketable

U.S. Treasury Notes

3.625% to 6.875% various maturities 32,307 711 33,018 32,784

U.S. Treasury Bonds

10.375% to 14.000% various maturities 44,232 4,941 49 49,173 ,798

 76,539 5,652 82 82,191 ,582

Longshore and Harbor Workers' Trust Fund

Non-marketable

One Day Deposit

3.460% maturing October 3, 2005 60,000 - 60,000 60,000

District of Columbia Trust Fund

Non-marketable

One Day Deposit

3.460% maturing October 3, 2005 3,000 - 3,000 3,000

Backwage Restitution Fund

Marketable

U.S. Treasury Bill

2.920% to 3.160% maturing October 20, 2005 1,625 (55) 1, 1,570 570

$ 54,947,047 $ 5,597 $ 54 54,952,644 $ ,953,035

Entity investments $ 54,850,990 $ 5,652 $ 54,856,642 $ 54,857,033

Non-entity investments 96,057 (55) 96 96,002 ,002

$ 54,947,047 $ 5,597 $ 54 54,952,644 $ ,953,035

FY 2005 Performance and Accountability Report 185
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 3 - INVESTMENTS - Continued 

Investments at September 30, 2004 consisted of the following: 

Face Premium Net Market

(Dollars in thousands) Value (Discount) Value Value

Unemployment Trust Fund

Non-marketable

U.S. Treasury Certificates of Indebtedness

4.375% maturing June 30, 2005 $ 10,238,570 $ - $ 10,238,570 $ 10,238,570

Special issue U.S. Treasury Bonds

4.375% maturing June 30, 2005 4,210,119 - 4,210,119 4,210,119

6.250% maturing June 30, 2005 22,266,681 - 22,266,681 22,266,681

5.500% maturing June 30, 2006 8,524,011 - 8,524,011 8,524,011

 45,239,381 - 45,239,381 45,239,381

Panama Canal Commission

 Compensation Fund

Marketable

U.S. Treasury Notes

3.625% to 7.875% various maturities 27,685 450 28,135 28,607

U.S. Treasury Bonds

10.375% to 14.000% various maturities 49,428 6,494 58 55,922 ,767

 77,113 6,944 87 84,057 ,374

Energy Employees Occupational Illness

 Compensation Fund

Marketable

U.S. Treasury Bill

1.720% maturing October 1, 2004 46,833 - 46,833 46,833

Longshore and Harbor Workers' Trust Fund

Marketable

U.S. Treasury Bills

1.340% to 1.890% various maturities 69,863 (210) 69,653 69,653

District of Columbia Trust Fund

Marketable

U.S. Treasury Bills

1.320% to 1.790% various maturities 5,020 (13) 5,007 5,007

Backwage Restitution Fund

Marketable

U.S. Treasury Bill

1.543% to 1.553% various maturities 1,593 (14) 1 1,579 ,579

$ 45,439,803 $ 6,707 $ 45,446,510 $ 45,449,827

Entity investments $ 45,353,104 $ 6,707 $ 45,359,811 $ 45,363,128

Non-entity investments 86,699 - 86 86,699 ,699

$ 45,439,803 $ 6,707 $ 45,446,510 $ 45,449,827

186 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 4 - ACCOUNTS RECEIVABLE, NET OF ALLOWANCE

 

Accounts receivable at September 30, 2005 consisted of the following: 

Gross Net

(Dollars in thousands) Receivables Allowance Receivables

Entity intra-governmental assets

Due for UCFE and UCX benefits $ 344,073 $ - $ 344,073

Due for workers' compensation benefits 3,640,388 - 3,640,388

Other 6,809 6,80 - 9

 3,991,270 3 - ,991,270

Entity assets

State unemployment taxes 871,549 (636,367) 235,182

Due from reimbursable employers 547,623 (31,513) 516,110

Benefit overpayments 1,949,359 (1,737,979) 211,380

Other 10,264 7,95 (2,314) 0

 3,378,795 97 (2,408,173) 0,622

Non-entity assets

Fines and penalties 113,075 (55,807) 57,268

Backwages 27,789 15 (12,661) ,128

 140,864 72 (68,468) ,396

 3,519,659 1 (2,476,641) ,043,018

$ 7,510,929 $ 5 (2,476,641) $ ,034,288

Changes in the allowance for doubtful accounts during 2005 consisted of the following: 

Balance at Balance at

September 30, Revenue September 30,

(Dollars in thousands) 2004 Write-offs Adjustment Bad Debt 2005

Entity assets

State unemployment taxes $ (556,917) $ 334,716 $ (414,166) $ - $ (636,367)

Due from reimbursable employers (39,404) 27,088 (19,197) - (31,513)

Benefit overpayments (1,862,710) 524,158 - (399,427) (1,737,979)

Other (2,121) 234 - (2,31 (427) 4)

 (2,461,152) 886,196 (433,363) ( (399,854) 2,408,173)

Non-entity assets

Fines and penalties (56,326) 20,135 (19,616) - (55,807)

Backwages (10,389) - - ( (2,272) 12,661)

 (66,715) 20,135 (19,616) ( (2,272) 68,468)

$ (2,527,867) $ 906,331 $ (452,979) $ ( (402,126) $ 2,476,641)

 

FY 2005 Performance and Accountability Report 187
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 4 - ACCOUNTS RECEIVABLE, NET OF ALLOWANCE - Continued

 

Accounts receivable at September 30, 2004 consisted of the following: 

Gross Net

(Dollars in thousands) Receivables Allowance Receivables

Entity intra-governmental assets

Due for UCFE and UCX benefits $ 333,918 $ - $ 333,918

Due for workers' compensation benefits 3,572,765 - 3,572,765

Other 9,991 9,991 - 

 3,916,674 3,916,674 - 

Entity assets

State unemployment taxes 755,789 (556,917) 198,872

Due from reimbursable employers 659,820 (39,404) 620,416

Benefit overpayments 2,091,586 (1,862,710) 228,876

Other 6,991 4,870 (2,121) 

 3,514,186 (2,461,152) 1,053,034

Non-entity assets

Fines and penalties 115,869 (56,326) 59,543

Backwages 24,846 14,457 (10,389) 

 140,715 74,000 (66,715) 

 3,654,901 (2,527,867) 1,127,034

$ 7,571,575 $ (2,527,867) $ 5,043,708

Changes in the allowance for doubtful accounts during 2004 consisted of the following: 

Balance at Balance at

September 30, Revenue September 30,

(Dollars in thousands) 2003 Write-offs Adjustment Bad Debt 2004

Entity assets

State unemployment taxes $ (524,043) $ 307,970 $ (340,844) $ - $ (556,917)

Due from reimbursable employers (36,072) 18,974 (22,306) - (39,404)

Benefit overpayments (1,881,135) 688,846 - (670,421) (1,862,710)

Other (481) 1,061 - ( (2,701) 2,121)

 ( 1 2,441,731) ,016,851 (363,150) (2,461,152 (673,122) )

Non-entity assets

Fines and penalties (51,700) 8,504 (13,130) - (56,326)

Backwages (921) - - (10,389 (9,468) )

 (52,621) 8,504 (13,130) (66,715 (9,468) )

$ ( 1 2,494,352) $ ,025,355 $ (376,280) $ (2,527,867 (682,590) $ )

188 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 5 – ADVANCES 

Advances at September 30, 2005 and 2004 consisted of the following: 

(Dollars in thousands) 2005 2004

Intra-governmental

Advances to the Bureau of the Census $ 10,812 $ - 

Advances to states for UI benefit payments 489,177 623,172

Advances to grantees and contractors to finance future DOL program expenditures 89,520 146,463

Other 7, 5,442 397

 7 584,139 77,032

$ 7 594,951 $ 77,032

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT, NET OF DEPRECIATION 

Property, plant and equipment at September 30, 2005 and 2004 consisted of the following: 

2004

Accumulated

Cost or Depreciation/ Net Book Net Book

(Dollars in thousands) Basis Amortization Value Value

Structures, facilities and improvements

Structures and facilities $ 884,117 $ (356,235) $ 527,882 $ 464,054

Improvements to leased facilities 385,067 (213,858) 15 171,209 0,788

 1,269,184 (570,093) 61 699,091 4,842

Furniture and equipment

Equipment held by contractors 162,064 (156,852) 5,212 6,026

Furniture and equipment 63,135 (37,286) 29,31 25,849 0

 225,199 (194,138) 35,33 31,061 6

ADP software 177,463 (69,656) 107,807 52,347

Construction-in-progress 94,464 - 94,464 106,668

Land 90,999 - 67,07 90,999 6

$ (833 1,857,309 $ 1,023,422 ,887) $ 87 $ 6,269

2005

NOTE 7 - NON-ENTITY ASSETS 

Non-entity assets consisted of the following at September 30, 2005 and 2004: 

(Dollars in thousands) 2005 2004

Intra-governmental

Funds with U.S. Treasury $ 59,059 $ 68,977

Investments 96,002 86,699

Interest receivable from investments 1, 1,095 086

 156,156 156,762

Accounts receivable, net of allowance 74 72,396 ,000

$ 23 228,552 $ 0,762

FY 2005 Performance and Accountability Report 189
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 8 - ADVANCES FROM U.S. TREASURY 

Advances from U.S. Treasury to the Black Lung Disability Trust Fund during 2005 consisted of the 

following: 

Balance at Balance at

September 30, Net September 30,

(Dollars in thousands) 2004 Borrowing 2005

Intra-governmental

Borrowing from the Treasury $ 8,740,557 $ 9, 446,000 $ 186,557

$ 8,740,557 $ 9, 446,000 $ 186,557

Advances from U.S. Treasury to the Black Lung Disability Trust Fund during 2004 consisted of the 

following: 

Balance at Balance at

September 30, Net September 30,

(Dollars in thousands) 2003 Borrowing 2004

Intra-governmental

Borrowing from the Treasury $ 8,243,557 $ 8 497,000 $ ,740,557

$ 8,243,557 $ 8 497,000 $ ,740,557

Assuming the continuation of current operating conditions, repayment of these and necessary future 

advances will require a change in the statutory operating structure of the fund. (See Note 19) 

NOTE 9 – ACCRUED BENEFITS 

Accrued benefits at September 30, 2005 and 2004 consisted of the following: 

(Dollars in thousands) 2005 2004

State regular and extended unemployment benefits payable $ 646,473 $ 869,504

Federal extended unemployment benefits payable 36,338 36,265

Federal temporary extended unemployment benefits 23,620 23,581

Federal emergency unemployment benefits payable 37,714 31,951

Federal employees' unemployment benefits payable 41,885 26,200

Federal employees' unemployment benefits for existing

 claims due in the subsequent year 14 145,642 1,022

Total unemployment benefits payable 931,672 1,128,523

Black lung disability benefits payable 51,995 55,542

Federal employees' disability and 10(h) benefits payable 156,570 155,716

Energy employees occupational illness compensation benefits payable 3,812 790

Longshore and harbor workers disability benefits payable 3,234 3,155

District of Columbia disability benefits payable 28 375 3

$ 1,147,658 $ 1,344,009

190 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 10 - FUTURE WORKERS' COMPENSATION BENEFITS

DOL’s liability for future workers’ compensation benefits at September 30, 2005 and 2004 consisted of the 

following: 

(Dollars in thousands) 2005 2004

Projected gross liability of the Federal government

 for future FECA benefits $ 2 26,007,693 $ 5,570,723

Less liabilities attributed to other agencies:

U.S. Postal Service (8,663,963) (8,379,832)

Department of Navy (2,725,371) (2,744,041)

Department of Army (1,950,173) (1,937,818)

Department of Veterans Affairs (1,776,459) (1,752,895)

Department of Air Force (1,399,314) (1,418,832)

Department of Transportation (1,007,910) (1,020,500)

Department of Homeland Security (1,473,295) (1,398,161)

Tennessee Valley Authority (580,506) (594,461)

Department of Treasury (644,620) (678,272)

Department of Agriculture (834,415) (836,341)

Department of Justice (926,336) (829,336)

Department of Interior (689,306) (664,856)

Department of Defense, Other (844,007) (858,146)

Department of Health and Human Services (270,354) (266,389)

Social Security Administration (284,589) (288,158)

General Services Administration (170,113) (176,351)

Department of Commerce (173,415) (179,186)

Department of Energy (98,479) (95,184)

Department of State (60,288) (59,984)

Department of Housing & Urban Development (81,613) (78,622)

Department of Education (18,082) (19,882)

National Aeronautics and Space Administration (62,430) (68,876)

Environmental Protection Agency (39,380) (40,281)

Small Business Administration (28,967) (28,436)

Office of Personnel Management (25,653) (13,077)

National Science Foundation (1,381) (1,465)

Nuclear Regulatory Commission (8,417) (8,114)

Agency for International Development (23,726) (24,523)

Other (5 (580,826) 80,636)

 ( (25,443,388) 25,042,655)

$ 52 564,305 $ 8,068

Projected liability of the Department of Labor for future FECA benefits

FECA benefits not chargeable to other Federal agencies payable by

 DOL's Federal Employees' Compensation Act Special Benefit Fund $ 270,255 $ 228,487

FECA benefits due to eligible workers of DOL and Job Corp enrollees 233,652 236,560

FECA benefits due to eligible workers of the Panama Canal Commission 63 60,398 ,021

$ 52 564,305 $ 8,068

FY 2005 Performance and Accountability Report 191
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 11 - OTHER LIABILITIES

Other liabilities at September 30, 2005 and 2004 consisted of the following current liabilities: 

(Dollars in thousands) 2005 2004

Intra-governmental

Accrued payroll and benefits $ 9,666 $ 8,281

Unearned FECA assessments 44,347 39,261

Non-entity receipts due to U.S. Treasury 57,268 59,542

Amounts held for the Railroad Retirement Board 94,820 86,209

Advances from other Federal agencies 1, - 134

Total intra-governmental 19 206,101 4,427

Accrued payroll and benefits 45,261 40,833

Due to Backwage recipients 71,632 63,901

Unearned assessment revenue 48,910 48,117

Deposit and clearing accounts 5,503 20,738

Readjustment allowances and other Job Corps liabilities 84,427 58,244

Other advances 7, 7,500 500

 23 263,233 9,333

$ 43 469,334 $ 3,760

NOTE 12 - LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

Liabilities not covered by budgetary resources at September 30, 2005 and 2004 consisted of the following: 

(Dollars in thousands) 2005 2004

Intra-governmental

Advances from U.S. Treasury $ 9,186,557 $ 8,740,557

Accrued benefits 13,519 - 

Future workers' compensation benefits 230,721 236,559

Accrued annual leave 90,222 94,846

Readjustment allowances and other Job Corps liabilities 58 84,427 ,244

 38 418,889 9,649

$ 9,605,446 $ 9,130,206

192 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 13 - PENSION EXPENSE 

Pension expense in 2005 consisted of the following: 

Accumulated Total

Employer Costs Imputed Pension

(Dollars in thousands) Contributions by OPM Expense

Civil Service Retirement System $ 27,034 $ 43,919 $ 70,953

Federal Employees' Retirement System 81,359 - 81,359

Thrift Savings Plan 30,824 30 - ,824

$ 139,217 $ 18 43,919 $ 3,136

Pension expense in 2004 consisted of the following: 

Accumulated Total

Employer Costs Imputed Pension

(Dollars in thousands) Contributions by OPM Expense

Civil Service Retirement System $ 31,473 $ 46,281 $ 77,754

Federal Employees' Retirement System 72,622 3,199 75,821

Thrift Savings Plan 28,712 28 - ,712

$ 132,807 $ 182 49,480 $ ,287

 

NOTE 14 - PROGRAM COST 

Schedules A, B, and C present detailed cost and revenue information by suborganization (responsibility 

segment) for programs in the Department, the Employment and Training Administration, and the 

Employment Standards Administration in support of the summary information presented in the Consolidated 

Statement of Net Cost for 2005. 

FY 2005 Performance and Accountability Report 193
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 14 - PROGRAM COST - Continued 

 

A. Consolidating Statement of Net Cost by Suborganization 

Net cost by suborganization for the year ended September 30, 2005 consisted of the following: 

194 United States Department of Labor 

Employment Employment Occupational Bureau of Mine Safety

and Training Standards Safety and Health Labor and Health

(Dollars in thousands) Administration Administration Administration Statistics Administration

CROSSCUTTING PROGRAMS

 Income maintenance

Intra-governmental $ 213,372 $ 832,659 $ - $ - $ - 

With the public 7, 36,697,266 627,930 - - - 

 Gross cost 3 8, 6,910,638 460,589 - - - 

Intra-governmental earned revenue (808,541) (2,354,837) - - - 

Public earned revenue (2,369) - - - - 

 Less earned revenue (81 (2 0,910) ,354,837) - - - 

Net program cost 6, 36,099,728 105,752 - - - 

 Employment and training

Intra-governmental 61,766 - - - - 

With the public 5,753,511 - - - - 

 Gross cost 5,815,277 - - - - 

Intra-governmental earned revenue (17,315) - - - - 

Public earned revenue (422) - - - - 

 Less earned revenue (17,737) - - - - 

Net program cost 5,797,540 - - - - 

 Labor, employment and pension

 standards

Intra-governmental - 114,598 - - - 

With the public - 236,175 - - - 

 Gross cost - 350,773 - - - 

Intra-governmental earned revenue - 111 - - - 

Public earned revenue - - - - - 

 Less earned revenue - 111 - - - 

Net program cost - 350,884 - - - 

 Worker safety and health

Intra-governmental - - 110,857 - 94,390

With the public - - 388,985 - 2 03,934

 Gross cost - - 499,842 - 2 98,324

Intra-governmental earned revenue - - (1,645) - (60)

Public earned revenue - - (1,250) - ( 791)

 Less earned revenue - - (2,895) - ( 851)

Net program cost - - 496,947 - 2 97,473

OTHER PROGRAMS

 Statistics

Intra-governmental - - - 177,019 - 

With the public - - - 354,656 - 

 Gross cost - - - 531,675 - 

Intra-governmental earned revenue - - - (4,057) - 

Public earned revenue - - - (2,607) - 

 Less earned revenue - - - (6,664) - 

Net program cost - - - 525,011 - 

 Cost not assigned to programs - - - - - 

Less earned revenue not

 attributed to programs - - - - - 

Net cost not assigned to programs - - - - - 

 Net cost of operations $ 6, 41,897,268 $ 456,636 $ 496,947 $ 52 2 5,011 $ 97,473
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

untability Report 195

Employee Benefits Veterans' Other

Security Employment Departmental

 Administration and Training Programs Eliminations Total

$ 8,284 $ - $ 2,050 $ (31,667) $ 1,024,698

 17,179 - 3,29 1 10,330 44,355,996

 25,463 - 5,34 1 (21,337) 45,380,694

 - - - 21,337 (3,142,041)

 - - - - (2,369)

 - - - 21,337 (3,144,410)

 25,463 - 5,34 1 - 42,236,284

 - 10,004 238 (26,411) 45,597

 - 201,001 601 26,411 5,981,524

 - 211,005 839 - 6,027,121

 - - - - (17,315)

 - - - - (422)

 - - - - (17,737)

 - 211,005 839 - 6,009,384

 39,970 629 32,126 (48,276) 139,047

 12,019 94,890 193, 804 48,276 585,164

 134,860 12,648 225, 930 - 724,211

 (9,425) - - - (9,314)

 (546) - - - (546)

 (9,971) - - - (9,860)

 124,889 12,648 225, 930 - 714,351

 - - - (44,792) 160,455

 - - - 44,736 637,655

 - - - (56) 798,110

 - - - 56 (1,649)

 - - - - (2,041)

 - - - 56 (3,690)

 - - - - 794,420

 - - - (16,423) 160,596

 - - - 16,423 371,079

 - - - - 531,675

 - - - - (4,057)

 - - - - (2,607)

 - - - - (6,664)

 - - - - 525,011

 - - 98,304 (3,060) 95,244

 - (13,8 - 60) 3,060 (10,800)

 - 84,4 - 44 - 84,444

$ 150,352 223,653 $ 316, $ 554 $ - $ 50,363,894

FY 2005 Performance and Acco
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

OTE 14 - PROGRAM COST - Continued

. Consolidating Statement of Net Cost - Employment and Training Administration 

et cost of the Employment and Training Administration for the year ended September 30, 2005 consisted of 

N

 

B

N

the following: 

Training and

Employment Employment

(Dollars in thousands) Security Programs Eliminations Total

CROSSCUTTING PROGRAMS

 Income maintenance

Benefits $ 31,988,265 $ 54 $ - $ 31,988,319

Grants 4,549,457 - - 4,549,457

Interest 2,699 - - 2,699

Other 369,876 287 37 - 0,163

 Gross cost 36,910,297 341 - 36,910,638

Less earned revenue (810,910) - (81 - 0,910)

Net program cost 36,099,387 341 36 - ,099,728

 Employment and training

Benefits - 25,360 - 25,360

Grants - 5,480,361 - 5,480,361

Other - 313,966 30 (4,410) 9,556

 Gross cost - 5,819,687 (4,410) 5,815,277

Less earned revenue - (22,147) 4, (1 410 7,737)

Net program cost - 5,797,540 5, - 797,540

Net cost of operations $ 36,099,387 $ 5,797,881 $ 41 - $ ,897,268

 

 

196 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 14 - PROGRAM COST - Continued 

C. Consolidating Statement of Net Cost - Employment Standards Administration 

Net cost of the Employment Standards Administration for the year ended September 30, 2005 consisted of 

the following: 

Office of Office of Office of

Workers' Federal Wage Labor

Compensation Contract and Hour Management

(Dollars in thousands) Programs Compliance Division Standards Eliminations Total

CROSSCUTTING PROGRAMS

 Income maintenance

Benefits $ 7,493,735 $ - $ - $ - $ (1,702) $ 7,492,033

Interest 674,894 - - - - 674,894

Other 293,662 - - - - 29 3,662

 Gross cost 8,462,291 - - - (1,702) 8,460,589

Less earned revenue (2,356,539) - - - 1, (2 702 ,354,837)

Net program cost 6,105,752 - - - - 6, 105,752

 Labor, employment and

 pension standards

Benefits - 12,100 26,328 6,456 - 44,884

Grants - - 13 - - 13

Other - 82,406 179,639 43,831 - 30 5,876

 Gross cost - 94,506 205,980 50,287 - 350,773

Less earned revenue - - 111 - - 11 1

Net program cost - 94,506 206,091 50,287 - 35 0,884

Net cost of operations $ 94 6,105,752 $ ,506 $ 206,091 $ 50,287 $ - 6, $ 456,636

FY 2005 Performance and Accountability Report 197

Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 14 - PROGRAM COST - Continued

Schedules D, E and F present detailed cost and revenue information by suborganization (responsibility 

segment) for programs in the Department, the Employment and Training Administration, and the 

Employment Standards Administration in support of the summary information presented in the Consolidated 

Statement of Net Cost for 2004. 

FY 2005 Performance and Accountability Report 199
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 14 - PROGRAM COST - Continued 

D. Consolidating Statement of Net Cost by Suborganization 

Net cost by suborganization for the year ended September 30, 2004 consisted of the following: 

Employment Employment Occupational Bureau of Mine Safety

and Training Standards Safety and Health Labor and Health

(Dollars in thousands) Administration Administration Administration Statistics Administration

CROSSCUTTING PROGRAMS

 Income maintenance

Intra-governmental $ 211,805 $ 782,018 $ - $ - $ - 

With the public 4,285,156 46,152,478 - - - 

 Gross cost 46,364,283 5,067,174 - - - 

Intra-governmental earned revenue (899,561) (2,394,786) - - - 

Public earned revenue (2,300) - - - - 

 Less earned revenue (2 (901,861) ,394,786) - - - 

Net program cost 2,672,388 45,462,422 - - - 

 Employment and training

Intra-governmental 56,263 - - - - 

With the public 6,164,127 - - - - 

 Gross cost 6,220,390 - - - - 

Intra-governmental earned revenue (16,876) - - - - 

Public earned revenue (359) - - - - 

 Less earned revenue (17,235) - - - - 

Net program cost 6,203,155 - - - - 

 Labor, employment and pension

 standards

Intra-governmental - 107,613 - - - 

With the public - 227,619 - - - 

 Gross cost - 335,232 - - - 

Intra-governmental earned revenue - 59 - - - 

Public earned revenue - (1,029) - - - 

 Less earned revenue - (970) - - - 

Net program cost - 334,262 - - - 

 Worker safety and health

Intra-governmental - - 114,460 - 90,874

With the public - - 391,575 - 204,182 

 Gross cost - - 506,035 - 295,056 

Intra-governmental earned revenue - - (2,352) - (11)

Public earned revenue - - (1,839) - (1,005) 

 Less earned revenue - - (4,191) - (1,016) 

Net program cost - - 501,844 - 294,040 

OTHER PROGRAMS

 Statistics

Intra-governmental - - - 179,644 - 

With the public - - - 356,809 - 

 Gross cost - - - 536,453 - 

Intra-governmental earned revenue - - - (4,197) - 

Public earned revenue - - - (1,307) - 

 Less earned revenue - - - (5,504) - 

Net program cost - - - 530,949 - 

 Cost not assigned to programs - - - - - 

Less earned revenue not

 attributed to programs - - - - - 

Net cost not assigned to programs - - - - - 

 Net cost of operations $ 51,665,577 3,006,650 $ $ 501,844 $ 530,949 294,040 $ 

200 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

Employee Benefits Veterans' Other

Security Employment Departmental

Administration and Training Programs Eliminations Total

$ 4,666 $ - $ 4,278 $ (29,816) $ 972,951

 10,776 - 8,75 5 7,534 50,464,699

 15,442 - 13,0 33 (22,282) 51,437,650

 - - (21) 22,282 (3,272,086)

 - - - - (2,300)

 - (21) - 22,282 (3,274,386)

 15,442 - 13,0 12 - 48,163,264

 - 8,639 2,320 (22,580) 44,642

 - 197,709 5,05 4 22,485 6,389,375

 - 206,348 7,37 4 (95) 6,434,017

 - - - 95 (16,781)

 - - - - (359)

 - - - 95 (17,140)

 - 206,348 7,37 4 - 6,416,877

 39,486 518 32,127 (42,725) 137,019

 109,490 11,664 171 ,911 42,725 563,409

 148,976 12,182 204 ,038 - 700,428

 (9,804) - (154) - (9,899)

 (547) - - - (1,576)

 (10,351) - (154) - (11,475)

 138,625 12,182 203 ,884 - 688,953

 - - 227 (41,865) 163,696

 - 572 - 41,865 638,194

 - 799 - - 801,890

 - - - - (2,363)

 - - - - (2,844)

 - - - - (5,207)

 - 799 - - 796,683

 - - 454 (14,549) 165,549

 - 1,19 - 8 14,549 372,556

 - 1,65 - 2 - 538,105

 - - - - (4,197)

 - - - - (1,307)

 - - - - (5,504)

 - 1,65 - 2 - 532,601

 - - 100,383 (1,662) 98,721

 - (22 - ,305) 1,662 (20,643)

 - 78,0 - 78 - 78,078

$ 154,067 218,530 $ 304 $ ,799 $ - $ 56,676,456

FY 2005 Performance and Accountability Report 201
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 14 - PROGRAM COST - Continued 

 

E. Consolidating Statement of Net Cost - Employment and Training Administration 

Net cost of the Employment and Training Administration for the year ended September 30, 2004 consisted of

the following: 

 

Training and

Employment Employment

(Dollars in thousands) Security Programs Eliminations Total

CROSSCUTTING PROGRAMS

 Income maintenance

Benefits $ 41,431,384 $ 63 $ - $ 41,431,447

Grants 4,563,342 - - 4,563,342

Interest 3,421 - - 3,421

Other 365,837 236 366,073 - 

 Gross cost 46,363,984 299 - 46,364,283

Less earned revenue (901,861) - (901,861) - 

Net program cost 45,462,123 299 45,462,422 - 

 Employment and training

Benefits - (8,217) - (8,217)

Grants - 6,057,175 - 6,057,175

Other - 171,432 171,432 - 

 Gross cost - 6,220,390 - 6,220,390

Less earned revenue - (17,235) (17,235) - 

Net program cost - 6,203,155 6,203,155 - 

Net cost of operations $ 45,462,123 $ 6,203,454 $ 51,665,577 - $ 

202 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 14 - PROGRAM COST - Continued 

F. Consolidating Statement of Net Cost - Employment Standards Administration 

Net cost of the Employment Standards Administration for the year ended September 30, 2004 consisted of 

the following: 

Office of Office of Office of

Workers' Federal Wage Labor

Compensation Contract and Hour Management

(Dollars in thousands) Programs Compliance Division Standards Eliminations Total

CROSSCUTTING PROGRAMS

 Income maintenance

Benefits $ 4,150,302 $ - $ - $ - $ (1,982) $ 4,148,320

Interest 650,579 - - - - 650,579

Other 268,275 - - - - 268 ,275

 Gross cost 5,069,156 - - - (1,982) 5,067,174

Less earned revenue (2,396,768) - - - 1 ( ,982 2,394,786)

Net program cost 2,672,388 - - - - 2, 672,388

 Labor, employment and

 pension standards

Benefits - 10,335 22,012 4,881 - 37,228

Grants - - 16 - - 16

Other - 83,229 175,121 39,638 - 297 ,988

 Gross cost - 93,564 197,149 44,519 - 335,232

Less earned revenue - - (970) - - (97 0)

Net program cost - 93,564 196,179 44,519 - 334 ,262

Net cost of operations $ 93 2,672,388 $ ,564 $ 196,179 $ 44,519 $ - 3, $ 006,650

FY 2005 Performance and Accountability Report 203
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 15 - NON-EXCHANGE REVENUE 

Non-exchange revenues reported on the Consolidated Statement of Changes in Net Position in 2005 and 

2004 consisted of the following: 

(Dollars in thousands) 2005 2004

Employer taxes

Unemployment Trust Fund

Federal unemployment taxes $ 6,810,122 $ 6,613,154

State unemployment taxes 33,151,082 30,196,902

 39,961,204 36,810,056

Black Lung Disability Trust Fund excise taxes 56 610,417 5,979

 40,571,621 37,376,035

Interest

Unemployment Trust Fund 2,586,064 2,522,421

Longshore and Harbor Workers' Trust Fund 1,007 421

District of Columbia Trust Fund 63 31

Panama Canal Commission Compensation Fund 3,915 1,299

Energy Employees Occupational Illness Compensation Fund 1,722 655

Black Lung Disability Trust Fund 308 644 

 2,593,415 2,525,135

Assessments

Longshore and Harbor Workers' Trust Fund 133,566 135,813

District of Columbia Trust Fund 11,216 10,352

Other ( 533 601)

 14 145,315 5,564

Reimbursement of unemployment benefits from state and

 local governments and non-profit organizations

 to the Unemployment Trust Fund 1,857,193 2,411,887

$ 45,167,544 $ 42,458,621

NOTE 16 - TRANSFERS WITHOUT REIMBURSEMENT 

Transfers from (to) other Federal agencies in 2005 and 2004 consisted of the following: 

(Dollars in thousands) 2005 2004

Budgetary financing sources

From DOL general fund unexpended appropriation

 accounts to the DOL Working Capital Fund $ 3,000 3,000 $ 

Other financing sources

Liability for EEOICPA, Part D, from the Department of Energy (810,000) - 

Liability for RECA, Section 5, from the Department of Justice (316,993) - 

From General Services Administration 3,564 1,063

To General Services Administration (1,051) (3,943) 

 (1,127,372) 12

$ (1,124,372) $ 3,012

204 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 17 - STATUS OF BUDGETARY RESOURCES

 

A. Apportionment Categories of Obligations Incurred

Obligations incurred reported on the Combined Statement of Budgetary Resources in 2005 and 2004 

consisted of the following:

(Dollars in thousands) 2005 2004

Direct Obligations

Category A $ 4,021,560 $ 3,961,569

Category B 9,551,655 10,399,454

Exempt from apportionment 47 37,760,421 ,205,222

Total direct obligations 61 51,333,636 ,566,245

Reimbursable Obligations

Category A 172,936 154,951

Category B 2, 2,609,991 591,348

Total reimbursable obligations 2, 2,782,927 746,299

$ 64 54,116,563 $ ,312,544

B. Permanent Indefinite Appropriations

The Department of Labor’s permanent indefinite appropriations include all trust funds, the Federal

Employees’ Compensation Act Special Benefit Fund, the Panama Canal Commission Compensation Fund, 

the Energy Employees Occupational Illness Compensation Fund, ETA and ESA H-1b funds, and portions of 

State Unemployment Insurance and Employment Service Operations and Federal Unemployment Benefits 

and Allowances. These funds are described in Note 1-A.3. 

C. Legal Arrangements Affecting Use of Unobligated Balances

Unemployment Trust Fund receipts are reported as budget authority in the Consolidated Statement of 

Budgetary Resources. The portion of UTF receipts collected in excess of amounts needed to pay benefits

and other valid obligations are precluded by law from being available for obligation at year end. Therefore,

these excess receipts are not classified as budgetary resources in the Consolidated Statement of Budgetary

Resources and are not included in unobligated balances in the status of budgetary resources included in that 

Statement. All excess receipts are reported as assets of the UTF and are included in the Consolidated 

Balance Sheet. They will become available for obligation as needed in the future. 

D. Explanation of Differences Between the Statement of Budgetary Resources and the 

Budget of the United States Government

The Budget of the United States Government with actual amounts for the year ended September 30, 2005 has 

not been published as of the issue date of these financial statements. This document will be available in 

February 2006. In addition, the reconciliation of the SF133 and the Statement of Budgetary Resources will 

be performed in Fiscal Year 2006 after the Department receives the final SF 133 reports from Trust Funds 

and allocated accounts. 

FY 2005 Performance and Accountability Report 205
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 17 - STATUS OF BUDGETARY RESOURCES – Continued 

D. Explanation of Differences Between the Statement of Budgetary Resources and the 

Budget of the United States Government - Continued

A reconciliation of budgetary resources, obligations incurred and outlays, as presented in the Consolidated

Statement of Budgetary Resources, to amounts included in the Budget of the United States Government for

the year ended September 30, 2004 is shown below. 

Budgetary Obligations Total

(Dollars in millions) Resources Incurred Outlays

Consolidated Statement of Budgetary Resources $ 67,890 $ 64,313 $ 58,201

Pension Benefit Guaranty Corporation reported separately 15,627 3,168 (247)

Overstatement of unemployment taxes in the Budget

 of the United States 300 - - 

Overstatement of draws for unemployment benefits in the

 Budget of the United States - 300 300

Accruals not reported in the budget 325 325 - 

Amounts in the budget not included in the Consolidated

 Statement of Budgetary Resources 50 49 87

Amounts in the Consolidated Statement of Budgetary Resources

 not included in the budget (18) - - 

Expired accounts (871) (199) - 

Budget of the United States Government $ 83,303 $ 58,341 67,956 $ 

Unemployment Trust Fund receipts are reported as budget authority in the Consolidated Statement of 

Budgetary Resources. The portion of UTF receipts collected in the current year in excess of amounts needed 

to pay benefits and other valid obligations are precluded by law from being available for obligation.

Therefore, these excess receipts are not classified as budgetary resources in the Consolidated Statement of 

Budgetary Resources. Conversely, when obligations exceed receipts in the current year, amounts are drawn

from unavailable collections to meet these obligations. Cumulative excess receipts are not included in 

unobligated balances in the status of budgetary resources included in that Statement. All excess receipts are 

reported as assets of the UTF and are included in the Consolidated Balance Sheet. They will become 

available for obligation as needed in the future. 

The cumulative amount of excess UTF receipts are denoted as unavailable collections in the Budget of the 

United States Government. The cumulative amount of these excess receipts at September 30, 2004, 

reclassified from unobligated balances to UTF unavailable collections, is presented below.

(Dollars in millions) 2004

Unemployment Trust Fund unavailable collections, beginning $ 45,489

Budget authority from current year appropriations 43,203

Less obligations (45,728)

Excess of obligations over budget authority (2,525)

Unemployment Trust Fund unavailable collections, ending $ 42,964

206 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 18 – SOURCES OF CUSTODIAL REVENUE 

Custodial revenues in 2005 consisted of the following:

Increase

Net (Decrease) in

Cash Less Cash Amounts to Total

(Dollars in thousands) Collections Refunds Collections be Collected Revenues

Civil monetary penalties

OSHA $ 62,548 $ - $ 62,548 $ 10,005 $ 72,553

MSHA 18,553 - 18,553 (1,202) 17,351

EBSA 13,654 - 13,654 2,079 15,733

ESA 12,577 (3) 12,574 13, 509 083

 107,332 (3) 107,329 11,391 118,720

ETA disallowed grant costs 4,893 - 4,893 (738) 4,155

Other 18,660 (211) 18,449 18, 298 747

$ (2 130,885 $ 14) $ 130,671 $ 1 10,951 $ 41,622

Custodial revenues in 2004 consisted of the following:

Increase

Net (Decrease) in

Cash Less Cash Amounts to Total

(Dollars in thousands) Collections Refunds Collections be Collected Revenues

Civil monetary penalties

OSHA $ 60,390 $ - $ 60,390 $ 917 $ 61,307

MSHA 17,399 - 17,399 6,017 23,416

EBSA 13,373 - 13,373 843 14,216

ESA 24,370 (318) 24,052 20,5 (3,543) 09

 115,532 (318) 115,214 4,234 119,448

ETA disallowed grant costs 15,526 (1,808) 13,718 (6,198) 7,520

Other 581 (80) 501 50 - 1

$ (2,2 131,639 $ 06) $ 129,433 $ 1 (1,964) $ 27,469

FY 2005 Performance and Accountability Report 207
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 19 - DEDICATED COLLECTIONS 

DOL is responsible for the operation of four major trust funds. The financial position of each trust fund as of

September 30, 2005 is shown below.

Longshore

Black Lung and Harbor District of

(Dollars in thousands) Unemployment Disability Workers' Columbia

Assets

Intra-governmental

Funds with U.S. Treasury $ (273,027) $ 41,906 $ 13,310 $ 2,066

Investments 54,805,883 - 60,000 3,000

Accounts receivable, net

Due from other Federal agencies

 for UCX and UCFE benefits 344,238 - - - 

Interest receivable from investments 634,736 - - - 

Total intra-governmental 55,511,830 41,906 73,310 5,066

Accounts receivable, net

State unemployment tax 235,182 - - - 

Due from reimbursable employers 516,110 - - - 

Benefit overpayments 177,640 9,055 - - 

Other - - 1,222 813

Advances to states 489,177 - - - 

Total assets $ 56,929,939 $ 50,961 $ 74 5, ,532 $ 879

Liabilities

Intra-governmental

Accounts payable to DOL agencies $ 1,406,934 $ - $ 477 $ - 

Advances from U.S. Treasury - 9,186,557 - - 

Amounts held for the Railroad

 Retirement Board 94,820 - - - 

Total intra-governmental 1,501,754 9,186,557 477 - 

Accrued benefits 931,672 24,413 3,234 375

Other - - 45 3, ,012 898

Total liabilities 2,433,426 9,210,970 48 4, ,723 273

Net position

Cumulative results of operations 54,496,513 (9,160,009) 25 1, ,809 606

Total liabilities and net position $ 56,929,939 $ 50,961 $ 74 5, ,532 $ 879

208 United States Department of Labor 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 19 - DEDICATED COLLECTIONS – Continued 

The net results of operations of each trust fund for the year ended September 30, 2005 is shown below. 

Longshore

Black Lung and Harbor District of

(Dollars in thousands) Unemployment Disability Workers' Columbia

Cost, net of earned revenues

Benefits $ (31,980,909) $ (327,860) $ (130,883) $ (10,700)

Interest (2,699) (674,894) - - 

Administrative (288,968) (212) - - 

 (32,272,576) (1,002,966) (130,883) (10,700)

Earned revenue 783,657 - - - 

 (31,488,919) (1,002,966) (130,883) (10,700)

Net financing sources

Taxes 39,961,204 610,417 - - 

Interest 2,586,064 646 1,007 62

Assessments 1,857,193 - 133,566 11,217

Transfers-in

DOL Entities 150 - - - 

Transfers-out

DOL entities (3,815,031) (56,662) (2,023) - 

 40,589,580 554,401 132,550 11,279

Net results of operations 9,100,661 (448,565) 1,667 579

Net position, beginning of period 45,395,852 (8,711,444) 24,142 1,027

Net position, end of period $ 54,496,513 $ (9,160,009) $ 25 1, ,809 $ 606

The financial position of each trust fund as of September 30, 2004 is shown below and on the following 

page. 

Longshore

Black Lung and Harbor District of

(Dollars in thousands) Unemployment Disability Workers' Columbia

Assets

Intra-governmental

Funds with U.S. Treasury $ 157,591 $ 43,777 $ 465 $ 2

Investments 45,239,381 - 69,653 5,007

Accounts receivable, net

Due from other Federal agencies

 for UCX and UCFE benefits 333,918 - - - 

Interest receivable from investments 577,341 - - - 

Total intra-governmental 46,308,231 43,777 70,118 5,009

Accounts receivable, net

State unemployment tax 198,872 - - - 

Due from reimbursable employers 620,416 - - - 

Benefit overpayments 196,156 9,651 - - 

Other - 1,003 1,317 280

Advances to states 623,172 - - - 

Total assets $ 47 54,4 ,946,847 $ 71 31 $ 5,28 ,435 $ 9

FY 2005 Performance and Accountability Report 209
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2005 and 2004 

NOTE 19 - DEDICATED COLLECTIONS - Continued

Longshore

Black Lung and Harbor District of

(Dollars in thousands) Unemployment Disability Workers' Columbia

Liabilities

Intra-governmental

Accounts payable to DOL agencies $ 1,336,263 $ - $ - $ - 

Advances from U.S. Treasury - 8,740,557 - - 

Amounts held for the Railroad

 Retirement Board 86,209 - - - 

Total intra-governmental 1,422,472 8,740,557 - - 

Accrued benefits 1,128,523 25,318 3,155 283

Other - - 44,138 3,979

Total liabilities 2,550,995 8,765,875 47,293 4,262

Net position

Cumulative results of operations 45,395,852 (8,711,444) 24,142 1,027

Total liabilities and net position $ 54,431 47,946,847 $ 71,435 $ 5,289 $ 

 

The net results of operations of each trust fund for the year ended September 30, 2004 is shown below. 

Longshore

Black Lung and Harbor District of

(Dollars in thousands) Unemployment Disability Workers' Columbia

Cost, net of earned revenues

Benefits $ (41,424,320) $ (344,340) $ (133,560) $ (10,800)

Interest (3,421) (650,579) - - 

Administrative (293,243) (60) - - 

 (41,720,984) (994,979) (133,560) (10,800)

Earned revenue 823,315 - - - 

 (40,897,669) (994,979) (133,560) (10,800)

Net financing sources

Taxes 36,810,056 565,979 - - 

Interest 2,522,421 309 421 30

Assessments 2,411,887 - 135,813 10,352

Transfers-in

Treasury 80,000 - - - 

DOL Entities 721,054 - - - 

Transfers-out

DOL entities (3,829,105) (55,743) (2,021) - 

 38,716,313 510,545 134,213 10,382

Net results of operations (2,181,356) (484,434) 653 (418)

Net position, beginning of period 47,577,208 (8,227,010) 23,489 1,445

Net position, end of period $ 45,395,852 $ (8,711,444) $ 24,142 $ 1,027

210 United States Department of Labor 
Required Supplementary Stewardship Information 
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

STEWARDSHIP INVESTMENTS IN HUMAN CAPITAL 

Stewardship investments are made by the DOL for the nation’s benefit. For accounting purposes, these 

investments are expensed as incurred, and reflected in the net cost of the DOL’s operations. Stewardship 

investments provide long-term benefits which cannot be measured in traditional financial reports. 

The DOL’s stewardship investments are in human capital, reported as expenses in the net cost of the DOL’s

employment and training programs. These investments are intended to maintain or increase national

economic productive capacity, as demonstrated by program outputs and outcomes. Within the DOL, the 

Employment and Training Administration and the Veterans’ Employment and Training Service administer 

programs which invest in human capital, as discussed below. 

Employment and Training Administration 

The U.S. Department of Labor, Employment and Training Administration’s (ETA) Federal investment in

human capital comprises expenses incurred for training programs enacted under the Workforce Investment

Act of 1998 (WIA); Job Training Partnership Act, as amended (JTPA); the Trade Act of 1974, as amended 

(Trade Act); School-To-Work Opportunities Act of 1994, as amended (STW), and Balanced Budget Act of 

1997, as amended. This investment is made for the general public and the expenses incurred are intended to 

increase or maintain national economic productive capacity. Investment in human capital specifically 

excludes expenditures for employment services, apprenticeship program administration and unemployment 

and other benefit payments which make up the bulk of ETA’s services to the public at $36.1 billion and 22.6 

million people served. 

The ETA’s investment in human capital for fiscal years 2001 to 2005, excluding the cost of internal Federal

education and training, is presented below, along with the number of participants exiting the programs, an

output measure for these programs for fiscal years 2004 and 2005 (participant data is not available for the 

earlier years). 

Investment in Human Capital

0

1

2

3

4

5

6

7

8

2001 2002 2003 2004 2005

Fiscal Year

Dollars (

Billions)

0.0

0.5

1.0

1.5

Participa

nts (

Millions)

Investment Participants

212 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

This output measure is the latest data available for the currently operating programs, was collected for 

periods ending in March or June of the fiscal year, and includes some estimates, depending on the program

involved. Participants could have exited from, and therefore been counted in, more than one program during

the measurement periods. This participant information specifically excludes participants for employment

services, apprenticeship and unemployment and other benefit recipients who receive ETA services to the 

public. 

A brief description of the programs under each Act is as follows: 

Workforce Investment Act (Successor Legislation to the JTPA) 

• Youth Activities - Grants to provide financial assistance to States and U.S. territories to design and 

operate workforce investment activities for eligible youth. 

• Youth Opportunity Grants - Grants to increase the long-term employment of youth who live in 

empowerment zones, enterprise communities, and high-poverty areas. 

• Adult and Dislocated Worker Employment and Training Activities - Grants to provide financial 

assistance to States and U.S. territories to design and operate training programs for low income

adults and reemployment services and retraining assistance to individuals dislocated from their

employment. 

• Job Corps - Nationwide program carried out in partnership with States and communities to assist 

eligible youth to become more responsible, employable, and productive citizens. 

• National Programs - Grants to provide financial assistance in support of employment and training

activities and opportunities for Native American, Migrant and Seasonal Farmworkers, Veterans and

Disadvantaged Youth. 

• National Emergency Grants - National Emergency Grants are discretionary awards by the

Secretary of Labor that are intended to temporarily expand service capacity at the state and local

levels by providing time-limited funding assistance in response to significant dislocation events. 

Job Training Partnership Act (Antecedent legislation to the WIA)

• Adult Employment and Training - Grants to provide financial assistance to States and U.S.

territories to design and operate training programs for low-income adults. 

• Dislocated Worker Employment and Training - Grants to provide re-employment services and 

retraining assistance to individuals dislocated from their employment. 

• H-1B Technical Skills Training Grants - Financed by fees paid by employers who bring skilled 

foreign workers into the U.S. under H-1B nonimmigrant visas, these grants help address the high

skill technology shortages of American businesses by developing and operating high skill training 

programs for unemployed and employed American workers. 

• Youth Training - Grants to provide financial assistance to States and U.S. territories to design and 

operate training programs for economically disadvantaged youth. 

• Summer Youth Employment and Training - Grants to operate programs of employment and

opportunities, as well as academic enrichment for economically disadvantaged youth during the 

summer months. 

FY 2005 Performance and Accountability Report 213
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

• Indian and Native Americans - Grants to Indian tribes and other Native American groups to 

provide training, work experience, and other employment-related services to Native Americans.

• National Farmworker Jobs Program (NFJP) - Grants to public agencies and nonprofit groups to

provide training and other employability development services to economically disadvantaged 

families whose principal livelihood is gained in migratory and other forms of seasonal farm work. 

• Veterans Employment - Grants or contracts to provide disabled, Vietnam era, and recently 

separated veterans with programs to meet their unique employment and training needs. 

• National Activities - Provides program support for JTPA activities and nationally administered

programs for segments of the population that have special disadvantages in the labor market. 

Trade Act of 1974 As Amended 

• Trade Adjustment Assistance - Adjustment assistance, including cash weekly benefits, training, 

job search, and relocation allowances provided to workers as authorized by the Trade Act of 1974, as 

amended. 

• North American Free Trade Agreement (NAFTA) - Transition adjustment assistance, including 

weekly cash benefits, training, job search, and relocation allowances provided to workers determined 

to be adversely affected as a result of the NAFTA as authorized by the Trade Act of 1974, as 

amended. 

School-To-Work Opportunities Act 

• School-To-Work Opportunities - Grants to States and localities, jointly administered by the DOL and 

U.S. Department of Education to build systems that provide youth with the knowledge and skills

necessary to make an effective transition from school to careers through work-based learning, 

school-based education, and connecting activities. 

Balanced Budget Act of 1997 

• Welfare-To-Work Opportunities - Grants to States and localities, jointly administered by the DOL

and U.S. Department of Health and Human Services to build programs to provide recipients

receiving assistance under State funded programs with the knowledge and skills necessary to make

an effective transition to unsubsidized employment opportunities. 

The National Apprenticeship Act 

• Apprenticeship - A combination of learning on the job and related technical instruction in which 

workers learn practical and theoretical aspects of a skilled occupation. Apprenticeship costs and 

participants are not included in the costs and participant numbers in the chart above because 

Apprenticeship funding does not generally pay for the actual training, but supports administrating the 

National Apprenticeship Act, including registration, certification, and monitoring of apprenticeship

programs. In 2005 there were approximately 391,000 participants in these non-federal

apprenticeship training programs. 

214 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

Veterans’ Employment and Training Service 

The mission of Veterans’ Employment and Training Service (VETS) is to provide veterans and transitioning 

service members with the resources and services to succeed in the 21st Century workforce, by maximizing

their employment opportunities, protecting their employment rights, and meeting labor market demands with 

qualified veterans. The Agency’s vision is embodied in this statement: Veterans Succeeding in the 21st

Century Workforce. 

VETS can be classified into two main areas, Career Counseling and Employment Services, and Transition

and Reemployment Services. Brief descriptions follow: 

Career Counseling and Employment Services 

Disabled Veterans Outreach Program Specialist (DVOP) - This program is codified at 38 U.S.C. 4103A. 

DVOP grants are made to State Workforce Agencies (SWAs) according to a distribution formula prescribed 

by law. DVOP staff provide counseling, assessment, lifelong learning skills and/or referral to training for 

veterans, particularly those with disabilities or recently separated from the military.

Local Veterans’ Employment Representative (LVER) - This program is codified at 38 U.S.C. 4104. The 

program provides grants to SWAs for the appointment of LVER staff positions identified in Job Service local 

offices and One-Stop Career Centers to enhance the services provided to veterans through oversight, 

technical support, and direct provision of services. LVER staffs help veterans into productive employment

through lifelong learning services. 

Homeless Veterans’ Reintegration Project (HVRP) - The HVRP, codified at 38 U.S.C. 2021, provides 

employment assistance to homeless veterans through grants to both urban and other areas. 

Veterans’ Workforce Investment Program (VWIP) - The VWIP, codified at 29 U.S.C. 2913, provides

targeted veterans training and/or employment opportunities. The program targets service connected disabled

veterans, recently separated, campaign badge veterans and veterans with significant employment barriers. 

Transition and Reemployment Services 

Transition Assistance Program (TAP) - Authority for TAP is provided in 38 U.S.C. 4215 and 10 U.S.C. 

1144. TAP operates as a partnership between the Departments of Labor, Defense, and Veterans Affairs. 

This partnership also exists at the local level, where memoranda of understanding spell out the 

responsibilities of SWAs, military installations, VETS staff and VA facilities. The program provides 

separating service members and their spouses or individuals retiring from military service with career

counseling and training on becoming productive members of society through employment. TAP workshops 

are provided throughout the Nation and overseas. 

Uniformed Services Employment and Reemployment Rights and Veteran’s Preference Rights 

(USERRA) - is codified at 38 U.S.C. Chapter 43. The Uniformed Services Employment and Reemployment

Rights Act of 1994 (USERRA) succeeded Veterans’ Reemployment Rights statutes. USERRA continues to 

protect civilian job rights and benefits for veterans, members of the National Guard and Reserves. Veteran’s 

Preference for Federal employment is codified in 5 U.S.C. 2108. VETS educates both employee and 

employer so they better understand the rights of the individuals and promotes a more productive relationship 

between employer and employee.

FY 2005 Performance and Accountability Report 215
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

The full cost of VETS major programs is presented below. Full costs include all direct program costs and 

those indirect costs which can reasonably be assigned or allocated to the program.

(Dollars in thousands) 2005 2004 2003 2002 2001

Program Expenses

Career Counseling and Employment Services

Disabled Veterans Outreach Program $ 82,913 $ 84,063 $ 87,013 $ 82,582 $ 84,681

Local Veterans' Employment Representative 77,703 78,320 82,148 77,977 80,155

Transition and Reemployment Services 30,419 28,500 25,957 25 27 ,635 ,970

$ 191,035 $ 190,883 $ 195,118 $ 186 192 ,194 $ ,806

A summary of program outputs is presented below. 

Program Outputs 2005 2004 2003 2002 2001

Disabled Veterans Outreach Program

Participants employed 294,252 281,591 na 120,400 131,000

Disabled veterans 34,008 32,993 na 15,057 16,000

Special disabled veterans 14,568 13,929 na 7,107 8,000

Participants assisted 342,828 507,190 na 584,719 581,000

Local Veterans' Employment Representative

Participants employed 289,624 286,720 na 128,450 138,700

Disabled veterans 28,855 29,391 na 13,533 14,000

Special disabled veterans 11,563 12,015 na 6,233 6,500

Participants assisted 330,041 529,911 na 639,694 733,600

Transition and Reemployment Services

Participants served 134,288 130,000 110,055 104,000 112,000

Workshops 4,185 3,200 3,142 3,151 3,181

Uniformed Services Employment and Reemployment

Briefings, presentations, and technical assistance 10,538 9,300 10,081 5,436 3,200

Individuals briefed or assisted 99,208 59,300 66,545 54,050 - 

na - Data not available.

216 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

SOCIAL INSURANCE PROGRAMS

The Federal Accounting Standards Advisory Board (FASAB) has classified certain government income

transfer programs as social insurance programs. Recognizing that these programs have complex

characteristics that do not fit traditional accounting models, the FASAB has developed accounting standards 

for social insurance programs which require the presentation of supplementary information to facilitate the

assessment of the program’s long term sustainability.

The U.S. Department of Labor operates two programs classified under Federal accounting standards as social

insurance programs, the Unemployment Insurance Program and the Black Lung Disability Benefits Program. 

Presented below is the supplementary information for the two programs. 

Unemployment Insurance Program 

The Unemployment Insurance (UI) Program was created in 1935 to provide income assistance to 

unemployed workers who lose their jobs through no fault of their own. The program protects workers during

temporary periods of unemployment through the provision of unemployment compensation benefits. These 

benefits replace part of the unemployed worker’s lost wages and, in so doing, stabilize the economy during 

recessionary periods by increasing the unemployed’s purchasing power. The UI program operates counter

cyclically, with benefits exceeding tax collections during recessionary periods and UI tax revenues exceeding 

benefit payments during periods of recovery. 

Program Administration and Funding

The UI program is administered through a unique system of Federal-State partnerships, established in 

Federal law but executed through conforming State laws by State officials. The Federal government 

provides broad policy guidance and program direction through the oversight of the U.S. Department of 

Labor, while program details are established through individual State UI statutes, administered through State 

UI agencies. 

Federal and State Unemployment Taxes 

The UI program is financed through the collection of Federal and State unemployment taxes levied on 

subject employers and deposited in the Unemployment Trust Fund (UTF). The UTF was established to 

account for the receipt, investment and disbursement of unemployment taxes. Federal unemployment taxes 

are used to pay for the administrative costs of the UI program, including grants to each State to cover the 

costs of State UI operations and the Federal share of extended UI benefits. Federal unemployment taxes are 

also used to maintain a loan account within the UTF, from which insolvent States may borrow funds to pay

UI benefits. State UI taxes are used exclusively for the payment of regular UI benefits, as well as the State’s

share of extended benefits. 

Federal Unemployment Taxes

Under the provisions of the Federal Unemployment Tax Act (FUTA), a Federal tax is levied on 

covered employers, at a current rate of 6.2% of the first $7,000 in annual wages paid to each

employee. This Federal tax rate is reduced by a credit of up to 5.4%, granted to employers paying 

State UI taxes under conforming State UI statutes. Accordingly, in conforming States, employers 

pay an effective Federal tax of 0.8%. Federal unemployment taxes are collected by the Internal 

Revenue Service. 

FY 2005 Performance and Accountability Report 217
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

State Unemployment Taxes

In addition to the Federal tax, individual States finance their UI programs through State tax 

contributions from subject employers based on the wages of covered employees. (Three States also

collect contributions from employees). Within Federal confines, State tax rates are assigned in 

accordance with an employer’s experience with unemployment. Actual tax rates vary greatly among 

the States and among individual employers within a State. At a minimum, these rates must be 

applied to the Federal tax base of $7,000; however, States may adopt a higher wage base than the 

minimum established by FUTA. State UI agencies are responsible for the collection of State 

unemployment taxes. 

Unemployment Trust Fund 

Federal and State UI taxes are deposited into designated accounts within the Unemployment Trust Fund.

The UTF was established under the authority of Title IX, Section 904 of the Social Security Act of 1935, as 

amended, to receive, hold, invest, loan and disburse Federal and State UI taxes. The U.S. Department of the 

Treasury acts as custodian over monies deposited into the UTF, investing amounts in excess of disbursing 

requirements in Treasury securities. The UTF is comprised of the following accounts: 

Federal Accounts

The Employment Security Administration Account (ESAA) was established pursuant to Section 901 

of the Act. All tax receipts collected under the Federal Unemployment Tax Act (FUTA) are 

appropriated to the ESAA and used to pay the costs of Federal and State administration of the 

unemployment insurance program and veterans’ employment services, as well as 97 percent of the 

costs of the State employment services. Excess balances in ESAA, as defined under the Act, are 

transferred to other Federal accounts within the Fund, as described below. 

The Federal Unemployment Account (FUA) was established pursuant to Section 904 of the Act. 

FUA is funded by any excesses from the ESAA as determined in accordance with Section 902 of the 

Act. Title XII, Section 1201 of the Act authorizes the FUA to loan Federal monies to State accounts 

that are unable to make benefit payments because the State UI account balance has been exhausted. 

Title XII loans must be repaid with interest. The FUA may borrow from the ESAA or EUCA,

without interest, or may also receive repayable advances, with interest, from the general fund of the 

U.S. Treasury, when the FUA has a balance insufficient to make advances to the States. 

The Extended Unemployment Compensation Account (EUCA) was established pursuant to Section 

905 of the Act. EUCA provides for the payment of extended unemployment benefits authorized

under the Federal-State Extended Unemployment Compensation Act of 1970, as amended. Under 

the extended benefits program, extended unemployment benefits are paid to individuals who have 

exhausted their regular unemployment benefits. These extended benefits are financed one-half by

State unemployment taxes and one-half by FUTA taxes from the EUCA. The EUCA is funded by a

percentage of the FUTA tax transferred from the ESAA in accordance with Section 905(b)(1) and (2) 

of the Act. The EUCA may borrow from the ESAA or the FUA, without interest, or may also

receive repayable advances from the general fund of the Treasury when the EUCA has a balance 

insufficient to pay the Federal share of extended benefits. During periods of sustained high 

unemployment, the EUCA may also receive payments and non-repayable advances from the general

fund of the Treasury to finance emergency unemployment compensation benefits. Emergency

unemployment benefits require Congressional authorization. 

218 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

The Federal Employees Compensation Account (FECA) was established pursuant to Section 909 of

the Act. The FEC account provides funds to States for unemployment compensation benefits paid to 

eligible former Federal civilian personnel and ex-service members. Generally, benefits paid are

reimbursed to the Federal Employees Compensation Account by the various Federal agencies. Any 

additional resources necessary to assure that the account can make the required payments to States,

due to the timing of the benefit payments and subsequent reimbursements, will be provided by nonrepayable advances from the general fund of the Treasury. 

 

State Accounts

Separate State Accounts were established for each State and territory depositing monies into the

Fund, in accordance with Section 904 of the Act. State unemployment taxes are deposited into these 

individual accounts and may be used only to pay State unemployment benefits. States may receive

repayable advances from the FUA when their balances in the Fund are insufficient to pay benefits. 

Railroad Retirement Accounts

The Railroad UI Account and Railroad UI Administrative Account were established under Section 

904 of the Act to provide for a separate unemployment insurance program for railroad employees. 

This separate unemployment insurance program is administered by the Railroad Retirement Board,

an agency independent of DOL. DOL is not responsible for the administrative oversight or solvency 

of the railroad unemployment insurance system. Receipts from taxes on railroad payrolls are 

deposited in the Railroad UI Account and the Railroad UI Administrative Account to meet benefit 

payment and related administrative expenses. 

UI Program Benefits 

 

The UI program provides regular and extended benefit payments to eligible unemployed workers. Regular 

UI program benefits are established under State law, payable for a period not to exceed a maximum duration. 

In 1970, Federal law began to require States to extend this maximum period of benefit duration by fifty 

percent during periods of high unemployment. These extended benefit payments are paid equally from 

Federal and State accounts. 

 

Regular UI Benefits

There are no Federal standards regarding eligibility, amount or duration of regular UI benefits. 

Eligibility requirements, as well as benefit amounts and benefit duration are determined under State 

law. Under State laws, worker eligibility for benefits depends on experience in covered employment

during a past base period, which attempts to measure the workers’ recent attachment to the labor 

force. Three factors are common to State eligibility requirements: (1) a minimum duration of recent 

employment and earnings during a base period prior to unemployment, (2) unemployment not the 

fault of the unemployed, and (3) availability of the unemployed for work. 

Benefit payment amounts under all State laws vary with the worker’s base period wage history. 

Generally, States compute the amount of weekly UI benefits as a percentage of an individual’s 

average weekly base period earnings, within certain minimum and maximum limits. Most States set

the duration of UI benefits by the amount of earnings an individual has received during the base 

period. Currently, almost all States have established the maximum duration for regular UI benefits at 

26 weeks. Regular UI benefits are paid by the State UI agencies from monies drawn down from the

State’s account within the Unemployment Trust Fund.

FY 2005 Performance and Accountability Report 219
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

Extended UI Benefits

The Federal/State Extended Unemployment Compensation Act of 1970 provides for the extension of

the duration of UI benefits during periods of high unemployment. When the insured unemployment 

level within a State, or in some cases total unemployment, reaches certain specified levels, the State 

must extend benefit duration by fifty percent, up to a combined maximum of 39 weeks. Fifty percent 

of the cost of extended unemployment benefits is paid from the Extended Unemployment 

Compensation Account within the UTF, and fifty percent by the State, from the State’s UTF account. 

Emergency UI Benefits

During prolonged periods of high unemployment, Congress may authorize the payment of

emergency unemployment benefits to supplement extended UI benefit payments. Emergency

benefits totaling $4.2 billion were paid under the Temporary Extended Unemployment

Compensation Act during FY 2004. The program is effectively over. No new claimants were

allowed to enter the program after January 2004, and no benefits were paid after January 2005. 

Payments in excess of $23 billion were paid since inception of the program in March 2002. The

benefits under this program were paid from Federal unemployment taxes and general fund

appropriations in EUCA. 

 

Federal UI Benefits

Unemployment benefits to unemployed Federal workers are paid from the Federal Employment

Compensation Account within the Unemployment Trust Fund. These benefit costs are reimbursed

by the responsible Federal agency and are not considered to be social insurance benefits. Federal 

unemployment compensation benefits are not included in this discussion of social insurance 

programs. 

Program Finances and Sustainability

At September 30, 2005, total assets within the UTF exceeded liabilities by $54.5 billion. This fund balance 

approximates the accumulated surplus of tax revenues and earnings on these revenues over benefit payment

expenses and is available to finance benefit payments in future periods when tax revenues may be

insufficient. Treasury invests this accumulated surplus in Federal securities. The net value of these 

securities at September 30, 2005 was $54.8 billion. These investments accrue interest, which is distributed to 

eligible State and Federal accounts within the UTF. Interest income from these investments during FY 2005

was $2.5 billion. Federal and State UI tax and reimbursable revenues of $41.8 billion and regular, extended 

and emergency benefit payment expense of $31.2 billion were recognized for the year ended September 30, 

2005. 

As discussed in Note 1.L.1 to the consolidated financial statements, DOL recognized a liability for regular,

extended and temporary extended unemployment benefits to the extent of unpaid benefits applicable to the

current period. Accrued unemployment benefits payable at September 30, 2005 were $0.9 billion. 

220 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

Effect of Projected Cash Inflows and Outflows on the Accumulated Net Assets of the UTF 

The ability of the UI program to meet a participant’s future benefit payment needs depends on the 

availability of accumulated taxes and earnings within the UTF. The Department measures the effect of 

projected benefit payments on the accumulated net assets of the UTF, under an open group scenario, which 

includes current and future participants in the UI program. Future estimated cash inflows and outflows of the

UTF are tracked by the Department for budgetary purposes. These projections allow the Department to

monitor the sensitivity of the UI program to differing economic conditions, and to predict the program’s 

sustainability under varying economic assumptions. The significant assumptions used in the projections 

include total unemployment rates, civilian labor force levels, percent of unemployed receiving benefits, total

wages, distribution of benefit payments by state, state tax rate structures, state taxable wage bases and

interest rates on UTF investments. 

Presented on the following pages is the effect of projected economic conditions on the net assets of the UTF, 

excluding the Federal Employees Compensation Account. 

FY 2005 Performance and Accountability Report 221
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

Expected Economic Conditions 

Charts I and II graphically depict the effect of expected economic conditions on the UTF over the next ten

years. 

Projected Cash Inflows and Outflows Under Expected Economic Conditions

Chart I depicts projected cash inflows and outflows of the UTF over the next ten years under

expected economic conditions. Both cash inflows and cash inflows excluding interest earnings are 

displayed. Current estimates by the Department are based on an expected unemployment rate of

5.12% during FY 2006, decreasing to 5.00% in FY 2009 and thereafter. Total cash inflows exceed

total cash outflows for all years projected. The net inflow peaks at $8.9 billion in FY 2006 and 

decreases to $3.2 billion in FY 2011, indicating that States have replenished their funds to desired 

levels. 

These projections, excluding interest earnings, indicate decreasing net cash inflows from FY 2006 to 

FY 2009, then net cash outflows for the next three years. This crossover back to net outflows 

implies that the fund must rely on interest earnings to keep growing.

Chart I

Unemployment Trust Fund 

Cash Inflow and Outflow

30

35

40

45

50

55

60

65

70

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Excludes the Federal Employee Compensation Account

$ - Billions

Total Cash Inflows Cash Inflow Excluding Interest Total Cash Outflow

222 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

Effect of Expected Cash Flows on UTF Assets

Chart II demonstrates the effect of these expected cash inflows and outflows on the net assets of the 

UTF over the ten year period ended September 30, 2015. Yearly projected total cash inflows, 

including interest earnings, and cash outflows are depicted, as well as the net effect of this cash flow

on UTF assets. 

Total cash inflows exceed cash outflows for all years projected, with this excess peaking in 2006. 

Starting at $63.3 billion in FY 2006, net UTF assets increase by 75% over the next nine years to 

$110.6 billion by the end of FY 2015. 

Chart II 

Unemployment Trust Fund 

Effect of Net Cash Flow on Net Assets

30

40

50

60

70

80

90

100

110

120

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Excludes the Federal Employee Compensation Account

$ - Billions

Total Cash Inflows Total Cash Outflows Net Assets

FY 2005 Performance and Accountability Report 223
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

Recessionary Scenarios 

Charts III and IV demonstrate the effect on accumulated UTF assets of projected total cash inflows and cash

outflows of the UTF over the ten year period ending September 30, 2015, under mild and severe recession 

scenarios. Each scenario uses an open group, which includes current and future participants in the UI

program. Charts III and IV assume increased rates of unemployment during mild and deep periods of

recession. 

Effect on UTF Assets of Mild Recession

The Department projects the effect of moderate recession on the cash inflows and outflows of the 

UTF. Under this scenario, which utilizes an unemployment rate peaking at 7.43% in FY 2008, net

cash outflows are projected in FY 2007 through FY 2009. Net cash inflows are reestablished in FY 

2010 and peak in FY 2013 with a drop in the unemployment rate to 5.13%. Net assets never fall 

below $38.9 billion and are within $11 billion of the balance under expected economic conditions by

2015. The crossover pattern remains the same when interest earnings are excluded. 

Chart III 

Unemployment Trust Fund 

Effect of Net Cash Flow on Net Assets

0

20

40

60

80

100

120

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Excludes the Federal Employee Compensation Account

$ - Billions

Total Cash Inflows Total Cash Outflows Net Assets

224 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

FY 2005 Performance and Accountability Report 225

Effect on UTF Assets of Deep Recession

The Department also estimates the effect of severe recession on the cash inflows and outflows of the

UTF. This scenario assumes a rising unemployment rate peaking at 10.15% in FY 2009. Under this 

scenario, net cash outflows are projected in FY 2007 through FY 2010, with the fund in a deficit

situation from 2009 to 2012. The net assets of the UTF decrease from $62.3 billion in FY 2006 to

negative $21.2 billion in 2010, a decline of $83.5 billion. State accounts without sufficient reserve

balances to absorb negative cash flows would be forced to borrow funds from the FUA to meet

benefit payment requirements. State borrowing demands could also deplete the FUA, which borrows 

from the ESAA and the EUCA until they are depleted. The FUA would then require advances from 

the general fund of the U.S. Treasury to provide for State borrowings. (See discussion of State

solvency measures following.)

Net cash inflows are reestablished in FY 2011, with a drop in the unemployment rate to 7.28%. By

the end of FY 2015, this positive cash flow has replenished UTF account balances to $51.0 billion at

a growth rate higher than prior to the recession. This example demonstrates the counter cyclical 

nature of the UI program, which experiences net cash outflows during periods of recession, to be

replenished through net cash inflows during periods of recovery. However, at the end of the

projection period, net assets are still $59.6 billion less than under expected economic conditions.

Chart IV 

Unemployment Trus

Effect of Net Cash Flow on Net

(40)

(20)

0

20

40

60

80

100

120

2006 2007 2008 2009 2010 2011

Excludes the Federal Employee Com

$ - Billions

t Fund 

 Assets

2012 2013 2014 2015

pensation Account

Total Cash Inflows Total Cash Outflows Net Assets
226 U

nited States Department of Labor 

(Dollars in thousands) 2006 2007 2008 2009 2010 2011 2012 2013 Balance, start of year $ 63,30 54,395,832 $ 7,202 $ 70,879,793 $ 76,505,233 $ 80,778,555 $ 84,576,483 $ 87,756,843 $ 91,438,630 $ 9Cash inflow State unemployment taxes 37,183,000 38,405,000 39,368,000 40,200,000 41,700,000 43,134,000 45,517,000 49,035,000 5

Federal unemployment taxes 7,464,000 7,393,000 6,080,000 5,753,000 5,895,000 6,041,000 6,312,000 7,028,000 

General revenue appropriation 100 100 100 100 100 200 200 200 

Interest on loans 7,000 - - 6,000 28,000 75,000 153,000 219,000 

Deposits by the Railroad Retirement Board 12 109,100 5,200 126,100 111,000 100,000 12 107,900 1,700 125,000 

Total cash inflow excluding interest 45,92 44,763,200 3,300 45,574,200 46,070,100 47,723,100 49,358,100 52,103,900 56,407,200 5

Interest on Federal securities 2,83 2,531,365 7,136 3,099,534 3,490,986 3,798,423 4,33 4,062,432 8,360 4,657,361 

Total cash inflow 48,76 47,294,565 0,436 48,673,734 49,561,086 51,521,523 53,420,532 56,442,260 61,064,561 6

Cash outflow State unemployment benefits 34,403,000 37,334,000 39,235,000 41,508,000 43,986,000 46,401,000 48,807,000 51,370,000 5

State administrative costs 3,696,763 3,572,458 3,528,472 3,491,573 3,446,790 3,538,853 3,645,578 3,743,888 

Federal administrative costs 169,158 168,432 171,027 173,119 173,620 181,255 187,148 193,161 

Interest on tax refunds 2,674 2,595 2,115 2,112 2,245 2,364 2,547 2,904 

Railroad Retirement Board withdrawals 11 111,600 0,360 111,680 112,960 114,940 11 116,700 8,200 120,480 

Total cash outflow 41,18 38,383,195 7,845 43,048,294 45,287,764 47,723,595 50,240,172 52,760,473 55,430,433 5Excess of total cash inflow excluding

 interest over total cash outflow 4,73 6,380,005 5,455 2,525,906 782,336 (495) ( ( 882,072) 656,573) 976,767 

Excess of total cash inflow over

 total cash outflow 7,57 8,911,370 2,591 5,625,440 4,273,322 3,797,928 3,68 3,180,360 1,787 5,634,128 

Balance, end of year $ 70,87 63,307,202 $ 76,50 9,793 $ 80 5,233 $ 84 ,778,555 $ 87 ,576,483 $ 91 ,756,843 $ 97 ,438,630 $ 10

,072,758 $ 

Total unemployment rate 5.12% 5.10% 5.03% 5.00% 5.00% 5.00% 5.00% 5.00% 

FOR THE TEN YEAR PERIOD ENDING SEPTEMBER 30, 2015

(1) EXPECTED ECONOMIC CONDITIONS

U.S. DEPARTMENT OF LABOR

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION

CASH INFLOW AND OUTFLOW OF THE 

UNEMPLOYMENT TRUST FUND EXCLUDING THE FEDERAL EMPLOYEES COMPENSATION ACCOUNT
FY 2005 Performance and Accountability Rep

ort 7

(Dollars in thousands) 2006 2007 2008 2009 2010 2011 2012 2013 Balance, start of year $ 62,31 54,395,832 $ 8,901 $ 58,016,908 $ 46,022,764 $ 38,930,587 $ 41,889,104 $ 52,806,892 $ 64,023,528 $ 78Cash inflow

State unemployment taxes 37,171,000 38,747,000 42,703,000 47,325,000 51,098,000 53,621,000 54,084,000 54,867,000 54

Federal unemployment taxes 7,443,000 7,277,000 5,915,000 5,598,000 6,570,000 8,142,000 9,142,000 10,576,000 11

General revenue appropriation 200 11,500 33,000 24,600 4,500 500 800 400 

Interest on loans 8,000 12,000 194,000 574,000 822,000 808,000 691,000 482,000 

Deposits by the Railroad Retirement Board 12 109,100 5,200 126,100 111,000 100,000 12 107,900 1,700 125,000 

Total cash inflow excluding interest 46,17 44,731,300 2,700 48,971,100 53,632,600 58,594,500 62,679,400 64,039,500 66,050,400 65

Interest on Federal securities 2,545 2,500,057 ,903 2,125,638 1,796,190 1,897,540 2,76 2,228,411 0,848 3,486,355 4

Total cash inflow 48,71 47,231,357 8,603 51,096,738 55,428,790 60,492,040 64,907,811 66,800,348 69,536,755 70

Cash outflow

State unemployment benefits 35,328,000 48,949,000 58,885,000 58,385,000 53,577,000 50,049,000 51,559,000 51,015,000 52

State administrative costs 3,696,863 3,790,250 3,921,118 3,847,833 3,665,461 3,639,882 3,715,676 3,765,066 3

Federal administrative costs 169,158 168,432 171,027 173,119 173,620 181,255 187,148 193,161 

Interest on tax refunds 2,667 2,554 2,057 2,055 2,502 3,186 3,688 4,369 

Railroad Retirement Board withdrawals 11 111,600 0,360 111,680 112,960 114,940 11 116,700 8,200 120,480 

Total cash outflow 53,02 39,308,288 0,596 63,090,882 62,520,967 57,533,523 53,990,023 55,583,712 55,098,076 56Excess of total cash inflow excluding interest over total cash outflow ( 5,423,012 6,847,896) (14,119,782) (8,888,367) 1,060,977 8,45 8,689,377 5,788 10,952,324 9Excess of total cash inflow over total cash outflow ( 7,923,069 4,301,993) (11,994,144) (7,092,177) 2,958,517 10,917,788 11,216,636 14,438,679 13

Balance, end of year $ 58,01 62,318,901 $ 46,022,764 6,908 $ 38,930,587 $ 41,889,104 $ 52,806,8 $ 64,02 92 $ 78 3,528 $ 91

,462,207 $ 

Total unemployment rate 5.24% 6.60% 7.43% 7.13% 6.35% 5.63% 5.48% 5.13% 

FOR THE TEN YEAR PERIOD ENDING SEPTEMBER 30, 2015

(2) MILD RECESSIONARY UNEMPLOYMENT RATE

U.S. DEPARTMENT OF LABOR

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION

CASH INFLOW AND OUTFLOW OF THE

UNEMPLOYMENT TRUST FUND EXCLUDING THE FEDERAL EMPLOYEES COMPENSATION ACCOUNT

 22
(Dollars in thousands) 2006 2007 2008 2009 2010 2011 2012 2013 Balance, start of year $ 62 54,395,832 $ ,319,859 $ 55,207,656 $ 26,233,373 $ (14,202,712) $ (21,228,539) $ (16,069,050) $ (7,165,371) $ Cash inflow State unemployment taxes 37,172,000 38,714,000 43,617,000 50,026,000 57,327,000 61,474,000 63,137,000 63,550,000 

Federal unemployment taxes 7,443,000 7,239,000 5,794,000 5,417,000 6,632,000 8,734,000 11,008,000 13,062,000 

General revenue appropriation 200 16,000 65,400 88,600 60,400 11,100 9,900 6,100 

Interest on loans 8,000 22,000 437,000 1,556,000 2,623,000 2,900,000 2,902,000 2,744,000 

Deposits by the Railroad Retirement Board 12 109,100 5,200 126,100 111,000 100,000 1 107,900 21,700 125,000 

Total cash inflow excluding interest 46 44,732,300 ,116,200 50,039,500 57,198,600 66,742,400 7 73,227,000 7,178,600 79,487,100 

Interest on Federal securities 2 2,500,015 ,459,167 1,545,983 1,096,083 913,683 1, 1,051,181 297,407 1,617,613 

Total cash inflow 48 47,232,315 ,575,367 51,585,483 58,294,683 67,656,083 7 74,278,181 8,476,007 81,104,713 

Cash outflow State unemployment benefits 35,328,000 51,567,000 76,038,000 93,535,000 69,349,000 63,701,000 64,289,000 61,079,000 

State administrative costs 3,696,863 3,839,237 4,237,044 4,507,700 4,041,824 3,916,319 3,973,539 3,975,113 

Federal administrative costs 169,158 168,432 171,027 173,119 173,620 181,255 187,148 193,161 

Interest on tax refunds 2,667 2,541 2,015 1,989 2,526 3,418 4,441 5,396 

Interest on General Fund advances - - - 400,000 1,000,000 1,200,000 1,000,000 600,000 

Railroad Retirement Board withdrawals 11 111,600 0,360 111,680 112,960 114,940 1 116,700 18,200 120,480 

Total cash outflow 55 39,308,288 ,687,570 80,559,766 98,730,768 74,681,910 6 69,118,692 9,572,328 65,973,150 Excess of total cash inflow excluding

interest over total cash outflow ( 5,424,012 9,571,370) (30,520,266) (41,532,168) (7,939,510) 7, 4,108,308 606,272 13,513,950 

Excess of total cash inflow over

 total cash outflow ( 7,924,027 7,112,203) (28,974,283) (40,436,085) (7,025,827) 8, 5,159,489 903,679 15,131,563 

Balance, end of year $ 55 62,319,859 $ 26 ,207,656 $ ( ,233,373 $ ( 14,202,712) $ (16,069 21,228,539) $ (7, ,050) $ 7,966,19 165,371) $ 

2 $ 

Total unemployment rate 5.24% 6.93% 9.08% 10.15% 7.83% 7.28% 7.05% 6.43% 

FOR THE TEN YEAR PERIOD ENDING SEPTEMBER 30, 2015

(3) DEEP RECESSIONARY UNEMPLOYMENT RATE

U.S. DEPARTMENT OF LABOR

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION

CASH INFLOW AND OUTFLOW OF THE

UNEMPLOYMENT TRUST FUND EXCLUDING THE FEDERAL EMPLOYEES COMPENSATION ACCOUNT

228 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

States Minimally Solvent 

Each State’s accumulated UTF net assets or reserve balance should provide a defined level of benefit

payments over a defined period. To be minimally solvent, a State’s reserve balance should provide for one 

year’s projected benefit payment needs based on the highest levels of benefit payments experienced by the 

State over the last twenty years. A ratio of 1.0 or greater prior to a recession indicates a state is minimally 

solvent. States below this level are vulnerable to exhausting their funds in a recession. States exhausting 

their reserve balance must borrow funds from the Federal Unemployment Account (FUA) to make benefit 

payments. The Missouri and New York state accounts had loans payable to FUA at the end of FY 2005. In

addition, Texas, Illinois and North Carolina had outstanding debts to other sources. During periods of highsustained unemployment, balances in the FUA may be depleted. In these circumstances, FUA is authorized 

to borrow from the Treasury general fund. 

Chart V presents the State by State results of this analysis at September 30, 2005, in descending order, by

ratio. As the table below illustrates, 27 state funds were below minimal solvency ratio at September 30,

2005. 

Chart V 

Minimally Solvent Not Minimally Solvent 

State Ratio State Ratio

Mississippi 2.82 Indiana 0.94

New Mexico 2.82 West Virginia 0.85

Vermont 1.89 Alaska 0.83

Montana 1.75 Alabama 0.81

Maine 1.73 Wisconsin 0.76

New Hampshire 1.70 North Dakota 0.75

Hawaii 1.69 South Carolina 0.69

Utah 1.59 Virginia 0.68

Wyoming 1.56 Connecticut 0.61

Oklahoma 1.55 Kentucky 0.56

District of Columbia 1.54 Idaho 0.49

Iowa 1.52 South Dakota 0.49

Arizona 1.47 Rhode Island 0.48

Oregon 1.44 Arkansas 0.42

Delaware 1.39 Colorado 0.42

Louisiana 1.39 New Jersey 0.40

Virgin Islands 1.34 Pennsylvania 0.38

Puerto Rico 1.30 Ohio 0.37

Washington 1.28 Michigan 0.28

Georgia 1.27 California 0.25

Kansas 1.22 Massachusetts 0.23

Nevada 1.21 Minnesota 0.08

Florida 1.04 Illinois 0.00

Maryland 1.01 Missouri 0.00

Tennessee 1.01 North Carolina 0.00

Nebraska 1.00 New York 0.00

Texas 0.00

FY 2005 Performance and Accountability Report 229
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

Black Lung Disability Benefit Program 

The Black Lung Disability Benefit Program provides for compensation, medical and survivor benefits for 

eligible coal miners who are disabled due to pneumoconiosis (black lung disease) arising out of their coal

mine employment. The U.S. Department of Labor operates the Black Lung Disability Benefit Program. The 

Black Lung Disability Trust Fund (BLDTF) provides benefit payments to eligible coal miners disabled by

pneumoconiosis when no responsible mine operator can be assigned the liability. 

Program Administration and Funding

Black lung disability benefit payments are funded by excise taxes from coal mine operators based on the sale

of coal, as are the fund’s administrative costs. These taxes are collected by the Internal Revenue Service and

transferred to the BLDTF, which was established under the authority of the Black Lung Benefits Revenue 

Act, and administered by the U.S. Department of the Treasury. The Black Lung Benefits Revenue Act

provides for repayable advances to the BLDTF from the general fund of the Treasury, in the event that

BLDTF resources are not adequate to meet program obligations. 

Program Finances and Sustainability

At September 30, 2005, total liabilities of the Black Lung Disability Trust Fund exceeded assets by $9.2 

billion. This deficit fund balance represented the accumulated shortfall of excise taxes necessary to meet 

benefit payment and interest expenses. This shortfall was funded by repayable advances to the BLDTF,

which are repayable with interest. Outstanding advances at September 30, 2005 were $9.2 billion, bearing 

interest rates ranging from 4.500 to 13.875 percent. Excise tax revenues of $610.4 million, benefit payment

expense of $327.9 million and interest expense of $674.9 million were recognized for the year ended

September 30, 2005. 

As discussed in Note 1.L.3, DOL recognized a liability for disability benefits to the extent of unpaid benefits

applicable to the current period. Accrued disability benefits payable at September 30, 2005 were $24.4 

million. Although no liability was recognized for future payments to be made to present and future program 

participants beyond the due and payable amounts accrued at year end, future estimated cash inflows and 

outflows of the BLDTF are tracked by the Department for budgetary purposes. The significant assumptions

used in the projections are coal production estimates, the tax rate structure, number of beneficiaries, life 

expectancy, medical costs and the interest rate on new repayable advances from Treasury. These projections

are sensitive to changes in the tax rate and changes in interest rates on repayable advances from Treasury. 

These projections, made over the thirty-five year period ending September 30, 2040, indicate that cash

inflows from excise taxes will exceed cash outflows for benefit payments and administrative expenses for 

each period projected. Cumulative net cash inflows are projected to reach $16.1 billion by the year 2040. 

However, when interest payments required to finance the BLDTF’s repayable advances are applied against

this surplus cash inflow, the BLDTF’s cash flow turns negative during each of the thirty-five periods

included in the projections. Net cash outflows after interest payments are projected to reach $41.6 billion by

the end of the year 2040, increasing the BLDTF’s deficit to $50.8 billion at September 30, 2040. (See Chart

I on following page) 

The net present value of future benefit payments for the thirty-five year period ending 2040 is $2.6 billion. 

The net present value of future excise taxes for the thirty-five year period is $8.5 billion which results in a 

$5.9 billion excess of excise taxes over benefit payments. However, the net present value of total cash 

outflows, including interest payments and administrative costs, is $25.1 billion resulting in an excess of cash

outflows over excise taxes of $16.6 billion. The interest rate used for net present value is 4.5 percent. The 

net present value of future benefit payments was $2.9 billion, $3.0 billion, $3.1 billion, and $3.5 billion for 

FY 2004, 2003, 2002 and 2001, respectively. The net present value of future excise taxes was $7.7 billion, 

$7.3 billion, $7.8 billion, and $7.9 billion for FY 2004, 2003, 2002 and 2001, respectively. The fund deficit

was $8.7 billion, $8.2 billion, $7.7 billion and $7.2 billion at the end of FY 2004, 2003, 2002, and 2001, 

respectively.

230 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

FY 2005 Performance and Accountability Report 231

Chart I 

BLACK LUNG DISABILITY TRUST FUND

CASH INFLOW AND OUTFLOW

1,000

1,500

2,000

2,500

3,000

2034 2038

$ - Millions

0

500

2006 2010 2014 2018 2022 2026 2030

Total Cash Outflow Total Cash Inflow Cash Outflow Before Interest

 

The projected decrease in cash inflows in the year 2014 and thereafter is the result of a scheduled reduction

in the tax rate on the sale of coal. This rate reduction is projected to result in a fifty-two percent decrease in

the amount of excise taxes collected between the years 2013 and 2015. The cumulative effect of this change

is estimated to be in excess of $12.2 billion by the year 2040.

Yearly cash inflows and outflows are presented in the table on the following page. 
(Dollars in thousands) 2006 2007 2008 2009 2010 2011 - 2040 Cash inflow Excise taxes $ 608,000 $ 623,000 $ 641,000 $ 654,000 $ 662,000 $ 12,921,547 

Total cash inflow 608,000 623,000 641,000 654,000 662,000 12,921,547 

Cash outflow Disabled coal miners benefits 309,806 292,449 275,007 258,031 241,274 2,570,757 

Administrative costs 57,989 60,199 62,505 64,909 67,417 1,027,722 

Cash outflows before interest payments 367,795 352,648 337,512 322,940 308,691 3,598,479 Cash inflow over cash outflow before interest payments 240,205 270,352 303,488 331,060 353,309 9,323,068 

Interest on advances 694,455 715,714 738,427 761,696 785,381 48,763,833 

Total cash outflow 1,062,250 1,068,362 1,075,939 1,084,636 1,094,072 52,362,312 Total cash outflow over total cash inflow (454,250) (445,362) (434,939) (430,636) (432,072) (39,440,765

Balance, start of year ( (9,160,009) 9,614,259) (10,059,621) (10,494,560) (10,925,196) (11,357,268

Balance, end of year $ ( (9,614,259) $ 10,059,621) $ (10,494,560) $ (10,925,196) $ (11,357,268) $ (50,798,033

U.S. DEPARTMENT OF LABOR

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION

CASH INFLOW AND OUTFLOW OF THE BLACK LUNG DISABILITY TRUST FUND

FOR THE THIRTY-FIVE YEAR PERIOD ENDING SEPTEMBER 30, 2040

232 United States Department of Labor 

Required Supplementary Information 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

STATEMENT OF BUDGETARY RESOURCES

The principal Statement of Budgetary Resources combines the availability, status and outlay of DOL’s

budgetary resources during FY 2005 and 2004. Presented on the following pages is the disaggregation of

this combined information for each of the Department’s major budget accounts. 

FY 2005 Performance and Accountability Report 235
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

COMBINING STATEMENT OF BUDGETARY RESOURCES 

For the Year Ended September 30, 2005 

Employment Employment Occupational

and Training Standards Safety and Health

(Dollars in thousands) Administration Administration Administration

BUDGETARY RESOURCES

Budget authority

Appropriations received $ 52,951,638 $ 2,485,951 $ 468,109

Borrowing authority - 446,000 - 

Net transfers (390,115) - - 

Unobligated balance

Beginning of period 2,079,330 1,428,161 22,094

Net transfers (104) (418) (952)

Spending authority fromoffsetting collections

Earned

Collected 51,972 2,299,208 3,731

Receivable from Federal sources 330 57,196 390

Change in unfilled customer orders

Advance received - 5,086 - 

Transfers from trust funds 3,538,339 34,637 - 

Total spending authority from offsetting collections 3,590,641 2,396,127 4,121

Recoveries of prior year obligations 335,591 10,853 11,738

Temporarily not available pursuant to Public Law (9,279,797) (16,920) - 

Permanently not available (462,774) (6,247) (7,906)

Total budgetary resources $ 48,824,410 $ 6,743,507 $ 497,204

STATUS OF BUDGETARY RESOURCES

Obligations incurred

Direct $ 46,419,130 $ 2,767,059 $ 468,716

Reimbursable 67,490 2,518,486 2,261

Total obligations incurred 46,486,620 5,285,545 470,977

Unobligated balances available

Apportioned 985,318 1,095,358 25

Other available - 175,158 - 

Unobligated balances not available 1,352,472 187,446 26,202

Total status of budgetary resources $ 48,824,410 $ 6,743,507 $ 497,204

RELATIONSHIP OF OBLIGATIONS TO OUTLAYS

Obligated balance, net, beginning $ 7,397,760 $ 329,283 $ 70,213

Obligated balance, net, ending

Accounts receivable (1,407,365) (58,780) (865)

Undelivered orders 5,170,851 109,619 44,521

Accounts payable 3,179,273 248,532 29,173

Outlays

Disbursements 46,534,824 5,246,930 456,233

Collections (3,519,640) (2,338,455) (3,731)

Total outlays 43,015,184 2,908,475 452,502

Offsetting receipts (823,232) (6,160) - 

Net outlays $ 42,191,952 $ 2,902,315 $ 452,502

236 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

Bureau of Mine Safety Employee Benefits Veterans' Other

Labor and Health Security Employment Departmental

Statistics Administration Administration and Training Programs Total

$ 455,045 $ 281,535 $ 132,345 $ 29,550 $ 444,692 $ 57,248,865

 - - - - - 446,000

 - - - - 3,000 (387,115)

 12,981 9,132 1,810 6,231 18,052 3,577,791

 (724) (125) (88) (150) 2,346 (215)

 7,693 1,073 10,142 468 171,095 2,545,382

 - - - - (216) 57,700

 - - - - 5,670 10,756

 77,346 - - 193,519 29, 3, 875 873,716

 85,039 1,073 10,142 193,987 206,424 6,487,554

 4,819 3,203 1,888 2,421 38,159 408,672

 - - - - - (9,296,717)

 ( (7,521) (1, 2,973) 791) (236) ( (6,749) 496,197)

$ 54 2 9,639 $ 14 91,845 $ 4,306 $ 231,803 $ 7 5 05,924 $ 7,988,638

$ 531,801 $ 287,288 $ 132,169 $ 227,865 $ 499,608 $ 51,333,636

 6, 795 667 9, 970 - 1 2, 77,258 782,927

 538,468 288,083 142,139 227,865 676,866 54,116,563

 438 773 16 1,138 10,859 2,093,925

 - - - - 152 175,310

 10 2, ,733 2, 989 151 2,800 18, 1, 047 602,840

$ 54 2 9,639 $ 14 91,845 $ 4,306 $ 231,803 $ 7 5 05,924 $ 7,988,638

$ 65,190 $ 27,083 $ 39,803 $ 58,249 $ 524,245 $ 8,511,826

 - (35) - - (6,429) (1,473,474)

 28,050 17,462 37,302 24,019 447,256 5,879,080

 39,678 12,698 11,361 35,962 46,869 3,603,546

 531,111 281,837 131,392 223,714 675,470 54,081,511

 ( (85,039) ( 1,073) 10,142) (193,987) ( (206,639) 6,358,706)

 446,072 280,764 121,250 29,727 468,831 47,722,805

 - - - - ( - 829,392)

$ 44 2 6,072 $ 12 80,764 $ 1,250 $ 29,727 $ 4 4 68,831 $ 6,893,413

FY 2005 Performance and Accountability Report 237
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

COMBINING STATEMENT OF BUDGETARY RESOURCES 

For the Year Ended September 30, 2004 

Employment Employment Occupational

and Training Standards Safety and Health

(Dollars in thousands) Administration Administration Administration

BUDGETARY RESOURCES

Budget authority

Appropriations received $ 54,241,769 $ 1,993,802 $ 460,786

Borrowing authority - 497,000 - 

Net transfers (565,235) 5,865 - 

Unobligated balance

Beginning of period 1,615,419 1,460,715 17,927

Net transfers (589) (147) (883)

Spending authority from offsetting collections

Earned

Collected 100,753 2,350,388 8,462

Receivable from Federal sources (418) (17,284) (412)

Change in unfilled customer orders

Advance received - (5,315) - 

Transfers from trust funds 3,554,031 34,025 - 

Total spending authority from offsetting collections 3,654,366 2,361,814 8,050

Recoveries of prior year obligations 347,462 10,731 14,665

Temporarily not available pursuant to Public Law (22,646) (15) - 

Permanently not available (176,850) (6,897) (7,579)

Total budgetary resources $ 59,093,696 $ 6,322,868 $ 492,966

STATUS OF BUDGETARY RESOURCES

Obligations incurred

Direct $ 56,940,460 $ 2,409,831 $ 466,813

Reimbursable 73,911 2,484,876 4,059

Total obligations incurred 57,014,371 4,894,707 470,872

Unobligated balances available

Apportioned 1,221,910 1,109,138 34

Exempt from apportionment (5) - - 

Other available - 212,547 - 

Unobligated balances not available 857,420 106,476 22,060

Total status of budgetary resources $ 59,093,696 $ 6,322,868 $ 492,966

RELATIONSHIP OF OBLIGATIONS TO OUTLAYS

Obligated balance, net, beginning $ 8,400,538 $ 261,764 $ 83,179

Obligated balance, net, ending

Accounts receivable (1,336,364) (1,107) (475)

Undelivered orders 5,529,146 77,114 43,145

Accounts payable 3,204,978 253,276 27,543

Outlays

Disbursements 57,637,954 4,833,741 469,585

Collections (3,622,638) (2,379,098) (8,462)

Total outlays 54,015,316 2,454,643 461,123

Offsetting receipts (1,542,933) (6,539) - 

Net outlays $ 52,472,383 $ 2,448,104 $ 461,123

238 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

 

Bureau of Mine Safety Employee Benefits Veterans' Other

Labor and Health Security Employment Departmental

Statistics Administration Administration and Training Programs Total

$ 447,088 $ 270,826 $ 124,962 $ 26,550 $ 473,791 $ 58,039,574

 - - - - - 497,000

 - - - - 42,491 (516,879)

 11,616 14,422 1,946 1,795 50,156 3,173,996

 (1,304) (331) (169) (51) (34,118) (37,592)

 7,588 2,058 10,812 144 165,327 2,645,532

 (794) (839) (236) (70) (4,056) (24,109)

 - - - - (219) (5,534)

 74,667 - - 192,253 3,884,725 29,749 

 81,461 1,219 10,576 192,327 190,801 6,500,614

 9,151 2,876 1,622 1,103 76,021 463,631

 - - - - - (22,661)

 (7 (2,918) ,424) (1,447) (157) (4 (207,353) ,081) 

$ 286,094 540,588 $ 137,490 $ $ 221,567 $ 67,890,330 795,061 $ 

$ 522,100 $ 276,058 $ 125,328 $ 215,336 $ 610,319 $ 61,566,245

 904 5,507 10,352 - 2,746,299 166,690 

 527,607 276,962 135,680 215,336 777,009 64,312,544

 466 5,834 24 5,274 1,724 2,344,404

 - - - - - (5)

 - - - - 161 212,708

 3,298 12,515 1,786 957 1,020,679 16,167 

$ 286,094 540,588 $ 137,490 $ $ 221,567 $ 67,890,330 795,061 $ 

$ 57,906 $ 20,452 $ 39,095 $ 55,215 $ 446,685 $ 9,364,834

 - (35) - - (6,645) (1,344,626)

 33,279 11,191 31,216 18,416 484,041 6,227,548

 31,911 15,927 8,587 39,833 46,849 3,628,904

 511,967 268,294 133,585 211,268 627,485 64,693,879

 (82 (2,058) ,255) (10,812) (192,397) (194 (6,492,578) ,858) 

 429,712 266,236 122,773 18,871 432,627 58,201,301

 - - - - - (1,549,472) 

$ 266,236 429,712 $ 122,773 $ $ 18,871 $ 56,651,829 432,627 $ 

FY 2005 Performance and Accountability Report 239
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

he estimated cost of deferred maintenance for fiscal years 2001 to 2005 is presented below.

DEFERRED MAINTENANCE

The U.S. Department of Labor, Employment and Training Administration (ETA) maintains 122 Job Corps 

centers located throughout the United States. While the ETA does fund safety, health, and environmental

projects in the year those deficiencies are identified, funding constraints limit the extent of maintenance that 

the ETA can undertake each fiscal year. Consequently, maintenance projects are not always performed as 

scheduled and, therefore, must be deferred to a future period. 

Information on deferred maintenance is based on condition assessment surveys that are conducted every 

three years at each Job Corps center to determine the current condition of facilities and the estimated cost to

correct deficiencies. The surveys are based on methods and standards that are applied on a consistent basis, 

including: 

• condition descriptions of facilities, 

• recommended maintenance schedules, 

• estimated costs for maintenance actions, and 

• standardized condition codes. 

These surveys evaluate the facilities at each Job Corps center to identify:

• rehabilitation projects that are required to provide for health and safety, or upgrade to an acceptable state 

of repair, 

• present utilization, 

• health and safety programs,

• barrier-free access, 

• maintenance, operations, and security programs, 

• energy usage, 

• natural hazards, and

• conformance to U.S. Environmental Protection Agency and applicable air and water quality standards. 

T

Summary of Deferred Maintenance

61.8

101.9

48.7

53.9

0.4 2.0 6.0

12.2 12.0 11.7

3.2

11.5

52.0

32.9

61.8

29.1

20.2

27.1

8.7

3.3

- 

20.0

40.0

60.0

80.0

100.0

120.0

2001 2002 2003 2004 2005

Fiscal Year

Dollars (in Millions)

Site utilities

Structural and

mechanical

New construction and

space utilization

Other

240 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

SEGMENT INFORMATION 

Franchise and intra-governmental support revolving funds not separately reported on the principal financial 

statements are required to report certain supplementary information. The Department of Labor’s Working 

Capital Fund qualifies under this definition. Required supplementary information for the Working Capital 

Fund is presented below.

Working Capital Fund 

The Working Capital Fund (WCF) was established to provide obligational authority, without fiscal year

limitation, for expenses necessary to provide certain centralized services and activities to agencies within 

DOL. These agencies are identified in the condensed financial information. 

The WCF is an intra-governmental revolving fund authorized specifically by law to finance a cycle of 

operations in which expenditures generate receipts which are available to the Fund for continuing use

without annual re-authorization by Congress. 

The Fund provides services on a centralized basis for the following Departmental activities: 

• Financial and Administrative Services - This activity provides a program of centralized administrative

management services at both national and regional levels. 

• Field Services - This activity provides a full range of administrative, technical, and managerial support

services to all agencies of the Department in their regional and field offices. 

• Human Resources Services - This activity provides guidance and technical assistance to DOL personnel 

offices in all areas of human resources management and provides a full range of operating personnel

services to all Assistant Secretary for Administration and Management client organizations. 

• Capitalized Equipment - The collection of funds for the periodic recordation of depreciation,

amortization and system support are held and made available to fund future acquisitions of major systems 

and system components that provide a service or benefit to agencies within DOL and ensure the 

Department has funds available to either extend the useful life or improve major asset acquisitions. 

• Investment in Reinvention Fund - The IRF was established within the WCF in FY 1996 to invest in

Departmental projects designed to achieve improvements in agency processes and result in significant 

savings to the taxpayer.

The activities are provided under the overall direction of the Assistant Secretary for Administration and

Management. The WCF advisory committee assists in reviewing overall procedures, systems, and 

regulations as well as programs, functions, and activities performed and financed through the WCF. The 

WCF advisory committee is chaired by the Chief Financial Officer and consists of the Agency Financial

Manager for each DOL agency, or a formally designated alternate. 

FY 2005 Performance and Accountability Report 241
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

Condensed financial information for the WCF as of and for the years ended September 30, 2005 and 2004 is 

as follows: 

(Dollars in thousands) 2005 2004

Assets

Funds with U.S. Treasury $ 31,582 $ 28,180

Accounts receivable, net of allowance 3,363 3,647

Property, plant and equipment 2 28,352 6,695

Total assets $ 5 63,297 $ 8,522

Liabilities and Net Position

Accounts payable $ 16,975 $ 14,496

Accrued leave 4,027 4,192

Future workers' compensation benefits 2,930 2,562

Other liabilities 3, 3,408 716

Total liabilities 2 27,340 4,966

Cumulative results of operations 3 35,957 3,556

Total liabilities and net position $ 5 63,297 $ 8,522

Cost

Intra-governmental $ 55,980 $ 51,798

With the public 8 99,703 7,624

 13 155,683 9,422

Earned

Departmental Management (39,679) (36,449)

Employment Standards Administration (36,835) (33,419)

Employment and Training Administration (23,638) (21,913)

Occupational Safety and Health Administration (21,722) (20,109)

Bureau of Labor Statistics (15,960) (13,801)

Mine Safety and Health Administration (11,087) (9,121)

Other revenues 715 (1,216) 

Total revenues ( (150,137) 134,097)

Net costs of operations $ 5, 5,546 $ 325

Net costs of operations $ (5,546) $ (5,325)

Imputed financing 4,947 4,865

Transfers-in 3,000 3,000

Net position, beginning of period 3 33,556 1,016

Net position, ending of period $ 3 35,957 $ 3,556

BALANCE SHEET

STATEMENT OF NET COST

STATEMENT OF CHANGES IN NET POSITION

242 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

INTRA-GOVERNMENTAL ASSETS 

Intra-governmental assets at September 30, 2005 consisted of the following: 

Funds with Interest Accounts

(Dollars in thousands) U.S. Treasury Investments Receivable Receivable Advances

Trading partner

Department of Agriculture $ - $ - $ - $ 175,283 $ - 

Department of Commerce - - - 31,317 10,812

Department of Interior - - - 141,357 - 

Department of Justice - - - 181,220 - 

Department of the Navy - - - 625,353 - 

United States Postal Service - - - 296,418 - 

Department of State - - - 17,558 - 

Department of the Treasury 9,219,660 54,952,644 637,443 122,168 - 

Department of the Army - - - 471,871 - 

Office of Personnel Management - - - 4,136 - 

Social Security Administration - - - 55,959 - 

U.S. Nuclear Regulatory Commission - - - 1,894 - 

Smithsonian Institution - - - 1,825 - 

Department of Veterans Affairs - - - 362,389 - 

General Services Administration - - - 34,877 - 

National Science Foundation - - - 284 - 

Department of the Air Force - - - 323,880 - 

Tennessee Valley Authority - - - 84,364 - 

Environmental Protection Agency - - - 8,624 - 

Department of Transportation - - - 220,846 - 

Department of Homeland Security - - - 365,092 - 

Agency for International Development - - - 8,890 - 

Small Business Administration - - - 7,421 - 

Department of Health and Human

 Services - - - 55,386 - 

National Aeronautics and Space

 Administration - - - 15,340 - 

Department of Housing and Urban

 Development - - - 17,551 - 

Department of Energy - - - 18,629 - 

Corps of Engineers - - - 46,851 - 

Department of Education - - - 3,907 - 

Department of Defense - - - 186,491 - 

Other - - - 104,089 - 

$ 54,952,6 9,219,660 $ 44 $ 637,443 $ 3,9 10,812 91,270 $ 

FY 2005 Performance and Accountability Report 243
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

INTRA-GOVERNMENTAL LIABILITIES

Intra-governmental liabilities at September 30, 2005 consisted of the following: 

Accounts Advances from

(Dollars in thousands) Payable U.S. Treasury Other

Trading partner

Department of Agriculture $ 248 $ - $ - 

Department of Commerce 130 - - 

Department of Interior 4 - - 

Department of Justice 727 - - 

United States Postal Service 119 - 44,347

Department of State 87 - - 

Department of the Treasury 307 9,186,557 - 

Office of Personnel Management 682 - 7,255

Social Security Administration 202 - 23

Department of Veterans Affairs 301 - - 

General Services Administration 10,666 - 833

Railroad Retirement Board - - 94,820

Department of Homeland Security 50 - - 

Department of Health and Human Services 1,123 - 3

Department of Energy - - 300

Department of Education 250 - - 

Treasury General Fund - - 58,999

Other 1,533 ( - 479)

$ 16,429 $ 9,186,557 $ 206,101

244 United States Department of Labor 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

INTRA-GOVERNMENTAL EARNED REVENUES AND RELATED COSTS 

Intra-governmental earned revenue and the related costs to generate that revenue for the year ended

September 30, 2005 consisted of the following: 

Earned

(Dollars in thousands) Revenue

Trading partner

Department of Agriculture $ 107,087

Department of Commerce 17,016

Department of Interior 87,423

Department of Justice 97,511

Department of the Navy 399,477

United States Postal Service 922,778

Department of State 8,713

Department of the Treasury 99,401

Department of the Army 438,914

Office of Personnel Management 2,567

Social Security Administration 24,388

U.S. Nuclear Regulatory Commission 948

Smithsonian Institution 685

Department of Veterans Affairs 167,113

General Services Administration 16,220

National Science Foundation 137

Department of the Air Force 198,779

Tennessee Valley Authority 55,366

Environmental Protection Agency 3,983

Department of Transportation 106,578

Department of Homeland Security 177,638

Agency for International Development 3,436

Small Business Administration 4,366

Department of Health and Human Services 29,175

National Aeronautics and Space Administration 6,024

Department of Housing and Urban Development 7,953

Department of Energy 10,768

Department of Education 19,048

Corps of Engineers 20,485

Department of Defense 88,334

Other 57,399

$ 3,179,710

FY 2005 Performance and Accountability Report 245
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

INTRA-GOVERNMENTAL NON-EXCHANGE REVENUE 

Intra-governmental non-exchange revenue for the year ended September 30, 2005 consisted of the following: 

(Dollars in thousands) Interest Taxes

Trading partner

Department of the Treasury $ 2,543,014 $ - 

Treasury General Fund 7, - 420,539

$ 2,543,014 $ 7,420,539

 

246 United States Department of Labor 
Appendices 

 
248 United States Department of Labor 

1. Performance Goal Details Due to the early reporting date (just six weeks after the end of the fiscal year) and the wide variety of sources from which the Depa

data – including states, contractors, and domestic and international grant recipients – not all of the data required to report performan

Department estimates performance results for some of its goals. 

Where estimates have been used in this report, they are clearly identified as such. These estimates are based on methodologies devreviewed by the Department of Labor’s Office of Inspector General. Most of these performance estimates use partial year data and fiscal year. In instances where final quarter data have not traditionally been representative of the entire fiscal year, other estimating New indicators often lack data needed to establish targets. For such indicators, the first year’s target may be to establish a baseline 

table); success is determined by gathering the data as planned. 

Performance Goal 04-1.1A (ETA) 

Increase the employment, retention, and earnings of individuals registered under the WIA Adult progra

PY 2000 

Goal Achieved 

PY 2001 

Goal Achieved 

PY 2002 

Goal Not Achieved 

PY 2003 

Goal Achiev

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated Target Result * Target Result * Target Result * Target Result Percent of participants employed in the first quarter after program exit 

— — — — — — 70% 74% Y 71% 74% 

Percent of those employed in the first quarter after program exit still employed in the third quarter after program exit 

77% 78% Y 78% 79% Y 80% 84% Y 82% 85% 

Average earnings change for those who are employed in the first quarter after program exit and still employed in the third quarter after program exit 

$3264 $3684 Y $3361 $3555 Y $3423 $2900 N $3100 $3260 

Average cost per participant — — — — — — — — — — — 

Data Source(s): Annual State WIA performance reports included in the Enterprise Information Management System (EIMS) and Unemployme
FY 2005 Performance and Accountability Report 249 

Performance Goal 04-1.1B (ETA) 

Improve the outcomes for job seekers and employers who receive core employment and workforce information services through 

PY 2000 

Goal Achieved 

PY 2001 

Goal Not Achieved 

PY 2002 

Goal Not Achieved 

PY 2003 

Goal Achiev

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated Target Result * Target Result * Target Result * Target Result Percent of job seekers registered for employment services who enter employment with a new employer by the end of the second quarter following registration PY 2000: Employment Service applicants entering employment 

3.2 

million

3.9 

million

Y 

— — — 55% 63% Y 58% 61% 

Percent of job seekers who continue to be employed two quarters after initial entry into employment with a new employer 

— — — 76% — — 70% — — 72% 80% 

Average cost per participant — — — — — — — — — — — 

Data Source(s): Annual State WIA performance reports included in the Enterprise Information M ment System (EIMS) and UnemploymeNotes: In DOL’s FY 2006 Performance Budget, the goal statement referred to these services as t blic labor exchange.” In PY 2000-03, t

indicators now under Performance Goal 04-4.1A. 

anage

he “pu

Performance Goal 04-1.1C (ETA) 

Increase the employment, retention, and earnings replacement of individuals registe the red under Workforce Investment Act Di

PY 2000 

Goal Achieved 

PY 2001 

Goal Achieved 

PY 2002 

Goal Not Achieved 

PY 2003 

Goal Not Ach

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated Target Result * Target Result * Target Result * Target Result Participants employed in the first quarter after program exit 

71% 75% Y 73% 79% Y 78% 82% Y 78% 82% 

Participants employed in the first quarter after program exit still employed in the third quarter after program exit 

82% 83% Y 83% 87% Y 88% 90% Y 88% 90% 

Percent of pre-dislocation earnings for those employed in the first quarter after program exit and still employed in the third quarter after program exit 

90% 95% Y 91% 101% Y 98% 90% N 93% 91% 

Average cost per participant — — — — — — — — — — — Data Source(s): Annual State WIA performance reports included in the Enterprise Information Management System (EIMS) and Unemployme
250 United States Department of Labor 

Performance Goal 04-1.1D (VETS) Improve the employment outcomes for veterans who receive public labor exchange services and veterans’ progra

FY 2001 Goal Achieved FY 2002 Goal Achieved FY 2003 Goal Not Measured PY 2003 Goal Achiev

*Indicator target reached (Y), substantially reached (S) or not reached (N) **Estimated Target Result * Target Result * Target Result * Target Result Percent of veteran job seekers employed in the first or second quarter following registration 

27% 33% Y 34% 43% Y — — — 58% 58% 

Percent of veteran job seekers still employed — — — — — — — — — 72% 79% two quarters after initial entry into employment with a new employer Percent of disabled veteran job seekers — — employed in the first or second quarter following registration 

— — — — — — — — — 

Percent of disabled veteran job 

o 

seekers still — — — — — — — — — — — 

employed two quarters after initial entry intemployment with a new employer Entered employment rate for homeless 

veterans participating in the Homeless 

Veterans Reintegration Program (HVRP) 

50% 54% Y 54% 54.4% Y 54.5% 60.3% Y 54.5% 61% 

Employment retention rate after 6 months for — — — — — — — — — — — homeless veteran HVRP participants 

Data Source(s): State Workforce Agency administrative reports, State UI wage records and homeless veteran grantee reports. 

f m ri rep out e with 

es for periods prior to PY 2004 were reported under another performance goal. 

Note: In FY 2003, this program transitionedbasis. Also, HVRP entered employment rat

 to a new system o easu ng and orting com s that is consistent the common measure

Performance Goal 05-1.1A (ETA) 

Strengthen the regist app ices syste mee e ne of business and work n th st ered rent hip m to t th training eds ers i e 21 

FY 2002 

Goal Achieved 

FY 2003 

Goal Substantially 

Achieved 

FY 2004 

Goal Achiev

*Indicator target reached (Y), substantially reached (S) or not reached 

(N) 

**Estimated 

Target Result * Target Result * Target Result 

Percent of those employed in the quarter after registration still employed nine months later 

— — — — — — — — 

Average wage gain for tracked entrants employed in the first quarter after registration and still employed nine months later (see note below)

— — — — — — — — 
FY 2005 Performance and Accountability Report 251 

Average cost per registered apprentice — — — — — — — — New programs in new and emerging industries 293 326 Y 359 359 Y 366 526 New apprentices registered by OATELS sta

 All registrations 

ff only 68,592 

FY 2002-03: 86,647 129,388 Y 133,909 130,615 S 

69,597 

New apprenticeship programs 1854 2952 Y — — — — — New businesses involved in apprenticeship 3248 5883 Y — — — — — 

Data Source(s): Registered Apprenticeship Infor ation Sy tem (R ) and Apprenticeship Information Management System (AIMS) 

gistere ppren ship p grams and enter data on individuals into the Registered Apprenticeship In

e co a ces stered and entered into RAIS during a given reporting period.

m s AIS

Note: Twenty-three states are federally-regroup of “tracked entrants” is defined as th

d a

hort of

ti e

pprenti

c ro

regi

Per nce al 05 B ( ) forma Go -1.1 ODEP

Provide national leadership to increase access and employment opportunities for youth and adults with disabilities receiving employm

support services by developing, testing, and disseminating effective practices

FY 02 20

Goal Achieved

FY 03 20

Goal Not hi Ac eved 

FY 04 20

Goal Achiev

*Indicator target reached (Y), substantially reach S) or reac ed ( not hed 

(N) 

**Estimated Target Result * Target Result * Target Result People with disabilities served through ODEP projects — — — — — — 2391 6151 Entered employment rate at pilot sites — — — — — — 13.3% 19.0% 3-monby the 

th and 6-month retention rates for people with disabilities served 

pilots 

— — — — — — base 12.3% 

6.9% 

Effective practices identified through pilot prresearch-related initiatives 

oject sites and other — — — — — — base 10 

Implement 30 new Olmstead grant projects, ta wit

lized 

rgeted at persons h — N 

significant disabilities who are institutiona

— — 30 16 — — 

Implement 12 youth grant projects (6 of which are new technology 

One- en d th

— — — 12 21 Y — — 

skills projects) to assist youth through the WIA youth programs 

Stop C ters an e 

Implement 12 demonstration programs, through grants, designed to 

 n be eme d 

th programs to effectively 

12 16 

22 

other 

Y — — — — — 

develop and test strategies and techniques thatin order for One-Stop Centers and WIA youserve persons with significant disabilities. 

eed to impl nte WIA, 

Data Source(s): ODEP Division of Program Management and Research & Evaluation Team 
252 United States Department of Labor 

Performance Goal 04-1.2A (ETA) Increase placements and educational attainments for youth served through the WIA youth program PY 2000 

Goal Substantially

Achieved 

PY 2001 

Goal Achieved 

PY 2002 

Goal Achieved 

PY 2003 

Goal Achiev

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated 

Target Result * Target Result * Target Result * Target Result 

Percent of the 14-18 year-old youth who enter the program without a diploma or equivalent that attain a secondary school diploma or equivalent by the first quarter after exit PY 2000-01: Percent of the 14–18 year-old youth either employed, in advanced training, post-secondary education, military service or apprenticeships in the third quarter after program exit 

50% 47% N 50% 50% Y 

51% 55% Y 52% 63% 

Percent of 19–21 year-old youth employed in the first quarter after exit 

— — — — — — 63% 67% Y 65% 71% 

Percent of 19–21 year-old youth employed in the first quarter after exit still employed in the third quarter after program exit 

70% 74% Y 75% 75% Y 77% 80% Y 78% 81% 

Average cost per participant — — — — — — — — — — — 

Data Source(s): Annual State WIA performance reports included in the Enterprise Information Management System (EIMS) and Unemployme
FY 2005 Performance and Accountability Report 253 

Performance Goal 04-1.2B (ETA) 

Improve educational achievements of Job Corps students, and increase participation of Job Corps graduates in employm

PY 2000 

Goal Substantially 

Achieved 

PY 2001 

Goal Substantially 

Achieved 

PY 2002 

Goal Not Achieved 

PY 2003 

Goal Not Ach

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated 

Target Result * Target Result * Target Result * Target Result 

Percent of Job Corps graduates (within 1 year of program exit) and former enrollees (within 90 days of program exit) who enter employment or enroll in post-secondary education or advanced/occupational skills training PY 2000-02: Percent of graduates who enter employment or enroll in education 

85% 91% Y 85% 90% Y 90% 87% N 

— — 

Percent of students earning a high school diploma, GED or certificate while enrolled in a Job Corps program PY 2002-03: The number of students who attain high school diplomas while enrolled in Job Corps 

— — — — — — 

3912 6381 Y 7658 8003 

Percent of students who achieve literacy or numeracy gains of one Adult Basic Education (ABE) level (one ABE level is approximately equivalent to two grade levels) 

— — — — — — — — — — — 

Average cost per participant — — — — — — — — — — — Percent of graduates who continue to be employed or enrolled in education six months after initial placement date 

70% 67% N 70% 64% N 65% 63% N 65% 63% 

Average hourly wages of graduates with jobs at six months after initial placement 

$7.50 $7.97 Y $7.25 $7.96 Y $8.20 $8.03 S $8.20 $8.95 

Data Source(s): Job Corps Management Information System 
254 United States Department of Labor 

Performance Goal 05-1.3A (BLS) Improve information available to decision-makers on labor market conditions, and price and productivity ch

FY 2004 Goal Not Ach

*Indicator target reached (Y), substantially reached (S) or not reached (N) **Estimated 

Target Result 

Improve relevancy

Cumulative number of series (e.g., Current Employment Statistics, Employment Cost Index, etc.) converted to the North American Industry Classification System (12 series in total) 

8 8 

Improve accuracy

Coverage Increase the percent of domestic output of in-scope services included in the Producer Price Index (PPI) 

Increase the percent of in-scope industries in the labor productivity measures Response Improve the response to the Employment Cost Index 

59.2% 58.0% 

78% 

59.2% 58.0% 

78% 

Enhance information technology

Lessen the likelihood of major systems failures that could affect the PPI's ability to release data on time, as measured by the

percent of the components of the new repricing system completed 

33% 17% 

Enhance efficiency and effectiveness

Cost per transaction of the Internet Data Collection Facility — — 

Raise customer satisfaction with BLS products and services (e.g., the American Customer Satisfaction Index) 75% 82% Deliver economic data on time (Percent of scheduled releases issued on time) 100% 96% Percent of accuracy measures met (e.g., revision, response rates, etc.) 100% 83% 

Data Source(s): Office of Publications and Special Studies report of release dates against OMB release schedule for BLS Principal Federal Eco

for each Principal Federal Economic Indicator; BLS budget submissions and Quarterly Review and Analysis System; ACSI Quarterly E-Gover

Performance Goal 05-2.1A (ESA) 

American workplaces legally employ and compensate workers

FY 2002 

Goal Achieved 

FY 2003 

Goal Substantially 

Achieved 

FY 2004 

Goal Achiev

*Indicator target reached (Y), substantially reached (S) or not reached 

(N) 

**Estimated 

Target Result * Target Result * Target Result 

Ensuring Customer Service

Average number of days to conclude a violation complaint FY 2003-04: Average number of days to conclude a complaint — — — 126 108 Y 108 92 
FY 2005 Performance and Accountability Report 255 

Reducing employer recidivism

Percent of prior violators who achieved and maintained FLSA compliance following a full FLSA investigation Percent of reinvestigations without any violations Percent of reinvestigations with identical violations 

— 

base base 

— 

34% 19% 

— 

Y Y 

— 

36% 17% 

— 

37% 17% 

— 

Y Y 

74% 

— — 

71% 

— — 

Increasing compliance in industries with chronic violations

Percent of low-wage workers across identified low-wage industries paid and employed in compliance with FLSA and MSPA. (for FY 2005, Southern CA garment and NYC garment) 

— — — — — — — — 

FY 2002-04: as indicated in the garment manufacturing industry by Percent of employees paid “on the payroll” in New York City Number of manufacturers in southern California that monitor contractors Percent of employees paid “on the payroll” in southern California New contractors in NYC participating in Compliance Assistance program Number of manufacturers in NYC that monitor contractors Percent of contractors in NYC that pay all employees “on the payroll” Number of monitoring components used by manufacturers in monitoring contractors for compliance in southern California Percent of contractors in southern California that pay all employees “on the payroll” Percentage of compliance of new contractors in NYC 

— 

43% 

— — — 

53% 

5.6 

65% 55% 

— 

53% 

— — — 

42% 

6.4 

92% 43% 

— 

Y 

— — — 

N Y Y N 

base 

714 

base 

72 

153 

— — — — 

33% 

715 

91% 

73 

158 

— — — — 

Y Y Y Y Y 

— — — — 

34% 

729 

— — — — — 

— — 

39% 

729 

— — — — — — — 

FY 2002-04: as indicated in the long-term health care industry by Percent of nursing homes in compliance with the FLSA. Percent of nursing home employees employed or paid in compliance with the FLSA. Percent of nursing home complaint cases concluded in 180 days Percent of employees in residential care paid in compliance with the FLSA overtime requirements Additional employees of multi-establishment nursing home corporations impacted by corporate proactive steps such as training and self-audit. Nursing home employers provided compliance assistance information through seminars and other outreach efforts Percent of employers (residential living) in compliance with the recordkeeping requirements of the Fair Labor Standards Act 

— — — — 

6000 2559 

base 

— — — — 

16,426

7681 

77% 

— — — — 

Y Y Y 

— — 

42% 85% 

— — — 

— — 

48% 77% 

— — — 

— — 

Y N 

— — — 

45% 91% 

— — 

— — — 

55% 90% 

— — — — — 
256 United States Department of Labor 

FY 2002-04: as indicated in agricultural commodities by Number of employees affected by compliance assistance programs for agricultural employers subject to the DWHaT provisions of MSPA Number of agricultural housing providers who corrected violations following an investigation. Number of agricultural housing providers who corrected violations following a first investigation Percent of employers in compliance with the MSPA disclosure provisions. Percent of employers in compliance with the MSPA wage provisions. Percent of employers in compliance with the MSPA housing safety and health provision. Percent of employers in compliance with MSPA vehicle safety provisions Percent of employers complying with MSPA drivers license provisions Percent of employers complying with MSPA vehicle insurance provisions Percent of investigated employers in compliance with child labor provisions of the FLSA 

— — — 

base base base base base base base 

— — — 

61% 91% 74% 88% 90% 85% 98% 

— — — 

Y Y Y Y Y Y Y 

— 

170 

98 

— — — — — — — 

— 

256 133 

— — 

— — — — — 

— 

Y Y 

— — — — — — — 

4743 

259 

— — — — — — — — 

911,004

335 

— — — — — — — — 

Ensuring timely and accurate prevailing wage determinationsNumber of wage determination forms processed per 1,000 hours. Percent of survey-based DBA wage determinations issued within 60 days of receipt of the underlying survey data. 

— — 

— — 

— — 

— — 

— — 

— — 

base 

80% 

1491 

87% 

Data Source(s): Wage and Hour Investigator Support and Reporting Database (WHISARD) data; WH significant activity reports; regional logs 

and statistically valid investigation-based compliance surveys in defined industries 

Performance Goal 05-2.1B (ESA) 

Ensure union financial integrity, democracy and transparency

FY 2002 

Goal Achieved 

FY 2003 

Goal Not Achieved 

FY 2004 

Goal Achiev

*Indicator target reached (Y), substantially reached (S) or not reached 

(N) 

**Estimated 

Target Result * Target Result * Target Result 

Percent of unions with fraud FY 2002-03: Percent of investigative resources applied to criminal investigation that result in convictions 

base 50% Y 53% 63% Y 

base 9% 

Percent of union reports meeting standards of acceptability for public 

disclosure FY 2002-03: The timely filing of union annual financial reports by unions with annual receipts over $200,000 

base 44% Y 

base 

85% 

73% 64% 

Y N 

75% 92% 
FY 2005 Performance and Accountability Report 257 

Union dollars protected per staff day — — — — — — — — 

Data Source(s): OLMS union audit data and e.LORS data system Note: Fraud indicator data are reported every other (even) year. 

Performance Goal 05-2.2A (ETA) 

Make timely and accurate benefit payments to unemployed workers, facilitate the reemployment of Unemployment Insurance claiman

accounts promptly for new employers

FY 2001 

Goal Not Achieved 

FY 2002 

Goal Not Achieved 

FY 2003 

Goal Not Achieved 

FY 2004 

Goal Achiev

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated 

Target Result * Target Result * Target Result * Target Result 

Pay Benefits Promptly: percent of all intrastate first payments made within 14/21 days FY 2001: Number of states meeting or exceeding the Secretary’s Standard for intrastate payment timeliness 

48 42 N 

91% 88.7% N 91% 89% N 89.2% 90.3% 

Detect Overpayments: Percent of estimated detectable/recoverable overpayments that States establish for recovery FY 2002: Establish a measure and baseline for payment accuracy 

— — — 

Y Y Y 

59% 54% N 59% 59.5% 

Facilitate Reemployment: Entered employment rate for UI claimants FY 2003: Develop a measure and a method to obtain entered employment information on UI claimants FY 2002: Define a measure of entered employment of Unemployment Insurance claimants and establish a baseline 

— — — 

Y N N 

Y Y Y 

base 51.5% 
258 United States Department of Labor 

Establish Tax Accounts Promptly: Percent of new employer liability determinations made within 90 days of the end of the first quarter in which liability occurred. FY 2000-01: Number of states meeting or exceeding the minimum performance criterion for benefit adjudication quality 

26 25 N 

80% 81.7% Y 80% 83% Y 82.2% 82.5% 

Efficiency: Quality-weighted base initial claims per $1,000 of inflation-adjusted base grant funds 

— — — — — — — — — — — 

Data Source(s): Eligibility Determinations Quality: ETA 9056; Payment Timeliness: 9050, 9050p Reports; Payment Accuracy: Benefit Accur

and ETA 227 report; Facilitate Reemployment: Unemployment Insurance wage records; New Status Determinations Timeliness: ETA 581 rep

Note: This goal was reported as not achieved in the FY 2004 PAR based on estimated data. Actual data for the first indicator, Pay Benefits Pro

Performance Goal 05-2.2B (ESA) 

Minimize the impact of work-related injuries

FY 2001 

Goal Not Achieved 

FY 2002 

Goal Not Achieved 

FY 2003 

Goal Substantially 

Achieved 

FY 2004 

Goal Substan

Achieved 

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated 

Target Result * Target Result * Target Result * Target Result 

Lost production days (LPD) per 100 employees for FECA cases of the United States Postal Service (see note below) FY 2001: combined with all other governmental agencies 

66.7 76.9 N 

115 131 N 130 143 N 146 147 

LPD rate for FECA cases of All Other Governmental Agencies (see note below) — — — 55 54 Y 54.7 55 N 55.4 62.6 FECA Vocational Rehabilitation placements with new employers for injured USPS employees 

— — — — — — 52 56 Y 56 59 

Savings in the FECA program through use of Periodic Roll Management 

$95 

million

$103 

million Y $19 million $26 million Y $20 million $25 million Y $18 million $24 million 
FY 2005 Performance and Accountability Report 259 

Trend in indexed cost per case of FECA cases receiving medical treatment remains below the Milliman Health Cost Index FY 2002: Reduce Inflation-adjusted costs per case in the FECA program FY 2001: Reduction in average annual cost for physical therapy and psychiatric services 

-1% 

(both) 

+4.5%, 

-3% 

N 

$2219 $2604 N 

+9.1% -2.8% Y +8.8% +2.4% 

Targets met for key communications performance areas 

— — — — — — base 5 Y 3 4 

Average days required to resolve disputed issues in Longshore and Harbor Worker’s Compensation Program contested cases 

— — — 242 285 N 279 266 Y 274 247 

Percent of Black Lung benefit claims filed under the revised regulations for which, following an eligibility decision, there are no requests for further action from any party pending one year after receipt of the claim. 

— — — 68.5% 89.9% Y 70.5% 86.6% Y 74.5% 82.2% 

Percent of Initial Claims for benefits in the Energy Program processed within standard timeframes FY 2002: 120 days for Department of Energy (DOE) employees or contractors employed at DOE facilities 180 days for employees of Atomic Weapons Employers (AME) and Beryllium Vendors 

— — — 

75% 75% 

48% 48% 

N 

75% 79% Y 77% 92% 

Percent of Final Decisions in the Part B Energy Program processed within standard timeframes FY 2002: Claims or No-Contest Denials within 75 days of the Recommended Decision. Reviews of the Written Record within 75 days of request Formal Hearings within 250 days of request 

75% 75% 75% 

76% 74% 

100% 

S 75% 76.9% Y 77% 99% 

Claimants under Part E to whom compensation benefits are paid — — — — — — — — — — — 
260 United States Department of Labor 

Data Source(s): 1&2. Federal Employees’ Compensation Act (FECA) data systems, Federal agency payroll offices and Office of Personnel Ma

3. Nurse/Rehabilitation Tracking System 4. Periodic Roll Management System and FECA Automated Compensation Payment System; 5. FECA 

Milliman USA Health Cost Index Report; 6. Telecommunications system standard reports, FECA district office and national MIS reports, custoand other customer service performance data sources; 7. Longshore Case Management System; 8. Black Lung Automated Support Package; 9-Management System Note: In FY 2004, OWCP changed the way it measures LPD. The FY 2003 result data for USPS and also for all other government agencies’ Lthe measurement changes. LPD’s are now measured in real-time rather than with accumulated data. 

Performance Goal 05-2.2C (EBSA) 

Secure pension, health and welfare benefits

FY 2003 

Goal Achieved 

FY 2004 

Goal Achiev

*Indicator target reached (Y), substantially reached (S) or not reached (N) **Estimated 

Target Result * Target Result 

Enforcement: 

Ratio of closed civil cases with corrected violations to civil closed cases. Ratio of criminal cases referred for prosecution to total criminal cases 

50% 25% 

69% 40% 

Y Y 

50% 25% 

69% 45% 

Participant Assistance: 

Customer Satisfaction Index, or comparable measurement, for Participants and Beneficiaries 

who have contacted EBSA for assistance. 

Additional applications to Voluntary Compliance programs 

59 

— 

59 

— 

Y 

— 

61 

— 

62 

— 

Data Source(s): Enforcement Management System and The Gallup Organization/Technical Assistance and Inquiry System (TAIS) 

Performance Goal 05-2.2D (PBGC) 

Serve sponsors of covered pension plans and participants in trusteed plans

FY 2004 

Goal Not Ach

*Indicator target reached (Y), substantially reached (S) or not reached (N) **Estimated 

Target Result 

American Customer Satisfaction Index (ACSI) score for sponsors of covered pension plans who have contacted PBGC for assistance 

71 69 

ACSI score for participants in trusteed plans who have contacted PBGC for assistance. 77 78 

Data Source(s): American Customer Satisfaction Index (ACSI) report 
FY 2005 Performance and Accountability Report 261 

Performance Goal 05-3.1A (OSHA/MSHA) 

Reduce work-related fatalities

FY 2001 

M: Goal Achieved 

FY 2002 

M: Goal Not Achieved 

FY 2003 

O: Goal Not Achieved 

M: Goal Not Achieved 

FY 2004 

O: Goal Not Ac

M: Goal Not A

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated 

Target Result * Target Result * Target Result * Target Result 

O: Fatalities per 100,000 workers — — — — — — 1.59 1.62 N 1.57 1.61 M: Fatal incidence rate (number of mining fatalities per 200,000 hours worked) FY 2001-02: Mine fatalities 89 71 Y 64 71 N 

.020 .023 N .022 .017 

Data Source(s): OSHA Integrated Management Information System (IMIS) and Bureau of Labor Statistics (BLS) Current Employment Statistiand Employment information that mine operators and contractors report to MSHA under Title 30 Code of Federal Regulations Part 50 

Note: Prior to FY 2005, OSHA and MSHA performance goals were separate. Goal and indicator achievements are distinguished by labels – O 

Performance Goal 05-3.1B (OSHA/MSHA) 

Reduce work-related injuries and illnesses

FY 2001 

O: Goal Achieved 

M: Goal Achieved 

FY 2002 

O: Goal Not Achieved 

M: Goal Not Achieved 

FY 2003 

O: Goal Achieved 

M: Goal Achieved 

FY 2004 

O: Goal Ach

M: Goal Ach

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated 

Target Result * Target Result * Target Result * Target Result 

O: Days away from work case rate per 100 workers FY 2001-02: Injury and illness incidence rates in industries characterized by highhazard workplaces (Lost workdays used in FY 2001, days away from work in FY 2002) 

Shipyard Food processing Meat Products Nursing homes Logging Construction (injuries only in FY 2001) 

11.9 

7.9 

— 

7.7 6.4 4.6 

7.5 6.3 

— 

7.3 3.5 3.9 

Y Y 

— 

Y Y Y 

6.8 

— 

7.7 6.6 

— 

3.6 

8.1 

— 

7.9 7.6 

— 

3.8 

N 

— 

N N 

— 

N 

1.8 1.7** Y 1.7 1.6** 

M: All-injury incidence rate (all injuries, including fatalities, per 200,000 hours worked) FY 2001-02: Non-fatal injury incidence rate 3.65 3.29 Y 2.87 3.15 N 

3.79 4.26 N 3.85 4.07 
262 United States Department of Labor 

M: Percent of respirable coal dust samples exceeding the applicable standards for designated occupations FY 2000-01: Percent of coal dust samples that are out of compliance for high risk mining occupations 

11.1% 10.2% Y 

14.2 15.0 N 14.2 11.7 Y 11.1 10.2 

M: Percent of silica dust samples in metal and nonmetal mines with a concentration result/enforceable level (C/E) ratio of at least 0.5 FY 2001-04: Percent of silica dust samples in metal and nonmetal mines exceeding the applicable standards for high risk occupations FY 2001: Index percentage of silica dust samples that are out of compliance for high risk mining occupations 

80% 64% Y 

8.8% 6.6% Y 8.6% 6.5% Y 6.2% 5.6% 

M: Percent of noise samples in metal and non-metal mines with a C/E ratio of at least 0.5 

— — — — — — — — — — — 

M: Percent of noise samples above the citation level in coal mines FY 2001-04: Percent of noise exposures above the citation level in all mines — — — 8.6% 5.8% Y 9.3% 4.8% Y 4.6% 4.6% 

Data Source(s): Bureau of Labor Statistics (BLS) Annual Survey of Occupational Injuries and Illnesses (ASOII). FY 2003 estimated results us

estimated results use CY 2002 data. Dust samples collected by MSHA inspectors. Coal Mine Safety and Health MIS. Metal and Non-Metal M

Note: Prior to FY 2005, OSHA and MSHA performance goals were separate. Goal and indicator achievements are distinguished by labels – O 
FY 2005 Performance and Accountability Report 263 

Performance Goal 05-3.2A (ESA) 

Federal contractors achieve equal opportunity workplaces

FY 2001 

Goal Not Achieved 

FY 2002 

Goal Achieved 

FY 2003 

Goal Achieved 

FY 2004 

Goal Achiev

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated Target Result * Target Result * Target Result * Target Result Incidence of discrimination among Federal contractors FY 2001-02: For contractors participating in specified compliance assistance activities and subsequently evaluated 

Rate of compliance findings for SIC 50 For SIC 87 Rate of findings of severe violations for SIC 50 For SIC 87 Rate of focused and offsite compliance evaluations for SIC 50 For SIC 87 

base base base base base base 

50.9% 49.6% 

7.7% 9.0% 

36.5% 27.8%

Y Y Y Y Y Y 

51.9% 48.6% 

6.7% 8.0% 

37.5% 28.8%

58.4% 64.5% 

2.2% 1.6% 

52.8% 50.8%

Y Y Y Y Y Y 

9% 1.2% Y 9% 1% 

Compliance among Federal contractors in all other respects of equal opportunity workplace standards FY 2001-02: For contractors and subcontractors selected for evaluation, outreach, or compliance assistance activities 

Rate of compliance findings for all supply and service closures Rate of findings of severe violations for contractors and subcontractors that have had prior contact with DOL/OFCCP Rate of focused and offsite compliance evaluation 

base base base 

52.9% 

9.8% 

34.1%

Y N N 

53.9% 

8.8% 

35.1%

62.9% 

2.7% 

49.8%

Y Y Y 

59% 72.4% Y 61% 91% 

Data Source(s): Case Management System (CMS) 

Performance Goal 05-3.2B (VETS) 

Reduce employer-employee employment issues originating from service members’ military obligations conflicting with their 

FY 2004 

Goal Achiev

*Indicator target reached (Y), substantially reached (S) or not reached (N) **Estimated 

Target Result 

Percent of USERRA cases resolved within 90 days of filing — — 
264 United States Department of Labor 

Percent of USERRA cases resolved within 120 days of filing — — Percent of USERRA cases resolved within one year of filing — — FY 2004: Indicators will be established to target reductions in USERRA compliance problems that are most severe and pervasive based on survey of veterans and service members covered by USERRA. 

base 4 

Data Source(s): USERRA Information Management System (UIMS) 

Performance Goal 05-3.3A (ILAB) 

Contribute to the elimination of the worst forms of child labor internationally

FY 2001 

Goal Not Achieved 

FY 2002 

Goal Achieved 

FY 2003 

Goal Achieved 

FY 2004 

Goal Achiev

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated 

Target Result * Target Result * Target Result * Target Result 

Number of children prevented or withdrawn from child labor and provided education or training opportunities as a result of DOLfunded International Labor Organization projects 

50,000 25,800 N 50,000 51,927 Y 60,000 69,915 Y 70,000 91,724 

Number of countries with increased capacities to address child labor as a result of DOL-funded International Labor Organization projects FY 2001-03: Action plans, policies or programs established that combat child labor and/or promote access to education for child laborers or children at-risk 

15 13 N 10 15 Y 15 19 Y 

15 26 

Percent of children completing education programs as a result of ILAB's Child Labor Education Initiative FY 2003-04: Child Labor Education projects that establish targets for education retention and completion rates in project areas 

— — — — — — 6 8 Y 8 16 
FY 2005 Performance and Accountability Report 265 

Percent of children retained in education programs as a result of ILAB's Child Labor Education Initiative FY 2004: Child Labor Education Initiative projects that establish baseline for rate of enrollment and drop out for targeted children FY 2002-03: Countries in which new Child Labor Education Initiative projects begin 

— — — 

8 9 Y 9 10 Y 

7 8 

Number of target children enrolled in education programs as a result of ILAB's Child Labor Education Initiative FY2001-03: Children targeted for prevention or removal from child labor, particularly its worst forms, through the provision of education or training opportunities in new DOL-funded programs 

100,000 200,000 Y 90,000 103,772 Y 40,000 83,682 Y — — 

Countries that ratify International Labor Organization (ILO) Convention 182 on Worst Forms of Child Labor. 

25 63 Y 15 29 Y — — — — — 

Data Source(s): ILO-IPEC (grantee) through progress reports and project monitoring; Child Labor Education Initiative Grantees Note: For FY 2005, retention result includes all children enrolled in Education Initiative (EI) projects in FY 2001 and FY 2002, but not those w Completion results include children who were enrolled in FY 2001 EI projects prior to FY 2005.

Performance Goal 05-3.3B (ILAB) 

Improve living standards and conditions of work internationally

FY 2001 

Goal Achieved 

FY 2002 

Goal Achieved 

FY 2003 

Goal Achieved 

FY 2004 

Goal Achiev

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated Target Result * Target Result * Target Result * Target Result Percent of USDOL project beneficiaries who consider the project to have improved their conditions of work 

— — — — — — base 63% Y base 62% 

Percent of individuals whose economic situation has benefited from USDOL project assistance 

— — — — — — base 39% Y base 39% 
266 United States Department of Labor 

Compliance with national labor laws FY 2003-04: Percent of workplaces exposed to USDOL project assistance that have implemented new measures to prevent workplace accidents and illnesses 

— — — — — — 

base 10% Y base 73% 

Employment-related discrimination against persons living with HIV/AIDS FY 2004: Number of new countries where HIV/AIDS workplace education projects begin 

— — — — — — — — — 

5 7 

HIV/AIDS risk behaviors among targeted workers 

— — — — — — — — — — — 

Number of workers participating in pension funds that are government regulated by project partner agencies 

— — — — — — base 3.545 

million

Y base no data 

Countries committed to undertake improvements in assuring compliance and implementation of core labor standards 

15 15 Y 7 41 Y — — — — — 

Countries that commit with US/DOL assistance to make substantive improvements in raising income levels of working families 

8 10 Y 6 49 Y — — — — — 

Data Source(s): OFR grantees and contractors 

Performance Goal 04-4.1A (ETA) 

Build a demand-driven workforce system by increasing access to workforce information

PY 2000 

Goal Achieved 

PY 2001 

Goal Not Achieved 

PY 2002 

Goal Not Achieved 

PY 2003 

Goal Achiev

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated 

Target Result * Target Result * Target Result * Target Result 

Job openings listed with the public labor exchange (with both State Workforce Agencies and America’s Job Bank) 

11.2 

million

12.3 

million

Y 13.5 

million

11.8 

million

N 11.8 

million 

10.2 

million

N 10.3 

million

12.5 

million

Number of job searches conducted by job seekers using America’s Job Bank 

— — — — — — — — — base 169 

million

The number of resume searches conducted by employers from America’s Job Bank will be collected to determine a baseline for setting future performance targets. 

— — — — — — — — — base 8 

million
FY 2005 Performance and Accountability Report 267 

New employers registered with America’s Job Bank 

60,000 66,563 Y — — — — — — — — 

Percent of new requirements ratings for O*NET-SOC occupations 

— — — — — — — — — — 15% 

Percent of O*NET-SOC occupations for which updated data are released 

— — — — — — — — — — 15% 

Web site visits to O*NET — — — — — — — — — — 2.7 

million

Data Source(s): America’s Job Bank Service Center and quarterly state performance reports included in the Enterprise Information Manageme

Note: This is a new goal for PY 2004. Data and goal achievement for prior periods were reported under Outcome Goal 1.1 (Employment Servtargets appear in DOL’s FY 2006 Congressional Budget Justification; however, they were inadvertently omitted from the FY 2006 DOL Perfor

Performance Goal 05-4.1A (ETA) 

Assist employers in meeting their workforce needs by providing them with expeditious determinations on their applications t

*Indicator target reached (Y), substantially reached (S) or not reached (N) **Estimated Percent of H-1B applications processed within seven days of the filing date for which no prevailing wage issues are identified Percent of employer applications for labor certification under the streamlined system that are resolved within six months of filing The average cost for processing a new PERM application Percent of the H-2B applications processed within 60 days of receipt 

Data Source(s): Automated processing systems and fax/mail processing system 

Performance Goal 05-4.1B (ETA) 

Increase the employment, retention, and earnings replacement of workers dislocated in important part because of trade and who rece

benefits

FY 2001 

Goal Substantially 

Achieved 

FY 2002 

Goal Not Achieved 

FY 2003 

Goal Not Achieved 

FY 2004 

Goal Not Ach

*Indicator target reached (Y), substantially 

reached (S) or not reached (N) 

**Estimated 

Target Result * Target Result * Target Result * Target Result 

Participants employed in the first quarter after program exit 

73% 65% N 78% 66% N 78% 62% N 70% 63% 

Participants employed in the first quarter after program exit still employed in the third quarter after exit 

80% 90% Y 88% 89% Y 90% 86% N 88% 89% 
268 United States Department of Labor 

Percent of pre-separation earnings for those still employed in the third quarter after program exit 82% 85% Y 90% 80% N 90% 74% N 90% 74% Average cost per training participant — — — — — — — — — — — 

Data Source(s): TAPR (Trade Act Participant Report) included in the Enterprise Information Management System (EIMS) 

Performance Goal 05-4.2A (OASP) 

Maximize regulatory flexibility and benefits and promote flexible workplace programs

FY 2004 

Goal Not Ach

*Indicator target reached (Y), substantially reached (S) or not reached (N) **Estimated 

Target Result 

Criteria and timeline established for regulatory reviews FY 2004: Seek input from the public as part of its decision-making process in determining which regulations or regulatory programs should be prioritized for review for their effects on small businesses and entities 

Y N 

Unit cost baseline established, and plan developed to identify practices that are not cost-effective FY 2004: Ensure that all new regulatory proposals identify monetary costs, benefits, and net benefits, and include a summary of this information in all Regulatory Impact Analyses performed by DOL agencies 

17 17 

Develop plan to review all significant regulations for maximum flexibility Y N Percent of small employers with access to health care benefit plans — — Women’s Bureau - Flex-Options for Women Project

Best practices for, and models of, flexible workplace practices are identified and publicized. 

FY 2004: Companies enlisted as corporate mentors Women-owned businesses seeking to establish workplace flexibility policies or programs 

40 80 

41 77 

Data Source(s): DOL's Spring 2004 Regulatory Agenda - Initiatives supplied by DOL agencies to OASP. Women's Bureau: Application form

program progress reports; and informal conversations with participants. 
Significant Audits and Evaluations 

FY 2005 Performance and Accountability Report 269

2. Significant FY 2005 Audits and Evaluations 

The Department of Labor recognizes the important role that program evaluations serve in helping us achieve our 

mission and strategic goals. Objective reviews and audits by the Office of the Inspector General (OIG) and the U.S. 

Government Accountability Office (GAO), along with evaluations by independent contractors are a critical source of

information about the effectiveness of our programs. They also help us identify the need for corrective actions. 

During the past year, the audits and evaluations described below have helped to ensure that our goals are reasonable 

and our strategies for achieving those goals are effective. While all of these audits and evaluations have their own 

unique focus and content, they all contribute to our common efforts to foster growth and encourage innovation. 

The audits and evaluations listed below are categorized by the DOL strategic goals they support.

GOAL 1: A PREPARED WORKFORCE 

1. Issue: The use of WIA funds and tracking WIA outcomes 

Program Area: ETA WIA

Performance Goal: Goal 04-1.1A – Increase the employment, retention,

and earnings of individuals registered under the WIA adult program.

Goal 04-1.1C – Increase the employment, retention, and earnings

replacement of individuals registered under the Workforce Investment 

Act Dislocated Worker Program.

Report Title: Substantial Funds Are Used for 

Training, But Little Is Known Nationally about 

Training Outcomes (GAO-05-650)

Date Completed: June 2005

Conducted By: GAO

Program Impacts: WIA funds used for training need to be clearly identified and tracked. 

Findings: 

1. Questions were raised about how WIA funds are being used and how much is being spent on training. 

2. Contributing to the concern about the use of WIA funds is the lack of accurate information about the extent to which WIA 

 participants are enrolled in training activities. 

Recommendations: 

1. Determine the extent to which WIA funds are used for training. 

2. Determine how local workforce boards manage the use of Individual Training Accounts (ITA). 

3. Determine what is known at the national level about outcomes of those being trained.

Actions Taken: 

1. DOL standardized the definition of ‘participant exit’ for purposes of assessing program performance across all programs 

 implementing common measures. States began implementing these changes as of July 1, 2005. The revised reporting 

 requirements will facilitate better information about outcomes for all training programs. 

2. Through the newly revised Workforce Investment Act Standardized Record Data (WIASRD), DOL will be able to capture 

 information on all participants who receive training in each program year, not just those who exit the program. 

3. ETA implemented a data validation initiative in PY 2003. ETA provides the states with software, handbooks, training and 

 technical assistance to validate annual reports and provides a sampling mechanism to review a select number of files from 

 each program for manual review. 

Actions Remaining: 

1. States will be required to validate annual reports and perform data element validation 

 once a year to improve the quality of the data used to compute performance reports. 

2. ETA will develop acceptable error rates for each program. 

Expected Completion:

1. This is an ongoing initiative. 

2. PY 2006 

Additional Information: A copy of the complete report can be obtained at www.gao.gov/cgi-bin/getrpt?GAO-05-650.
Appendices 

2. Issue: Comprehensive access to the WIA one-stop system for persons with disabilities 

Program Area: ETA WIA

Performance Goal: Goal 04-1.1A – Increase the 

employment, retention, and earnings of

individuals registered under the WIA adult

program. 

Report Title: Labor Has Taken Several Actions to Facilitate Access to 

One-Stops for Persons with Disabilities, but These Efforts May Not 

Be Sufficient (GAO-05-54) 

Date Completed: December 2004

Conducted By: GAO

Program Impacts: The WIA one-stop system may need to alter information tracking systems and relationships with disabilityrelated agencies in order to meet comprehensive access requirements. 

Findings: 

1. ETA, OASAM’s Civil Rights Center (CRC) and ODEP have taken several actions to ensure comprehensive access to onestops, but these efforts may not be sufficient. 

2. DOL has not developed a long-range plan for how it will carry out its oversight and enforcement responsibilities beyond 

 2005. 

3. The information DOL publishes on employment outcomes for people with disabilities is limited.

4. The performance measurement system may result in customers being denied services because local areas may be reluctant to 

 provide WIA-funded services to job seekers who may be less likely to find employment. 

Recommendations: 

1. DOL should develop and implement a long-term plan for ensuring that the WIA one-stops comply with the comprehensive 

 access requirements. 

2. DOL should use the expertise of staff from CRC, ETA, and ODEP to ensure comprehensive access within the one-stop 

 system. 

Actions Taken: 

1. In a letter signed by the chief executives of CRC, ETA and ODEP, DOL responded that the agencies will develop a 

 comprehensive, long-term strategic plan to address the One-Stop system’s provision of services to people with disabilities, 

 beginning with the development of an overall framework for the plan. 

2. CRC, ETA and ODEP have instituted a workgroup which has met consistently since January 2005. The Rehabilitative 

 Services Administration, Social Security Administration and Veterans’ Employment and Training Service have also begun 

 to participate in the development of the plan. 

3. DOL has articulated the mission of the workgroup developing the inter-agency work plan as to promote excellence in 

 service delivery for people with disabilities in the One-Stop Career Center system. By promoting excellence, DOL seeks to:

• Ensure that people with disabilities have equal opportunity to benefit from the programs and services available through 

the system; 

• Promote meaningful and effective career opportunities for people with disabilities. 

 The multi-year strategic plan will include a coordinated implementation strategy that will: 

• Identify, coordinate, and maximize the use of agency resources; 

• Ensure compliance with applicable disability-related statutes and regulations; and

• Promote quality in service delivery for people with disabilities. 

4. The workgroup has completed a draft of the initial framework, which will soon be placed into Departmental clearance and 

 forwarded to GAO. Given the breadth of the workgroup’s mission, the plan will be developed in phases. 

Actions Remaining:

1. The workgroup will develop a white paper proposing policies and strategies for 

Phase I of the work plan for approval by agency heads. The approved policies and

strategies will be translated into a work plan. 

2. Monitoring progress and updating the plan. 

Expected Completion:

1. February 2006 

2. Implementation, monitoring and 

 strategic planning will be ongoing. 

Additional Information: A copy of the complete report can be obtained at www.gao.gov/cgi-bin/getrpt?GAO-05-54 . 

3. Issue: Increasing employer use of the workforce system one-stops 

Program Area: ETA WIA

Performance Goal: Goal 04-1.1A – Increase the employment, 

retention, and earnings of individuals registered under the WIA 

adult program. Goal 04-1.1C – Increase the employment, 

retention, and earnings replacement of individuals registered

under the Workforce Investment Act Dislocated Worker

Program. Goal 04-4.1A – Build a demand driven system by

increasing accessibility to workforce information

Report Title: Employers Are Aware of, Using, and 

Satisfied with One-Stop Services, but More Data 

Could Help Labor Better Address Employers’ Needs

(GAO-05-259) 

Date Completed: February 2005

Conducted By: GAO

270 United States Department of Labor 
Significant Audits and Evaluations 

Program Impacts: Better information on employers’ use of the WIA one-stops would help ETA manage its resources and

improve service. 

Findings: 

1. Awareness of local one-stops increases with employer size: about half of small, two-thirds of medium, and three-quarters of 

 large employers know about their local one-stops. 

2. Employers primarily use one-stop services to help fill job vacancies. 

3. Three-quarters of employers who use one-stops are satisfied with the services they receive. 

4. Most employers who use one-stop services would likely use them again; about one-third of employers who are aware of 

 one-stop services, but have not used them, would consider using them in the future. 

5. Many employers choosing not to use one-stops do so because they either rely on other resources or do not have enough 

 information about the services offered.

6. DOL’s employer satisfaction measure does not provide enough information on the services employers use.

Recommendations: DOL should require States to collect and report on employer use of the workforce system. 

Actions Taken: 

1. DOL proposed a comprehensive, streamlined reporting system for 12 different programs, which included a component for 

 an employer record that proposed collection of information on workforce services assessed by employers. 

2. Based on comments received during a recent Federal Register Notice comment period, DOL is currently 

 conducting a feasibility study for incorporating such a component in our reporting system. This is expected to be completed 

 during FY 2007. 

3. Through recently revised guidance for the WIA and Wagner-Peyser Act two-year strategic plan and the WIA, Wagner- 

 Peyser, and Senio ervice Employment Program unified plan, States were required to describe how they will 

 actively engage bu service delivery approaches for all customers. The planning guidance also emphasized 

 w ation as a critical component of a demand-driven workforce system, and the role businesses play in 

 pr market information and in identifying high-growth, high-demand jobs. 

r Community S

sinesses to inform

orkforce inform

oviding labor

Actions Remaining: Results of the feasibility study will be reviewed and based on study 

findings, decisions will be made on the final reporting design and implementation schedule. 

Expected Completion:

1. December 2007 

Additional Information: A copy of the complete report can be obtained at www.gao.gov/cgi-bin/getrpt?GAO-05-259 . 

4. Issue: Obtaining good performance information on the WIA programs 

Program Area: ETA WIA

Performance Goal: Goal 04-1.1A – Increase the employment, retention,

and earnings of individuals registered under the WIA adult program.

Goal 04-1.2A – Increase entrance and retention of youth registered 

under the WIA youth program in education or employment. Goal 04-

1.1C – Increase the employment, retention, and earnings replacement of 

individuals registered under the Workforce Investment Act Dislocated

Worker Program.

Report Title: Labor Should Consider Alternative 

Approaches to Implement New Performance

and Reporting Requirements (GAO-05-539)

Date Completed: May 2005

Conducted By: GAO

Program Impacts: Rushed implementation of the new reporting system could negatively affect data quality and compromise 

the potential benefits of proposed changes. Unless DOL ensures that data collection is done in a consistent manner, the 

information will not be comparable on a national level. 

Findings: 

1. While many states supported streamlined reporting, 36 states indicated that implementing ETA’s reporting system, as 

 proposed, would be very burdensome. 

2. DOL has underestimated the magnitude and type of changes the reporting system would require and the resources states 

 would need to implement it. 

3. The use of common measures could increase the comparability of outcome information across programs and provide a more 

 complete picture of the one-stop system, but states will face challenges in making the required changes. 

4. One of the common measures will replace the current WIA earnings measures for dislocated workers, which may be a 

 disincentive for serving this population. 

5. States have very little time to make changes before they must begin data collection and reporting.

6. DOL has not provided guidance in a timely manner for states to implement changes.

Recommendations: 

1. Consider alternative approaches to reach the goals of the new reporting system, including (a) ongoing consultations with key

 stakeholders, (b) implementing changes in phases, and (c) pilot testing and evaluating changes before full implementation. 

2. Help states and local areas develop the capacity to track all jobseekers in a consistent manner using one-stop services. 

FY 2005 Performance and Accountability Report 271
Appendices 

3. Use the first year of implementation as a test phase and work with states to identify promising practices in collecting and 

 reporting this data; provide technical assistance to states that do not have this capacity. 

Actions Taken: 

1. As an alternative implemented revised reporting requirements on current Workforce Investment Act 

 Standardized Record Data (WIASRD). States began implementing these changes as of July 1, 2005 and collecting baseline 

 data during PY 05. This move was intended to facilitate the reporting of common performance measures across DOL’s 

 employment and training programs. 

2. Through the newly revised WIASRD, DOL will be able to capture information on all participants who receive training in 

 each program year, not just those who exit the program. DOL cited past consultation with stakeholders, and will continue to 

 consult with and provide technical assistance to representatives of the State and local workforce system. 

3. DOL is conducting a feasibility study in three States and two local areas to examine the changes needed at the state and local 

 levels to meeting the proposed data collection requirements as originally proposed in the July 2004 Federal Register. This 

 will be completed during FY 2007. 

approach, DOL

Actions Remaining: ETA is continuing to work with State agencies to develop a more 

complete reporting system that will provide greater comparability and understanding of

performance information by using the same definitions for the measures, and enhanced

information about all services provided. 

Expected Completion:

1. This will be an ongoing

 action. 

Additional Information: A copy of the complete report can be obtained at www.gao.gov/new.items/d05539.pdf . 

5. Issue: The quality and outcomes of programs in the nation’s apprenticeship system and DOL’s 

oversight 

Program Area: ETA Apprenticeships

Performance Goal: Goal 05-1.1A – Strengthen the registered

apprenticeship system to meet the training needs of business and 

workers in the 21st Century. 

Report Title: Labor Can Better Use Data to Target 

Oversight (GAO-05-886)

Date Completed: August 2005

Conducted By: GAO

Program Impacts: DOL will need to improve oversight of apprenticeship programs. 

Findings: 

1. Labor’s monitoring of programs it directly oversees has been limited. In 2004 Labor reviewed only four percent of 

 programs in the 23 states where it has direct oversight. 

2. Limited staff constrained DOL’s ability to do more reviews. 

3. DOL has not employed its database to generate information indicative of program performance, such as completion rates. 

4. Labor does not regularly review council-monitored states or collect data from them that would allow for a national picture of 

 apprenticeships. 

5. Formal reviews by DOL have been infrequent and not necessarily useful. 

Recommendations: 

1. Labor should better utilize its database for oversight – particularly for apprenticeship programs with expected future labor 

 shortages. 

2. Labor should develop a cost effective strategy for collecting data from council-monitored states for selected occupations. 

3. Labor should conduct is reviews of apprenticeship activities in states that regulate their own programs on a regular basis to 

 ensure that state activities are in accord with those requirements set forth by federal law, and offer substantive feedback. 

Actions Taken: 

1. The Department concurs with GAO’s recommendation on better utilizing the database. ETA will use its existing data

resources, as well as data from the Bureau of Labor Statistics (BLS), to identify occupations with skill shortages to help ETA 

better target Apprenticeship program performance and oversight activities. 

2. In order to have the most complete national apprenticeship data possible, efforts underway have resulted in two additional 

State Apprenticeship Agency (SAA) states agreeing to participate in Registered Apprenticeship Information System (RAIS). 

State of Kentucky started using RAIS in June 2005, and North Carolina State is currently in the process of converting to

RAIS. 

3. ETA staff conducted and completed 14 SAA state reviews and 13 project reviews, including the District of Columbia during

Fiscal Year 2005.

4. The Department agrees with the recommendation, and plans to offer substantive feedback to states after reviews. 

5. ETA instituted a lectronic Registration process for RAIS in October 2004. This new feature is offered to SAA 

states as a cost-effective measure to improve data integrity and efficiency of apprenticeship data collection because the

sponsor will enter the data. ETA has been in negotiations with five SAA states since this process went on-line. 

n Apprentice E

272 United States Department of Labor 
Significant Audits and Evaluations 

Actions Remaining:

1. ETA will seek input from DOL’s Advisory Committee on Apprenticeship regarding

industry labor shortages. ETA will expand its use of the Registered Apprenticeship 

Information System (RAIS) indicators along with implementation of WebCEO, a data

mining tool. 

2. Encouraged by early successes of Kentucky and North Carolina, ETA expects that other 

states will join RAIS. Targeted resources are being utilized to make this a priority for the 

Department. 

3. The Department’s goal is to complete the remainder of reviews in SAA states. 

4. Final reports of the SAA reviews will provide additional feedback and technical assistance. 

Expected Completion:

1. End of FY 2007

2. End of FY 2007

3. End of FY 2006

4. End of FY 2006

Additional Information: A copy of the complete report can be obtained at www.gao.gov/cgi-bin/getrpt?GAO-05-886. 

6. Issue: Understanding what supports the workforce development system needs to provide 

universal access to services for people with disabilities.

Program Area: ODEP

Performance Goal: Goal 05-1.1B – Provide national leadership

to increase access and employment opportunities for youth and

adults with disabilities receiving employment, training, 

employment support services by developing, testing and 

disseminating effective practices.

Report Title: Case Study Research: How People with

Disabilities are Served through the Workforce 

Development System

Date Completed: September 2005

Conducted By: Academy for Educational Development

(AED)

Program Impacts: The study will document the actual challenges faced and strategies employed by 12 state and local 

workforce development systems (case study sites) in serving people with disabilities. The identification of effective 

practices will be nationally disseminated.

Findings: 

1. Leadership: Sites reported the need for effective and active Local Workforce Investment Boards (LWIB). It is critical that 

 leadership at the LWIB level set the tone and direction for serving people with disabilities. 

2. Strategies of planning and support: Support from the disability navigator grant and other support agencies is critical in 

 serving people with disabilities. However, there may be a caveat to this additional support. In many sites, the Navigators are 

 being seen as the primary referral point for persons with disabilities. 

3. Collaboration: While many sites reported positive experience with the collaboration of their partners, vocational 

 rehabilitation appears to be the most problematic. In some cases, the One-Stops continue to view VR as the “automatic” 

 referral for people s. To the extent of this belief, it is difficult for professionals to see the need to increase their 

 capacity to work wit disabilities. Another area of challenge in collaboration is the exchange of data. The sites 

 r fidentiality requirements often prevented them from sharing information. 

4. Accessi d Assistive Technology

with disabilitie

h people with

eported that con

bility an : Many sites have mad making their facilities and equipment more 

a le. The staff received training in how to use assistive technol pment. The primary area of improvement 

 nee cessibility to programs. There is little evidence of widespread efforts to make all available programs accessible to

 people with disabilities. 

5. Human Resources

e strides in

ccessib ogy equi

ded is ac

: Sites noted the need for additional training and skill-building in the areas of connecting people to 

 resources, improving administrative skills, and communicating effectively with people with disabilities. 

6. Data and Quality Assurance: The sites reported that the accountability system does not require data that accurately identifies 

 all of the people with disabilities served. In addition to data collection, the sites experience a tremendous pressure to provide 

 positive outcomes to satisfy the performance measures. This has caused an unintentional notion among the sites which 

 encourages the “pre-screen” of people with disabilities in order to select those that will satisfy the performance measures.

Recommendations:

1. Review all current LWIB professional development curriculums and training activities for LWIB members. Develop a 

 national curriculum for LWIB members which require training on how to serve people with disabilities. 

2. Define the role of Navigators. Clearly state that they are to provide consultative services to other staff and not to provide 

 direct services to customers. 

3. Initiate efforts to bring to scale the similar support services deemed to be effective. 

4. Develop and disseminate concise descriptions regarding Vocational Rehabilitations “order of selection” process for serving 

 individuals with disabilities to WIA partner agencies. 

5. Develop the capacity of all WIA and other agencies within the workforce development system, both at state and local levels, 

 to work effectively with individuals with disabilities. 

6. Develop federal policy that allows for the sharing of information only for the purpose of improvement in service delivery.

7. Require all sites to carry out a comprehensive review and, if necessary, modification of their operating procedures to ensure 

 accessibility. 

8. Continue professional development for staff, in regard to effectively communicating with individuals with disabilities and 

FY 2005 Performance and Accountability Report 273
Appendices 

 skills such as resource mapping, cross-agency collaboration and service delivery, and disability etiquette. 

9. Increase the scope of training providers to other disability specific organizations and agencies such as Independent Living

 Centers, Parent Training and Information Centers, and educational facilities. 

10. Implement a pilot data collection project designed to collect data that would present a more comprehensive profile and an 

 accurate count of individuals with disabilities being served. 

11. Develop and pilot alternative performance measures that are enhanced to allow for the complexities of serving individuals 

 with disabilities. 

Actions Taken: No actions taken. 

Actions Remaining:

1. Since the report is newly completed, the program is now beginning to review the 

 recommendations and determine the next steps. 

2. ODEP will provide a briefing to the interagency workgroup composed of ODEP, ETA, and 

 OASAM’s Civil Rights Center. 

3. The interagency workgroup will determine how to use the information from the report as they 

 develop a strategic plan to increase accessibility of workforce development programs, as 

 recommended in a 2005 report from GAO. 

Expected Completion: 

1. December 2005 

2. December 2005 

3. June 2006 

Additional Information: A copy of the complete report can be obtained from Richard L. Horne, Ed.D, Supervisory Research

Analyst, ODEP, 200 Constitution Ave., NW, Room S-1303, Washington, D.C. 20210; (202) 693-7880.

7. Issue: The need for a web-based tool to help transitioning service members find civilian 

employment 

Program Area: VETS

Performance Goal: – Improve employment

outcomes for veterans who receive One-Stop and 

homeless veterans’ program services

Report Title: Feasibility Assessment of a Web-Based Career 

Guidance Tool for Transitioning Military Service Members 

Date Completed: June 2005

Conducted By: Personnel Decisions Research Institute 

Goal 04-1.1D

Program Implication: Since no single existing web-based tool meets the needs of transitioning service members and veterans,

it will be necessary to customize a tool that will include career tips, a search function and details on civilian occupations. 

Findings: 

1. There is a need for a career guidance tool for transitioning service members. 

2. It is feasible to design a tool that would meet the specific career information needs of key groups. 

3. It is feasible – both from a content and a technology standpoint – to develop and implement such a tool. 

Recommendations: 

1. It is important to produce and implement a useful product that serves the needs of key stakeholders as quickly as possible, 

 with features requiring longer-term research and development added later. 

2. To build a successful tool, it is critical to have a solid understanding of service members’ needs and to gather feedback from 

 them at several points in the development process.

3. Develop strategies to promote the use of the Career Guidance Tool. 

4. The tool must be maintained and updated; regular data updates from the Defense Management Data Center will be critical 

 for developing and maintaining search capabilities. 

Actions Taken: Findings have been shared with the Departments of Defense and Veterans Affairs 

Actions Remaining: Review with other agencies to determine next steps. Expected Completion: June 2006

Additional Information: A copy of the complete report can be obtained by contacting Veterans’ Employment and Training

Service, FPB S-1325, 200 Constitution Avenue, N.W., Washington, DC 20210, or by calling 202-693-4700.

8. Issue: A new performance accountability system for the Disabled Veterans’ Outreach Program 

(DVOP) and the Local Veterans’ Employment Representative (LVER) 

Program Area: VETS

Performance Goal: Goal 04-1.1D – Improve employment

outcomes for veterans who receive One-Stop and 

homeless veterans’ program services

Report Title: Preliminary Observations on Changes to

Veterans’Employment Programs (GAO-05-662T )

Date Completed: May 2005

Conducted By: GAO

Program Impacts: More work needs to be done to implement a minimum standard for veterans entering employment that all

states will be expected to meet. Until the standard becomes available, it is difficult to assess how well DVOP and LVER 

staff are performing.

274 United States Department of Labor 
Significant Audits and Evaluations 

Findings: 

1. VETS has established newly defined roles for DVOP and LVER staff as required by the Jobs for Veterans Act (JVA) and 

 provided guidance and training. 

2. Almost half of the states plan to use JVA authority to assign DVOP staff on a part-time basis. 

3. Integrating DVOP and LVER staff into one-stop centers remains a long-standing challenge. 

4. VETS has implemented changes to its system for monitoring state compliance; work continues to determine how best to use 

 the monitoring information to improve program performance. 

Recommendations: None made. 

Actions Taken: 

1. Findings discussed at the VETS National Office level and with a special VETS workgroup that addresses DVOP and LVER 

 issues. 

2. VETS has committed to set a national “minimum performance level” under the new Common Measures. 

3. VETS has initiated a review of its grant based measures system. 

4. VETS anticipates a revamped set of measures during PY 2005. 

Actions Remaining:

1. VETS plans to conduct a nationwide study of DVOP/LVER programs in order to develop 

 programmatic initiative recommendations for better integration into one-stop centers. 

Expected Completion:

1. September 2006

Additional Information: A copy of the complete report can be obtained at www.gao.gov/cgi-bin/getrpt?GAO-05-662T .

9. Issue: Assessing the effectiveness of the Homeless Veterans’ Reintegration Project (HVRP) 

Program Area: VETS

Performance Goal: Goal 04-1.1D – Improv employment

outcomes for veterans who receive One-Stop and 

homeless veterans’ program services

Report Title: Job Retention Goal Under Development for 

DOL’s Homeless Veterans’ Reintegration Program (GAO05-654T ) 

Date Completed: May 2005

Conducted By: GAO

e

Program Impacts: In order to assess the effectiveness of HVRP prior to reauthorization, the program needs to be able to

develop and implement a goal for employment retention.

Findings: 

1. DOL’s expenditures for HVRP grants have increased from $9.5 million in fiscal year 2000 to over $18 million in fiscal year 

 2004. 

2. DOL estimates that it will expend over $20 million each year on HVRP grants in 2005 and 2006. 

3. DOL has not developed a performance goal for a job retention measure and has not provided the Congress with statutorily 

 required reports on program effectiveness. 

Recommendations:

1. Because employment retention is crucial to the overall success of transitioning veterans from homelessness, it is important 

 that DOL continue to develop a realistic performance goal for employment retention to assess the success of HVRP. 

Actions Taken: 

1. VETS is collecting and analyzing retention data for HVRP during PY 2004. 

2. VETS has informed HVRP grantees of the need to place homeless veterans in jobs with maximum employment retention 

 potential. 

Actions Remaining:

1. VETS will use the retention data that is being collected to establish a baseline for future 

 performance targets and tracking. 

2. VETS will issue guidance for implementing the new performance targets. 

Expected Completion:

1. July 2006

2. July 2006

Additional Information: A copy of the complete report can be obtained at www.gao.gov/cgi-bin/getrpt?GAO-05-654T . 

10. Issue: Meeting the needs of service members leaving the military 

Program Area: VETS Transition Assistance Program (TAP)

Performance Goal: Goal 04-1.1D – Improve employment

outcomes for veterans who receive One-Stop and 

homeless veterans’ program services

Report Title: Enhanced Services Could Improve Transition 

Assistance for Reserves and National Guard (GAO-05-544 ) 

Date Completed: May 2005

Conducted By: GAO

Program Impacts: The program needs to determine when and where to offer the TAP for members of the Reserves and

FY 2005 Performance and Accountability Report 275
Appendices 

National Guard, especially since they have been called to active duty in greater numbers than at any time since the Korean

War.

Findings: 

1. The federal agencies have taken actions to improve TAP’s content and increase participation. 

2. TAP faces challenges serving Reserve and National Guard members because of their rapid demobilization. 

3. DOL is assessing its employment workshop curriculum using focus groups and survey data. 

4. DOL provides some workshops and briefings overseas. 

5. DOL has pilot programs in three states that will offer employment workshops after members return home. 

Recommendations: DOD, in conjunction with DOL and the U.S. Department of Veterans Affairs should determine what 

demobilizing Reserve and National Guard members need to make a smooth transition and explore options to enhance their 

participation.

Actions Taken: DOL is participating in a DOD led effort to determine the best way to provide services to Reserve and 

 transitioning National Guard members. 

Actions Remaining: Collaborating with the Department of Defense in order to report

back to Congress. 

Expected Completion:

1. December 2005 

Additional Information: A copy of the complete report can be obtained at www.gao.gov/cgi-bin/getrpt?GAO-05-544 . 

11. Issue: Developing baseline values for efficiency and earnings gain measures for veterans

Program Area: VETS

Performance Goal: Goal 04-1.1D – Improve employment

outcomes for vet ve One-Stop and 

homeless veterans’ ces

Report Title: Developing Efficiency and Earnings Gain

Measures 

Date Completed: September 2005

Conducted By: SRA International, Inc. 

erans who recei

 program servi

Program Impacts: Obtaining and analyzing data on the post-program earnings experiences of veterans served by the Labor 

Exchange will enable VETS to establish baselines and future targets for program performance.

Findings: 

1. Developing baseline values for efficiency measures had to avoid potential double counting of veterans because both a DVOP

 and an LVER serve the same veteran. 

2. Job seeker data were not available prior to PY 2002 to identify veterans served by DVOP or LVER. 

3. A number of states appear to have different strategies and thresholds for reporting who received staff-assisted services, a 

 key tracking variable. 

4. Data suggest a positive baseline value for veterans served by DVOP or LVER, but it is difficult to say precisely what that 

 positive value should be. 

5. Additional analyses, perhaps conducted by States, can provide further insights. Selection of zero as the baseline value for 

 average earnings gains may not change, but one could select it with greater confidence. 

Recommendations:

Good candidates for efficiency measures are: 

1. Cost per individual who received a staff-assisted service (all participants). 

2. Wagner-Peyser cost per individual who received a staff-assisted service (non-veteran). 

3. DVOP/LVER cost per veteran who received a staff-assisted service. 

4. Cost per individual who entered employment (all participants). 

5. Wagner-Peyser cost per individual who entered employment (non-veteran). 

6. DVOP/LVER cost per veteran who entered employment. 

Actions Taken: 

1. Background information from the study was utilized in deciding on an efficiency measure for the DVOP/LVER program.

2. “Cost per veteran participant” has been adopted for immediate implementation as the efficiency measure for the 

 DVOP/LVER program.

Actions Remaining: Once a Common Measures definition is adopted, VETS will use the 

study’s findings o n” measures to establish baselines. 

Expected Completion:

n “earnings gai 1. September 2006

Additional Information: A copy of the complete report can be obtained by contacting Veterans’ Employment and Training

Service, FPB S-1325, 200 Constitution Avenue, N.W., Washington, DC 20210, or by calling 202-693-4700.

276 United States Department of Labor 
Significant Audits and Evaluations 

12. Issue: The compliance of Job Corps contractors with laws, regulations, policies and 

procedures relating to operating costs

Program Area: ETA Job Corps

Performance Goal: Goal 04-1.2B – Improve educational

achievements of Job Corps students and increase participation of

Job Corps graduates in employment and education. 

Report Title: Performance Audit of Job Corps Center

Operating Costs (OIG 03-05-004-03-370)

Date Completed: March 2005

Conducted By: OIG 

Program Impacts: ETA is taking steps to ensure that Job Corps Centers’ financial reports accurately reflect operating costs and 

expenses. 

Findings: 

1. Overall, Job Corps contractors are complying with laws, regulations, and Job Corps policies and procedures related to center 

 operating costs. 

2. Three areas of noncompliance that related to specific contractor operations were identified:

• Inadequate accounting systems 

• Discrepancies between the ETA-2110 and the Public Voucher 

• Compensation in excess of statutory limitations. 

3. At several centers, journal entries were unauthorized, inadequately supported or incorrectly recorded. 

Recommendations: 

1. ETA should require the contractor for the North Texas Job Corps Center (JCC) to:

• refund $786,977 because these costs were not shown to be reasonable and allowable 

• use a current cost method to prepare the ETA-2110 financial report

• take the nec nsure there is support for the amounts reported on the ETA-2110. 

2. ETA should ensur

• financial reports and billings by the former contractor for the Homestead JCC are accurate and complete 

• Homestead JCC staff receive training on how to accurately prepare the monthly ETA-2110 

• controls are implemented so that all future submissions are properly reconciled to the Public Voucher and the books 

of account. 

3. ETA should require the contractor for the Treasure Island JCC to refund $38,235 paid in excess of Executive Level II 

 compensation limits. 

4. ETA should ensure that each center has written policies and procedures related to the preparation, documentation, recording, 

 and approval of all journal entries made to the centers’ books of account and that corrective actions are taken by the five 

 JCCs to address the deficiencies reported. 

essary steps to e

e that: 

Actions Taken: 

1. Job Corps was reimbursed by North Texas Job Corps Center for costs that were unreasonable. The Dallas Regional Office 

 is working with the center operator for North Texas JCC to use current cost methods to prepare financial reports. 

2. A trainer was also brought in to the North Texas Job Corps Center from an outside source to train and work with center to 

 bring them into compliance. 

3. The Contracting Officer for Homestead JCC now requires that center operator implement controls to ensure all future 

 submissions are properly reconciled to the Public Vouchers and the books of account. 

4. The National Office of Job Corps is currently developing online and video training for all center operators to utilize with

 staff on financial reporting, particularly the 2110 financial reports. There will be specific emphasis to make sure that the 

 Homestead JCC takes part in the training. 

5. Job Corps was reimbursed by Treasure Island Job Corps Center for costs paid to the Center Director in excess of Executive 

 Level II compensation. 

6. The Regional Office Contracting Officers and Project Managers for the five centers noted now require that the operators

 have written policies and procedures for the preparation, documentation, recording, and approval of all journal entries made 

 to the centers’ books of account and that corrective actions be taken. 

Actions Remaining:

1. Online training will be conducted with centers to assure proper preparation of the ETA-2110. 

Expected Completion:

1. December 2005 

Additional Information: A copy of the complete report can be obtained at http://www.oig.dol.gov/public/reports/oa/2005/03-

05-004-03-370.pdf .

FY 2005 Performance and Accountability Report 277
Appendices 

13. Issue: The reliability of performance outcomes reported by center operators and Career 

Transition Services (CTS) providers

Program Area: ETA Job Corps

Performance Goal: Goal 04-1.2B – Improve educational

achievements of Job Corps students and increase participation of

Job Corps graduates in employment and education. 

Report Title: Job Corps Performance Measurement 

Outcomes Report (OIG 09-04-004-03-370)

Date Completed: September 2004

Conducted By: OIG 

Program Impacts: Job Corps has implemented procedures to correct management control weaknesses. 

Findings: 

1. Job Corps management controls over performance data reliability do not adequately address the increased financial risk 

 created by the May 2002 implementation of performance-based contracting. 

2. Job Corps did not effectively validate reported performance outcomes during onsite assessments conducted by Job Corps 

 Regional Offices. 

3. Job Corps’ written procedures do not require regional staff conducting onsite assessments to test the validity of reported 

 performance outcomes. 

Recommendations: 

1. Test performance outcomes data reported by center and Career Transition Services providers during each onsite 

 review using statistical sampling methodologies. 

2. Retain records that document the testing performed and the basis for any conclusions.

3. Take appropriate actions to recover any overpayments made to the contractor as a result of misreported performance data. 

Actions Taken: 

1. Job Corps has taken steps to amend the Program Assessment Guide to include mandatory activities for testing the 

 validity and reliability of performance outcome data. 

2. Job Corps has developed and is testing a documentation system in support of the performance data evaluation testing model.

3. Job Corps is working to establish procedures and parameters for recovery of identified overpayment made to a contractor as a

 result of misreported performance data. 

Actions Remaining:

1. Finalization of the documentation system and training of Federal and Regional staff. 

2. Finalization and implementation of procedures and parameters for recovery of identified 

 overpayments. 

Expected Completion:

1. October 2005

2. January 2006

Additional Information: A copy of the complete report can be obtained at http://www.oig.dol.gov/public/reports/oa/2004/09-

04-004-03-370.pdf

14. Issue: Status of the BLS Consumer Price Index (CPI) information security program 

Program Area: BLS Consumer Price Index System

Performance Goal: Goal 05-1.3A – Improve information 

available to decision-makers on labor market conditions, 

and price and productivity changes.

Report Title: Federal Information Security Management Act

Audit of the Consumer Price Index System (OIG-23-05-005-

11-001) 

Date Completed: March 2005

Conducted By: OIG 

Program Impacts: Effective controls over information systems are essential to ensuring the protection and availability of

Federal government economic indicator data. Under the Federal Information Security Management Act, OIG evaluated the

effectiveness of the management, operational and technical security controls of the Consumer Price Index (CPI) System. 

Findings: 

1. The CPI contingency plan is in draft format and has not been tested. 

Recommendations: 

1. Finalize, approve, and distribute the contingency plan to key personnel.

2. Make sure that all recovery team members are aware of their roles and responsibilities for system recovery. 

3. Ascertain that the equipment necessary to support the CPI contingency plan is purchased and placed into the recovery 

 facility. 

4. Test the Continuity of Operations Plan in accordance with DOL and National Institute of Standards and Technology

 requirements. 

Actions Taken: 

1. BLS has made progress toward finalizing and approving the CPI Contingency Plan. The plan has been completed 

278 United States Department of Labor 
Significant Audits and Evaluations 

 sufficiently to allow for testing. Updates are made to the plan when additional information is presented. 

2. Equipment necessary to support the CPI contingency plan has been purchased and placed into the recovery facility. 

3. The CPI Continuity of Operation Plan testing under their current technical testing plan has been completed. 

Actions Remaining

1. Once the CPI Contingency Plan has been finalized and approved, it will be distributed to 

 key personnel. 

2. Training for recovery team members will begin by the end of the fiscal year. 

Expected Completion:

1. December 2005 

2. September 2005

: 

Additional Information: A copy of the complete report can be obtained at the Bureau of Labor Statistics, Division of

Management Systems, Room 4080, 2 Massachusetts Avenue, NE, Washington, DC 20212, or by calling 202-691-7628. 

GOAL 2: A SECURE WORKFORCE 

15. Issue: The impact of DOL compliance assistance strategies 

Program Area: ESA WHD

Performance Goal: Goal 05-2.1A – American workplaces 

legally employ and compensate workers.

Report Title: Findings from Employers Pocket Guide on Youth 

Employment: YouthRules! Telephone Survey 

Date Completed: December 2004

Conducted By: Westat

Program Implication: Identifying cost effective ways of providing employers with information on youth employment rules 

impacts WHD’s ability to ensure safe workplaces for young workers and to educate employers of the youth employment 

laws. 

Findings: 

1. The information contained within the evaluated compliance assistance publication was not relevant to the majority of 

 businesses in the census because they did not employ young workers. 

2. Those who read the brochure found it valuable and thought it offered good compliance tips. 

3. A small percentage of employers who where mailed the guide hired workers younger than 18 years and reported reading the 

 guide. 

Recommendations: None made. 

Actions Taken: 

1. Evaluation findings were communicated throughout the organization. 

2. WHD’s field offices were encouraged to rely less heavily on non-targeted mass mailings as a form of compliance assistance, 

 and directed to incorporate alternative methods of outreach into local initiatives during the annual planning phase. 

Actions Remaining:

1. Work completed; no additional actions planned at this time. 

Expected Completion: 

NA 

Additional Information: A copy of the complete report can be obtained from Wage-Hour Division, Employment Standards 

Administration, U.S. Department of Labor, FPB S-3502 , 200 Constitution Ave., N.W., Washington, D.C. 20210, or by

calling 202-693-0051. 

16. Issue: The impact of DOL compliance assistance strategies 

Program Area: ESA WHD 

Performance Goal: Goal 05-2.1A – American workplaces 

legally employ and compensate workers.

Report Title: The Fair Labor Standards Act: Executive, 

Administrative, and Professional Exemptions Seminar 

Evaluation

Date Completed: May 2005

Conducted By: Westat

Program Implications: Identifying cost effective ways of educating employers about the Fair Labor Standards Act (FLSA)

affects WHD’s ability to ensure workers receive fair and legal compensation. Developing clear, useful compliance 

materials promotes compliance and an accurate understanding of the law. 

Findings: 

1. The seminar was informative and prompted attendees to perform additional research on overtime security laws. 

2. Most respondents reported learning some new information on all topics covered by the seminar. 

3. Over 75 percent reported being satisfied with the seminar. 

FY 2005 Performance and Accountability Report 279
Appendices 

Recommendations: 

1. Strengthen the seminar by increasing the number of examples presented and broadening the topic coverage. 

2. Offer two versions of the presentation – introductory and advanced. 

3. Ensure availability of prompt email and telephone responses to questions regarding the seminar. 

4. Ensure the Web site is up-to-date regarding the exemption rule. 

Actions Taken: 

1. WHD considered possible future improvements to the FairPay Seminar, which would include industry specific examples of 

 compliance issues as new policies are defined or clarified or as new compliance problems are identified through the agency’s 

 compliance efforts. 

2. WHD verified that the FairPay Web site is up-to-date and that email and telephone reply process were in place. 

3. WHD has developed and disseminated through the organization abridged versions of the seminar. 

Actions Remaining: No additional actions planned at this time. Expected Completion: NA 

Additional Information: A copy of the complete report can be obtained from Wage-Hour Division, Employment Standards 

Administration, U.S. Department of Labor, FPB S-3502, 200 Constitution Ave., N.W., Washington, D.C. 20210, or by

calling 202-693-0051.

17. Issue: Budget and performance integration 

Program Area: ESA WHD 

Performance Goal: Goal 05-2.1A – American workplaces 

legally employ and compensate workers.

Report Title: Budget and Performance Integration Model

Evaluation 

Date Completed: October 2004

Conducted By: ICF Consulting 

Program Implications: Refining a model to integrate WHD’s budget and performance will improve cost effective management

of resources. 

Findings: 

1. WHD is in the early stages of a successful budget and performance integration effort and the basic processes used by the 

 WHD budget and performance integration model are appropriate, given the constraints under which they operate. 

2. The current WHD budget/performance integration model uses a proportional distribution methodology to map non-

 investigative time and resources to WHD program goals. This is based on the assumption that the distribution of total costs is 

 similar to the investigator hour’s distribution, determined by the database. In the absence of an activity-based cost system, 

 this is a reasonable approach to allocate non investigative time and resources, but does not accurately reflect total costs 

 required to achieve performance goals. 

3. The current WHD model does not take full advantage of the capabilities of spreadsheet technology and may not utilize all of

 the actual data currently collected and available from existing systems. 

Recommendations:

1. Include output measures in the model, in order to calculate unit costs for activities.

2. Use enhanced uni alculating the fully loaded unit costs and direct unit costs of output measures, in order to 

 determine if resources would be better spent on one performance goal or another. 

3. Use object class codes to improve the precision of the allocation process. 

4. Distinguish direct costs from other costs in the model to consider the impact of shifting resources from one performance 

 category to another to meet performance goals. 

5. Calculate regional costs and track performance throughout the year against the budget to better evaluate performance at the 

 regional level. 

6. Document the mechanics of the model and the data relationships to ensure that information is available to enable others to 

 understand the mechanics of the model and the distribution approach. 

7. Incorporate links and formulas in the model’s spreadsheets to reduce data entry time and errors. 

8. Identify all contract costs and collect staff travel time; assign them across all performance goals. 

9. Incorporate the results of the DOL Cost Analysis Manager (CAM) survey into the model. 

10.Explore the advantages/disadvantages of using: (a) dollar-weighted labor hours, (b) three-year averages, and (c) a correction 

 step in the model. 

t-cost data by c

Actions Taken: 

1. Evaluation findings were communicated throughout the organization; some recommendations are still under consideration, 

 such as using three-year averages, distinguishing between direct and other costs, and calculating fully loaded unit costs and 

 direct unit costs of output measures. 

2. Incorporated output measures into the model to calculate unit costs for activities. All of the output measures developed for 

 CAM are incorporated into the performance budget and can be identified in the “Summary of Performance and Resource 

 Levels” table. 

280 United States Department of Labor 
Significant Audits and Evaluations 

3. Used major object class codes to improve the precision of the allocation process. 

4. Incorporated the results of the CAM survey into the model. 

Actions Remaining:

1. Document the mechanics of the model and the data relationships to ensure that information 

 is available to enable others to understand the mechanics of the model and the distribution 

 approach. 

2. Incorporate links and formulas in the model’s spreadsheets to reduce data entry time and errors. 

3. Improve the output measures in CAM to more accurately reflect unit costs. 

Expected Completion: 

1. March 2006 

2. March 2006 

3. October 2005 

Additional Information: A copy of the complete report can be obtained from Wage-Hour Division, Employment Standards 

Administration, U.S. Department of Labor, FPB S-3502, 200 Constitution Ave., N.W., Washington, D.C. 20210, or by

calling 202-693-0051. 

18. Issue: Assessing the connection between the UI program and reemployment services 

Program Area: ETA UI 

Performance Goal: Goal 05-2.2A – Make timely and accurate benefit 

payments to unemployed workers, facilitate the reemployment of 

Unemployment I nts, and set up Unemployment tax 

accounts promptly for new employees.

Report Title: Better Data Needed to Assess 

Reemployment Services to Claimants (GAO-05-

413)

Date Completed: June 2005

Conducted By: GAO

nsurance claima

Program Implications: Although there are program specific tracking systems in place, there is no single, comprehensive 

database that tracks the extent to which all claimants are receiving reemployment services (including self-services) and the 

outcomes of those services. 

Findings: 

1. Little data are available to gauge the extent to which UI claimants are receiving reemployment services or about the 

 outcomes they achieve. 

2. Information is generally collected on a program-by-program basis or is focused on a single category of claimants. This does 

 not allow for a comprehensive, nationwide understanding of claimants' participation in the broad range of reemployment 

 services provided through federal programs nor do they move states in the direction of having the data they need to better 

 manage their systems. 

Recommendations: 

1. As part of the development of the ETA's Management Information and Longitudinal Evaluation (EMILE) system, the 

 Department should work with states to develop a plan for considering the feasibility of requiring states to collect more 

 comprehensive information on UI claimants' use of reemployment services and the outcomes achieved by claimants, 

 including the length of time claimants receive UI before they are reemployed. 

Actions Taken: 

1. Developed a performance measure of the extent to which UI beneficiaries become reemployed. 

2. Funded 21 States to conduct in-person Reemployment and Eligibility Assessments (REAs) with UI beneficiaries. 

3. Requested additional funding for REAs in the FY 2006 budget. 

Actions Remaining:

1. Issue instructions to States for reporting reemployment data. 

2. Incorporate the reemployment measure into the performance measurement system. 

3. Collect information from nine States on the results of the REAs. 

4. Seek authority to collect data from all States funded for REA activity. 

Expected Completion: 

1. September 2005

2. April 2006

3. May 2006

4. February 2006 

Additional Information: A copy of the complete report can be obtained at http://www.gao.gov/new.items/d05413.pdf

19. Issue: Gaining a better understanding of the UI program 

Program Area: ETA UI 

Performance Goal: Goal 05-2.2A – Make timely and accurate 

benefit payments to unemployed workers, facilitate the 

reemployment of Unemployment Insurance claimants, and set up

Unemployment tax accounts promptly for new employees.

Report Title: Unemployment Insurance. Information on

Benefit Receipt (GAO-05-291) 

Date Completed: March 2005

Conducted By: GAO

Program Implications: The UI program, administered by ETA in partnership with states, plays a critical role in ensuring the 

financial security of America’s workforce. 

FY 2005 Performance and Accountability Report 281
Appendices 

Findings: 

1. About 38 percent of workers born between 1957 and 1964 received UI at least once between 1979 and 2002, with almost 

half of these individuals receiving UI benefits more than once. 

2. Another 39 percent of this age group of workers were eligible to receive UI benefits, but never did so. 

3. Nine percent of all workers in this age group are estimated to have been unemployed at least once, but were never eligible for

 UI benefits, mostly because of the conditions under which they separated from their jobs. 

4. UI receipt varied by industry and occupation. 

Recommendations: None made. 

Actions Taken: NA

Actions Remaining: NA Expected Completion: NA 

Additional Information: A copy of the complete report can be obtained at http://www.gao.gov/new.items/d05291.pdf . 

20. Issue: Difficulties obtaining workers’ compensation benefits for exposure to Agent Orange 

Program Area: ESA OWCP 

Performance Goal: Goal 05-2.2B – Minimize impact of 

work-related injuries. 

Report Title: Limited Information is Available on the Number 

of Civilians Exposed in Vietnam and Their Workers’ 

Compensation Claims (GAO-05-371) 

Date Completed: April 2005

Conducted By: GAO

Program Implications: Meeting the needs of civilian federal employees exposed to Agent Orange during the Vietnam war 

may require changes to the (a) ways claims are processed, (b) dissemination of information to claimants, and (c) legislation. 

Findings: 

1. Claimants faced many difficulties and delays because of a lack of readily available information on how to file a claim, their 

 Vietnam era employers, and their exposure to Agent Orange. 

2. Claimants faced processing delays caused by employers, insurance carriers, and DOL. 

3. Both DOL and private insurance carriers had difficulty identifying the number of claims they had received, largely because 

 they do not assign a unique code to Agent Orange claims that would enable easy identification. 

Recommendations: 

1. DOL should enhance its processing and management of claims, including improving the information used to track claims. 

2. DOL should maintain better information on the insurance carriers it licenses. 

3. DOL should provide better information to claimants to use in filing claims. 

Actions Taken: 

1. The Longshore Case Management System (LCMS) was changed in March 2005 to record a unique nature of injury code for 

 Agent Orange claims, as well as requiring that a country code for Vietnam is entered for each Agent Orange case. The 

 accuracy of the data entry will be subject to the performance measures and standards currently in place. 

2. The case management system for FECA is also being modified to accommodate the new identifiers. 

3. The Cleveland district office, where all special claims are processed, has been notified of the intent to use this new 

 identifying information. 

4. The Longshore Program Web site has been enhanced to direct potential claimants to the existing Defense Base Act (DBA) 

 question and answer web page where the information and forms for submitting claims are already available at 

 www.dol.gov.esa/owcp/dlhwc/DBAFaqs.htm. The DBA Frequently Asked Questions section has been specifically updated 

 with reference to claims arising from Agent Orange exposure in Vietnam. 

5. Regarding the specific recommendation that information be posted on Vietnam era contractors, please see the GAO findings 

 on the lack of surviving records with regards to Vietnam era employment records. In view of this, we agree to preserve 

 information we still have on Vietnam era employment. 

Actions Remaining:

1. Most of the claims activity and records pertaining to “Vietnam era employers” predates the 

 automation of the Longshore Case Management System (LCMS) by many years. The 

 GAO reported that, “most agency records maintained during this period were not 

 computerized, and because so much time has elapsed, many paper records have been 

 destroyed and many agency personnel knowledgeable of the period are no longer working 

 at these agencies.” The GAO also documented similar difficulties common to the private 

 insurance companies which had provided the coverage under the DBA. Nevertheless, the 

 Longshore Program has already committed to more closely enforce the coverage card 

 submission requirement. An evaluation of the Longshore database is underway and 

Expected Completion:

1. FY 2006

282 United States Department of Labor 
Significant Audits and Evaluations 

 enhancements to Longshore’s data capacity will result from that study. 

Additional Information: A copy of the complete report can be obtained at http://www.gao.gov/cgi-bin/getrpt?GAO-05-371 . 

21. Issue: Cost to the government of insurance coverage purchased under the Defense Base Act 

(DBA) 

Program Area: ESA OWCP 

Performance Goal: Goal 05-2.2B – Minimize impact of 

work-related injuries. 

Report Title: Defense Base Act Insurance: Review Needed of 

Cost and Implementation Issues (GAO-05-280R) 

Date Completed: April 2005

Conducted By: GAO

Program Implications: DOL administers the DBA and must ensure that workers’ compensation benefits are provided to

employees of government contractors working at U.S. defense bases overseas. 

Findings: 

1. The number of employees required to be covered under DBA while working in Iraq is significant. The State Department 

 reported over 150, performing work in Iraq on U.S. government-administered projects.

2. Conditions in Iraq, -funding sources for contracts and language barriers, have led to complications in

 implementing DBA. 

3. Challenges include clarifying when DBA applies, providing adequate and accurate information to companies and workers, 

 monitoring compliance, and processing claims. 

4. There is confusion among federal agencies and contractors over DBA. 

5. The Department of Labor is limited in the actions it can directly take for non-complying contractors.

6. Processing claims has been slowed by difficulty obtaining medical and personal information because of conditions in Iraq 

 and the need to respect local customs. Attorneys involved in DBA issues also report difficulty obtaining necessary 

 documentation, including contracts and marriage records, to file and report claims. 

000 Iraqis were

such as mixed

Recommendations: 

1. GAO suggests that Congress consider requiring the Director of OMB to determine, in coordination with DOD, 

 DOL, the State Department, and the U.S. Agency for International Development, current and future needs, options, and risks 

 associated with DBA insurance. 

2. The agencies involved in the coordinated effort should identify necessary actions, including legislative changes.

Actions Taken: 

1. The Department of Labor has express a willingness to work with any other agencies on matters of DBA coverage should 

Congress determine that an interagency initiative is required.

Actions Remaining:

1. To be determined by congressional action. 

Expected Completion:

1. Determined by congressional action.

Additional Information: A copy of the complete report can be obtained at www.gao.gov/new.items/d05280r.pdf . 

22. Issue: Customer Satisfaction in follow-up to a Program Assessment Rating Tool (PART) 

recommendation to conduct more systematic program evaluations. 

Program Area: EBSA, Office of Participant Assistance.

Performance Goal: Goal 05-2.2C – Enhance Pension and Health

Benefit Security. 

Report Title: Office of Participant Assistance Program

Evaluation Studies 

Date Completed: February 2005 

Conducted By: The Gallup Organization 

Program Impacts: The information gained through these studies continues to be instrumental in enabling EBSA to address 

program performance issues at the level that has the highest impact to effect change: the interaction that our customers have

directly with EBSA personnel and representatives. We have found that those employees who are most engaged with their 

customers are better able to ascertain situations that require the attention of the enforcement staff. Being able to provide 

feedback to our employees on their strengths and weaknesses with respect to their customer interactions has been the key to

continued program improvements. 

Findings: 

Participant Assistance Customer Satisfaction Surveys and Mystery Shopper: 

1. EBSA achieved a 62 percent customer satisfaction score (percentage rating 4 or 5 on a 5-point scale). 

2. EBSA has improved its customer satisfaction score each year since 2001, but variances still exist among offices and staff. 

3. The program needs to convey that EBSA is willing to work with its constituents to ensure their needs are met. 

4. The Mystery Shopper study indicated significant improvement in the quality of interaction and technical competence. 

 Variance in technical competence did remain depending on subject matter. 

Outreach Surveys: 

1. Most attendees and sponsors of outreach seminars rate overall satisfaction and usefulness favorably.

FY 2005 Performance and Accountability Report 283
Appendices 

2. As in FY03, EBSA presenters are rated favorably for being knowledgeable and well informed, but the information is often 

 found to be unclear and hard to understand. 

3. Satisfaction varies widely by office. 

4. “Presenter excellence” (defined as those receiving a 5 on the 5 point scale) varied greatly by type of program presented. 

Public Disclosure Room: 

1. The Public Disclosure Room satisfies 73 percent of its customers. 

2. Two performance attributes were identified as improvement priorities: “the clerk’s level of knowledge” and “the clerk’s 

 ability to explain what would be sent.” 

3. Verbatim comments indicate that accessibility and timeliness of the material in the Public Disclosure Room are issues that 

 need to be addressed. 

Recommendations: 

Participant Assistance Customer Satisfaction Surveys and Mystery Shopping: 

1. Share individual results with Benefits Advisors and supervisors to aid in training. 

2. Due to high percentage of “information only” calls, EBSA should focus improvement efforts on answering questions. 

3. Examine staff fitness for customer service role. 

4. Focus on developing the best talents of each Benefits Advisor.

5. Set clear expectations and hold Benefits Advisors and Supervisors accountable for their service delivery.

6. Recognize and compensate for greatness. 

Outreach: 

1. Examine organization and comprehensibility of presentations in relation to specific needs of different audiences. 

2. Track specific presenters in the survey process as some are highly rated and others are not. 

Public Disclosure Room: 

1. Review results with Disclosure Room staff and develop an action plan for addressing performance. 

Actions Taken: 

Participant Assistance Program: 

1. The Gallup Organization again conducted targeted training in each regional office based on their findings and conducted a 

 focus group of the highest ranking Benefits Advisors to determine best practices. 

2. The Benefits Advisors in each office developed a plan for improving their office’s scores. 

3. Certain offices began experimenting with morale building events to recognize greatness as part of their action plans to 

 improve service. 

4. Regional Directors are now rated on whether or not they meet the current year goal for customer satisfaction. 

Outreach: 

1. EBSA will continue to evaluate this service and relate updated findings to the presenters and offices conducting outreach. 

Public Disclosure Room: 

1. Results have been communicated to the Supervisor of the Public Disclosure Room for development of an action plan to 

 address the issues identified in the study. 

Actions Remaining:

Outreach: 

1. Public speaking training is being made available to those conducting outreach events to improve 

 outreach performance. 

2. Public Disclosure Room personnel have met to devise methods for improving service in the 

 areas identified by the report and will continue to work toward improving performance. 

Expected Completion:

1. Training to take 

 place in FY 2006. 

2. Ongoing. 

Additional Information: A copy of the complete reports can be obtained from the Employee Benefits Security Administration,

200 Constitution Avenue, N.W., Room N-5625 Washington, DC, 20210, or by calling 202-693-8655. 

23. Issue: Office of Technology and Information Service – EFAST Data Accuracy 

Program Area: Office of Technology and Information Service.

Performance Goal: Goal 05-2.2C – Enhance Pension and

Health Benefit Security.

Report Title: EBSA Should Mandate Electronic Filing Of

the Form 5500 to Improve Data Accuracy (OIG 09-05-

002-12-121)

Date Completed: September 2005

Conducted By: OIG 

Program Impacts: The ERISA Filing and Acceptance System (EFAST) is EBSA’s system for processing the Form 5500 

reports. The Form 5500 is the primary source of employee benefit plan information for both the Federal Government and

the private sector. EFAST processes approximately 1.2 million Form 5500s per year and distributes the data to the IRS,

PBGC, and EBSA. The Form 5500 data provides the foundation for EBSA’s enforcement, participant assistance, and 

disclosure programs. Maintaining accurate data is critical to achieving the program’s ambitious performance goals and 

EFAST is the locus of that data. 

Findings: 

1. EBSA has not ensured that its contractor, NCS-Pearson, met the data accuracy standards specified in the contract. 

2. Data from electronically filed Form 5500s met the data accuracy standards.

3. EBSA has not received the quality for the price paid. 

284 United States Department of Labor 
Significant Audits and Evaluations 

4. Electronic filings processed by EFAST were significantly more accurate than paper filings but only constitute about 1

percent of 

 filings. 

5. Agency user resources have been diverted to address data accuracy issues. 

Recommendations: 

1. Mandate electronic filing.

2. Consider withholding payment to NCS-Pearson if accuracy standards are not met.

3. Include in future systems development contracts, specific remedies for noncompliance with data accuracy standards. 

Actions Taken: 

1. EBSA supports mandating electronic filing of the Form 5500 and has issued a Notice of Proposed Regulation in the Federal 

 Register on August 30, 2005. 

2. EBSA has considered withholding payment to NCSP if accuracy standards are not met but wants to ensure no unintended 

 adverse consequences. If adopted, this approach would have to be taken with the approval and assistance of the Offices of

 Procurement Services and Solicitor. 

3. EBSA will consider, and implement as appropriate, specific remedies for noncompliance with data accuracy standards in 

 EFAST2. 

Actions Remaining:

1. As deliverables are received, EBSA will consider whether performance targets are met and 

 will consider withholding payment consistent with the contract. 

2. Contingent on EFAST2 funding approval, EBSA will implement, as appropriate, remedies 

 for noncompliance with data accuracy standards. 

Expected Completion:

1. On-going

2. On-going

Additional Information: 

A copy of the complete report can be obtained from the U.S. Department of Labor Office of Inspector General, 200

Constitution Avenue, N.W., Washington, D.C. 20212 or from http://www.oig.dol.gov/ . 

24. Issue: Providing timely information on private pension and other employee benefit plans 

Program Area: EBSA and PBGC

Performance Goal: Goal 05-2.2C – Enhance Pension and

Health Benefit Security. Goal 05-2.2D – Improve service to 

pension plan customers. 

Report Title: Government Actions Could Improve the 

Timeliness and Content of Form 5500 Pension Information 

(GAO-05-491) 

Date Completed: June 2005

Conducted By: GAO

Program Impacts: DOL will need to coordinate with the Internal Revenue Service (IRS) and PBGC to overcome processing

delays and the lack of critical information on multiemployer plans. 

Findings:

1. Statutory reporting requirements, processing issues, and current DOL practices affect the timeliness of the release of Form

 5500 information about private pension plans, resulting in a three year lag.

2. Form 5500 is filed 98 percent of the time in a paper format. These take more than three times as long as electronic filings to 

 process and have twice as many errors. 

3. The release of Form 5500 information in the research file is further delayed because DOL waits until all filings for that plan 

year are processed, which can take up to two years. 

4. Form 5500 still lacks key information that could better assist DOL, IRS, and PBGC in identifying and tracking all plans over 

 time and monitoring multiemployer plans. 

Recommendations: 

1. Require electronic filing of Form 5500. 

2. Modify DOL processing methods to improve timeliness, reduce errors, and maximize efficiency. 

3. Evaluate ways to speed up the release of the research file, including making interim information available prior to the final 

 release to the public. 

4. Modify Form 5500 to collect additional information on multiemployer pension plans. 

Actions Taken: 

1. The Department of Labor, the IRS, and PBGC are working to implement a mandatory, wholly electronic system for the

receipt and processing of Form 5500 data to improve timeliness and reduce errors. 

2. PBGC is actively pursuing actions to obtain much of the multiemployer data mentioned by GAO. A decision, however, has 

not yet been made to add these questions to the Form 5500.

Actions Remaining:

1. DOL, IRS, and PBGC will continue to work to implement electronic Form 5500 

 processing

Expected Completion:

1. Work will continue throughout FY 

 2006. 

Additional Information: A copy of the complete report can be obtained at http://www.gao.gov/cgi-bin/getrpt?GAO-05-491 . 

FY 2005 Performance and Accountability Report 285
Appendices 

GOAL 3: QUALITY WORKPLACES 

25. Issue: Improving performance monitoring and the selection of cases for inspection 

Program Area: OSHA

Performance Goal: Goal 05-3.1A – Reduce work-related 

fatalities. Goal 05-3.1B – Reduce work-related injuries and 

illnesses. 

Report Title: Safety in the Meat and Poultry Industry, while 

Improving, Could Be Further Strengthened (GAO-05-96) 

Date Completed: January 2005

Conducted By: GAO

Program Impacts: Program performance could be better assessed and inspections could be targeted more effectively if changes 

are made to data systems. 

Findings: 

1. The meat and poultry industry still has one of the highest rates of injury and illness of any industry. The most common 

 injuries are cuts, strains, cumulative trauma, and injuries sustained from falls, but more serious injuries, such as fractures and 

 amputation, also occur. 

2. Evidence suggests that OSHA’s efforts have a positive impact on injury/illness rates in meat and poultry plants. 

3. OSHA could improve its selection process for inspection by considering plants’ injury and illness rates over time. 

4. It is difficult to assess the effectiveness of OSHA’s efforts because the agency does not assign a unique identifier to each 

 plant, making it hard to compare the data on injury/illness rates with information collected through inspections. 

Recommendations: 

1. OSHA should consider adjusting its criteria for selecting plants for inspection and audit to include those that have had large 

 reductions in their injury and illness rates over time. 

2. OSHA should change the way it collects data on plants in order to make it easier to measure the impact of its programs. 

Actions Taken: 

1. OSHA has solicited public comments on its Site Specific Targeting (SST) program; we are currently reviewing comments 

 from industry associations, employers and safety and health professionals. 

Actions Remaining:

1. Upon completion of the review of the SST comments, OSHA will consider expanding the 

 criteria for SST inspections in the meatpacking industry. 

2. OSHA will consider expanding data-collection efforts for multiple years for trend 

 analysis, inclusion of recordkeeping submittals to capture contract workers illness and 

 injuries, linking the IMIS and other data processing systems to come up with unique 

 identifiers. 

Expected Completion:

1. April 2006

2. FY 2006

Additional Information: A copy of the complete report can be obtained at www.gao.gov/cgi-bin/getrpt?GAO-05-96 . 

26. Issue: Identifying Nationally Recognized Testing Laboratories (NRTL) to perform safety 

testing/certifications. 

Program Area: OSHA

Performance Goal: Goal 05-3.1A – Reduce work-related 

fatalities. Goal 05-3.1B – Reduce work-related injuries and 

illnesses. 

Report Title: OSHA Correctly Denied ED&D’s Incomplete 

NRTL Application (OIG 05-05-002-10-001) 

Date Completed: March 2005

Conducted By: OIG 

Program Impacts: C nally Recognized Testing Laboratories (NRTL) review and audit procedures will improve 

OSHA’s process of selecting organizations to conduct safety testing and certificat 

hanges to Natio

ion.

Findings: 

1. OSHA’s decision to deny Education Design and Development, Inc. (ED&D) NRTL recognition was justified because ED&D 

 did not meet all the elements required for recognition. 

2. OSHA’s records adequately supported its decision to grant recognition to several organizations ED&D alleged were given 

 recognition inappropriately. 

3. OSHA permitted some applicants to self-certify they were independent and did not verify these statements. 

4. OSHA did not appropriately handle ED&D’s application in two areas, but these deficiencies did not adversely affect the 

 outcome of the application. 

286 United States Department of Labor 
Significant Audits and Evaluations 

Recommendations: 

1. OSHA should make independence review a mandatory part of application reviews and periodic audits. 

2. Modify current policy to ensure that all areas related to an NRTL’s recognition are reviewed at least once during each five-

 year recognition period. 

3. Review two NRTLs’ current business practices to ensure conformance with the independence requirement. 

4. Ensure that incomplete applications are closed. 

5. Maintain a log of contacts with the applicants and NRTLs. 

6. Develop procedures to acknowledge all requests for feedback. 

Actions Taken: 

1. OSHA is revising and supplementing its procedures for verifying an NRTL’s independence. 

2. OSHA is developing procedures to ensure review of NRTL’s recognition requirements every five years. 

3. OSHA procedures will be adhered to ensure that incomplete applications are closed. 

4. OSHA is now using a phone log for tracking substantive contact with NRTL applicants and will develop tracking tools to 

 capture all contacts with applicants or other parties. 

6. OSHA is augmenting its current controls for acknowledging all requests for feedback. 

Actions Remaining:

1. Final implementation of new policy and revised procedures for reviewing independence 

 and other areas. 

2. Review of the independence of two NRTLs. 

3. Final implementation of chronological log referred to in Actions Taken #4. 

4. Final enhancements to procedures for feedback request acknowledgement, referred to in 

 Actions Taken #5. 

5. Review of two specified NRTL’s for independence are planned. 

Expected Completion:

1. March 2006 

2. September 2006

3. September 2006

4. September 2006

5. September 2006

Additional Information: A copy of the complete report can be obtained at http://www.oig.dol.gov/public/reports/oa/2005/05-

05-002-10-001.pdf .

27. Issue: Evaluation required by Section 610 of the Regulatory Flexibility Act and Section 5 of 

Executive Order 12866

Program Area: OSHA

Performance Goal: Goal 05-3.1A – Reduce work-related 

fatalities. Goal 05-3.1B – Reduce work-related injuries and 

illnesses

Report Title: Regulatory Flexibility Act Review of the 

Occupational Safety and Health Administration’s Ethylene

Oxide Standard. 

Date Completed: March 2005. 

Conducted By: OSHA

Program Impacts: Regulatory review indicates the ethylene oxide standard has been effective in reducing exposures and

achieving health benefits. 

Findings: OSHA determined that the Ethylene Oxide standard should be continued without change. 

Recommendations: 

1. As a result of the review and comments received, OSHA will enhance its compliance assistance materials on the subject. 

Actions Taken: 

1. OSHA has initiated a review of its guidance materials in order to enhance compliance assistance information

Actions Remaining: 

1. Development and publication of clarified guidance material. 

Expected Completion:

1. December 2006 

Additional Information: A copy of the complete report can be obtained at

http://www.osha.gov/dcsp/compliance_assistance/lookback.html#Completed%20Lookback%20Reviews

28. Issue: The impact of OSHA’s Voluntary Protection Programs (VPP) 

Program Area: OSHA

Performance Goal: Goal 05-3.1A – Reduce work-related 

fatalities. Goal 05-3.1B – Reduce work-related injuries and 

illnesses

Report Title: Evaluation of the Voluntary Protection Program

Date Completed: September 2005 

Conducted By: The Gallup Organization 

Program Impacts: This report provides OSHA with models and formulas to project the participation benefits of the Voluntary 

Protection Program (VPP). With this information, OSHA is able to measure VPP’s value accurately, demonstrate the 

programs’ benefits, and promote program growth. 

FY 2005 Performance and Accountability Report 287
Appendices 

Findings: 

1. The draft study indicates that VPP sites may have a leveraging effect in their dissemination of safety and health knowledge 

 through outreach and mentoring conducted by the sites to other establishments in like industries, both within their own 

 corporations and outside. 

2. The draft study measured injury and illness rates at the respondent VPP sites and documented overall reductions from the 

 time of the early decision and inception phase to full participation in the VPP process. These data will be available to OSHA 

 for further analysis, in response to the GAO recommendation that OSHA obtain data on VPP sites for analysis. 

3. The draft study do and provided data from a limited number of responding sites, estimating the costs and 

 benefits of d be used as the basis for a broader sampling and in-depth evaluation of the national 

 program.

cumented a model

VPP. This model coul

Recommendations: 

1. OSHA should continue to use and build upon the data gathered for this evaluation to strengthen the data analysis capabilities 

 for the VPP and other voluntary programs. 

Actions Taken: 

1. Preparations are being made to disseminate the study to VPP managers for analysis and opinion. 

2. Information from the study will be presented to companies expressing interest in the program.

Actions Remaining:

1. OSHA will consider broader uses of the study’s models and formulas for future standardized 

 assessments of VPP effectiveness. 

Expected Completion:

1. 4th Quarter, FY 2006. 

Additional Information: A copy of the complete report can be obtained at http://www.osha.gov .

29. Issue: Providing services to and tracking injury, illness, and fatality rates for independent 

contractors

Program Area: MSHA 

Performance Goal: Goal 05-3.1A – Reduce work-related 

fatalities. Goal 05-3.1B – Reduce work-related injuries and 

illnesses

Report Title: Evaluation of the Mine Safety and Health

Administration’s Efforts to Deliver Services and Support to 

Miners Working for Independent Contractors

Date Completed: September 2005 

Conducted By: Research Triangle Institute (RTI) 

Program Impacts: The increased use of independent contractors by mine operators creates unique workplace safety and health 

challenges. Consequently, MSHA is seeking ways improve the delivery of its enforcement, educational, and technical

support activities at independent contractor operations. 

Findings: 

1. Mine operators may use independent contractors to lower their costs and liability, and increase staffing flexibility. 

2. Fatality rates for contractor employees are higher. However, accidents and non-fatal injuries may be underreported in some

cases, and there is incomplete information on contractor employee work hours at the mine level. 

3. Contractor work on mine property is transient and temporary in some cases, and some independent contractors may have

multiple mine identification numbers. These factors, combined with the lack of contractor employment data by mine site, 

limits MSHA’s ability to provide compliance and educational assistance to independent contractors and accurately measure

program impacts. 

Recommendations: None made. 

Actions Take eveloping plans to improve its ability to obtain more accurate data on the hours worked by 

independent contractors and for delivering support and services to independent contractors.

n: MSHA is d

Actions Remaining:

1. MSHA will respond to the GAO recommendation to collect hours worked by 

 independent contractors at the mine-specific level.

2. MSHA will develop a plan to improve services to independent contractors. 

Expected Completion:

1. FY 2006 

2. FY 2006 (MSHA revised Strategic Plan) 

Additional Information: A copy of the complete “interim” report can be obtained from the Mine Safety and Health

Administration at 1100 Wilson Boulevard, 21st Floor, Arlington, VA 22209-3939 or by calling 202-693-9607. 

288 United States Department of Labor 
Significant FY 2005 Audits and Evaluations

30. Issue: Selecting establishments for compliance reviews

Program Area: ESA OFCCP 

Performance Goal: Goal 05-3.2A – Federal contractors 

achieve equal opportunity workplaces.

Report Title: An Evaluation of OFCCP’s Equal Opportunity

(EO) Survey

Date Completed: March 2005

Conducted By: Abt Associates Inc. 

Program Implication: Targeting establishments that are most likely to be involved in systemic discrimination should improve

the cost effectiveness of efforts to increase regulatory compliance. 

Findings: 

1. Four main predictor variables seem to be related to the presence or absence of system discrimination:

• whether the establishment reported more than 200 full-time employees 

• the ratio of average tenure among minority employees to average tenure among non-minority employees 

• the absolute value of the difference between the proportion of female employees and the proportion of male employees 

in EEO-1 Category 3 (technicians) 

• the ratio of female-to-male tenure ratio to the median of those ratios in the establishment’s comparison group. 

2. The model fits the data reasonably well and has acceptable predictive ability, although alternative approaches are possible.

3. Systemic discrimination was found in only about 3 percent of establishment reviewed; thus screening on the basis of the 

predicted 

 probabilities would be expected to produce large numbers of false positives. 

4. The ability to use a model and data from the Equal Opportunity (EO) Survey may be strengthened by more extensive cleaning

of submitted data. 

Recommendations: 

1. OFCCP could select a stratified random sample of establishments for compliance reviews. 

2. Data provided by contractors at the desk audit stage of the review could be used to develop specified data elements. 

3. Over several years, OFCCP could accumulate a substantial amount of data, consisting of the compliance reviews and 

 corresponding data elements similar to those collected by the EO Survey. 

4. This approach has the advantage of collecting more accurate and more pertinent data than provided by the current EO Survey. 

Actions Taken: 

1. Based on the final report, OFCCP prepared a document, summarizing the findings from the Abt report and outlining options 

 for the next steps. 

Actions Remaining:

1. Potential interactions with the compensation analysis initiative and the finalization of the 

 applicant issue will be considered and next steps determined. 

Expected Completion:

1. December 2005 

Additional Information: More information may be obtained from the Office of Federal Contract Compliance Programs, 

Employment Standards Administration, Department of Labor, FPB N-3402, 200 Constitution Avenue, N.W., Washington, 

DC 20210, 202-693-1109. 

31. Issue: Finding a data system to support timely information and interagency cooperation 

Program Area: ESA OFCCP 

Performance Goal: Goal 05-3.2A – Federal contractors 

achieve equal opportunity workplaces.

Report Title: Evaluation of the OFCCP Prototype 

Construction Contractor Information System (CCIS)

Date Completed: November 2004

Conducted By: ERG 

Program Implication: A secure web-based implementation system for construction contractors would improve the cost

effectiveness of OFCCP’s information collection and reporting on construction awards. 

Findings: 

1. There is strong evidence that the prototype CCIS can be implemented nationally to establish a universe of construction 

 contractor information based on the best available data. 

2. CCIS would provide OFCCP with a solid foundation for implementing a methodology that supports neutral selection of 

 construction contractors for compliance review. 

3. Using the GSA’s Federal Procurement Data System-Next Generation (FPDS-NG) as a data source raises some difficulties 

 that would need to be resolved. 

4. To accomplish national implementation, OFCCP would need to fully integrate the system with data sources and prepare for 

 an expanded user community.

5. Estimated startup costs for implementation of the national CCIS are in the range of $165,000-$210,000. 

FY 2005 Performance and Accountability Report 289
Appendices 

6. Estimated first-year operating costs are in the range of $60,000-$70,000. 

Recommendations: 

1. In the short term, OFCCP could implement CCIS using F.W. Dodge data only. Even though Dodge data include fewer data 

 elements that FPDS-NG, OFCCP already has routine access to these data. 

2. In the longer term, it appears that CCIS would be most useful if tied into the evolving FPDS-NG and related E-Government 

 initiatives. 

Actions Taken: 

1. The structural framework for a database system has been completed. 

2. Start up and operational costs have been determined. 

3. The prototype is currently under review. 

Actions Remaining:

1. OFCCP will not develop and disseminate guidance to District and Regional offices 

 regarding the use of sources for selecting construction contractors for compliance 

 evaluations until decisions are made on the prototype CCIS. 

2. Additionally, the proposed meeting with GSA to discuss the feasibility for accessing 

 FPDS-NG contract information has been pushed back to the end of FY 2005. 

Expected Completion:

1. September 2005

2. September 2005

Additional Information: More information may be obtained from the Office of Federal Contract Compliance Programs, 

Employment Standards Administration, Department of Labor, FPB N-3402, 200 Constitution Avenue, N.W., Washington, 

DC 20210, 202-693-1109.

32. Issue: The employment needs of National Guard and Reserve members returning from active duty 

Program Area: VETS

Performance Goal: Goal 05-3.2B – Reduce employeremployee issues arising from service members’ military 

obligations conflicting with their civilian employment.

Report Title: Survey of USERRA Issues for Returning

Military Members 

Date Completed: October 2004

Conducted By: K.W. Tunnell Company, Inc.

Program Implication: Identifying patterns of difficulty experienced by Guard and Reserve members returning from active 

 service will assist VETS in meeting the statutory Uniformed Services Employment and Reemployment Rights Act (USERRA) 

 requirements. 

Findings: 

1. There is considerable evidence that the protections of USERRA work most of the time; many employers make considerable 

 efforts to be supportive. 

2. There are some problem areas and these are increasing as more Guards and Reservists are called to active duty; over 40

percent of 

 respondents reported difficult gaining assistance with USERRA issues. 

3. There needs to be a systematic approach and multiple briefings on job issues prior to active duty. 

4. VETS staff members are often asked informally to answer questions and resolve complex issues, such as pension and health 

 care benefits, for which they need additional training. 

Recommendations: 

1. Implement and monitor an Annual Briefing Plan, identifying how every customer will be briefed several times each year. 

2. VETS should extend the briefing materials and consider using a briefing evaluation form. 

3. Improve the USERRA Web site with deeper content on specific issues. 

4. Provide a one-stop telephone hotline with experts on specific issues, such as pensions, health insurance, and training. 

 Customers need to know that ongoing information and assistance is always available; all customers should know how to 

 access such information and assistance. 

5. Provide training and information support for VETS field personnel and state agency representatives. 

Actions Taken: 

1. VETS is closely monitoring Guard and Reserve mobilizations and demobilizations in each State. 

2. Nationwide mobilization and demobilization schedules are being consolidated monthly.

3. VETS is delivering USERRA briefings to affected Guard/Reserve members at either mobilizations or demobilizations or 

 both, as time and resources permit. The consolidated schedules help Regional and Headquarters staff plan the briefings. 

4. The VETS Web site was enhanced during FY 2005 with the addition of the Electronic Form 1010 – an online function 

 available to the public which references USERRA information. This enhancement enables anyone to directly file an official 

 USERRA claim online and open a USERRA case with VETS. 

5. VETS field personnel are receiving information on complex issues from qualified USERRA practitioners in their State, or in 

290 United States Department of Labor 
Significant Audits and Evaluations 

 other States, other Regions, or VETS Headquarters. 

Actions Remaining:

1. All other recomm ll pending consideration and possible action.

Expected Completion:

endations are sti 1. FY 2006 

Additional Information: A copy of the complete report can be obtained at the Veterans Employment and Training Service 

(VETS), Roon S1316, U. S. Department of Labor, 200 Constitution Avenue, Washington, D.C. 20210, or by calling Keenan 

Torrans at 202-693-4731

33. Issue: The trends and patterns found in 55 mid-term and final evaluations of DOL-funded 

projects implemented by the International Labor Organization’s International Program on the 

Elimination of Child Labor (ILO-IPEC) 

Program Area: ILAB

Performance Goal: Goal 05-3.3A – Contribute to the 

 elimination of the worst forms of child labor internationally 

Report Title: Comparative Assessment of ILO-IPEC

Evaluation Reports Since 1995 

Date Completed: April 2005

Conducted By: Academy for Educational Development

Program Impacts: The design, implementation, and monitoring of new and ongoing child labor-elimination projects can be 

enhanced through a synthesis of findings and recommendations of past project evaluations. 

Findings: This assessment synthesized finding and recommendations from the 55 evaluation reports.

Recommendations: 

1. Use national rather than international staff as main project implementers in the future. 

2. Give more attention to sustainability of projects in their design and implementation.

3. Remove bureaucratic overload by reducing the number and frequency of progress reports. 

Actions Taken: 

1. ILAB is pressing grantees to first consider national staff before proposing international experts as key project personnel. In

 cases where international experts are proposed, ILAB will request that grantees justify their choice. ILAB is taking this 

 action not only to improve the cost efficiency of projects, but also to build local capacity to eliminate the worst forms of child 

 labor and promote project sustainability. 

2. The greater the government involvement and commitment, the greater the chance that project successes will be sustained after

the project ends. ILAB is, therefore, giving funding priority to projects in countries where governments are involved and 

committed to the project objectives. ILAB is taking particular note of instances where governments contribute financial or

in-kind support to the projects. 

3. ILO-IPEC plans to update ILAB regularly on the status of project sustainability efforts through a separate section of 

 upcoming technical progress reports. 

4. ILAB will address the issue of sustainability at all grantee meetings in Fall 2005 and Winter 2006. 

5. ILAB has reduced the reporting frequency for its child labor projects from quarterly to semi-annually for low-risk grantees. 

Actions Remaining:

1. ILAB will continue to work with ILO-IPEC on these recommendations from the 

 evaluation reports and on future recommendations. 

Expected Completion:

1. ILAB will continue to work with 

 ILO-IPEC. 

Additional Information: A complete copy of the report can be obtained from ILAB’s International Child Labor Program at

GlobalKids@dol.gov or by calling (202) 693-4843. 

GOAL 4: A COMPETITIVE WORKFORCE 

34. Issue: Identifying contractual responsibilities and action of contractors assisting with 

researching the impact of the proposed and final overtime rule 

Program Area: ESA WHD 

Performance Goal: Goal 05-4.2A – American 

workplaces legally employ and compensate workers.

Report Title: Fair Labor Standards Act: Labor Made Key Decisions 

in Studies of Updated Overtime Rule and Contractor Provided

Support

Date Completed: June 2005

Conducted By: Government Accountability Office (GAO) 

Program Implications: Reports on the cost/benefit analysis of WHD’s new overtime security rule. 

FY 2005 Performance and Accountability Report 291
Appendices 

Findings: GAO found that CONSAD Research Corporation, in accordance with its contract, provided DOL with technical and 

analytical support and that DOL made all of the key decisions in estimating the impact of the updated overtime rule. 

Recommendations: None made. 

Actions Taken: NA

Actions Remaining: NA Expected Completion: NA 

Additional Information: A copy of the complete report can be obtained at http://www.gao.gov/new.items/d05580r.pdf. 

35. Issue: The implementation of Trade Adjustment Assistance (TAA) reforms, changes in the 

demand for TAA training, and program effectiveness 

Program Area: ETA TAA

Performance Goal: Goal 05-4.1B – Increase the employment, 

 retention, and earnings replacement of workers dislocated in 

 important part because of trade and who receive trade adjustment 

 assistance benefits. 

Report Title: Reforms Have Accelerated Training 

 Enrollment, But Implementation Challenges Remain

 (GAO-04-1012)

Date Completed: September 2004

Conducted By: GAO

Program Implication: DOL needs to monitor the new TAA provisions and proposed legislation if there is a negative impact. 

Findings: 

1. Most workers are enrolling in services more quickly than in prior years. DOL reduced its average petition-processing time

 from 107 days to 38 days. 

2. Due to a new deadline for enrolling, some workers may be negatively affected because it does not always leave enough time

 to assess workers’ training needs. 

3. States reported challenges implementing some new provisions of the TAA Reform Act.

4. Demand for TAA training increased substantially in fiscal year 2002, prior to the implementation of reforms. However, States 

 have struggled to m demand with available TAA training funds, even though funds available doubled nationally 

 between fiscal years 2002 and 2003. Most states have responded by using other Federal employment and training resources. 

eet this higher

Recommendations: 

1. Monitor the implementation of certain provisions of the TAA Reform Act and propose legislative changes if: 

• The new training enrollment deadline is negatively affecting some workers, or 

• The eligibility criteria for the new wage insurance provision are resulting in denial of services to some older workers 

who could benefit from them. 

Actions Taken: 

1. DOL has convened a summit of select States to discuss TAA Reform Act implementation issues. 

2. DOL is conducting a review of implementation and post-implementation issues to gauge whether there has been positive 

 change over time, with a particular focus on the collection of information relating to the training enrollment deadline as well 

 as the eligibility requirements for the wage insurance program for older workers, known as the Alternative Trade Adjustment 

 Assistance (ATAA) program. 

Actions Remaining: The Department will utilize the information gleaned from all of the 

activities discussed above, as well as information provided in the GAO report, as we 

move forward on the development and implementation of a work plan to address these 

issues. 

Expected Completion:

1. December 2006 

Additional Information: A copy of the complete report can be obtained at http://www.gao.gov/new.items/d041012.pdf

36. Issue: The completeness and reliability of the CY 2003 data used to support the FY 2003 

performance goal 2.3B 

Program Area: ETA TAA

Performance Goal: Goal 4.1B – Increase the employment, retention, 

and earnings replacement of workers dislocated in important part 

because of trade who receive trade adjustment assistance benefits.

Report Title: GPRA Data Validation Review, Trade 

 Adjustment Assistance Program (OIG 22-05-007-03-

 330)

Date Completed: September 2005

Conducted By: OIG 

Program Implication: DOL relies on accurate and complete participant data, submitted quarterly by the states, to assess whether 

or not the TAA program is achieving its yearly goals and if changes are needed to make it more accurate. 

Findings: 

1. The OIG verified seven data elements to source documentation found in participant files. 

2. The “date of exit” data element could not be verified because it was recorded as an anticipated date, not the last data of 

 services as required by TAA guidelines and because the State Workforce Agencies did not have source documentation to 

292 United States Department of Labor 
Significant Audits and Evaluations 

 verify it. 

3. Five of the seven verified data elements were dependent on the “date of exit” and, therefore, were not complete or 

 reliable. 

Recommendations: 

1. The TAA Program should collect and record the participant’s actual “date of exit” according to ETA’s written definition.

2. The TAA Program should properly manage and maintain source documentation to support the actual “date of exit” and 

 make it readily available for review. 

Actions Taken: 

1. ETA clarified the “date of exit” definition and issued a list of source documentation requirements for each of the data 

 elements being validated. 

2. In FY 2003, ETA implemented a data validation initiative for the Trade Act Participant Report (TAPR). 

3. ETA has recently received OMB approval of a revision that reflects common performance measures and reporting 

 definitions. 

4. ETA completed a ional training sessions for all states on reporting definitions and documentation 

 requirements for o ncluding TAPR. 

series of three nat

utcome reports, i

Actions Remaining:

1. The TAA program will move to the common measures. 

2. ETA intends to issue additional guidance to the states. 

Expected Completion:

1. FY 2006 

2. FY 2006 

Additional Information: A copy of the complete report can be obtained at http://www.oig.dol.gov/public/reports/oa/2005/22-

05-007-03-330.pdf. 

FY 2005 Performance and Accountability Report 293
Appendices 

3. Improper Payments Information Act Reporting Details 

I. Risk Assessment 

The Department’s risk assessment for FY 2005 was developed by establishing criteria for determining levels of risk

and evaluating all major programs against these criteria. Different methodologies were necessary for assessing the 

risks of improper payments for benefit programs and grant programs because of the differences in the administration 

of these programs and the availability of data. 

Benefit Programs

The Department performed the risk assessment for all benefit programs according to the criteria defined below: 

1. Programs with outlays less than $200 million 

The Department assumed a low risk of improper payments unless a known weakness existed in program 

management, based on reports issued by oversight agencies such as the Department’s Office of Inspector General

and/or the Government Accountability Office. Unless such weaknesses were identified, the Department made an

assumption that the improper payment rate for these programs would not exceed the IPIA defined threshold of 2.5 

percent. As a result of this review, no programs with outlays less than $200 million were deemed to be susceptible to

risk of improper payments. 

2. Programs with outlays greater than $200 million 

The Department sampled FY 2004 data in order to determine an improper payment rate. The sampling details, 

including sampling methodology and sampling selection, are provided in the next section. The Department sampled 

Federal Employees Compensation Act (FECA), Unemployment Insurance (UI), Black Lung Disability Trust Fund, 

and Energy Employees Occupational Illness Compensation Program. In addition, the Department sampled the Job 

Corps program, a direct grant program, since data was available to conduct the sampling to determine a statistical 

improper payment rate. The Department applied the improper payment rate determined through sampling to the 

program outlays for FY 2004 in order to determine if the amount of potential improper payment for these programs

exceeded the $10 million threshold. UI was the only program deemed to be susceptible to risk as a result of this 

approach. However, the Department reported FECA’s improper payment rate since it is required under Section 57 of

the Office of Management and Budget (OMB) Circular A-11. 

Grant Programs 

The Department used a separate methodology to assess the risk of improper payments in grant programs because 

these programs are administered differently than benefit programs. However, as noted above, the Department

sampled the Job Corps program, a direct grant program, since data was available to conduct the sampling to 

determine a statistical improper payment rate. 

Since the Department provides grants to states, cities, counties, private non-profits, and other organizations to operate 

programs, it relies significantly on single audits (as required by the Single Audit Act of 1996) to monitor funding to

all grant recipients. Therefore, the Department analyzed these single audit reports36 in order to determine the

improper payment rate for all grant programs. 

The Department r l FY 2003 single audit reports with Department of Labor-related findings from the 

Federal Audit Clearinghouse and identified all questioned costs. FY 2003 reports were the most recent single audit

 

eviewed al

36 The Single Audit Act of 1996 provides for consolidated financial and single audits of state, local, non-profit entities, and

Indian tribes administering programs with Federal funds. Since 1997, all non-Federal entities that expend over $300,000

($500,000 for fiscal years after December 31, 2003) or more of Federal awards in a year are subject to a consolidated financial

single audit; any non-Federal entities that do not meet this threshold are not required to have a single audit. All non-Federal 

entities are required to submit all single audit reports to a Federal Audit Clearinghouse (Clearinghouse) that is administered by

the Census Bureau.

294 United States Department of Labor 
Improper Payments Information Act Reporting Details

reports available for review. Based on a review of the definition of questioned costs in OMB Circular A-133 and 

OMB’s IPIA implementation guidance, we determined that questioned costs can be used as a proxy for improper 

payments. 

To determine an approximate rate of improper payments for the WIA program, the Department divided the projection

of questioned costs from the FY 2003 single audit reports by the FY 2003 program outlays identified in the Federal 

Audit Clearinghouse. The Department applied this improper payment rate to the program outlays for FY 2004 in

order to determine if the amount of potential improper payment for these programs exceeded the $10 million 

threshold. 

For the other non-WIA grant programs, the Department determined an overall improper payment rate by dividing the

projection of the non-WIA questioned costs by the total non-WIA outlays.

37 No grant programs were determined to 

be susceptible to risk as a result of this approach. However, like FECA, the Department is reporting on WIA’s

improper payment rate since it is also a Section 57 designated program though its improper payment rate is well 

below the 2.5 percent threshold. 

Results

Based on the risk assessment methods applied to benefit programs and grant programs, only one program, UI, was 

determined to be high risk. Two other programs, FECA and WIA, were classified as high risk because they are 

Section 57 programs, although their risk assessments do not support such a high risk designation. However, the 

Department plans to continue to identify corrective actions to reduce improper payments in these programs and 

established improper payment reduction and overpayment recovery targets in accordance with IPIA and associated 

OMB Guidance. 

Table 2: Department of Labor’s High Risk Programs 

DOL Program/Activity Risk Reason for High Risk Classification Type of Program 

Unemployment Insurance (UI) High Exceeds OMB Threshold; also Section 57 Benefit

Federal Employees Compensation Act (FECA) High Section 57 Benefit

Workforce Investment Act (WIA) High Section 57 Grant 

The Department also sampled the following programs in FY 2005 despite their low risk status in FY 2004. A listing 

of programs that were sampled is presented below in Table 3. 

Table 3: Additional programs that were sampled

DOL Program/Activity Type of Program Risk 

Job Corps Direct Grant Low Risk 

Black Lung Benefit Payments Benefit Low Risk

Energy Employees Occupational Illness Compensation Program (EEOICP) Benefit Low Risk 

DOL Salaries Other Low Risk 

DOL Expenses Other Low Risk 

II. Statistical Sampling 

The Department’s risk assessment identified only the UI program as being risk susceptible based on OMB guidance 

threshold. However, two additional programs, WIA and FECA, were added to this list due to their Section 57 status. In

addition, the Department sampled several other programs that did not qualify as risk-susceptible programs. 

 

37 A review of the FY 2003 single audit reports revealed questioned costs for only some of the grant programs. Even for those 

programs that had questioned costs, there were not enough samples to make a valid projection. Therefore, an aggregate 

projection of questioned costs was made for all non-WIA grant programs and an overall estimated improper payment rate was 

calculated by dividing this projection by the total non-WIA outlays identified in the Clearinghouse. This estimated improper 

payment rate was then applied to the specific grant program outlay to calculate the estimated amount of improper payments. 

FY 2005 Performance and Accountability Report 295
Appendices 

Unemployment Insurance (UI)

Sampling Methodology: Improper payment rates are obtained from the Benefit Accuracy Measurement (BAM)

program. It is designed to determine the accuracy of paid and denied claims in the three largest permanently

authorized unemployment compensation (UC) programs: State Unemployment Insurance (State UI), Unemployment

Compensation for Federal Employees (UCFE), and Unemployment Compensation for Ex-Service Members (UCX).

BAM provides two rates of improper payments. The first, the Annual Report Overpayment Rate, includes estimates 

of nearly every divergence from what state law and policy dictate the payment should have been. The second rate, 

the Operational Overpayment Rate, includes only recoverable overpayments states are most likely to detect through 

ordinary overpayment detection and recovery procedures, known as Benefit Payment Control (BPC) procedures.

Operational overpayments are the most likely to be detected and established for eventual recovery and return to the 

Trust Fund. 

BAM reconstructs the UI claims process for randomly selected weekly samples of payments and denied claims using 

data verified by trained investigators. For claims that were overpaid, underpaid, or improperly denied, BAM 

determines the amount of benefits the claimant should have received, the cause of and the party responsible for the 

error, the point in the UI claims process at which the error was detected, and actions taken by the agency and 

employer prior to the error.

In reconstructing each sampled payment, the BAM program retroactively investigates the accuracy of the UI claim’s

monetary and separation determination as well as all information relevant to determining weekly eligibility for the 

sampled payment, including the claimant’s efforts to find suitable work, ability and availability for work, and 

earnings from casual employment or other income sources, such as pensions. 

Using the same methodology applied to paid claims, the Denied Claim Accuracy module of BAM assesses the 

accuracy of denial decisions made at the monetary, separation, and continuing eligibility levels of eligibility

determination. 

Sample Selection: The universe (population) is the payments and denials under the State UI, UCFE, and UCX 

programs. State UI, UCFE and UCX account for approximately 95% of UC programs activity in an average year. 

Data on overpayment and underpayment rates for FY 2005 shown in the Improper Payment Reduction Outlook Table

are for the period July 1, 2004, to June 30, 2005. The paid claim accuracy sample selected consisted of 24,520 

payments. For Denied Claims Accuracy (DCA), states sample 150 cases for each of the monetary, separation, and 

non-separation denials; the allocated sample for each type is 7,800 cases per test per year. A total of 47,784 items

were selected and investigated for both the BAM and DCA samples for the period July 1, 2004, to June 30, 2005. 

Federal Employees’ Compensation Act (FECA)

Sampling Methodology: A stratified sampling approach was applied to estimate improper payments for both medical 

bill payments and compensation payments. For medical bill payments, sampling was designed to test payment

issues, such as duplicate payments, appropriate receipts, and billing consistent with regional allowances, payment 

made for appropriate procedures, and eligibility at date of service. The compensation payment sampling was 

designed to test issues such as compensation payments consistent with identified injury, current medical evidence 

supporting continued compensation payments, eligibility requirements, and calculations of compensation amounts. 

Sample Selection: The universe of the population is for both the compensation and medical payments paid out of the

FECA program in the testing period, October 1, 2004, to April 30, 2005. The population was stratified in

compensation payments and medical payments from five district offices. Samples of 183 items from compensation 

payments and of 264 items from medical payments were selected. A total of 447 items were selected and tested for 

the FY 2005 FECA sample. 

Black Lung Disability Fund

Sampling Methodology: A stratified sampling approach was applied to estimate improper payments for both medical 

bill payments and benefit payments. The population was stratified into medical payments and benefit payments. The 

medical bill payment sampling was designed to test payment issues such as duplicate payments, eligibility at date of 

service, procedure covered by program, and appropriate receipts and paperwork. The compensation payment

296 United States Department of Labor 
Improper Payments Information Act Reporting Details

sampling was designed to test issues such as eligibility requirements, calculations of compensation amounts, and

calculations of compensation offsets due to dependants. 

Sample Selection: The universe of the population is for medical payments made at Computer Sciences Corporation

(CSC) and for all benefit payments paid out of the Black Lung program in the testing period, October 1, 2004, to

February 6, 2005. The universe of the population is also medical payments made at affiliated Computer Services 

(ACS) in the testing period, February 7, 2004, to July 31, 2005. The sample consisted of 75 benefit payments and 78 

medical bill payments. A total of 153 items were selected and tested for the FY05 Black Lung sample. 

Energy Employees Occupational Illness Fund

Sampling Methodology: The sampling approach for Energy’s compensation payments consisted of Monetary Unit 

Sampling (MUS) to estimate improper payments. The compensation payment sampling was designed to determine 

that the benefits paid were in accordance with specified policies and procedures, that eligibility requirements were

followed, and that payments were made in the correct amount. 

Statistical sampling for the Energy medical bill payment population was deemed unnecessary since total medical

benefits paid for the period October 1, 2004, to April 30, 2005 were not material (less than 10% of the total benefit 

payments). Although no sampling was conducted this year, the Department plans to continue to scan on a periodic 

basis the medical payment database for unusual activity or relationships. 

Sample Selection: The universe of the population consisted of the compensation payments made under EEOICP in

the testing period, October 1, 2004, to April 30, 2005. Of the four district offices that process compensation

payments, MUS was applied to select compensation payments from the Jacksonville and Cleveland district offices 

due to their high volume of claims processed. Using MUS, 113 compensation payments were selected out of the 

compensation population. 

Job Corps

Sampling Methodology: The sampling approach consisted of a stratified sampling effort to estimate improper 

payments. The population was first stratified between Job Corps center operating costs and student allowances. For

student allowances, the population was further stratified and a two-stage stratified cluster sampling designed was 

used. In the first stage, the Job Corps centers were stratified based on center costs. In the second stage, a random

sample of students was selected from 12 centers for both living allowances and transition allowances.

Sample Selection: The universe of the population of Job Corps center operating costs is all of the operating expenses 

reported by Job Corps centers in the testing period, October 1, 2004, to March 31, 2005. The sample selected

consisted of 150 payroll items and 230 non-personnel expense items. Additionally, 240 significant non-personnel

expenses were sampled from 12 centers. A total of 620 items were selected and tested for FY 2005 Job Corps 

operating costs sample. The universe of the population of Job Corps student allowances is the entire student living

and transition allowances made by Job Corps centers in the testing period, October 1, 2004, to March 31, 2005. The

sample selected consisted of 320 living allowances and 355 transition allowances. A total of 675 items were

selected and tested for FY 2005 Job Corps student allowance sample. 

Department of Labor Salaries

Sampling Methodology: DOL Salaries consist of the department payrolls of the national office and three regional 

offices: Atlanta, Philadelphia, and San Francisco. To accomplish the sampling for the payroll, a stratified approach

was applied. The testing criteria consisted of testing items such as employee’s eligibility, earnings and leave tracked

correctly, time card consistent with payment, and pay rate calculated correctly.

Sample Selection: The universe of the population of Department salaries is comprised of the payroll transactions in

the testing period, October 1, 2004, to March 31, 2005. A sample of 102 items from the Department’s payroll

transactions was selected for testing. 

FY 2005 Performance and Accountability Report 297
Appendices 

Department of Labor Expenses

Sampling Methodology: DOL expenses consist of department expenses related to the operation and administration of 

programs’ and headquarters’ activities. Expense transactions were stratified into seven groups and samples were

then statistically drawn from each stratum. For non-payroll costs, sample testing focused on testing criteria such as:

(1) appropriate contracts used, (2) payments supported with invoices, (3) invoices correct, and (4) whether or not the 

purchase was allowable under program costs. 

Sample Selection: The universe of the population of expenses is comprised of DOL expense payments in the testing 

period, October 1, 2004, to March 31, 2005. A total of 72 items were selected and tested. 

III. Corrective Actions 

Unemployment Insurance

For the past several years, the causes of overpayments have remained fairly constant, although total rates have

improved for FY 2005. The principal cause is “Benefit Year Earnings” (BYE) - payments received by claimants who

continue to claim benefits despite having returned to work. These constitute about a quarter of overpayments using 

the broad Employment Training Administration (ETA) Annual Report Overpayment measure and about half of the

recoverable overpayments detectable by BPC that the Operational Overpayment measure includes. The next largest 

cause is errors associated with the reasons claimants separate from work. These errors are over a fifth of the broad

definition and a quarter of the narrower definition of overpayments. Because of their prominence, ETA has devoted 

a significant proportion of its integrity efforts in the past few years to preventing or detecting BYE and separationrelated overpayments. ETA’s major integrity initiatives are as follows: 

• Implementation of the Denied Claim Accuracy measurement program (DCA) to assess the accuracy of denial 

decisions (September 2001). 

• Development of a Detection of Overpayments measure to assess how well the system is detecting and 

establishing overpayments for recovery to the Trust fund (first incorporated into the Strategic and Annual 

Performance Plans in FY 2003). This measure is based on the Operational Overpayments definition of which

BYE overpayments are nearly one half. 

• Continuing analyses of the causes, costs, and benefits of improper payment prevention or establishing recovery

operations.38 

• Encourage state implementation of benefit integrity initiatives by providing funding to assist them in these 

endeavors. One such benefit integrity initiative is the use of data on new hires to detect and prevent BYE

overpayments. States initially began to implement the State Directory of New Hires (SDNH) for this purpose, 

and ETA estimates suggest that savings from the use of this tool—largely, prevention of overpayments due to

unreported work while in payment status—increased from approximately $55 million in CY 2002 to $84 million

in CY 2004. During CY 2004, 42 states were using the SDNH. 

• Enhancement of states’ ability to detect BYE violations by UI claimants working in other states or for certain 

multi-state employers who may post all new hires to only one state. Based on draft legislation proposed by the

Department, the President signed P.L. 108-295 on August 9, 2004, granting state UI agencies access to the

National Directory of New Hires (NDNH). A three-state pilot in 2005 indicated that the NDNH should result in 

a substantial increase in “hits” of claimants with potential BYE violations over the SDNH. Twenty-nine states 

are expected to begin using NDNH cross-matches during FY 2006. 

• ETA has also promoted and funded states to provide connectivity to systems to exchange data with the Social

Security Administration (SSA) on a real-time basis. This will give states the ability to verify claimants’ identity

and will help prevent many, if not most, overpayments due to fraudulent or mistaken use of SSNs. Since 2002,

the Department has worked with the states to establish electronic communications with SSA and on

implementation plans. On March 5, 2004, the ETA and SSA signed a memorandum of understanding formalizing 

the data exchange agreement. 

 

38Posted to the ETA Web site; http://workforcesecurity.doleta.gov/unemploy

298 United States Department of Labor 
Improper Payments Information Act Reporting Details

• The Department provided funds to states to establish cross-matches with other state governmental agencies, such

as with state department of motor vehicles, to facilitate fraud and overpayment reduction. 

• DOL awarded Reemployment and Eligibility Assessments (REA) grants to 21 states during FY 2005. The grants 

have been used to conduct in-person claimant interviews in One-Stop Career Centers to assess UI beneficiaries’

need for reemployment services and their continued eligibility for benefits and to assure that beneficiaries 

understand that they must stop claiming benefits upon their return to work. 

• The FY 2006 budget request includes both funding to continue and expand REA grants and to combat identity

theft. It also includes a legislative proposal— Unemployment Compensation (UC) Integrity Act of 2005 as 

submitted to Congress by the Secretary on June 14th, 2005 —designed to reduce improper payments by allowing

states to fund integrity activities by retaining a percentage of overpayments recovered and from penalties 

assessed on fraud overpayments, by using collection agencies to recover overpayments, and by recovering 

overpayments through a Federal Income Tax Offset. 

• In FY 2005, ETA promulgated a state-level detection of overpayments performance measure (the measure used

for national aggregates as a GPRA indicator), giving states an additional incentive to prevent and detect

overpayments. This additional incentive to reduce overpayments will work to improve the integrity of the State 

Quality Service Plan system that is used to promote performance achievement. ETA also conducted a pilot test 

of adding a post-audit cross-match component to the BAM paid claim review. ETA is currently evaluating the 

benefits and costs of using data on UI wage records or new hires to supplement the BAM investigative procedure 

and better detect and estimate overpayments due to BYE violations. 

• ETA is also working with states to ensure recovery of improperly paid benefits. The Department has established 

a FY 2005 target that the UI system should recover 46 percent of overpayments established. For the 12 months

ending 6/30/2005, this ratio stood at 48.5 percent. The Integrity Act changes would give the states both strong

incentives to establish and recover overpayments as well as the resources and systems with which to do this. 

Federal Employees’ Compensation Act

The FECA program continues its progress in improving medical bill processing using an outsourced bill processing

service. Significant attributes of the service include the ability to better match treatments to work related injury or

illness and more sophisticated bill editing techniques. The bill processing service uses automated front-end editing 

operations to check for provider and claimant eligibility, accepted condition and treatment type, billing form and

content, and duplications. The service uses proprietary software to screen professional medical and outpatient 

hospital bills to check for certain improper billing practices. Furthermore, on-site process audits resulted in clearer

instructions and corrective action plans. This year’s implementation of in-house audits of bill samples will provide 

the program with additional information about bill processing performance and will also identify weaknesses. 

Additional causes of improper payments for FECA include: (1) incorrect or incomplete information submitted for the

claims record (such as pay rate, night differential rate, retirement plan, etc.); (2) Office of Workers’ Compensation 

Programs (OWCP)39 errors including mistakes in judgment or interpretation in making decisions; (3) miscalculations 

in making payments; and (4) claimant fraud or misrepresentation. OWCP’s integrity initiatives to address these 

issues are as follows: 

• Medical bill processing performance is reviewed as a routine function of FECA National Office oversight of the

central bill processing contract and is used to score against performance requirements specified in the contract. 

• Samples of medical payments are audited monthly by FECA district office staff for both financial and procedural 

errors. 

• Compensation payment performance is reviewed by FECA district office managers, line supervisors, and fiscal

operations staff; frequency of review varies according to need (e.g., supervisors and fiscal staff look at 

performance almost on a per-transaction basis; whereas, summary performance is reviewed daily, weekly, or 

quarterly by supervisors and managers). Results are monitored in the National Office and used to design 

procedural revisions or corrective action plans for the District Offices. The National Office also conducts formal 

biennial accountability reviews to rate each District Office for quality and accuracy. System reports used to 

analyze payment information include the Report on Receivables Due from the Public (Schedule 9), Accounts 

 

39 OWCP oversees the administration of four federal employee compensation programs. These programs are the Energy 

Employees Occupational Illness Compensation program, the Federal Employees’ Compensation program, the Longshore and 

Harbor Workers’ Compensation program, and the Coal Mine Workers’ Compensation program.

FY 2005 Performance and Accountability Report 299
Appendices 

Receivable Aging Schedule and Performance reports. Regular matching of death records is done to reduce

improper payments. 

• Case management techniques to monitor ongoing entitlement to benefits and payment accuracy. For example,

FECA’s Periodic Roll Management (PRM) units monitor cases receiving long-term disability benefits. Changes 

in medical condition or ability to return to work are identified by regular ongoing PRM review of the cases, and 

compensation benefits may be reduced or terminated. Benefit reductions also result from new information 

reported about changes in status, such as the death of a claimant. The key outcome measure for PRM is the 

annual amount of benefit savings generated from these case actions. Benefits savings can also be compared

directly to PRM administrative costs. 

• Improvements in documentation quality and encouragement of faster transmission of notice of injury and claims 

for compensation from the agencies to OWCP. Progress in submitting these forms more quickly yields faster

and more accurate adjudication and payment and fewer customer service problems. More than a quarter of new

claims are now received via Electronic Data Interchange from the Departments of Labor, Defense, Treasury,

Transportation, Veterans Affairs, and Homeland Security. That percentage is expected to grow in the future. 

Workforce Investment Act

Ensuring proper fund stewardship is of primary importance to the WIA program. ETA currently uses a multi-step

approach to ensure proper administration and effective program performance of WIA grants. First, ETA starts its

review/oversight process by conducting a structured risk assessment of all new grants and grantees. Risk assessments are 

periodically revised as new information about a grant and grantee becomes available. Second, ETA Federal Project 

Officers (FPOs) conduct quarterly desk reviews of the financial and program performance of each grant. This serves as an

early warning system to detect potential financial management and/or programmatic performance issues. Finally, ETA 

staff (FPOs and others) conduct periodic onsite reviews of grantees. ETA attempts to conduct an onsite review at least 

once every two years, but actual review schedules are based on the results of the risk assessments and desk reviews.

Onsite reviews are conducted using ETA’s core financial and performance monitoring guide and program specific 

supplements. For grantees with large numbers of sub-recipients (e.g., WIA formula grantees), the onsite review will 

include an assessment of the grantee’s sub-recipient monitoring. Whenever deficiencies or problems are identified as a

result of a desk review, onsite review, or an independent audit, ETA begins working with the grantee to obtain appropriate

corrective actions. 

300 United States Department of Labor 
IV. Improper Payment Reduction Outlook FY 2004 – FY 2008 (in $ millions)

Program FY 04

Outlays 

FY 04 % FY 04 IP $ FY 05 

Outlays 

FY 05 % 

FY 05 IP $ 

FY 06 Est. Outlays 

FY 06 % 

FY 06 IP $ 

FY 07 Est. Outlays 

FY 07 % 

FY IP 

UnemploymentInsurance(Operational Rate) 

$37,335 5.07% $1,893

overpayment

$32,248 4.98% $1,606 $35,080 4.75% $1,666 $38,010 4.5% $1,

UnemploymentInsurance(Annual ReportRate) 

$37,335 9.70% $3,622

overpayment

$32,248 9.46% $3,051 $35,080 9.30% $3,262 $38,010 9.0% $3,

UnemploymentInsuranceUnderpaymentRate 

$37,335 0.64% $239

underpayment

$32,248 0.67% $216 $35,080 0.64% $225 $38,010 0.64% $24

Workforce Investment Act

Not Available5

Not Available 

Not Available $3,743 0.21% $7.9 $3,792 0.20% $7.6 $3,857 0.19% $7

Federal Employees’ Compensation Act 

$2,544 0.25% $6.37

overpayment

$2,519 0.13% $3.3 $2,568 0.248% $6.4 $2,626 0.244% $6

FY 2005 Performance and Accountability Report 301

5 WIA’s baseline rate was established in FY 2005. 
Ap

30

V.

DOL 

were 

focused on testing criteria 

correct; and (4) the purchase was allo

co

were selected and tested, and no 

necess

The Depart

deter

the Depart

pendices 

2 United States Department of Labor 

Recovery Auditing 

expense transactions consist of all non-payroll program operation and administration costs. These transactions 

stratified into seven groups and samples were then statistically drawn from each stratum. Sample testing 

such as: (1) appropriate contracts used; (2) payments supported with invoices; (3) invoices 

wable under program costs. The universe of the population of expenses is 

mprised of DOL expense payments in the testing period, October 1, 2004, to March 31, 2005. A total of 72 items 

improper payments were noted; as such, recovery audit efforts for FY 2005 were not 

ary.

ment will continue to sample and estimate the level of improper payments for all non-payroll expenses to 

mine if there are costs that must be set up for recovery. In the event that such recoverable costs are identified, 

ment will work to institute an effective recovery audit system to ensure that all contract overpayments are 

recovered and/or resolved. The Department will also make sure that all recovery audit actions, costs, and amounts 

recovered are clearly documented and reported to OMB on an annual basis. 

VI. Management Accountability 

Existing control processes and the implementation of the revised OMB Circular A-123 requirements will continue to 

ensure that the Department’s internal controls over financial reporting and systems are well documented, sufficiently 

tested, and properly assessed. In turn, improved internal controls enhance safeguards against improper payments, 

fraud, waste, and abuse and better ensure that the Department’s resources continue to be used effectively and 

efficiently to meet the intended program objectives. Furthermore, this Department-wide effort will support the 

Secretary of Labor’s annual certification of internal controls in the PAR. As part of its A-123 implementation plan, 

the OCFO will continue quarterly financial management certifications and reviews with each agency in the 

Department. These controls began in fiscal year 2003. The primary objectives of this oversight are to obtain 

assurances of DOL compliance with the Federal Managers’ Financial Integrity Act of 1982 (FMFIA), the Federal 

Financial Management Improvement Act of 1996 (FFMIA), and IPIA, to enhance the Department’s internal financial 

controls, and to resolve financial management issues in a more efficient and timely manner. The quarterly 

certification process allows for an open discussion of each agency’s progress in resolving internal control issues, 

audit findings, and improper payments, as well as establishing a formal, early warning process to identify and address 

other potential problem areas. 

VII. Information Systems and Infrastructure 

Unemployment Insurance

ETA believes that in most cases the states have the information systems and infrastructure they need for improper 

payment reduction. States are implementing systems to exchange data with the Social Security Administration 

(SSA) and interface with their SDNH. Four fifths of the states are now using the SDNH and 29 are expected to begin 

using the NDNH during FY 2006. More states plan to access both the SDNH and NDNH during FY 2007. 

Federal Employees’ Compensation Act

The Office of Worker’s Compensation Programs (OWCP) is currently developing an integrated management 

information and compensation benefit system that will enhance both compensation payment accuracy and medical 

bill processing accuracy. The basic system was deployed in March 2005. Completion of the deployment is planned 

by March 2006. Resources are included in the FY 2006 budget request for this system.

Workforce Investment Act

ETA currently has multiple technology projects underway in an effort to improve grants management. The WIA 

program utilizes these tools to execute the risk management process to assess and monitor grantees. They include the 

web-based EIMS (Enterprise Information Management System), with its GEMS (Grants e-Management Solution) 
Improper Payments Information Act Reporting Details

FY 2005 Performance and Accountability Report 303

and EMILE (ETA Management Information and Longitudinal Evaluation) modules. EIMS is the Enterprise 

Information Management System, a web-based solution used to track and manage grants, including the capture of 

grant cost reporting meant to improve fiscal integrity. This system is meant to feed data into GEMS and the

combination of the two will be part of the cradle-to-grave E-grants solution for all of DOL, expected to begin rollout 

in January of 2006. The GEMS system is an online grants management tool meant to provide web accessible,

customizable, role based context access to grant related information from multiple sources. 

VIII. Statutory or Regulatory Barriers 

Unemployment Insurance

The UI program has several legislative barriers to reducing improper payments. First, by statute, states administer 

the UI program and set operational priorities. The Department has limited ability to ensure they pursue

improper payment reduction activities. Second, Sec. 3304(a)(3) of the Federal Unemployment Tax Act,

which states that monies in the fund can only be used for benefit payments, precludes the use of recovery 

auditing techniques. Third, the “immediate deposit” requirement (Sec. 3304(a)(3) of the Federal Unemployment 

Tax Act (FUTA) and Sec. 303(a)(4), SSA) and the “withdrawal standard” (Sec. 3304(a)(4), FUTA and Sec. 

303(a)(4), SSA) both affect recovery efforts. The immediate deposit requirement dictates that dollars for benefits 

must be paid immediately into the trust fund, and the withdrawal standard says that money in the trust fund can only

be used for benefits. There are certain exceptions to the immediate deposit requirement, but they do not apply to

recouped benefit overpayments. These requirements preclude Unemployment Insurance from using funds recovered 

from overpayments to be used towards administrative or operational efforts to improve prevention, detection, and 

recovery efforts. Elements of the Integrity Act proposal of the FY 2006 budget would relax the “withdrawal 

standard” barrier to provide additional funding for recovery and other integrity activities. 

Federal Employees’ Compensation Act

With regard to the FECA program, legislation does not currently permit FECA to verify employment earnings with

the SSA without the claimant’s written permission. Compensation benefits may be overpaid if an employee has 

unreported earnings and does not grant permission for the program to verify earnings with SSA. 

Workforce Investment Act

No statutory or regulatory barriers exist that limit WIA’s ability to address and reduce improper payments. The WIA 

program has the legal authority to establish receivables and implement actions to collect those receivables. 

IX. Additional Comments 

To achieve IPIA compliance for susceptible grant programs, the Department faces challenges similar to those faced

by many other Agencies. In numerous instances, grants are structured to provide federal funds that empower local 

entities to operate programs based on local need. The Federal government provides the monies to states, cities, 

counties, private non-profits, and other organizations to distribute these federal funds. The Federal agencies capture 

information related to only the first level of grantee and rely on the Single Audit Act to monitor grantees. 

To investigate how the single audits might be used to meet IPIA compliance in FY05, the Department examined 

single audits with DOL-related findings from the Federal Audit Clearinghouse and the corresponding single audit 

reports returned to the Department as the cognizant agency responsible for resolving the identified findings. The 

Department’s review of single audits indicated a low level of risk for susceptible grant programs. While the rigorous 

analysis of these sources provided a measure of risk, none offered the detailed information necessary for statistical 

estimation. However, of the available data sources for IPIA statistical estimation, single audits offer the most

efficient means to gather data from these recipients of federal funds.

 
Appendices 

4. Acronyms 

ACSI American Customer Satisfaction 

Index 

AJB America’s Job Bank 

BAM Benefit Accuracy Measurement 

BLS Bureau of Labor Statistics 

BRG Business Relations Group 

CAM Cost Analysis Manager 

CATARS Capital Asset Tracking and Reporting 

System

CFO Chief Financial Officer 

CPI Consumer Price Index 

CY Calendar Year 

DBA Davis-Bacon Act 

DOD U.S. Department of Defense 

DOE U.S. Department of Energy

DOL U.S. Department of Labor 

DOLAR$ Department of Labor Accounting and 

Related Systems 

DVOP Disabled Veterans’ Outreach Program

EBSA Employee Benefits Security 

Administration

EEO Equal Employment Opportunity

EIMS Enterprise Information Management 

System

EMILE ETA Management Information and 

Longitudinal Evaluation 

EO Equal Opportunity

ERISA Employee Retirement Income 

Security Act 

ESA Employment Standards 

Administration 

ETA Employment and Training 

Administration 

EVMS Earned Value Management System

FASAB Federal Accounting Standards 

Advisory Board 

FBCO Faith-Based and Community 

Organization 

FECA Federal Employees’ Compensation 

Act 

FFMIA Federal Financial Management 

Improvement Act 

FMFIA Federal Managers’ Financial Integrity

Act 

FLSA Fair Labor Standards Act 

FMLA Family Medical Leave Act

FTE Full Time Equivalent 

FUTA Federal Unemployment Tax Act 

FY Fiscal Year 

GAO U.S. Government Accountability

Office 

GPRA Government Performance and Results 

Act 

GSA General Services Administration 

HGJTI High Growth Job Training Initiative 

HVRP Homeless Veterans’ Reintegration 

Project 

ILAB Bureau of International Labor Affairs 

ILO International Labor Organization 

IMIS Integrated Management Information 

System

IPEC International Program for the 

Elimination of Child Labor

IPIA Improper Payments Information Act 

IRS Internal Revenue Service 

IT Information Technology

JFMIP Joint Financial Management 

Improvement Program

LMRDA Labor-Management Reporting and 

Disclosure Act 

LPD Lost Production Days

LVER Local Veterans’ Employment 

Representative 

MSHA Mine Safety and Health 

Administration 

MSPA Migrant and Seasonal Agricultural 

Worker Protection Act 

NAICS North American Industry

Classification System

NFC National Finance Center 

OASAM Office of the Assistant Secretary for 

Administration and Management 

OASP Office of the Assistant Secretary for 

Policy

OATELS Office of Apprenticeship Training, 

Employer and Labor Services 

OCFO Office of the Chief Financial Officer 

OCIA Office of Congressional and 

Intergovernmental Relations 

ODEP Office of Disability Employment 

Policy

OFCCP Office of Federal Contract 

Compliance Programs 

OIG Office of Inspector General 

304 United States Department of Labor 
Acronyms

OLMS Office of Labor-Management 

Standards 

OMB Office of Management and Budget 

O*NET Occupational Information Network 

OPA Office of Public Affairs 

OSHA Occupational Safety and Health 

Administration 

OWCP Office of Workers’ Compensation 

Programs 

PART Program Assessment Rating Tool

PBGC Pension Benefit Guaranty

Corporation 

PMA President’s Management Agenda 

PPI Producer Price Index 

PRM Periodic Roll Management 

PY Program Year 

SHIMS Safety and Health Information 

System

SOL Office of the Solicitor 

SSA Social Security Administration 

SWA State Workforce Agencies

TAA Trade Adjustment Assistance 

TAP Transition Assistance Program

TAPR Trade Adjustment Participant Report 

UI Unemployment Insurance 

USPS U.S. Postal Service 

UTF Unemployment Trust Fund

VA U.S. Department of Veterans Affairs 

VETS Veterans’ Employment and Training 

Service 

VPP Voluntary Protection Programs

WB Women’s Bureau 

WHD Wage and Hour Division 

WHISARD Wage Hour Investigator Support and 

Reporting Database 

WIA Workforce Investment Act

FY 2005 Performance and Accountability Report 305
Appendices 

5. Internet Links

Employment Information (For Workers and Employers) 

America’s Career InfoNet http://www.acinet.org/acinet/ 

America’s Job Bank http://www.ajb.dni.us/ 

Occupational Outlook Handbook http://www.bls.gov/oco/ 

Job Corps http://jobcorps.doleta.gov/ 

Join the Team that Keeps America Working http://www.dol.gov/oasam/doljobs/main.htm

DisabilityInfo.gov http://www.disabilityinfo.gov 

Job Accommodation Network (JAN) http://www.jan.wvu.edu/

Small Business and Self Employment Service (SBSES) http://janweb.icdi.wvu.edu/sbses/

Employer Assistance Referral Network (EARN) http://www.earnworks.com

Women’s Bureau GEM-Nursing Project http://www.gem-nursing.org

Workplace Laws and Related Information 

Compliance Assistance portal http://www.dol.gov/compliance

elaws Advisors (Employment Laws Assistance for Workers and Small businesses) http://www.dol.gov/elaws/ 

State Labor Offices and State Laws http://www.dol.gov/esa/programs/whd/state/state.htm 

Minimum Wage http://www.dol.gov/esa/minwage/q-a.htm

Fair Labor Standards Act http://www.dol.gov/esa/regs/statutes/whd/allfair.htm 

Family & Medical Leave Act http://www.dol.gov/esa/whd/fmla/ 

Small Business Compliance Assistance http://www.dol.gov/osbp/sbrefa/ 

Union Reporting and Public Disclosure http://www.dol.gov/esa/regs/compliance/olms/rrlo/lmrda.htm

Statistical Information 

Consumer Price Indexes http://www.bls.gov/cpi/ 

Bureau of Labor Statistics Most Requested Data http://www.bls.gov/data/ 

Current Population Survey http://www.bls.gov/cps/ 

Workplace Injury, Illness & Fatality Statistics http://www.osha.gov/oshstats/work.html 

Employment Projections http://www.bls.gov/emp

International comparisons http://www.bls.gov/fls/ 

Employment, Hours, and Earnings http://www.bls.gov/ces/

Safety and Health Information 

OSHA’s Partnership Page http://www.osha.gov/dcsp/partnerships/index.html 

The Workers’ Page http://www.osha.gov/as/opa/worker/index.html 

OSHA Regulations and Compliance Links http://www.osha.gov/comp-links.html 

OSHA Standard Industrial Classification Search http://www.osha.gov/oshstats/sicser.html 

OSHA Reading Room http://www.osha.gov/readingroom.html 

MSHA’s Accident Prevention Program http://www.msha.gov/Accident_Prevention/appmain.htm 

Health Hazard Information (MSHA) http://www.msha.gov/hhicm.htm 

To report a safety or health hazard to MSHA http://www.msha.gov/codeaphone/codeaphonenew.htm 

Labor Department History 

History at the Dept of Labor http://www.dol.gov/asp/programs/history/main.htm

Annals of the Dept of Labor http://www.dol.gov/asp/programs/history/webannalspage.htm

Labor Agencies 

Bureau of Labor Statistics http://www.bls.gov/ 

Employee Benefits Security Administration http://www.dol.gov/ebsa/

Employment Standards Administration http://www.dol.gov/esa/ 

Employment and Training Administration http://www.doleta.gov 

Mine Safety and Health Administration http://www.msha.gov 

Occupational Safety and Health Administration http://www.osha.gov/index.html 

Office of Disability Employment Policy (ODEP) http://www.dol.gov/odep/

Veterans’ Employment and Training Service http://www.dol.gov/vets/ 

Women’s Bureau – A Voice for Working Women http://www.dol.gov/wb/ 

306 United States Department of Labor 

Appendices 

308 United States Department of Labor